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What is a Sales Funnel and Why Do You Need It?
Why an Efficient Sales System is Important to Your Internet Business!
Why an Efficient Sales System is Important to Your Internet Business!
You’re probably aware that it does not matter how attractive your website is or how fantastic the product or service offer that you’re making from that site is either. If no one ever visits your website, it is totally impossible for you to generate any sales so without site visitors, it is equally inevitable that your business is going to collapse around your ears sometime very soon.
You may also understand that sending visitors to your website is not enough because unless those visitors are targeted, your sales process is far less than efficient. This is something we will look at in a little more detail later.
However, for the moment, let’s consider how you attract visitors to your site.
There are in essence three different ways of pulling visitors onto your web pages.
Firstly, you can buy visitors by using paid advertising like Google AdWords to generate traffic. Doing things this way can be very efficient as long as you know what you’re doing with the possibility of driving visitors to your site in a matter of hours.
On the downside, you have to pay for advertising and it is a fact that when you are using AdWords in particular, it can work out extremely expensive until you have mastered exactly how the system works.
This is because the pricing structure adopted by Google is flexible with the cost of each click on your adverts varying according to whether your adverts and the supporting website at which your ads are ‘pointed’ are constructed in the way that Google want them to be.
There are of course dozens of alternatives to AdWords. Nevertheless, the fact is that most online marketers use AdWords because nearly 70% of the internet enabled population of the planet use the Google search engine rather than any of the alternatives.
In short, if you want your advertising to be seen by the largest number of potential prospects, then AdWords is the most sensible choice.
With AdWords, it is possible to reduce your costs by making sure that your adverts and your site comply with Google requirements. This can however take time.
The second option is to promote your business for free by publishing keyword focused articles, video materials on sites like YouTube and
Google video, forum marketing and so on. All of these methods are effective but they are usually far slower than using paid advertising and there is considerable time involved in preparing the materials in the first place.
For instance, unless you are an expert article author, it could take you anything from 30 minutes to 1 hour to do your initial research and then write your article. If you were to follow the advice of many experts who suggest that you should always submit at least five or six articles that are based on the same topic or subject matter together, it becomes fairly obvious that even something as simple as creating articles can be pretty time-consuming.
The third option is to ‘borrow’ traffic by getting involved in suitable joint-venture operations with other marketers in your market sector or niche. This is a fantastic way of marketing, because you are leveraging the popularity and market presence of the person you’re working with to generate business. Consequently, joint ventures are often the most successful form of marketing.
However, there is yet again a proviso because joint ventures do not happen overnight. You have to build or develop your relationship with the marketer with whom you’re planning to work and you have to put together a top quality package of marketing materials to make their job as easy as possible. It is likely that you will probably have to spend some time and not a small amount of effort convincing them that you know what you are doing and that everything is ready to go to the market.
If you think about these three different methods of driving traffic to your site, you will probably begin to note that there is a common theme running through everything you have read so far.
Every one of these individual traffic generation strategies has advantages over the others, but at the same time, each of them also has disadvantages. And in every case, the major disadvantage is remarkably similar.
No matter how you set up your systems to drive traffic to your site, there is a cost involved, whether that cost is measured in terms of money (paid advertising) or time (which in business often amounts to pretty much the same thing anyway).
To a certain extent, the way that you promote your business will be decided by your own value judgment of which is more important to you, keeping money in your pocket or saving your time.
In my experience, when you are a complete beginner, it is money that is the most valuable, primarily because you don’t have any. However, as your business becomes more successful and starts to generate income, the importance of time tends to come to the fore as money is always replaceable, but time never is.
And here is another critical thing to understand about the cost of the traffic that you generate to your site.
Each and every one of those visitors is expensive in some way or another. Indeed, getting them to come to your site for the very first time is the most expensive visit you will ever generate. To get to this point, you have had to spend time, money or both to go out onto the internet and ‘grab’ that visitor.
Until you did so, they were not aware of your site or business. Hence, it naturally follows that if you had not gone out there with promotional materials that attracted their attention, you would never have been in a position to present them with your offer.
