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Three Strategies for Running a More Effective Online Business

Jason Roy

Most online marketers try to increase their profits only by increasing their website traffic or by increasing their conversion rates.  However, there are other factors that can help you to increase your profits without having to attract more traffic or increase conversions and which can make your traffic strategies more profitable. In this article, we’ll look at three simple strategies that you can apply right away to generate more profits and make better decisions about how to promote your website.

Strategy #1: Finding and Increasing Your Value Per Customer

Do you know the exact value of your average customer? If not, you’re missing out on a chance to gain greater control over your marketing campaigns. Your value per customer is the dollar value of each person who buys from you minus the cost of delivering the product to the customer. For example, if you only have one product and it costs $97, you would calculate your average value per customer with an equation like the one below:

$97 – product delivery cost - the cost of acquiring customer = total value per customer

For example, let’s assume that your product costs $17 to drop ship to the customer’s home. Then, if you run a PPC campaign and spend $50 to acquire one customer, your value per customer would be calculated as follows:

$97 - $17 = $80

So one customer brings in $80 and costs $50 to obtain:

$80 - $50 = $30

This means $30 is your total value per customer. Once you know this, you can work on increasing your total value per customer simply by adding an upsell offer. You also have a much clearer picture of how an increase in your conversion rate might affect your profits. For example, if your conversion rate is 1%, you know that increasing it to %1.5 increases your value per customer to $60.

This can help you more accurately measure the value of decisions such as: hiring a copywriter to rework your sales page, hiring a designer to give your sales page a makeover, adding a free bonus to your offer. For example, if you hire a copywriter for $200 to rewrite your sales page and the conversion rate increases by only .25%, your total value per customer has increased by $7.50. So you know it will take you 30 sales to make your $200 investment back.

This gives you a clearer picture of how quickly you’re recovering your investments so that you can make more intelligent decisions about where to spend your marketing dollars. It will also help you apply the second strategy…

Strategy #2: Focusing On the Right Marketing Campaigns

Calculating your value per customer helps you to compare two marketing campaigns and discover which one is more effective. For example, if you have a classified ad that costs you a total of $200 a month to run and you’re making and an average of five sales, you could calculate your value per customer as follows:

$97 -$17 = $80

So one customer brings in $80 and costs $40 to obtain:

$80 - $40 = $40

As you can see, you now know that your value per customer is higher for your classified ads. This means that it might make more sense to invest some more money into running classified ads before you invest more money into PPC campaigns, where your value per customer is only $30. You also know that by hiring a professional copywriter or designer to rework your ad, you could recover your investment faster than you would if you had the copywriter rework your PPC offer.

As you calculate your value per customer for each of your campaigns, you might find that you have campaigns that are only generating a $10 value per customer and that you’re better off investing that money into a campaign that brings you better profits. With this information, you can also get a better idea of what your average value per customer is across all your campaigns and use this information to create more effective long term marketing plans…

Strategy #3: Future Revenue Forecasting

Revenue forecasting is creating specific financial goals for your company and determining in advance how you’re going to achieve them. For example, let’s assume that you have four marketing campaigns and that you already know your total value per customer for each campaign and how much money you have to spend to acquire each customer:

  1. PPC Marketing: $30 Value per Customer (you make one sale for each $50 invested)
  2. Facebook Marketing: $45 Value Per Customer (you make one sale for each $60 invested)
  3. Article Marketing: $10 Value Per customer (you make $10 for each $50 invested)
  4. Classified Ads: $40 Value per Customer (you make $40 for each $40 invested)

If you have a goal to earn a total of $4,500, you know that you need 100 sales from your Facebook marketing campaign which means that you need to invest $6,000 into Facebook marketing to earn the total of $4,500 in profits. So if the traffic from your Facebook marketing campaign maxes out at $600 a week, you know that it’s going to take you about 10 weeks to achieve your goal using Facebook marketing.

As you can see, this will require some work and analysis, but it will help you to set and to achieve specific business goals according to a fairly well-estimated timeline. The more precise you can be with your goals, the easier it will be for you to plan how and where to invest your money and your time. This will take the fear out of decisions such as outsourcing or investing additional money into creating new products or new marketing campaigns.

Where to Find More Tips and Strategies for Increasing Your Online Profits

As you know, there are many other strategies for increasing the value of your marketing and generating traffic for your site. This is why we’re offering a free seven-part email course on SEO and internet marketing. To get instant access to this email course and weekly up to date SEO tips, fill in the form below. Thanks for visiting

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