Today’s post is a guest post on the Clickbank blog by successful internet marketer, Simon Hodgkinson. It details the issues to have in mind when considering affiliate marketing and is a must-read for all budding internet entreprenuers.
Written by: Simon Hodgkinson, Guest Author
The secret to becoming a successful affiliate marketer: WORK BACKWARDS
This might seem odd so let me explain…
Over the last few years, we’ve generated millions in commissions and taught thousands of budding affiliate marketers how to make more money online. After many unsuccessful attempts, we finally realized what we were doing wrong.
Statistics show there’s a 95% chance that you aren’t as successful at affiliate marketing as you’d like to be, and even if you’re doing great, by simply applying the little ‘mind shift’ I’m about to share with you, you’ll be able to take your current success to an entirely new level.
Before you begin any promotional campaign you need to identify your end goal.
Think about it for a second, and ask yourself why are you even working as an affiliate in the first place? Although affiliate marketing can be fun, making money is essential.
Like everyone else, you’re an affiliate because you need the money. Making car payments, paying bills such as rent or mortgage, family vacations or the 101 different things that factor into our cost of living add up.
One of the biggest problems is that most people never sit down and add the cost of all these expenses. Once you begin to crunch those numbers and figure out exactly what it takes to live without the worry of how much things cost, or where the money for the next bill is coming from, is when you will start to see the true power of affiliate marketing.
The revelation is that affiliate marketing doesn’t just have the power to make you some ‘extra cash,’ it has the power to set you free!
So how do we start? First you need to know how much you need (pretty simple right). ☺
Grab a notebook and make a list of everything you spend money on each month. At the top of your sheet, you want to write “living expenses.” Go through the fixed costs that you have each month (everything should go in here, rent/mortgage, car payments, cell phone, utilities, food etc.).
Then you want add in your entertainment expenses (the fun stuff!). You can estimate the monthly costs but include things like movies, eating out, monthly mini-vacations etc. Next combine your living expenses with your entertainment costs and you’ll have a total monthly expense figure. Got it?
Don’t underestimate the power of doing this. This has been the number one exercise we ask our coaching students to do because affiliate marketing is not the be all and end all – it’s the tool that gets you there. Without the end goal, you don’t have any kind of way to evaluate your progress!
Let’s work an example: Say $5,000 is the amount you need each month. If your affiliate income can match $5,000 (which is peanuts compared to what you can do if you really push things), you’ll have all of your expenses covered!
Now it’s just a matter of building your system that will generate this income for you automatically, every month. We need to calculate how many sales we need to achieve our income goal. What I want you to do is take your income goal and divide it by the net amount of commission you plan to make with each sale.
For example, let’s say that we’re going to make $30 per sale. $5,000 divided by $30 is equivalent to 166 sales a month. When you break that down, it’s just 6 sales a day.
Now, if you think it’s hard to sell 6 ClickBank products a day, just understand that there are people who can sell 150 ClickBank products a day and more. What I’m talking about here doesn’t even take into account rebills and future payments and how they can compound over time!
So how much traffic do we need to get to those 6 sales?
Just take the monthly number of sales you need (which was 166), and divide that by the vendor’s sales page conversion rate.
We can make a quick assumption that sales page conversion rate will be around the industry standard of 2%. Then, we divide the total number of sales we need by .02, and see what we get from that. Don’t worry if you don’t want to do all the calculations right now, I have handy ‘one click’ resource for you coming up at the end. ☺
For example: 166 / 0.02 = 8,300 unique visitors a month. Break that down and it becomes just 277 unique visitors a day.
The point is, with this formula you’ll know how to figure out exactly how much traffic you need to reach that goal, and vice-versa. If you know how much traffic you site is getting right now, you can reverse the calculation to determine which programs to promote based on commission amounts. It’s not just random numbers floating around anymore!
You have a target to aim for!
Well, kind of. That’s the number of visitors you need to get to the vendor’s page (the page of the person you’re promoting), however, you’ll probably want to send them to your own site first, and then get them to the vendor’s site. In a perfect world you could get every visitor to go from your site to your vendor’s page (that would be a 100% conversion rate), but it’s not a perfect world. So the big question is how many do you actually need to come to your site to reach your goal?
For a quick and dirty answer just divide the number by 0.3 (this is a 30% conversion rate from your site to a vendor’s site). Although you may be able to achieve a higher conversion rate (we have pages that covert to 40%-50%), we will estimate on the conservative side. So, 8,300 / 0.3 is 27,666 and that’s the traffic we would need to reach the goal in our example. The next step is to take that 27,666 and divide it by 30. That tells us how many visitors per day we need to arrive at our own website. That’s 922 visitors a day.
And that’s everything you need for financial freedom! Beautiful how this works isn’t it?
When you calculate your own personal freedom formula number, you might be surprised how close you are to it already. It’s just a matter of setting up your traffic plan and finding the best programs from the ClickBank Marketplace to promote.
You can also run more than one campaign, identify programs that offer recurring billing to automatically add fresh commissions each month to your tally without having to drive more traffic and test and tweak your own pages to increase conversions to ultimately reach your goal. In fact there are many easy-to-apply adjustments that will reduce the time it takes to achieve your objective. Just remember that knowing your objective first is the best way to achieve it.
If you’d like to calculate your own freedom formula number (and you don’t want to crunch through all those numbers in your head), we’ve put a useful online tool that will do it all for you with just a couple of clicks. Click Here: http://www.cbcashgrenade.com/freedom
About the Author
Simon Hodgkinson and his business partner Jeremy Gislason have been involved in Internet Marketing for more than 10 years and are the creators of a number of best selling information products and software applications. For more information about their business visit www.cbcashgrenade.com.
Sound advice indeed and plenty to mull over and apply.
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