Thus, it is an inarguable fact that getting new traffic to your site for the very first time is expensive and that any subsequent visit to your site by someone who has already visited costs almost next nothing in comparison.
In some cases, the visitor will return to your site of their own accord, in which case there is really no cost to you at all. Alternatively, they might come back because you have a system in place that encourages them to return.
This system might take some time and effort to set up, but you only have to do the job once, after which your system continually pulls visitors back to your site. The cost per individual return visit is therefore negligible.
Knowing that each first-time visitor is the most expensive that you will ever attract means that it has to make sense to ensure that you do everything possible to turn that visitor into an asset of your business.
This is essentially what having a sales system in place is all about.
An efficient sales system is one that is designed to squeeze every possible cent out of every visitor who ever comes to your site. To go one stage further, it is about maximizing the profits of your business because profits always equal incoming revenue minus costs. As we have already established, the cost of each visitor is the highest it will ever be when they visit for the first time.
So far, I have continually used the phrase sales system. However, it is relatively common in all forms of business, both online and off, to present this sales process as a funnel, hence the title of this course. In the next lesson, I will illustrate why this is and how the concept works.
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The Basic Sales Funnel Model Explained
The Basic Sales Funnel Model Explained
There are dozens of different ways of illustrating the sales funnel concept because the exact make-up of this funnel will vary from business to business depending upon the demands and operating style of different businesses.
Nevertheless, there is always a general similarity in the basic depiction of the sales funnel model. Thus, we can use a general stylized sales funnel to begin to illustrate exactly how the sales funnel is applicable to online marketing.
The basic idea of the sales funnel is that at the top (the ‘mouth’ or widest part of the funnel) you have your potential prospects. At this point in time, these individuals have done nothing to signify that they are likely to do business with you at any time in the future.
Depending upon how you create your own funnel model, these prospects could be just outside the top of your funnel or just inside the top lip.
However, as a general rule, it is normal to assume that anyone who is actually inside the funnel has made a least some degree of commitment to your business, possibly something as simple or basic as visiting your site.
This is the most basic commitment level from a potential prospect to your business. The prospect has seen some form of promotional material that you have ‘seeded’ the net with, was interested in what you had to say and decided to visit your site to investigate a little further.
Thus, they have taken the very first step that you wanted them to take, hence the notion that they have already made some form of commitment to you, albeit a very small one.
At this point, having just entered the widest, uppermost part of your sales funnel, the prospect has a choice to make. Either they are going to find your offer to be of sufficient interest to commit themselves further or they are going to decide the opposite. In this case, they jump back out of your funnel, lost to your business forever.
It is this notion that people can ‘jump out’ of your sales system at any time they want which leads to the basic funnel concept. At every step of the process, there will be people who make the decision to go no further and back out. Hence, you have less and less people still interested in what you are doing as they move through your sales process (or down your sales funnel) meaning that your scope for business narrows because of the dwindling number of people still involved.
But even at this early stage, your first-time site visitor has a choice to stay or go. If they do not jump out of your sales funnel by closing your page for ever, the next logical step is that they will increase their commitment to you to a greater or lesser degree.
For example, they may browse around your site to see exactly what you have to offer on a site-wide basis, an act that indicates that they are seriously interested in what you have to offer. Hence, this simple action indicates a higher level of commitment.
Alternatively, it is more common to ask them to take a specific action on this page, such as signing up for your mailing list, providing additional information or some action of this nature. If they choose to do this, the element of commitment is considerably higher because they have taken the action that you required.
In the first of these two commitment examples, the individual who takes a look at a few more pages on your site pushes themselves a little further down the funnel (or through your system) by this action.
However, we have already established that some people will already have backed out before now. Thus, there are less people still interested in what you have to offer at this slightly more advanced stage, hence the narrowing of the sales funnel.
On the other hand, the individuals who have taken the action that you asked them to take have pushed themselves considerably further down the funnel. At this level, there are again less people and therefore the funnel continues to get still narrower.
In the following simple sales funnel schematic, you might say that the upper blue layer represents the first time visitors that you have drawn to your site:
Of these visitors, the ones who make a minor commitment to you by browsing around your site for a reasonable period of time might be imagined to have moved down to the next (green) level of the funnel.
