The Math Behind Internet Network Marketing

I know I know! Where should you spend your advertising dollars?
Maybe you're on a limited budget, maybe you're not. Either way,
this will help you get the most bang for your buck!

Us network marketers aren't too fond of adding numbers and
equations to growing our business, but it's essential to
growing your business online. So much so, that I've been
reviewing my numbers over the past few months to look for
breakthrough areas of improvement.

So I figured I'd give you a little behind the scenes look at
what I'm doing in my business right now.

There are four important numbers you MUST know to improve
your business online.

They are . . .

1. Cost Per Click
2. Cost Per Lead
3. Cost Per Sale
4. Average Lifetime Value

Cost per click is a simple one to explain. It's the amount
you pay in either your time and effort or in money to get a
person to your site.

If you're doing newsletter marketing then it's your total
cost of the ad placed diviuded by the number of people who
click your link.

An example . . .

You place a $20 ad and get 100 clicks

20/100 = $0.20 per click

Not bad!

If you're doing article marketing then it's the number of
clicks you get per article distributed over the course of
time.

An example . . .

If you placed 1 article to 10 article directories and got 40
clicks for 1 hour of effort than you got 60/40 = 1 clicks
per 1.5 minutes for your effort.

With article marketing it gets even better over time because
it's viral nature.

Cost per lead is the next step in the equation. It's simply
how much does it cost to get a lead from your spend.

If we take the above example and saw that we got 40 leads
for our 100 clicks in the newsletter example then we know
that it cost us about $0.50 per lead or $20/40

If we took the same numbers from our article marketing
example and saw that we got 20 leads from our articles
distributed then that means we basically get a lead every 2
minutes or 60min/20leads.

Not bad.

So let's take it a little further with our cost per sale.
Which is just how many sales did we get on a per cost basis.

In our newsletter example let's say we got 2 sales for $20
so that means we have a sale for every $10 spent.

In our article marketing example let's say the same thing
happens. We get 2 sales for our 1 hour of article
distribution, so we're making $20 an hour for our output of
work.

Again not bad at all, but let's take it up a notch and put
it all together with our final important number, the
lifetime value of your customer post sale.

Since we're network marketers we're put on auto ship and pay
a monthly recurring fee to fulfill our compensation plan's
requirements.

So let's say that we know after our sale our customers on
average stick around for 3 months and we earn $10 for each
month they stay.

So each time we get a sale we actually get $30 from each
customer over the course of 3 months.

That means that actually for those two customers we got
above in either situation we actually make $60 total over
the course of 3 months.

That means for a $20 spend in a newsletter we actually make
$40 because $60 - $20 is $40.

And the same goes for article marketing . . . For one hour
of work we actually earn $60 an hour over 3 months which
isn't too shabby at all!

So now that you understand the basics of these numbers,
here's what's important . . .

You can influence them all and make them better.

So if you increase your click through rate by 10% and get
110 clicks instead of 100 you've going to get better
results, but it gets even better . . .

Say you increase your lead conversion from 40% to 50% well
now you're not only getting 50% of 100 but your getting 50%
of 110 which is 55 instead of 50 leads.

What if you increase your sales conversions from 5% to 10%
well that's not 10% of 40 lead or 50 leads it's 10% of 55
leads which is now 5.5 sales.

And let's take the final leap and say that you increase the
lifetime value of your customers just one month, so instead
of them sticking around for 3 months they stick around for
4, so from each sale you're making $40 over the long haul
instead of $30.

What happens when you put all these numbers together instead
of making $60 from 2 sales you make 5.5 X 40 = $220 so
that's an extra $160 you made from tweaking your recruiting
process.

That's a huge jump.

A small change in each conversion metric in a positive
direction effectively builds on the others and when added
together they create huge results.

I'm big on leverage and this is leverage in a big big way.

So when I look at how to improve my conversion metrics I'm
not shooting to double everything because I know one small
tweak to each area can create huge increases overall at the
end of the day.

If you make each part of your system just a little bit
better, the whole system improves many fold. Small changes
count a lot in your marketing, so make sure you're making
them.

For more info please visit: http://www.itvwithsarah.com/Moving Forward,Sarah Tapp3 Star Gold National ExecutiveITV Venturessarahtapp526@gmail.com