The purpose of this blog is to teach how to run a successful Internet business.
I have personally created four different very successful Internet businesses. When I say “created”, I mean just that. I did not create four different jobs for myself to do. I created four different businesses that run completely on their own. I do absolutely nothing except to spend the dividends I earn from those businesses.
Is that something that interests you?
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OK; let’s get started with the basics.
There is a formula up there at the top of the blog that explains that there are three differnet areas you must master and create systems for if you wish to have a successful Internet business. Let’s define them:
Traffic
Traffic is an industry standard term that really just means people. You need to be able to put a message in front of people in order to have a successful Internet business. Sometimes that activity is called advertising or promotion. This, like the other two areas are absolutely critical. You simply can not have a successful Intenet business without traffic.
Someone once said that if you build a better mousetrap, the people will beat a path to your door. That’s just plain nonsense. It is easily disproven. Go to your grocery store and ask for a mousetrap. It looks and works almost exactly like the mousetraps you used as a kid; doesn’t it? Can you think of a better way to catch a mouse? I can. Lots of people can and have designed better mousetraps. Did people beat a path to their door? Nope.
It doesn’t matter how great of a product you have if nobody knows about it. You can have the best mousetrap ever devised (and there are a bunch of people who have literally done that) and you won’t make a dime if you don’t figure out a way to tell people about it.
That’s the first part of the formula. You must get traffic (a fancy name for people) to hear your message or you will never sell a thing.
Let’s go on to the next critical area.
Copywriting
This is another industry standard word that really just means “message.” In the last section, I talked about getting a message to people. Copywriting is that message.
Let’s say you have devised a better mousetrap and you have also figured out a way to be a keynote speaker at the next convention of mousetrap users. Over a million people will be attending.
You certainly have the traffic. What are you going to say?
What you decide to say is called copywriting. It’s just words, but words are very powerful.
In copywriting, we measure the effectiveness of the message with something we call a “conversion rate.” That’s a fancy way of saying… What percentage of people exposed to a message ended up taking the desired action.
It’s called a “conversion rate” because you are converting traffic (people) into prospects or customers or employees or friends or partners or subscribers or whatever. You decide on what you are converting your traffic into.
In this example, you want customers. You want to convert your traffic (the 1,000,000 conference attendees) into customers (purchasers of your mouse trap).
The words you use to inform them about your mousetrap will have a direct impact on how many of those conference attendees will purchase your mousetrap.
You could stand up and say…
“I have a better mousetrap. It only costs $1 and you can buy it right here.” and then sit down.
Some percentage of those conference attendees will make a decision to purchase your mousetrap. Maybe that message will make 10,000 or 1% of the conference attendees purchase your better mousetrap. Maybe if you added some more information to your message… like a 100% guarantee and a picture of your mousetrap and an explanation of how it works and a list of ways that it is better than other mousetraps and a list of people who have tried it and what they thought about it… maybe more of the conference attendees would purchase it. If 100,000 purchased it, then your copywriting had a 10% conversion ratio.
This factor is just as critical as traffic.
It doesn’t matter if you can reach 1,000,000 people if your copywriting can only convince 1 out of a million to take your desired action. That’s only one sale. It is ten times better to have a message that reaches 1 out of 10 people and give that message to only 100 people. That means 10 will take your desired action.
Both are important. The formula shows a plus sign between them, but that isn’t accurate. It is actually a multiplication sign that should be there. Each time you increase your traffic or your copywriting conversion ratio, you multiply your profits.
If you have 100 people visiting your web-site every day and a 1% conversion ratio on your traffic, you will be making 1 sale per day. Let’s say that sale is worth $1. You will be making $1 per day.
Let’s say you increase your traffic by doubling it. Now you have 200 people a day reading the same message and 1% purchase so you have 2 sales per day. Each sale is worth $1, so you are now making $2 per day.
Instead of increasing traffic, let’s say you improve your message so that 2% purchase. You still have 100 people visiting the web-site, but 2 of them purchase every day. You make $2.
You can see that copywriting and traffic are equally important.
However, let’s see what happens when you increase both. If you increase your traffic to 200 visitors per day to your web-site and you increase your copywriting to have a 2% conversion ratio… all of a sudden you have four sales per day! That’s $4.
As you grow your business, you will always want to focus on the weak factor among the three items in the formula. All three items multiply against each other so improving the weak factor will always have the most benefit.
If any of the three factors are so weak that they are zero… you will NOT make a dime. You MUST have all three factors to have a successful Internet business. When you multiply by zero… you get zero. That’s just a mathematically fact.
The last factor is…
Product
In the example we have been giving, the product is a mousetrap. When I say “product”, I am including services. There are a lot of different kids of products. You don’t have to have a box. You can offer a service to get traffic… or a service to provide copywriting. In my various Internet businesses, I do both.
Some people like to get started with affiliate programs. These are programs that pay you when you sell someone else’s product. In this case, you should realize that the above formula still applies.
You just need to understand that the product you are selling is actually a service to the other company to get them qualified traffic. It isn’t the actual product. The product belongs to that other company. Your product is providing a service to that company.
Your choice of product is very important. I hope you recognized that my example above was a bit silly. There are no conventions of mousetrap users that have a million people attending. That’s important to recognize before you choose a product to sell.
I recommend that you start with large markets. Don’t worry about competition. I’ll teach later about why competition is a good thing, not a bad thing. If you don’t have massive competiton, you are probably in a market where it is very difficult to make money. Otherwise there would be lots more competitors.
I recommend that you imagine in your head going to some public place with a lot of people (the mall, a fair, etc) and in your mind… ask them the following two questions:
1. Are you interested in ______________?
2. Would you pay $___ to ______________?
I like markets where 30% or more answer yes to both questions and the blank after the dollar sign is something over $25. I also like to make sure that the costs involved in creating the product or service are extremely low… on the order of 10% or less of the product price.
Some examples of good markets are:
1. make more money
2. lose weight
3. look better
4. live longer
5. have a better relationship with a significant other
If you went to the mall and asked 100 people if they would like to make more money, more than 30% would say “yes.” If you asked them if they would be willing to spend $100 to learn how to make $1,000 more per month, more than 30% would say “yes.”
That’s a good market. The same goes for losing weight and the others listed.
Start in one of those markets. Don’t try to make your break selling to Norwegian alpaca farmers who are also fans of South American skiing. All of the above numbers work against you.
OK; those are the basics. I’ll go into more detail in future blog posts.
For now, start thinking about a product you could sell that meets the above criteria.
And be sure to sign up for the blog annoucement list so you can get each new lesson.
Internet Business You may reprint the above article in any publication online or offline as long as you do not modify it and give credit to Diego Norte as the author. No link is required, but links are always appreciated.