Andy Black
Help people. Get paid. Help more people.
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Your Goal Is To INCREASE CPCs
Most people want to reduce their cost-per-click (CPC).
But you should be trying to increase you CPC instead.
Obviously you have to stay positive ROI, so the game becomes:
The secret is to increase the visitor life-time-value (LTV).
This means increasing the conversion rate of visit to sale.
…and increasing the average order value.
…and increasing the chance that these new buyers become repeat buyers (aka customers).
…and increasing the chance that these buyers refer us to their friends.
…and increasing the chance that they perform a “branded search” next time (where we can get clicks for pennies).
…and increasing the chance that they type in our website name directly the next time they need the products we sell, rather than perform a search on Google in the first place.
Any smart business (and they aren’t all that smart btw), will reinvest as much of their additional backend profits back into the front of their funnel so that they can get more people into the funnel.
They will also be able to pay more to affiliates, so affiliates will all start sending them their traffic.
…which is especially important when it’s a zero sum game where every sale you make or customer you get for life is a sale and customer that your competitors don’t get.
So that you eventually become the 1,000lb Gorrilla that can’t be moved from the top of the pile.
It looks to me like the winner of the “traffic acquisition” game actually ends up becoming conversion optimisation experts, with proper backend sales funnels, with cross-selling and up-selling, with good relationships with their customers, who are great referrers and evangelists of your business.
Everything that building a proper business means in effect!
-----------------------------
My typical AdWords paid search starting strategy is to bid low and count impressions.
This helps to identify where you can get traffic from at the lower CPCs for your market.
Then gradually raise the bids until I’m getting more clicks and can trickle traffic through my funnels.
I’ll then get to know my conversion rates and try and plug my major leaks.
Each time a leak is plugged, the tap is ratcheted open at the top of the funnel by increasing bids a bit more.
All the while trying to run at whatever target profit margin the business has.
If we can double conversion rates, we’ve instantly doubled sales (which is great), but we’ve also halved our CPA.
Our profit margin is now too big (yep, I’ve been shot down for that as well!), so we double CPCs to get back to the previous CPA. Which will often quadruple volumes.
(In case you didn’t spot that let me say it another way: Doubling our conversion rates can often multiply our sales volumes by a factor of 8.)
The target is position 1, all the time.
Get the 30% CTR, and also buy the traffic from the other positions.
(Watch a related video here.)
Most people want to reduce their cost-per-click (CPC).
But you should be trying to increase you CPC instead.
Obviously you have to stay positive ROI, so the game becomes:
“How can I increase my CPCs and still remain profitable?”
The secret is to increase the visitor life-time-value (LTV).
This means increasing the conversion rate of visit to sale.
…and increasing the average order value.
…and increasing the chance that these new buyers become repeat buyers (aka customers).
…and increasing the chance that these buyers refer us to their friends.
…and increasing the chance that they perform a “branded search” next time (where we can get clicks for pennies).
…and increasing the chance that they type in our website name directly the next time they need the products we sell, rather than perform a search on Google in the first place.
Any smart business (and they aren’t all that smart btw), will reinvest as much of their additional backend profits back into the front of their funnel so that they can get more people into the funnel.
They will also be able to pay more to affiliates, so affiliates will all start sending them their traffic.
…which is especially important when it’s a zero sum game where every sale you make or customer you get for life is a sale and customer that your competitors don’t get.
So that you eventually become the 1,000lb Gorrilla that can’t be moved from the top of the pile.
It looks to me like the winner of the “traffic acquisition” game actually ends up becoming conversion optimisation experts, with proper backend sales funnels, with cross-selling and up-selling, with good relationships with their customers, who are great referrers and evangelists of your business.
Everything that building a proper business means in effect!
-----------------------------
My typical AdWords paid search starting strategy is to bid low and count impressions.
This helps to identify where you can get traffic from at the lower CPCs for your market.
Then gradually raise the bids until I’m getting more clicks and can trickle traffic through my funnels.
I’ll then get to know my conversion rates and try and plug my major leaks.
Each time a leak is plugged, the tap is ratcheted open at the top of the funnel by increasing bids a bit more.
All the while trying to run at whatever target profit margin the business has.
If we can double conversion rates, we’ve instantly doubled sales (which is great), but we’ve also halved our CPA.
Our profit margin is now too big (yep, I’ve been shot down for that as well!), so we double CPCs to get back to the previous CPA. Which will often quadruple volumes.
(In case you didn’t spot that let me say it another way: Doubling our conversion rates can often multiply our sales volumes by a factor of 8.)
The target is position 1, all the time.
Get the 30% CTR, and also buy the traffic from the other positions.
(Watch a related video here.)
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