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Learn How to Increase Your Web Site's Profit Per Visitor
by Marnie Pehrson
Many Webmasters complain that they cannot afford to advertise their Web site because their profit per visitor is so low that they can't justify advertising. But there may come a time when free promotion isn't enough. So are you just stuck?
Not necessarily. Make sure you really do have a low profit-per-visitor ratio. Make sure you're not just looking at initial sales. Many people calculate profit per visitor by taking their total profit for a month and dividing it by the number of unique visitors to their site. But this doesn't take into account what a customer is really worth.
What you want to determine is the Lifetime Value of a Customer (LVC). You'll have to do a bit of number crunching to calculate this, but it shouldn't be that bad. Gather these two figures:
- the total profit you've made since your site has been up and
- the total number of customers you've gotten since your site has been up.
Then use this formula to calculate your profit per customer
Total Profit / # of Customers = Average Lifetime Value of Customer
You may find after doing this that you earn more than you thought you did from each customer. If, for example, you only looked at the first sale you might think you're only earning $20 per customer, but if those customers are repeat buyers or buy back-end products and services, you may discover that a customer is worth more like $60, $100, $500 or more. Armed with this information, you are better able to determine what you can afford to spend to get a new customer.
Calculate the profit per visitor using this formula:
New customers * Lifetime Value of Customer / Unique Visitors = Profit Per Visitor
Increase both the lifetime value of your customers and also your conversion rate by creating back-end products and services. For example, if you are a consultant or a coach, you may have a low conversion rate from visitor to client. By creating ebooks, books, teleclasses, online memberships, audio tapes/CD's, and so forth you can convert visitors to buyers in baby-steps. You can also increase the LVC by giving buyers incentives to purchase more on each transaction. For example, you might bundle a book, workbook and an audio CD and offer it at a special price. Bundling is a great way to build your profit per transaction. Just go easy with it. Don't give people so many choices that you confuse them.
Marnie Pehrson is an author and Internet revenue & promotion consultant who helps talented professionals deliver their message to the online world using innovative product development and promotion techniques. For more information on her services, visit http://www.pwgroup.com
Marnie Pehrson, a mother of 6, has been highlighting truth and talent for 15 years. Whether it's writing a novel that spotlights individuals who've made a difference in the world or helping a talented entrepreneur create a platform for his life's work, Marnie underscores truth and talent in innovative and compelling ways. She is the creator of www.IdeaMarketers.com and helps experts promote their products and services online. For more information on her various projects and books, visit http://www.pwgroup.com.
Contact the author, Marnie Pehrson
, at marnie@pwgroup.com
.