However, those who subscribed to your mailing list or took whatever other action you requested have moved past these slightly less committed people straight down to the red layer, where there are considerably less people and therefore a narrower funnel.
And so it goes on. The more commitment you are asking for from your site visitors, the less people are likely to make that commitment.
It should therefore be clear that the whole sales funnel concept is based upon the idea that selling products or services (whether online or offline) is a step-by-step process of pushing people down the funnel or through your sales system.
At each level of the funnel, you have to ask your prospect to increase their level of commitment knowing that by doing so you are going to drive some of these prospects or customers away.
This is absolutely inevitable but there is no inevitability attached to the number of people who might decide to jump out of your sales funnel at any particular level.
In other words, this book is going to show you how to create a sales funnel in such a way that you can prevent huge numbers of hot prospects from jumping back out of your funnel once you have got them to take the initial step that you want them to take.
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Getting Targeted Traffic to Your Sales Funnel
Getting Targeted Traffic to Your Sales Funnel
The sales funnel concept DOES NOT work on the basis of pulling just anyone to visit your website.
On the contrary, it is absolutely essential for the funnel concept to make any sense that the people you draw your website are targeted, pre-qualified visitors.
For example, if you have a website based business that promotes weight loss products online, it is logical that the best prospect for your business is someone who is overweight that wants to change their life.
Consequently, you would target your marketing and promotional efforts in such a way that they would be put in front of people who are overweight. By doing so, you ensure that the majority of people who come to your site already represents a hot prospect because they are looking for or interested in the products you have to offer.
If however you bring someone who is trying to decide whether they want to buy an Xbox 360 or Wii, the chances of that individual buying your products are almost zero.
Sure, it is perfectly possible that they might be overweight but they are still not going to buy. The fact is, they are not particularly interested in weight loss related products at this particular moment in time, so why would they?
They are searching for specific information that is completely different to that which you provide and they are therefore going to close your site within milliseconds.
Hence, all of your initial marketing efforts have to be focused on making sure that the people who you bring to your site (to the first, widest level of your funnel) are targeted visitors.
You have to make sure that your marketing efforts are targeted.
For example, your AdWords advertising materials must feature your primary keywords as must any articles that you publish on directory sites like EzineArticles as well as the descriptions that you attach to the videos that you publish at YouTube and so on.
This element of prequalifying visitors to your site is an essential part of an efficient sales funnel.
Or, to put it another way, without pulling targeted, pre-qualified visitors to your site, trying to construct an efficient, profitable sales system is a huge waste of time.
If the ‘front end’ of your system is not attracting the right kind of visitors to your site, then the chances of converting any of those visitors into customers are very remote indeed!
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Why The Concept of a Sales Funnel is so Important for Internet Marketers
Why The Concept of a Sales Funnel is so Important for Internet Marketers
Once you have targeted visitors entering your sales funnel, a percentage will make some kind of commitment to your business and a percentage will simply leave.
Consequently, your job in this situation is twofold.
Firstly, you should be applying every tool and resource available in an attempt to minimize the people who jump straight back out of your sales funnel after first entering.
Secondly, you should also be doing everything within your power to ‘push’ people to the next lower level of your sales funnel as quickly and efficiently as you can. With every level that they descend further through the funnel, the more they are increasing their level of commitment and therefore their value to your business.
For example, if someone chooses to subscribe to your mailing list, you are in a position to send them a continual stream of promotional e-mails pushing your primary products.
At some point, it is likely that a percentage of prospects that you are e-mailing in this way will buy the products that you are promoting because it is widely accepted in online marketing that most prospects have to see an offer anywhere between seven and twenty times before they finally decide to buy (or not).
Of course, successfully selling a product in this way is exciting and rewarding because it puts money in your bank account, but it is not the end of the story. Indeed, it is really only the beginning.
It should be obvious that the likelihood of a prospect turning themselves into a customer by buying the product that you recommend will to an extent depend upon the price of that product.
If for example the product only costs $7, it is pretty much a no-brainer for anyone who has even the remotest interest in it to buy. Thus, if you were selling a $7 product you could probably anticipate big sales numbers whilst understanding that the income is going to be relatively low.
Logically speaking, it is going to be more difficult to sell a $27 product, and harder still to move one that is priced at $47. Nevertheless, as long as the product offers clearly outstanding value, even at these levels, you could expect to see reasonable sales figures.
So, let’s say that you sell a $7 or $27 product to your customer as the first piece of business that you have ever done with them. What do you do next? Is that it or are you going to push for something more?
What you now know is that if you present a suitably well targeted offer to each individual customer (as they now are), they will buy at this price level.
What you don’t know is the depth of their interest in the subject on which they have just spent money. Nor do you know how far they are willing or able to go on spending money or where their price ceiling is.
So, if you have just generated a $27 sale, the next step is to offer that new customer a $47 or even a $67 product.
As you’ll discover, you should do this as soon after they have completed their initial purchase as possible because at that very moment, they are in full-on ‘buying mode’ and this is always the best time to ask for more business.
It is a fact of doing business online that the hardest thing in the world is to convince a new customer to get their credit card out of their wallet. Thus, once they have done so, you should maximize your returns by presenting them with an immediate upsell offer of some type.
Some of your new customers will buy, whilst others will decline the offer.
If they buy, that’s great, you have even more cash in the bank, but this is still not the end of the story. Now you need to know whether they have the wherewithal and/or the inclination to spend even more money on targeted products in your market.
The customer who buys your upsell offer could well be in the mood to keep buying, so you should keep offering them the opportunity to do so. And even for those customers who do not buy your upsell or anything else that you offer them, you should definitely start offering more higher-priced products in your promotional e-mail messages to them.
After the initial flurry of sales activity, at every step of the way, you must progressively narrow down and focus your business by establishing how far each individual customer who is on your mailing lists is willing to go. This concept is based upon the somewhat clichéd but nevertheless remarkably accurate notion called the Pareto principle or 80/20 rule.
When applied to sales, this principle dictates that 80% of your business will eventually come from 20% of your customers. To a large extent, my own experience indicates that this principle generally holds reasonably true.
What it means for your business is therefore relatively straightforward.
By continually qualifying your customers, thereby narrowing the number of people still in your funnel, you will gradually whittle it down to the situation where you have isolated the 20% of customers who are willing to spend the most money with you.
These are the people who will not bat an eyelid if you propose a $2000 or $5000 training course to them. They are therefore the customers who you should be focusing almost all of your attention on.
By isolating the individual customers who are going to make the most money for your business in this way, you ultimately ensure that your business is as profitable as it could be.
At the same time, you are not wasting your own time trying to work with customers who are never going to make a great deal of money for your business, so this ‘narrowing down’ process also makes your life easier and far less complicated as well.
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Why Automation is Essential to Your Success Online
Why Automation is Essential to Your Success Online
As you gradually build your business, prospects will initially be ‘small price ticket’ customers who may then become ‘larger price ticket’ customers.
Beyond this, some will ultimately become the kind of ‘major price ticket’ customers who according to the Pareto principle ‘pop out’ of the bottom of your sales funnel.
With every gradual move that your prospect makes through this process, the e-mail messages that you send them must change as they attain each progressively more profitable level.
For example, after they buy your first product, they may or may not take advantage of the initial upsell.
If they do not do so, then the first tranche of e-mail messages that you send them should promote the first upsell product that they have just turned down. Remembering that they need to see your sales message anywhere between 7 and 20 times, you should give them plenty of opportunity to buy this product by making the offer to them at least 10 times.
However, there comes a point where you have to accept that the reason they are not buying is something that you are not overcoming. In this case, after 10 e-mail messages have all promoted the same product without success, you should change tack by introducing a different product to the same customer.
Alternatively, if the customer did accept the upsell immediately after making their initial purchase and perhaps even other products besides, the next step is to promote an even more expensive product to them by e-mail. Once again, you should give them plenty of opportunity to buy this more expensive product, so I would recommend at least 10 e-mail messages focusing on the same product once again, before moving on to something different.
