The 3 Key Metrics You MUST Know To Achieve Maximum Profits

When it comes to “knowing your numbers”, there are a lot of different metrics you should know.

However, every business is different and should rely on different numbers to help them determine which traffic source is best, which media to enter next, etc…. so this article is only going to talk about the top THREE which applies to every single business in the world.

The first metric is one that very few people ever consider. They take a look at conversion rates, CTR’s and other numbers but don’t ever consider…

Value Per Visitor

You want to know how much each VISITOR is worth to your website. Just divide the number of visitors you had over the past month/year/ or week… by the amount of money you made.
For example if your site had 20,000 visitors last month and you made $20,000… that’s an average of $1 per visitor.

You can also break it down into segments such as traffic source, page, gender, age, etc.

The next metric is yet another one that VERY few people take into consideration.

Lifetime Customer Value

When it comes to this number, there are TWO very important factors to consider.

First, you want to know how long it takes for the average person to complete his or her buying cycle. Then you figure out how much they spent during that time period.

The result is your customer lifetime value.

Next you figure out how to use this information. The point of knowing it is so you know how much you can spend to acquire a new customer.

So you have to look at 3 things. One is how much you can spend for a new customer. Two is how much of a margin you want to have. Three is how quickly you want that investment returned.

This is going to vary from business to business… ranging from 1-2 months to several years.

Cost Per Conversion

This number is crucial because after breaking it down by traffic source, you can tell which traffic channels are profitable, and which aren’t!

For example if you find out that your customer value after 6 months is $100… but you’re spending an average of $95 to acquire that customer… you obviously need to change something.

Sure, you’re profitable… but hardly. On the other hand, you may have one traffic source giving you a cost per conversion of $20, while another is at $90. Which would you choose?
Obviously, you want the traffic source with the lowest cost per conversion.

What you do next is analyze those visitors in-depth, and try to seek out other similar traffic sources.

Now… don’t let this pass you by. The only way to grow your business is knowing these numbers and TAKING ACTION.

About the Author Jeremy Reeves

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