Okay, so we've eliminated the Get paid to surf phenomenon as a way of making a living from the internet. So, we seem to stuck with having to come up with a product or service that we can sell online, in order to make money. One of the hardest problems with this method is finding the right product(s) or service(s) to sell. Let me explain why it is so hard... Let's say that you've managed to purchase 1,000,000 banner ads that link to your site. (This would cost you anywhere from $100 to $1,000, so it's not for the faint of heart or the impoverished). Not everyone who sees the banner ad will visit your site. How many of the ads that you've seen here thus far have you clicked on? The rule of thumb with banner ads is that only 0.1-0.5% of the people who see the ad will click on it. That means, depending on where the ad appears, you'll get between 1,000 and 5,000 visitors. If you buy clicks instead of running banner ads, 1,000 visitors will cost you between $100 and $500. Still, that doesn't seem all that bad though, right? Wrong! Because not everyone that visits your site will make a purchase. I like to divvy up visitors into 4 groups: Curiosity seekers Information gatherers Potential customers Motivated customers Curiosity seekers are people who click on ads and other links just to see what's on the other side. It's like the cliche about mountain climbing. "Why did you climb the mountain? Because it's there". Why do they click on the ads -- because it's there. You have almost no chance to convert a Curiosity seeker into a paying customer. Odds are, they aren't even interested in what you're selling. They just wanted to see your website. Information gatherers go from website to website gleaning information. I have to confess that I'm an Information gatherer. I'll visit websites with definite intentions to not purchase anything. I just want to see what information is there. Some information gatherers do it in order to comparison shop, but there are those of us who do it because we like to learn new things. The likelihood of selling something to an information gatherer, at least on the first visit is near zero. With a really compelling pitch, and low prices, you might snare one. But don't count on it. Potential customers are people who are interested in what you're selling, but are reluctant. They may be afraid of purchasing something over the Internet. They may be worried about being ripped off or defrauded. They may be worried about warranties and service. They may be worried that what you're selling may not be what they need. Basically, they're worried period, and if you're going to sell to them, you have to assuage every possible fear known to man before you can get them to commit. You'll have to offer different payment plans -- online credit cards are of course the preferred method of payment, but, if a person is afraid of giving his credit card information online, then you must offer either an 800 number he or she can use to place an order or allow them to mail an order in along with a check for payment. If they're afraid that the product is unsuitable, you must provide them with a 30 day, no questions, money-back guarantee. And you must convince them that the product or service you're selling is of the highest quality, with guarantees. Even then, they'll be very reluctant to order on the first visit. They may end up visiting several other websites, and even several brick-and-mortar stores, before they end up making a purchase. There's only a slim chance that they'll come back to your site to give you the business. Lastly, there are motivated customers. These are the people that businesses love to see. These people are in a hurry and desperately need whatever it is that you're selling. If you can give them the guarantees that they need to feel comfortable with a positive decision, then they are more likely to make a purchase. Just how likely? That depends on their motivation, your sales pitch, and pricing, amongst other things. Perhaps, you can assume that 20% of motivated customers will make a purchase on their first visit. How many of those 1,000-5,000 visitors will be motivated customers? Not many, I'm afraid. While situations vary, there's a handy little rule of thumb that I like using in situations where there's insufficient data available. It's the 80-20 rule. You can apply the 80-20 to just about anything, and get a reasonably good guestimate. First, assume that 80% of your visitors will be Curosity seekers or Information gatherers. Since they are highly unlikely to make a purchase, assume zero sales to them. If you had 1,000 visitors, then 800 of them won't buy a thing. Of the remaining 200, 160 will be Potential or reluctant customers. If you apply the 80-20 rule to them, then only 32 will make a purchase with you, but it may take up to 3 separate visits to your site before they'll commit. Of the remaining 40 visitors (the Motivated customers) perhaps half will make an immediate purchase. That means, out of 1,000 visitors to your site, only 30-50 people will actually make a purchase. And for high-priced items, that number is much much less. All of a sudden, the numbers don't look so good. If it cost you $300 to get those 1,000 visitors, it means each sale cost you $6-$10 to get. If you're only making $10 per sale. you run the risk of losing money, not making it. Choose the product or service you're selling wisely. And price it wisely as well There must be an existing need or demand for what you're selling. If there isn't, it doesn't matter how many banner ads you purchase, or how great your sales pitch is, you won't sell a single one. Back Next