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- The Steps to Starting an Internet Business - Part 3

Welcome to Part 3 in my series on starting an Internet business. In the previous post I looked at 2 extremely important steps, finding products to sell and driving traffic. Slip up on either of those steps and you'll not be quitting your day job any time soon. Weather you're putting the mop in the bucket one more time, or attending your next board meeting, that's probably not in your plan. To get your out of the daily grind, and into a whole different sort of grind (but a very satisfying and exciting one), here are the next steps to take as you start and grow your Internet business:

Steps to Starting an Internet Business # 7 – Analyze

One of the keys in any business is to determine where your business is coming from, how you can be more effective at marketing to this group of consumers, and what other markets you can tap in order to grow your business. In order to do these things, you'll need to do the next step in the plan; analyze the results of your marketing. There are several key metrics used by most Internet marketers for analytical purposes.

Unique Visitors –
The number of unique visitors to your web site. Not to be confused with hits or page views.

Page Views –
The number of times a page was accessed (not the same thing as 'hits', which is the number of times files were accessed. A single web page can be made up of dozens of different files)

Referral -
The last page looked at by a visitor before they came to your site. Now we're getting somewhere. This is the kind of information you need to go over with a fine toothed comb in order to maximize your marketing efforts. Are there new traffic sources that you were unaware of? Are your current marketing efforts bearing any fruit?

Conversion Rate -
Conversion is the percentage of visitors to one of your websites or web pages that took the desired action. That can be buying something, signing up for your news letter, filling out a lead form, or any other thing that you want them to do. If you'd like them to stand on their head in front of the mirror, and you have such a great sales page that they actually do it, count that as a conversion. The conversion for your site(s) and every sales page, product, or offer within it will be different. In addition, the conversion rate will be usually be different depending on the traffic source. The more information you have regarding the conversion rate for every page, offer, and product on your site, the better you can calculate CPM.

CPM - Cost per 1,000 visitors.
Obviously this is one of the most important metrics when you're analyzing your traffic. If you know the amount of revenue generated by a visitor to your site, you'll know how much you can pay to acquire a new one and still generate a profit. The thing to be aware of is that traffic from different sources will usually generate different CPM figures.

For example, traffic to your sales page from your forum may generate more or less revenue than traffic from PPC advertising, article marketing, or blog posts. This is because different traffic will have different conversion figures and different acquisition costs. The more granularity you can get when determining your CPM, the better, so make sure you know not only where your traffic is coming from.

Location - Where is your traffic coming from?
This is very important, and more important with some types of sites than others. If you have a geographically oriented site such as a local real estate information website, is most of your traffic coming from the area that you're targeting? If not you may have a large number of visitors but relatively few conversions. That can lead you in one of two directions; you can refine your marketing to bring more traffic from the area that you're trying to target, or you can change the scope of your offerings to more effectively convert the traffic you're getting.

Browser / resolution - While this may seem techy and unimportant to many marketers, it's actually very important. You need to be sure that your site is properly displaying in all the browsers that your visitors use, and especially the more popular ones. The same is true with screen resolution. You want your page to be optimized for the more popular resolutions used by your visitors. If you originally made your page to appeal to visitors running 800 x 600 monitors, you're probably losing sales to those running 1,440 x 900, or 1280 x 1024 monitors because some of site's features just won't be displayed correctly. Going forward, keep in mind that most of the new monitors are wide screen in either 1280 x 800, 1440 x 900, 1680 x 1050, or 1920 x 1200 resolutions. Make sure your site displays well in these resolutions so it's ready for the future.

Duration - How long are visitors staying on your site? If you have a site with a 4-page sales letter and the average duration is 30 seconds, the reason your site isn't converting well is that no one's reading your sales letter. You better hire a copywriter and revise the thing, because it's most likely crap. It's the same with any type of site. You can tell an awful lot about how well your site is holding a visitor's interest by how long they stick around.

Average Views - This also called depth, and it's the number of pages a visitor to your site views, or how deep into your site they go, when they are there. If you have a 1 page sales letter site, well, that number is always going to be 1, but it lets you know if visitors are just hitting the page they entered on, then clicking away, or are they seeing more of your content.

There are more analytics, which I'll get to in a future post, but the upshot is that you absolutely need to know as much information about your visitors and customers as possible in order to maximize your marketing effectiveness. There are many packages you can use but I like Sitemeter and Google analytics, both of which are free or have free versions that are very good. Other well regarded analytics used by marketers include Quantcast, Weblog Expert, and Compete. Most web hosting companies also have analytics of some sort you can use. Whichever package you choose, make sure you analyze, so you maximize your site's profits and minimize your efforts.

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