Archive for the ‘Marketing ROI’ Category

Global Marketing Strategies and SEM

The global market place affects pretty much everyone. Any business model that ignores this fact is outdated. It used to be that you wouldn’t have to worry about global marketing strategies unless you were a large multinational conglomerate, but this is true no longer. International brand positioning and identity are imported from the ground up. With the increasing skills of national and international brands at capturing niche markets, niche brands in turn have to be aware of global markets. In the long run, this is the best way to stay competitive.

That is why even narrowly focused marketing companies try to be aware of the global scene. There is simply no other way to go about it. Using globally positioned brands names allows them to stay ahead of the curve. Otherwise, it is very easy to miss a regional marketing strategy that is making inroads in your own market. After all, who is to say that global marketing strategies used in small-town Canada won’t work in small town America? By watching the trends before they affect you, you can be prepared for when they hit your locality.

One of the most important global marketing strategies in the current age is global search engine marketing or SEM. Globally positioned markets try to dominate search traffic even in areas where they have not yet penetrated the consumer market. This is one of the best ways to increase brand recognition. If you are selling a brand of soda pop for example, and every time someone Googles soda pop your brand comes up, they will already recognize it by the time it makes it to the local grocery store. Though this advertising doesn’t come free, it is much cheaper than an international ad campaign. If you optimize for search traffic, you really can effectively advertise everywhere at once.

Many of the most interesting and effective global marketing strategies are currently being developed on the Internet. Viral and guerrilla marketing is easier than ever using electronic communication. After all, you can make a virtually unlimited number of copies for absolutely nothing. People who would change the channel automatically when the commercials come on still may be willing to look at a clever video that your company has put together. If they like it, they will even send it on to their friends. By studying Internet consumer habits, you can develop global marketing strategies that take care of themselves.

Lifetime Value of a Customer

The lifetime value of a customer warrants serious thought. Knowing your customer lifetime value can mean the difference between success and failure for your business. Here is how to calculate this important value.

You will be surprised once you find out how much each customer is worth to your business. To find out the lifetime value of the customer you will need to know two pieces of information: One is the average amount of money each customer buys from you while they are with you; two is how long the average customer does business with you.

Once you get these two vital pieces of information, multiply both the values. The product of the two values gives you the lifetime value of the customer.

Now that we know how much each customer is worth to our business, we know how much we can spend to acquire a new customer. For example, if the lifetime value of our customer is $3,650, we know that we can spend up to $3,650 to acquire this customer and still break even. But there is another important insight to this number.

By working to retain the customer, we can actually increase our profitability. It’s also cheaper to use our customer base as a source for new customer referrals. It goes without saying that customers who are happy with our product and/or service are more likely to make referrals. However, we could also introduce incentives to help with our referrals. This method is still cheaper than acquiring a new customer from scratch.

So what is the lifetime value of your customer? If you don’t know, find out. Without this number, you really don’t know the profitability of your business.

AD Publishing, How Much Should You Pay?

To maximize the number of customers to your business, you need to spend regularly on ad publishing… This much is clear. What’s not so clear is how much to pay for ad publishing — an important question in the current economy where every marketing dollar must have a clear ROI.

Fortunately for businesses that make money online with their websites, there are a couple of key measurements for determining marketing ROI. Suppose you have a business selling t-shirts online. In order to make it known to the world that you are selling t-shirts on your website, you do some ad publishing. How much should you spend?

To answer this question, you must determine your visitor value. In other words, how much is each visitor to your website worth to you in monetary value? In order to calculate this visitor value (VV), follow these steps:

  1. Look in your web stats to see how many people visit your website per month. Let’s assume 1,000 people visit your website per month.
  2. Based on your sales history, of the 1,000 website visitors, how many of them bought your t-shirt? Let’s say 10 people bought.
  3. How much did you make per t-shirt sale? Let’s assume you make $9.00.
  4. Based on the sample numbers, your conversion rate is 10/1000 = 1%. Your visitor value is 1% x $9 = $0.09.

Now that you know your visitor value, you know that you can spend up to $0.09 on ad publishing and still break even. So if you spend $0.05 per visitor, you would make a profit of $0.04 or 80%. If you spend $0.10 to get each visitor, you would lose money.

There are two ways to increase your profitability according to VV, one is to increase your conversion rate, and the other is to increase your profit margin per t-shirt. Let’s look at what happens when you increase your conversion rate from 1% to 1.5%. Your VV jumps to 1.5% x $9 = $0.135. With the same amount of ad spend ($0.05), your profit per visitor increases to $0.09 or 180%.

Imagine that… If you increased your conversion rate by 0.5%, your profit per visitor jumps by 100%! What would happen if you further increased your conversion rate and/or decreased your production expense per t-shirt? I’ll let you do the math. The net effect is that you can spend more money to get even more visitors to your website, thus increasing your overall sales volume. This would blow away all your competitors.

This is the power of using AD Publishing .org to maximize your income potential online.

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