In the process of creating a viable management information system for my own online business, I have been thinking about the very essence of making money online.
What are the critical success factors and how can I measure my progress towards achieving them? These are critically important questions because they will determine our daily activities and the actual work we do online.
Here are my current thoughts…
#1 Build Lists
Why you need to do this:
- so you can communicate value and offers to people who have an interest in your niche
- so you can contact them many times (as most people will not buy until they know, like and trust you.)
- you will have the ability to direct traffic on demand and to earn money through doing so
What is a list?
- a database of people willing to accept communications from you
- the definition of a list can be extended to:
- email lists (aweber, get response, icontact, mailchimp, infusionsoft)
- social sites
- Facebook friends, fans and groups
- Twitter followers
- YouTube subscribers
- LinkedIn colleagues
- Google Plus followers
- other lists:
- Skype contacts & groups
How to get people to join your lists
- offer something valuable in exchange
- free gifts
- information or tools that will improve their life
- give them multiple, high quality opportunities to join your lists with a call to action i.e. create multiple and deep sales funnels (- see my free eBook entitled ‘Sales Funnel Supremacy‘)
- drive TRAFFIC to those opportunities (i.e. optin boxes, squeeze pages, sales pages, invitations to join your social network)
What you need to measure in your list building activities
- number of people on your lists
- their responsiveness to your communications (i.e. the quality of your relationship with them)
- email opens
- clicks on links
- likes, comments, shares
- the amount of unique visitors to your landing pages
- sales/optin conversions
- Return on Investment (ROI), Earnings Per Click (EPC), Cost per Click (CPC), Cost Per action (CPA)
- Advertising spend & effectiveness
- buyers convert better than prospects – also measure #of buyers and # of prospects
The size of your lists, and the quality of relationship with them, will be a major determining factor in your ability to make money online. I created List Building Renegade to give more information about List Building
#2 High quality communication with your lists
Why you need to do this?
- to differentiate yourself from your competition
- to build a relationship – the know, like and trust factor
- this shows that you are an authority and someone worth listening to
- this is what will generate a substantial portion of your online income if you do it well
What is ‘high quality’ communication?
- regular and consistent communications i.e. this shows that you care and that you actually want a relationship
- your content is:
- entertaining (- stories, real, well-scripted, well-presented, easy to consume)
- valuable (- useful and relevant or Better, Cheaper, Quicker and/or Nicer than your competitors.)
- disruptive (- that you have your own opinion or viewpoint that is worth listening to)
- answers the ‘what’s in it for me?’ question going on in the recipients mind
- has calls to action (and all the other elements of copywriting)
What you should measure
- See list building measures above plus
- Amount of communications:
- no of posts
- no of emails/promotions
- no of Facebook posts
- no of tweets on Twitter
The quality of your communications will determine the strength of your relationship, your customer retention rate, the lifetime value of your customer i.e. your ability to get them to buy from you again and again. Look out for Email-ATM which I will create shortly covering email marketing!
#3 High quality content/product creation
Why you need to do this
- to persuade people to join your list
- to build your relationship with your list
- to get people to give you money either for your own product (or through following your recommendations for other people’s products)
How to deliver high quality content / products
- keep informed
- be on the lists of the best marketers in your niche
- Google Alerts
- use content creation techniques to find current and relevant information
- Google search
- Facebook shares
- improve on, add to and share the best stuff (e.g. re-purpose, re-format, re-organise etc)
- focus or go deeper on one aspect of your niche (become the expert) – preferably in an area where a lot of other people are having problems.
- share what you are actually doing (and your results, good or otherwise) – authenticity is critically important.
- outsource content creation e.g. a plugin coder or content creator
What you should measure
- no and range of your own products (- just one product may be enough if it is a market leader but a spread will reduce your risks)
- no of leads and buyers
- no of affiliates
- multiple purchases
- email open rates and click throughs
- number and amount of sales
- outsourcing – project management measures – delivered on time and to cost at an acceptable quality?
The quality of your content and your products will influence the volume of sales, prices of your products, the average value of each sale and your reputation in the marketplace. This is why I created Product Creation Renegade and Membership Millionaires Bootcamp i.e. my strategies for creating high quality content and products.
#4 Traffic Generation (- start by focusing and mastering one method)
Why you need to do this
- to build your list of prospects and buyers
- to find the people who want what you can provide
- to grow your business
How to generate traffic – examples
- through affiliates
- through paid advertising – examples
- Banner ads
- Solo Ads
- search engine optimisation (SEO) – examples
- blog posts
- viral content – examples
- posting on other peoples blogs
- facebook posts
- forum posts
- YouTube views
- your list
What you should measure
Decide the critical success factor for each traffic method and then decide what to measure – examples:
- time spent networking
- no of affiliates on your list
- no of approaches to affiliates and responsiveness (opens, replies)
- average number of communications with affiliates
- Amount and number of prizes
- Paid Ads:
- Ad Impressions #
- CTR (click thru rate) % Ad to Landing Page
- Clicks to Offer
- CTR % to Offer
- Unique Visitors
- # Sales
- Conversion Rate %
- # Refunds
- Return On Investment %
- Earnings Per Cclick
- Cost Per Click
- Cost Per Action
- Alexa ranking
- No of relevant ranking keywords
- On page factors (- score)
- No of backlinks & quality
- No of unique visitors
- WSO’s – there is a huge amount of traffic on the Warrior Forum for IM related products!
The amount and quality of traffic that you can drive to your offers will determine your ability to scale your business. This is also a function of the size and quality of your list.
A Viable Strategy & Proven Business Model
The business activities above need to take place within a viable strategy and a proven business model ( such a strategy and business model is fully set out in ‘The Way of the Warriors‘.) For example, selection of your niche and target market are critical. You also need to be able to build the systems and processes that will deliver on your strategy. In fact you need to be able to deliver in each of the following areas in your business:
However, measuring your progress towards delivering on the critical successes factors is absolutely vital in my opinion. If you take action without putting in place the systems to measure the outcome you will not know what is working and what isn’t. I am afraid that many, many businesses make this mistake.
It is absolutely critical that you should implement systems to measure your activities. It’s boring and tedious but it is nevertheless essential which is why I created Measure N Manage.
Whilst it is desirable to measure everything, in practical terms there is a cost to doing so. Initially, it is therefore important to get started by selecting just a select a handful of measures that are the most critical and apply those, building more sophistication into your management information system as your business grows.
I believe that some of the key performance indicators outlined above will be appropriate for most online businesses but each business has to design its own management information system according to its own aspirations and goals and depending on the stage of its development, ability and the tools available for doing so.
Measurement will focus your activities around what is getting results and the results will drive your actions. This is the very essence of making money online.