Its The ROI STUPID.....

by 7 comments
Okay so you just launched your new ebook on "How To Train Your Pet Rat To Do Backflips" and you're publishing it through Clickbank."

You can't wait to see if this whole Internet Marketing baloney really works.

You sign up with Google Adwords,set-up a few ad groups, bid .30 per click & off you go.

You start driving some traffic via Google Adwords & after a few days of receiving clicks you get an email notification from Clickbank notifying that you received 1 sale.

You get super excited and run around the room jumping for joy.

Next day you get 2 more sales. Day after that you get 4 sales. You're absolutely pumped.

You log into your Google Adwords account and see that your reports show you've generated a total of 500 clicks. have a 1.4% conversion rate. But herein lies the rub.

You come to the dramatic realization that although you've made sales, you've lost money.

See... you priced your ebook at $19.97 a pop. You sold 7 copies.

Before Clickbank fees here is what the math looks like.......

$19.97 ebook x 7 sales = $139.79

$19.97 x 1.4% conversion rate = .28 epc

BUT, you bidded .30 per click. You've lost money.

Now, come on....this is hypothetical, i'd hope that 'Rat Training' keyword bids would be much lower but who knows, we are talking about Google here.

You throw your hands up in total could this be. Damn you Perry Marshall

This Internet Marketing stuff SUCKS. NO YOU SUCK!....just kidding.

Anyway, here is why you should turn that frown upside down.

Rewind a bit....You should be ABSOLUTELY STOKED & heres why.

For one, you just proved that beyond a shadow of doubt that there is a market for a "Rat Backflips" ebook. You just proved it. That alone should get you excited.

Okay heres how you fix the leak....

First realize this. You can't have Conversions without Traffic & you can't have ROI without Conversions.

Now that doesn't mean run out and start driving more traffic. It means that you
should work on TESTING & IMPROVING Conversions.

But Shon you said its the ROI stupid ....and it is. But if you only focus on conversions you could lose money all day long just being happy that you're getting sales.

What you want, is to focus on having a positive ROI as a result of having TESTED & IMPROVED (increased) your conversions.

Okay, you think i'm full of crap........So lets see. Using the same scenario but having increased conversions.

$19.97 ebook x 10 sales = $199.70

$19.97 x 2.00% new conversion rate = .40 epc

You still bidded .30 per click

You're now earning .10 per click....SWEET i'll take it.

Its the ROI Stupid. ITS THE ROI. Test & Improve.

Test Headlines
Test Prices
Test Offers
Test Call-to-Actions etc....

I'm out

Shon C.
#internet marketing #conversion #roi #stupid #test
  • Profile picture of the author John Ritz
    Absolutely! Here's an article about ROI I wrote on my blog a while back:

    ROI: The Cinderella of Stats? | A Prescription in Marketing

    We forget that traffic and conversion by themselves can mean very little.

    • Profile picture of the author LB
      Actually, let's take it a step further. It's not the ROI- it's one thing only...


      I see people talking about the "incredible ROI" they're getting on their ad campaigns where they spend $200 and make $400. Hey, that is awesome.

      But instead, I'll take the campaigns where I spend $1500 and make $2000. Sure, it's not a "double my money" scenario but it IS $500 profit compared to $200.

      Essentially I'm agreeing with your post, just reminding everyone that there is a tier above ROI and there are even tiers above profit too...if you can think of them.
    • Profile picture of the author Shon Chris
      Great Article John.

      We're on the same page.

      Shon C.
    • Profile picture of the author DonDavis
      19.97 x 10 sales (2% conversion on 500 clicks) = 199.70 / 500 clicks = .40 a click.

      Big 10-4 on your post LB. It's all about the bottom line when the day is over.

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