Case study part III

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This is the third installment of a case study about 5 money-making websites. This post focuses on metrics to measure success.

I’m an old-school direct marketer. The principles of direct marketing haven’t changed for 100 years, even with the Internet. The bottom line is direct marketing is to have your cost per order be less than your cost to fulfill the order.

Many Internet marketers forgot this principle in the dot com era and many still seem to be forgetting it today. That makes some sense, since sometimes companies pay big dollars just to acquire your “eyeballs.”

But why not have the best of both worlds?

Here is a methodology to use to use this timeless principle of direct marketing:

1. Put up a product that doesn’t cost much to test. In my old direct marketing days, we never ordered any product until we had tested it. We used a mock up for advertising and then ordered product based on orders we received (following laws about collecting cash and keeping customers informed about any delays in shipments). Now you can put up a website for under $500, even if you (like me) don’t know how to code.

2. Run some tests and see what kind of response you get.

3. Assess. For instance, on Boxing Fitness the price of the program is $237 or so, and the gross profit is around $190. It didn’t take long to see that on Google Adwords we got plenty of orders at a cost of less than $190. So we had a good product.

4. Tweak. Had it cost more than $190 to get a customer, I would have had to tweak my approach: adjust the website copy, increase benefits, try a different ad source. Ultimately I might have had to stop investing in the site.

5. Expand what works. Since Google worked for me, I expanded to other venues. Some have worked and some have not. I continue to expand what works.

6. Use print advertising. Many of your comments focus on building communities, links, SEO, etc. Again, I’m old-school. Lots of people still read, especially in niche markets. So I use print ads. Have you ever looked in the back of a National Enquirer to see how many Astrology ads reach 2.5 million readers every week?

7. Test new categories. If one certification program can succeed, why not others?

8. Get customer feedback. For instance, in boxing fitness, a customer asked for a trainer locator. So we put that in. Now people look for trainers in a specific area and, if we don’t have one, they often get certified. Also, this benefit caused other people to see that we can help them get more business.

Now, in terms of the free networking site, I still intend to use the CPO or Cost Per Order metric. How much do I have to spend on marketing to get a dollar of revenue? Since I don’t know (the site hasn’t launched) and have no idea if this will work, I’ll be using free marketing avenues: press releases, direct emails inviting thought leaders to join, etc. Then maybe I’ll test some classified ads and Google.

Many of you ask why I don’t readily share websites (although I caved in in the previous post). The reason is that Sitepoint readers tend to focus too much on design and not enough on the metrics and numbers. Every time someone on Sitepoint gives a URL, some of you have positive things to say and some of you don’t (and some of you are just plain rude and personal). It doesn’t matter whether you care for a design or not. What matters is whether the metrics work in the site’s favor.

So make this your mantra: Cost per order.

Andrew NeitlichAndrew Neitlich
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