You must therefore have a series of outgoing e-mail messages being sent to your subscribers when they first join your list, followed by many, many more e-mail messages to them once they become customers who occupy various different levels in your sales funnel.
Furthermore, with each purchase that these customers make, it will be necessary to start a completely different series of e-mail messages because with each purchase, they are pushing themselves further through your sales funnel to another different level.
In short, an integral part of any well constructed sales funnel is an automated e-mail management system, because without this, your sales funnel can never work as efficiently or as profitably as you want it to.
For this reason, you must have an autoresponder system in place, and given that you want the system to work as effectively and efficiently as possible, it will pay you to use only the best.
Yes, you can of course use a free autoresponder, but from my own experience, I know that the more efficient your sales funnel system becomes, the more quickly you will outgrow a limited autoresponder system of the type that you might find for free.
In terms of spending money on an autoresponder, you have two choices, or at least in theory you do. However, because one option is so much better than the other, I would suggest that in truth, there is no real choice to be made.
Option one is to buy autoresponder software that you can install and run from your desktop or from your own web hosting account. The advantage of doing this is that once you have bought the software, you do not need to invest any more money in your autoresponder.
However, apart from this single advantage, there is a little or nothing else to recommend buying and using your own software in this way.
On the other hand, there are far too many disadvantages such as using your own bandwidth for outgoing e-mail messages, a general lack of flexibility and the likelihood that your software will fail to keep up with the latest autoresponder market developments. In addition, sending e-mail from your own ISP almost certainly means that you will encounter significant deliverability problems so that you will send lots of e-mails that do not arrive because the intended recipients ISP has anti-spam software blocking it.
Alternatively, there are web-based autoresponder systems where you have to pay a monthly subscription to use the service. Beyond this however, every advantage lies with this option because online systems of this nature offer almost every tool and feature that you could ask for.
They provide significantly enhanced flexibility in comparison to desktop or host-based software programs, they make all of the latest features and resources available as soon as they hit the market and with the right autoresponder system, you should have very few deliverability problems either.
The importance of this last factor should not underestimated.
If you convince a new prospect to subscribe to your mailing list but then because of your autoresponder, the initial ‘Welcome’ message never arrives, the only thing that can be said for certain is that this prospect will never become a customer.
After all, if they do not receive your e-mail message, how can they?
You need to automate as much of your business as you can, but you have to use the best tools to do so. If you do not, a significant percentage of your potential profitability will simply trickle away down the drain.
For this reason, there are only two autoresponder systems that I would suggest you look at, Aweber or GetResponse.
Most online marketers seem to prefer the former over the latter, but having used both services at various times over the years, I would say that they are equally good as one another, so you should go with the one with which you feel most comfortable.
Given that successful automation is so mission-critical and that your autoresponder system is the heart of your automation, you should not look beyond one or the other of these two companies to handle the automation of your business!
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Why It's So Important to Get Your Marketing Funnel Up and Running Quickly
Why It's So Important to Get Your Marketing Funnel Up and Running Quickly
Every prospect that you bring in at the top of that funnel is going to cost you a great deal of money one way or another.
Thus, you must reduce the amount of both prospects and customers who ‘escape’ your business before you have had a chance to maximize your returns from them.
And don’t forget that creating an effective and ultimately profitable sales funnel is something that you only have to do once.
Yes, there is some work involved in testing various landing page formats one against the other and because you need different e-mail messages for all of the different ‘levels’ of your funnel, there is some work to be done creating those outgoing messages as well.
But once it is done, you need do no more than finesse, test and improve various aspects of your system, confident in the knowledge that it is already working extremely well in any event.
However much knowledge of the sales funnels concept you had when you began reading, you now have some basic knowledge about both the theoretical and practical aspects of using sales funnels for maximum profits in your own business.
Simply by setting up your initial sales system as detailed in the previous lessons, you will increase the number of people you convert from prospects into customers. Moreover, each of those customers will become increasingly more profitable as you feed them down your sales funnel too.
You have all the practical knowledge that you need in order to improve the profitability of your business right here in front of you.
Now is as good a time as any to start putting it into action!
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