August 18th, 2010 | 
Author: Quick Reference Guide To Website Statistics
Web statistics performance metrics or whatever you’d like to call them are important numbers that tell you where your business is heading and where it’s been. Most people talk about product conversion rates. However conversion rates depend upon the quality of the traffic that is visiting your site.
If you are selling an information product about dog training but people looking for breeds find your site then your conversion rate will be in the toilet if even on the radar. On the other hand if your list contains people interested in dog behavior and your product is about dog behavior your conversion rate might be as high as 2530. Again the conversion rate depends on the quality of the leads.
So what numbers are important?
1.Cost per visitor CPV This number tells you the amount of money you spend to get one unique visitor. If you spend 50.00 to drive 500 unique visitors it would have cost 00.10 for each visitor. 50.00/500=00.10.
2.Cost per lead CPL This is the amount of money it costs you to generate an optin lead. In the same example above 20 of the 500 opted in which means you now have 100 new subscribers. If you have 100 new subscribers for the same 50.00 it took to send 500 visitors to your site your CPL is 00.50. 50.00/100 = 00.50.
3.Cost per sale CPS This is your cost to make a sale. If you spent 100.00 on an ezine ad which drove 1000 visitors to your site and you had 20 sales 2 conversion your cost per sale would be 5.00. 100.00/20 = 5.00. This number MUST be less than the price of your product or your net profits are a negative number.
4.Customer lifetime value CLV This number gives you the value of a customer over their lifetime on your list. You’ll have to do some digging for your numbers but for convenience sake let’s assume that you have 1500 people who have purchased 150000.00 of product from you in the past year. The math is 150000.00/ 1500 people = 100.00 CLV. Each buying customer is worth about 100.00 to you.
This number should be considered when you do your ad campaigns. If you have a campaign that barely breaks even you may not run the ad again. However if you know that your lifetime value of those customers you acquired is 100.00 this would significantly impact your decision.
5.Visitor Value VV This is the value of your visitors which is individualized for each type of advertising channel you use.
Let’s say you spend 1500.00 on ezine advertising in 2 months. This advertising brings you 5000.00 in sales. Subtracting your costs for the product your profit margin is 70.
5000 X .70 = 3500.00 1500.00ad cost = 2000.00 net profit
Your 1500.00 ad generated 8500 visitors and 2000.00 net profit. For this particular ad campaign you visitor value is:
2000 profit / 8500 visitors = 00.23 Visitor Value
Each type of advertising channel PPC banner ezine will have it’s own visitor value. You must know what the average is for each channel. When you decide to advertise using that channel you then can make a rational decision about how much you can spend. Otherwise you are just making uneducated guesses.
Using the calculations you’ve just done you can evaluate the cost of your current marketing plan. With the appropriate numbers your plan will net you a tidy profit. With the wrong plan your numbers should show you the direction you should now take.
About the writer:nbsp;nbsp;Jo Han Mok is a 1 bestselling author and frequent featured speaker at Internet Marketing bootcamps and conferences. Visit his website for a simple stepbystep plan to profit online in 21 days or less!http://www.SuperFastProfit.com
Related posts:
