Today I’m going to be covering something which is crucially important if you are building your own email list, and that is your sign up conversion rate vs lead quality.
Given the option for YOUR business, what would you prefer to have?
1. Higher sign up conversion rate and so more leads on your email list
2. A Lower sign up rate, (so less leads on your list) but higher quality lead
Don’t get me wrong, it IS possible to have both, and in an ideal world, this would always be the case, however, this isn’t necessarily always going to happen!
To answer this, we first need to know what process our new subscriber is going to go through, and whether you would benefit from more leads, or ‘better’ leads.
For example, if you are building your email list, using a ‘clickbanking’ model (i.e. sending your new subscriber to a list building partner’s sign up page after they have signed up with you, in return for an equal number of clicks from them in return) you would be looking to maximise the amount of leads you receive from your buys, as this would have a direct link to how many clicks you would get back from your clickbanking partner.
However, if you’re building your email list and then sending you new subscriber to your own offers or affiliate offers, then the quality of your lead will be more important than the amount of subscribers you receive. For example, achieving a 35% sign up conversion rate and seeing good sales on your backend would be better than converting 50% of your visitors into subscribers, but seeing no sales.
Ok.. So I’m sure that makes sense to most people, but, how can you actually tell what kind of traffic to buy?
Fortunately, this is quite straightforward, and I’ll be getting to this shortly. First of all, it’s important to understand that not all traffic is equal in terms of quality or price.
It’s possible to get cheap clicks using some traffic sources for $0.01 per click (or even lower) while many solo ad sellers charge $0.50 – $0.80 (and even higher) for their clicks.
While the $0.01 clicks may seem VERY appealing, more often than not the traffic quality is terrible, however, the warmer and much more targeted click from the solo ad seller will be more responsive in terms of signing up and actually buying.
So generally, the ‘cheaper’ clicks you see around will also mean a lower quality. This is certainly true for solo ads too, as there are some sellers selling their clicks for as low as $0.25, and generally you’ll be scraping the bottom of the barrel if you buy these!
Now thats out of the way, how do you work out the best clicks to be investing in?
Assuming that you’re actually sending your new subscribers to your own sales funnel, or an affiliate offer, you’ll definitely want a higher quality lead over sheer quantity of leads (this doesn’t mean you shouldn’t try to maximise your sign up conversion rate by the way!)
There are a couple of good ways to know what your numbers are:
1. CPL (Cost Per Lead) vs. Average Lead Value
Simply calculate your cost per lead generated and compare it to the average value of your lead.
1000 clicks bought at $0.50 per click = $500 investment
45% sign up conversion rate = 450 leads (subscribers) = Cost Per Lead of $1.11
Total backend sales = $650 = Average Lead Value = $1.44
Cost Per Lead = $1.11 vs. Average Lead Value = $1.44
Profit Per Lead = $0.33 (actually $1.33333)
Total profit = $150
When working your numbers out, you need to bear in mind that some leads will make you more money in the next couple of months, so you should have your numbers calculated for 15, 30, 60 and 90 days. The longer you go, and the better your sales funnel, the more you will make.
You may be unprofitable or at break even at 15 days, but very profitable at 30+ days, which is why you need metrics up to and including 60 days (For example, the $650 sales in this case may have taken 30-60 days to take place.)
2. CPC (Cost Per Click) vs. EPC (Earnings Per Click)
This is a common short-term way of determining your numbers, and is really straight forward.
Example (using the same numbers as above):
1000 clicks bought at $0.50 per click = $500 investment
45% sign up conversion rate = 450 leads (subscribers)
Total backend sales = $650 = $0.65 EPC
Cost Per Click = $0.50
Earnings Per Click = $0.65
Profit Per Click = $0.15
Total profit = $150 (1000 clicks x $0.15)
Your EPC will also go up over time, as your new subscribers progress through your funnel, just like the last example.
If your EPC is equal to, or higher than your CPC then you’re doing well. Breaking even on your traffic buys is an amazing thing, as you’re building your email list and customer base for free!
Now that we’ve covered the above examples, ask yourself this…
“Does it really matter that I’m paying $0.80 a click if my EPC is $1.20?”
“Does it matter that my cost per lead is $1.20 seeing as my average lead value is $2.10?”
At the end of the day, building your asset (your email list) and making a profit is what it’s all about, so to stay on the right tracks you must make sure your lead quality is high, and that you’re also maximizing the amount of leads you’re receiving.[button_1 text="Boost%20Your%20Squeeze%20Page%20Conversion%20Today!" text_size="27" text_color="#000000" text_bold="Y" text_letter_spacing="0" subtext_panel="N" text_shadow_panel="Y" text_shadow_vertical="0" text_shadow_horizontal="0" text_shadow_color="#ffffff" text_shadow_blur="15" styling_width="40" styling_height="30" styling_border_color="#000000" styling_border_size="0" styling_border_radius="6" styling_border_opacity="100" styling_gradient_start_color="#ffcb29" styling_gradient_end_color="#ffcb29" drop_shadow_panel="Y" drop_shadow_vertical="7" drop_shadow_horizontal="0" drop_shadow_blur="1" drop_shadow_spread="0" drop_shadow_color="#d19900" drop_shadow_opacity="91" inset_shadow_panel="N" align="center" href="https://apex.iljmp.com/1/conv-vs-qual"/]
Don’t be afraid to try out higher quality and more expensive traffic, you may just find it’s the most profitable decision you ever make! (Just make sure your monetization process is in place and working well before you begin increasing your budget).
Relying on the cheapest traffic is a huge newbie mistake, not to mention a complete false economy. Like most things in life, you get what you pay for, but this is especially true when you consider the fact that some leads will spend thousands of dollars with you.
In summary, it’s not about one or the other; maximise the amount of leads your squeeze page generates and send them to a well performing sales and marketing process. Make sure you know your numbers over 15-90 days, as these will give you a good reflection on what is really going on within your business. Lastly, with the above in place, increase your budget and obtain higher quality, more expensive clicks.
If you want an easy way to record and track your numbers, see our previous post over here (we’ve included a cool spreadsheet for you to use which will save you loads of time!)
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