What is Testing and Tracking Lesson 1
Friday, April 22nd 2011 @ 12:13 PM (not yet rated)
Imagine trying to run a business without any idea how much money you’re making. You don’t know your inventory costs or how much revenue your business has.
How likely is this business to succeed?
Unfortunately, that’s how most online businesses run their companies. They might have a vague idea of how much money they’re making or how many visitors they’re getting, but in reality they’re keeping very poor track of their online business.
Some business owners are even surprised when at the end of the month their business isn’t profitable.
Wise business owners on the other hand track almost everything in their business.
What You Can Track, You Can Improve
If you were to ask a business owner how well his site sells, most business owners would probably give you a response like: “Pretty good.”
How difficult is it to improve a website that sells “pretty good?”
It’s next to impossible. Because there are no measurable metrics, there’s really no way to measure whether or not something you’re doing is actually working or not.
On the other hand, if a business owner could tell you “Out of every 150 visitors, we’ll make one sale for $40.”
With this business owner, you could …
- Improve the ratio of visitors to buyers, so that one out of every 100 will buy. Or …
- Increase the sale amount from $40 to $60 so the business makes more money per sale
Whether your efforts in increasing profits are effective or not can be clearly measured. If the numbers show an improvement, it worked. If the numbers don’t show an improvement, it didn’t work.
In short, what you can track, you can improve. What you can’t track or aren’t tracking can’t be improved.
Keeping a Pulse on Your Business
Another crucial reason to track your website statistics is so that you can keep a pulse on your business.
Often things will go wrong in an internet business. For example, a script will go down that prevents people from buying your products.
If you’re not watching your stats on a regular basis, you won’t know something’s wrong until days later. This could result in thousands of dollars in losses that could have been prevented.
Good business owners keep a set of analytics close at hand at all times. Their entire business can be broken down into numbers.
What’s the conversion rate? What’s the ROI on advertising? How many visitors are we getting? What’s the open rate on our emails?
A skilled business owner always has a finger on the pulse of his/her business. On the internet, that means keeping very careful track of your statistics.
What Is Split Testing?
Split testing is the process of testing different options in your business to see which brings in more profit.
Take price, for example.
Most business owners will just arbitrarily pick a price that they “think will sell.” Unfortunately, this highly unscientific method often costs business owners thousands of dollars every month.
Take for example, a business owner who sells 100 products per day at $40 each. He figured that’s what his product is approximately worth, which is why he’s charging $40. He’s making $4,000 a day.
Without realizing it, he’s leaving thousands of dollars on the table.
A savvy marketer would use the $40 mark simply as a starting point. They’ll try selling their product for $20, $30, $40, $50, $60, or even $100.
These are some possible results that may arise:
- Instead of 100 sales at $40, at $80 sales go down to just 65 sales. However, now instead of making $4,000 a day, he’s making $5,200.
- By selling his product at $15 instead of $40, he found that he’s offering such an incredible value that he gets a dramatic increase in sales. He now makes 400 sales a day instead of 100 and makes $6,000 a day.
The possibilities are endless. As you can see, sales can go up or down depending on the price, but the most important factor is how much money you’re making at the end of the day.
If you don’t test the different prices possible, you’ll never know which price really works best for your product.
An Overview of What We Covered
The first step of getting started with testing and tracking is to get a solid understanding of all the marketing principles that go behind testing and tracking. If you just understood the software without getting the fundamentals, you won’t actually be able to use what you learned to increase your bottom line.
The next step is to understand all the important variables to test and track. There are tons of different things you can track or test, but only a few are truly important.
Part of this process is also learning what other marketers have testing in the past. There’s no reason to re-invent the wheel. Take what other marketers have learned to help you find a good starting point. From there, test and improve your results for your own website.
Once you understand the fundamentals and you know what to test, then it’s time to learn the software.
Here you’ll learn how to use two pieces of software: Google Analytics for statistics and Google Website Optimizer for split testing.
Although these tools are free, they’re very comprehensive. Until your business reaches a six or seven figure level, these two tools will most likely be more than enough to do everything you need to do.
Once you’ve applied split testing and analytics to your website, then you can start to expand out and apply the same principles you learned to everything else in your business. You should track and test your email marketing, your advertising, your upsells, your shopping cart checkout process, etc.
Finally, we’ll tie everything together in a nice, cohesive system you can use and implement today. After you read this guide, you should be able to immediately apply what you learned and see an improvement in your bottom line.
That’s what we’ll cover in the next few chapters. The skills, techniques and principles you’re about to learn are going to have a big impact on your business. To Learn More Click Here Now
