My $36,000 Mistake
Have you ever made a BIG mistake…I mean a really big mistake that’s cost you a lot of money?
I have. And not just once, but several times. I remember for example the $100,000 I lost on a real estate deal, but that’s another subject entirely.
In internet marketing I’ve been careful. I learned in the beginning to do small tests so my financial risk on any of my ads were low UNTIL I knew something was working or not. Try 3 ads…lose a couple of hundred dollars on two of them, but one works. The winner quickly earns more than the losers in the tests.
But most clients I work with have figured that out. You keep your investments and risks low until something proves it will pay off.
Simple to understand. So let’s talk another issue…that of opportunity cost and conversion.
The #1 issue that still shocks me when I run into it for an experienced online marketer is when they’re not tracking anything.
Yes, that’s right…I said an EXPERIENCED marketer.
When I coach a beginner, that’s understandable. They’re a beginner so you expect them to make some mistakes such as not tracking. But experienced marketers earning a full-time living online still make this mistake all the time.
It’s easy to keep creating new products and finding ways to generate more traffic. That’s why you see me talking so much about the importance of FOCUS and how running multiple frontend items splits your focus.
The most profitable clients I have focus heavily on one primary frontend product – and a strong funnel system to move their visitors and prospects through that funnel. Get the visitor on the list. MAKE THE FIRST SALE of this product. Follow-up with upsells and additional backend sales.
Work on conversion all the way through this process (higher subscriber numbers, more frontend sales, and so on). Make that frontend offer the best deal possible to give your customers the results they’re looking for quickly.
Then pump the traffic through…with PPC, affiliates, and other forms of advertising.
I’ve made the mistake of not having this focus personally many times in my own businesses. This isn’t a lecture for anyone else as much as it is for myself. I get bored too easily with my own projects and continually want to create new ones. That’s my issue and problem, but it’s common for others I work with as well.
You will ALWAYS bore of your project much faster than the market does.
I remember the story of a company that was discussing a new series of ads. The ads made their rounds several times through the executives. They edited them. They added updates. They made changes. And they kept making their rounds.
Eventually one of the executives made a comment to another one that they needed new ads now instead of continually running these. That would be possible, except for the fact the ads never ran in public yet. He was tired of seeing the ads making their rounds inside the company before they were published.
I have that same issue. By the time I publish an ad I’ve often done so many revisions I’m tired of seeing it anymore. But once it’s published, that’s when you really have to pay attention because you need to track and test the results. You need to run split tests of different headlines, photos, and intros.
Only testing a live ad produces the best results possible.
This brings me to my $36,000 mistake. I ran an ad for over a year WITHOUT doing any testing on the sales copy. Just put up the sales copy and let it run. After a year, I had another copywriter (John Carlton), give me some suggestions for test headlines. One of his test headlines was only a MINOR change to the headline.
Yet this little changed boosted sales on that site by over $3,000 a month. One change in the headline meant that much more money every month. All I could think about at the time was how this ad had already been running for over a year, so I lost out on $36,000 in real sales I could have had. No additional traffic needed. Just $36,000 never to be seen again….a big mistake.
Why did I make this mistake?
I simply didn’t take the time to setup a few simple tests for the site. Every time I setup a site I think back to this experience. It keeps the importance of testing in my mind and convinces me to setup the tests needed.
I wonder how much you may be losing right now if you’re not testing.
Sometimes it those simple tests that boost your conversion enough to turn a losing ad into a winner. Or they improve your conversion to the point where it’s a worthwhile promotion for your affiliates. Or they enable you to expand your advertising into directions which weren’t affordable before.
In other words, the REAL KEY to traffic is getting your conversion up to the point where generating traffic simply becomes an investment in the growth of your business. You can afford to buy traffic by the profits you make from your sales.
All traffic has a cost associated to it in either time or money. Your income from the traffic needs to make whatever you’re investing worthwhile to continue the traffic flow.
