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Asi Erenberg is CEO Ecommerce Partners &
Dr. Roni Horowitz Chief Consultant for Ecommerce Partners

The preliminary stage for building Internet-based sales systems is an initial marketing test in which we try to evaluate (even roughly) the income and profits.

In this article I’ll demonstrate the process. I’ll choose a product and check its initial sales potential on the Internet. You can check the sales potential of products or services offered by you in a similar way.

The product I’ll check is called Backlife. The function of this product is to ease back pain. You can find information about this product on the website http://www.backlife.com

The price of the product is approximately $340
We start the test by checking the popularity of the relevant search words for the product as well as their costs (that’s the cost for each click if your ad appears at the top of the Overture list).

Here are the relevant keywords for Backlife and their prices:
Every line contains three words. The search word or phrase appears on the left, in the middle is the number of searchers per month per click, and on the right is the cost of the ad.

Back pain 59512 $0.10

Lower back pain 22802 $0.10

Low back pain 7387 $0.10

Back pain relief 6050 $1.30

Back pain exercise 2148 $0.49

Cause of lower back pain 2034 $0.10

Chronic back pain 2017 $0.96

Lower back pain exercise 1921 $0.16

By the way, take note that search words connected to treating back pain, such as back pain relief are much more expensive than the general ones such as back pain.
There are approximately 100,000 searchers for relevant phrases on Overture. To proceed and check the sales potential we need to make two estimates:

1. What will the clickthrough of your ads be? (Meaning, what will be the rate at which surfers will click on the ad once exposed to it?)
Of course this data influences the quality of the advertisement.

2. What will your conversion rate be, meaning which part of the visitors on the website will indeed purchase the product? This data is influenced from the quality of the sale process on the website.

Because we don’t have all this data at this stage, we don’t have any other choice but to use the general data about those two numbers.

A reasonable assumption regarding ad click through is that approximately 2% of those exposed to the ad will click on it, and 2% of those entering the website will actually purchase the product.

According to this, the number of purchases through Overture only is 40 per month. And because the price of the product is $340 our sales will be $13,600 per month.

The cost of the campaign will be approximately $400 (simply add the cost of each phrase, that is itself a multiplication of the cost of the phrase, the number of searchers and Click through).

Let’s assume that the profit from selling Backlife is half the price to the customer (a reasonable assumption), the expected profit from our campaign in Overture is therefore approximately $6400 per month.

Of course Overture is only one channel. The sales on Google Adwords may be much larger

The overall sales through the Internet may be much bigger if we add to it the traffic from affiliate programs, viral marketing, net public relations and other channels.

In any case, using a “per click�? advertising channel is an excellent way to start the sales process and it’s therefore better to check that this process is profitable.

Asi Erenberg is CEO Ecommerce Partners &
Dr. Roni Horowitz Chief consultant for Ecommerce Partners

Subscription to a mailing list, must it be on a website?

Repeat after me… “The objective of my internet business is to create a real relationship built on strong foundations of trust and long term commitment with my existing and potential customers, all with the intention of constantly increasing the lifetime value of each visitor to the website.

Relationship is the key word to business on the Internet. You need to check each marketing action to see if it contributes to or damages the relationship with your customers.

Relationship with customers is now a very fashionable topic in the business community and you may therefore wonder why I’m raising such a worn subject.

The Internet is different from the old business world at some point. On the Internet you first create a relationship with the visitors and only afterwards do you sell. In the old business world a person first becomes a customer and only afterwards (maybe) a relationship is formed.

In my Internet business, for example, I have a weekly newsletter with over 10,000 subscribers. The objective of the newsletter is to promote sales of my e-books. Some people purchase e-books from me only after reading my weekly newsletters over a fairly long period of time – one person subscribed for two years before purchasing from me.

A necessary condition for having a relationship with visitors and customers is to collect their e-mail addresses. The trick is that you have to provide a very good reason for people to willingly provide you with their e-mail address – everyone is very sensitive about their privacy and their time.

It’s necessary to do whatever possible (and sometimes creativity is required too), to persuade visitors to give you the thing that is most precious to them – “their time (that’s how the majority of people view providing their e-mail address).

Let’s assume that you have a hair salon. You have a website and you want to encourage your customers to provide you with their e-mail addresses.

Do you expect them to go into your website and register after a visit to the hair salon? That would be hard to believe. Even if you promise them significant benefits, chances are that they’ll simply forget to do it.

You therefore need to use a totally different tactic in this case:

An example would be to provide the customers waiting in the hair salon with Internet access in return for providing their e-mail addresses. Another possibility would be to offer a discount on the next visit to those who agree to provide their e-mail address on the spot.

One other way would be for a few hair salons to unite and produce electronic newsletters on the subject of lifestyle that will be sent free to the customers who provided their e-mail addresses.

There’s a need to break the fixation that subscribing to a mailing list must be on a website. This can be anywhere, even outside the Internet, in a hair salon – notices on the board, etc.

When you have the list in your hands, you have the gold in your hands. And if you use it correctly, you’ll increase your sales significantly.

Using the list, the hair salon can invite customers for an inexpensive haircut on slow days. It can also sell other products, for example cosmetics.There’s no limit to the possibilities.