Why Your Best Keywords May Not Be Copyright 2004 by Kevin Bidwell All-In-One-Business.com Pay-Per-Click advertising is one of the very best ways to quickly and (often) cheaply get the word out about your business. A new campaign can be "live" in just a couple hours and can bring in thousands of visitors and sales in its first week. It can also drain your bank account like a bandit. The key to making your PPC campaign is simple: Only bid on keywords that will make you money. Here’s how you can do that: Step One: Know the Value of a Customer While some people use a longer time line, I use a 12 month average to figure the value of a customer. I calculate how many different customers I have received over the last 12 months and divide that by the total net profit I received from those customers’ purchases. That gives me the average 12 month value of a customer. If you are new and just starting out, the 12 month value of a customer will have to be an educated guess-take the net profit per sale and use that figure. For newsletter publishers who only sell affiliate products, use a figure of $5 to $10 per year per "opened" email. If you don’t know what an "open rate" is or how to track it, I have placed a tutorial here: http://www.All-In-One-Business.com/openrate For this article, let’s pretend we are selling a monthly membership at $17 per month where the "average" sale results in $17 and the average person keeps the subscription for 8 months. $ 17 x 8 months is $136 gross income per customer. If out of that $17 our net profit is $10, then our one year profit per customer would be $80: $10 x 8 months is $10 net profit per customer. Once you know the net profit per customer for a year, then you are ready for step two. Step Two: Know How Much You Are Willing to Pay Customer We typically base our advertising on the 1 year value of a *new subscriber* rather than a customer, since we often use a two-step method of advertising our products-we first get people to a free report then advertise our products to them. I am willing to pay up to 50% of my 1 year value per subscriber in order to get them on my list. In most cases, 50% of net 1 year value of a customer is a good figure to use. So, based on our "subscription" example above, I would be willing to spend 50% of $80 to get the customer: $40. In my next article I will show you exactly how to use these figures to bid on the exact words that will give you the greatest return.

PREVIOUS PAGE | TABLE OF CONTENTS | NEXT PAGE Click here to learn more about The SUCCESS SECRETS COURSE Your Key to Online Success