Should I Spend Money On Generating Traffic And Leads?
Everybody who is doing Home Business is confronted many times with the choice whether or not to spend money on buying extra traffic or leads in order to speed up or increase their sales. And even though it is not too difficult to decide when to spend money it is still not an easy decision. First of all you need to decide what this investment will bring you in terms of sales compared to its costs. This is difficult, especially when you don¡¯t have any experience to base your assumptions on. Still, it is vital to think about this and make an estimate. The best way to tackle this is to break your assumptions down in small pieces in order to work out how many sales you are going to generate.
For example, you buy 25.000 visitors to your webpage for US$ 100,-. You assume that this service will not deliver you a warm market. Therefore the chance is significant that people who will visit your page are not very interested. So assume that only 1 out of 5.
000 visitors are actually interested. Assume also that 1 out of 4 who is interested will buy one product of US$ 50,-. In this case you will get 25.000 visitors divided by 5.000 are 5 people who are actually interested. Out of those 5 you will get 1,25 orders of US$ 50,- which equals US$ 62,50 of sales. As this service costs US$ 100,- you may decide not to purchase it. But even though only 1,25 sales are generated all the people who visited your webpage may bring in future sales. So you could as yourself what the chances are that some of these visitors come back in the future and buy something or that they tell somebody else about your webpage. Chances are slim, but this is just to illustrate that you need to think about several scenarios.
Secondly, you need to decide if you have the budget to spend that much money. Even if you think you can turn a profit, they are based on your assumptions. Even worse, many times we decide those purchases based on the sales pitch of the service you buy. So, when you have a certain budget, and it is very wise to have one, try to stick to it. That doesn¡¯t mean you can never change your budget. Actually, this should be done periodically. In the end, you don¡¯t want to take too much risk and not being able to pay your other bills just because your assumption were too optimistic. Thirdly, are you willing to take the risk of investing money at all? But, any kind of business will bring some kind of risk. The question is therefore not if you need to take some risk, but is the risk bearable to you. Don¡¯t buy when it takes up to 50% of your total budget.
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