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Traffic first, Conversions second and Systems third

Adrian Singer, 11-07-2007
Brace yourself!

What I'm about to reveal may shock you.


Ok -- don't say I didn't warn you.

Here goes:

You do NOT need a PPC management system, to make money online.
You do NOT need Web analytics, to make money online.
You do NOT need CRM, Help desk or a professional Graphic design, to make money online.

Oh - and you also don't need an expensive dedicated server, to make money online.

If you're not making 4 digits a month in net profit yet, please take all the services I just mentioned off your list RIGHT NOW and stop failing yourself with excuses on what systems you need "before you can start being successful online".

Sure, we'd love for you to buy all those services from Software Projects. But until you're making 4 digits a month in net profit, you cannot afford nor do you need any of this.

Here's an email exchange I had with a customer today:

Ben wrote:

I am getting ready to launch the new site, but before we launch I want to find a solid data warehousing application. I need a system to show trends, upgrades, memberships etc. I need a database that holds all the information. Should I be trying to find custom code or can you guys develop it? Maybe there is an existing data warhousing application I can install that will integrate with my site or can you help me with the integration?

What should I have replied to this?

The customer has a new website with zero paying customers. I could easily sell this customer on a Software Projects 20 hours plan, where we will research and integrate the proper data warehousing solution for him. That's what I should do, right?

Yeah right.

Adrian wrote:

Ben -- Forget about all of this. You don't need it.

Don't get me wrong -- I'm not saying it is not important to eventually have a datawarhousing application, sophisticated bid management, state of the art CRM system, 24x7 phone/email support etc. etc.

But the first step is to generate $100 gross sales from your site. Then the next step is to generate $1,000 pure profit. Then $5,000 monthly profit from the site. And then $10k monthly profit from the site.

Until you have a site that is generating a healthy $10k a month, none of the applications I mentioned above are required. In fact, spending time on researching those applications and trying to integrate them into your business, is not only going to take you away from your goal, it is probably going to kill your site altogether.

We have clients who are making $50k a month, running a simple eBay site, using PayPal as the payment gateway, with no help desk, no CRM, no bid management system and no nothing.

And there's nothing special about it.

You really don't need any of those systems until you're making a healthy 5 digit return every month.

Guys and Gals,

You need Traffic. Then Conversions. And then back-office systems.

There are lots of ways to generate instant traffic. As long as you have decent content / product / service to offer, focus all your energy on building repeat traffic and the rest will come naturally.

Keep looking for that perfect "system" you need before you made a dime of profit and... well, good luck with that.

Thomas, 11-07-2007
What do you mean by building "repeat traffic"?

I don't get it

Adrian Singer, 11-07-2007
Thomas -

If you spend $100 to get 100 visitors to your website and zero of them come back for a second visit over the next 30 days, you're missing out big time.

You have to break free from paying $X per every Y visitors. You need a viral element to get visitors to bring their friends (at no extra cost to you) and you need site stickiness to get them to come again.

Sounds complicated? It's not.

Engage (visitors). Inspire (visitors). And keep your content Fresh.

Bettie Salino, 11-07-2007
Great tips. I love reading your posts Adrian, especially the more heart to heart ones

Sarah Pollister, 11-07-2007
How long is it going to take until someone can make 10k a month from their website?

Adrian Singer, 11-07-2007
Bettie - Thank you. Much appreciated.

Sarah -

It is virtually impossible to predict how long it is going to take until you can generate $10k in monthly net profits from your site.


There is a great formula we came up with to help us predict these kind of things. This simple formula proved to work well in diverse industries with various different websites.

It is:

2 to 1
then 1 to 1
then 1 to 2

And it means:

On month #1, you are going to spend $2 per every $1 that comes in.
By month #3, you are going to spend $1 per every $1 that comes in.
By month #4, you are going to spend $1 per every $2 that comes in.

Naturally it is very generic, but as I said, this formula served us well over time.

Plug your advertising budget and profit margin into the formula and you'll have your answer.

rick gregory, 11-08-2007
I mostly agree. I think the problem is that most people forget that they're simply selling a product or service and get caught up in the tech.

Forget AJAX, PHP, MySQL and all that. Imagine, instead, that you're opening a shop. On a street. What do you do first? You rent space and stock the store. (Buy a domain and put up a site with content or products) Next? Open the doors (Take the site live). Next? Right... you get people in the door. And then you get them to buy things by walking up to them and talking to them.

Here's why I said 'mostly' though. Just as a store owner might shove a clipboard with a sheet asking you to signup for their mailings out on the counter or offer a buyer's club signup, you can, and should, stuff some basic analytics on the site. Google Analytics, maybe CrazyEgg. They're free/cheap and take close to zero time to deploy. Don't mess with them a lot... but have them there.

Why? Well... your advice is to grow your revenues, and that's right. But HOW? Do you know why your PPC ads aren't converting? Can you test different ad versions? Different landing page designs? No, you don't need to go whole hog into multivariate testing... but if you have no idea what search terms are driving people to your site or how they are interacting with it, you won't increase your revenues as efficiently as if you do have some basic insight.

To go back to the store on the street... maybe you nitice that you get a rush of people right at 6pm as you close. Hmm... perhaps staying open for another 30 minutes or an hour would be good business. All that is is observing customer behavior and adjusting your site, er, store to better help them.

Adrian Singer, 11-08-2007
Rick -

Excellent feedback! Google Analytics and Crazy Egg are two no brainers you should slap on your site as soon as possible.

Takes a few minutes to setup and definitely worth it.

Beyond those two, I would urge all wanna-be Internet Millionaires to focus on making the first buck of profit, before anything else.
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