Any successful business needs to measure performance. Fortunately as an Online Business owner you can measure performance without being an Accountant, Bookkeeper or Math Whiz.
1.Number of Visitors
As an Online Business you will have many different kinds of Ad Campaigns. Banner Ads, Pay Per Clicks, Solo Ezine Ads etc. You should have a separate ad tracking page for each Ad Campaign. This way you can see how many visitors were generated by that ad campaign.
2.Cost Per Visitor
If an Ad Campaign cost's $100 and Generates 1,000 Visitors then your cost per visitor is 10 Cents
3.Cost Per Lead
If 100 People join your mailing list from that $100 Ad Campaign then your cost per lead is $1.00. Leads are important because they are potential sell. Many Online Business owners would be thrilled to generate 100 Leads for 1 Dollar Each.
4.Cost Per Sale
Your cost per sale is made up of many variables, Product Cost, Shipping Cost, and Advertising cost. If you make 10 Sales and Your Ad Cost is $100 then your Ad Cost per sale is $10.
5.Average Sale
If you make 10 Sales for $1,000 then your average sale is $100.
6. Conversion Rate
Visitors don't always translate into sales. I would much rather have 100 Visitors that convert to 10 Sales then 1,000 Visitors that convert to 3 sales assuming the average profit per sale were the same.
7.Profit Per Sale
Your Profit per sale is the average sale minus the average cost per sale. This can be a deceptive number because existing customers are far more likely to purchase from you in the future then a new visitor. It is very possible to loose money on an existing ad campaign but make it up later in follow up sales to the customers and leads generated from that ad campaign.
About The Author:
Mike Makler has been Marketing Online Since 2001 When he Built an Organization of over 100,000 Members
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