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13 Responses to “My $36,000 Mistake”
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Wow, that is hell of a money man, 36 000 $, that is around what is my parents’ combined salary the whole year.
However, how to determine what is the optimized ad or advertising campaign. You can test 3, and have 1 winner, but then again, you can make some money with that 1, and invest it in further testing, which eventually outperforms the previous best version.
When does it come an end to testing? I think it’s a good question…
Hi terry,
Reading this article has just kicked my butt into gear on testing one of my sites. I put a site up nearly a year ago selling an ebook. It has done OK, but nothing fantastic.
I think I will create a couple of other sites to test the difference.
Thank you for the advice.
Kind Regards
Jacinta
Terry,
You are right again. Test, test and test.
I remember years ago being an IT programmer and 40% of our effort went into testing. I can’t remember the percentages exactly but it was something like:
Planning/Analysis: 30%
Programming: 30%
Testing: 40%
That’s something we have to take to our Internet businesses.
Great reminder for me.
Thanks.
Andrew
FYI, something is missing here…
“In other words, the REAL KEY to traffic is getting your conversion up to the point where traffic simply because an investment in the growth of your business.”
Davor: The truth is the testing is NEVER done. It just gets to the place where your attention is better spent on other tests. Why do I say it’s never done? Eventually any ad will start tiring (for example after a year or two). Then you need to start testing again to get the response up or even run a totally new offer.
Jacinta: I use this memory to kick my own butt into testing when I’m not doing it.
Andrew: I’d say online testing is even more than the 40% but those are good guidelines to think of.
Alan: You definitely caught an error. I fixed it in the article. THANK YOU!
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Terry,
Great story.
You reminded me of my $30,000 mistake… perhaps I’ll write about that soon.
Ryan
Man, those are some costly mistakes but at least you learned from them. Sometimes people need to make mistakes even if there large mistakes, so they can learn and grow from them. You prob will not be making those kind of mistakes anytime soon. You prob made 10 times that back by learning from them in the first place. Nice post, thanks!
Great story terry….. truly an eye opener…. I think it better we look back a few months in pasta and evaluate the worth of every money that we have spend in advertisement.s
Very good post!
I’ve lost a lot more than $36K and I kick myself in the butt everyday for it. However, I have learned from my mistakes and will not make them again. It is amazing how changing just the slightest little thing can make a world of difference between making a lot of money and making no money.
I say take time to really study what you are doing and how you are doing it. In this internet marketing thing we MUST monitor our results closely. This is especially true when we are just starting out but even more when we get things going.
We tend to become comfortable and think that things will magically happen. These things DONT happen. Trust ME.
Great Post
Blog Marketing Diva
http://www.blogmarketingdiva.com
Hi Terry.
A great lesson that all of us need to re-learn constantly. It’s not even about laziness — it’s about finding a groove or systematic way of applying all the cool stuff we know about making biz work… consistently, and in spite of our brain’s best attempts to lull us into a self-satisfied daze.
Nearly every time I do a consultation, I reflect back on my advice to the client… and realize that everything I just said applies to myself, too. It’s like the shoemaker’s kids going barefoot.
The problem is that testing is something that can be put off. Results will still come in, and there’s a sense that the “heavy lifting” has already been done (getting a website up and working), and any tinkering is just extra work.
It’s not. Time and time again, even testing obvious tweaks can reap huge rewards. Testing radically different approaches can bring in tons of fresh info, too, even if it fails to increase the bottom line.
The great advantage of the Web is the ability to test essentially in real time, for free. A lot of what looks like genius is really just the steady application of smart testing and applying research.
Thanks for the reminder (and the plug).
John Carlton
http://www.john-carlton.com
$36,000? That’s a huge amount of money! Imagine, you lose that amount of money without you actually knowing it. Whenever we enter business, we must always remember to try testing first the most effective strategy before focusing too much on it. Actually, it’s the safest way in order to minimize our cost and maximize our time.
Terry, I really learn some useful tips when reading your articles, there are also very good tips posted in the comments section.