Wednesday, January 15, 2014

List building - Calculating Your Average Visitor Value

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An opt-in list can be quite crucial to any site or internet based business. Building your own opt-in list is fundamental of online business. If you want to run successful online business you must extract out as much money as you can from your leads.

There are two main ways of list building: free list building and paid list building. Irrespective what method list building is used you must  know average visitors value.

Average Visitor Value = Gross Sales / Unique Visitors. Also known as: Earning Per Click (EPC)

Your average visitor value (AVV) is the maximum you can pay for a visitor to your site and still break even. Unless you know these values, you cannot make informed traffic buying decisions. Any traffic you buy will be based on 'intuition' or 'hope.'

Example: Let's say you send 100 unique visitors to your site. And, from those 100 visitors, you get just one sale for $100 (a conversion rate of 1%)

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To work out the average visitor value of your site, simply take your gross sales, and divide it by your unique visitors for the same time. So take $100 and divide it by 100 unique visitors, and you are left with an average visitor value of $1.

That means that on average, every visitor you got that day was worth $1 to your business. If you are spending less than your AVV to acquire leads, you have the beginnings of a profitable business. If you are spending more, you do NOT have a sustainable online business.

On the other hand, the two  formulas for making money online are:
 1.) Traffic + Conversions = Sales
2.) Sales > Ad Expenditure

 Let's say you get no conversions, then:
Traffic + ZERO Conversions = ZERO Sales
 Any number you get for traffic multiplied by zero, is still zero.
 If you have no conversions, traffic is worthless. But, if you have conversions – you will have all the traffic you could ever want because affiliates will always send their traffic to whoever pays the highest price for it.
In online  industry, those who have been the best at converting traffic have made the vast majority of the money. And, don't forget about monetize your traffic. It means that you  must have sales funnel that has done over your money in revenue for me these past 12 months


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