It’s not quite as easy as the title makes it sound, but bear with me, this article will explain the three steps that are the foundation of every Internet business, why so many people go wrong and give you some realizations that might just be the key to take your Internet business to the next level…
I’ve been studying resources lately designed to teach Internet business, but not just introductory materials, content that goes beyond beginners and is intended to take you to making making millions online.
In my case I’m interested in advanced topics that I can apply to what I do and fill my current knowledge gaps to take the next step forwards. While hunting for those elusive gold nugget ideas I invariably scan the introductory materials and learn with interest how this particular person or organization cover the basics - how they suggest you get traffic and make sales.
My studies have led me to the conclusion that Internet business is actually quite easy. Explained in simple terms (which I will do in a moment), the structure of a successful online enterprise is comprised of a few components, that when linked together can deliver hundreds, thousands and even millions of dollars in online profits.
Easy As 1-2-3
While we all have different ways of presenting what we do and the tiny details of getting a result vary, most Internet marketing experts teach the same few principles, which are in fact no different from what direct marketers have been doing and teaching for decades.
It goes something like this…
Step 1: Traffic
All online business models rely on traffic of some shape or form, and it’s here where I’m always curious to find what others do to drive attention to their business, as I’m sure you are too. In almost all cases a combination of one, two or all three of the following techniques are the main traffic drivers that fuel the business.
Pay Per Click: Buying traffic from Google’s AdWords is recommended as the quickest, but least forgiving traffic tool. Get this right and you get thousands of visitors instantly at a cost lower than the income they return. Get this wrong and you lose money. It’s a harsh learning curve, but for the winners the pay-off is significant.
Search Engine Optimization: Again Google is a significant component of this traffic source, delivering thousands of visitors to websites that rank well. I was tempted to call this traffic method “content marketing” but let’s keep this as simple as possible. For those who are diligent and learn how to leverage content, search engines offer a steady stream of free traffic - it can just take a while to get it flowing.
Affiliates: Affiliate marketing is the most underutilized traffic source for many Internet businesses and that’s likely because it takes more than mechanical mechanisms to make it work. Relationships are required, but when you get the elements right presenting a winning offer to affiliates results is a huge traffic windfall for you. Affiliate traffic is usually quality traffic, thus has the highest conversion rate and best of all - it only costs you money when you make money, so it’s a low-risk investment.
Beyond these three core traffic techniques there are many other methods that can be used, but if you look under the hood of most Internet businesses you will find that one or two or all three techniques above account for the big chunk of converting traffic.
What Is Yaro’s Best Source of Traffic?
In case you are wondering, my best source of traffic is affiliates followed by search engines. For most blogs search engines will account for the largest chunk and most dependable source of traffic, since good blogs are content driven and search engines love content.
Step 2: Make A Sale
Once traffic is flowing, the next condition required for a profitable business is to make that first sale. A targeted front end offer is the usual suggestion, in most cases a sub-$50 priced information product, although a physical product can work too (many late night TV infomercials use a loss-making front end offer of a physical product that is used to identify and open communication with customers).
The purpose of the front end product is to generate a customer. Profit does not come from sales of the front end product in most cases (it’s hard to get rich off a $27 ebook), rather it is raising the per customer value that results in the big gains (more on this at step 3).
The front end product is important because it opens the door to a potentially long term relationship, which when done right, will result in benefits for the company and the customer. The first sale also creates the window of opportunity for step 3 - upsells and back-end offers.
Step 3: Sell More With A Bigger Margin
The core concept of step 3 is that it is always easier to convince someone who is the process of buying or who has bought previously, to purchase more.
The front end offer at step 2 creates the buying condition and then at step 3, upsells, downsells and cross-sells of digital items, continuity products, coaching, consulting, physical products, seminars, conferences and anything you can come up with that is relevant and valuable to your customers, is where the profit comes from.
While not every customer will take advantage of back-end offers you make, the strategy relies only on small segments of your customers buying your upsells and back-end offers. The margins at this point however are significant, so one back-end sale can result in as much profit as 10, 100 or even 1,000 front end orders.
As I talk about in the Conversion Blogging Video and break down in some depth in the Sales Funnel 4-Part Article Series, the idea here is to filter down to a very small group of people, a subset of all the traffic you generate, who buy everything you offer (or at least something with a high profit margin). It’s these people who benefit the most from your business, but it takes the above three step process to attract and filter down to them.
When you get this process set-up, you can determine how much each customer to your site is worth. You know how much traffic you get, you know how many of them buy your front end offer depending on what source of traffic they come from and you know how many of them buy back-end products and upsells. From there you can calculate how much each customer is worth, on average, to your business.
Do You Know Your Customer Value?
Rich Schefren hammers home the concept of Customer Value in his Business Growth System. He really needed to get this principle right because long before he was an Internet business guru, he had physical real world businesses (an hypnosis company and a boutique fashion store in Manhattan, New York).
When you run real world stores your costs are so high that you have to get your numbers right. If you don’t, you lose money - lots of it. In the Internet world things are more forgiving because sunk costs are so much lower, however that doesn’t mean customer value is any less important.
Internet business owners don’t suffer the consequences of not focusing on the key customer metric, instead we can flounder around, test and fail and walk away perhaps bitter and frustrated, but it doesn’t cost us much more than our time. If you were investing ten or twenty or even hundreds of thousands into your business, you would know your numbers from the start.
Raising Customer Value
If you knew, despite selling a $27 front end ebook, that thanks to a strategically timed and optimized followup process, that each customer you convert is eventually worth $300 to your business, could you use that to your advantage?
Of course you could!
You could spend more on pay per click advertising. You could hire search engine and content development professionals. You can pay more money to affiliates. All these things drive more people into your business, result in a huge strategic advantage over your competitors and fuel massive profit growth.
If you have been keeping up with recent launches in the Internet marketing space, nearly all the leading players have been implementing this process recently, and that’s no coincidence. These guys (and a handful of girls) are testing, sharing results and then replicating the process and of course - promoting each other’s launches each time they have something new.
As I outlined above in the three steps, it’s not a difficult concept to grasp once you spend some time studying Internet marketing (and perhaps experiencing the process as a customer of another marketer). However so many things can hinder the outcome that very few get far enough along to realize the million dollar result.
If It Is So Easy - Why Isn’t Everyone Doing It?
The problems lie in the details. While the explanation I provided in this article may present a process that is conceptually easy enough to understand once you get used to the basics of Internet marketing, pulling it off is difficult.
Most fail at step one - traffic. Despite best intentions and some initial hard work, people are sporadic workers at best, and without some kind of immediate gratification, give up long before results come.
Worse still, many begin an Internet business with existing hindrances that plague their ability to perform - things like mortgages, full time jobs, families to support, ingrained self defeating belief systems, unrealistic expectations, poor work habits, an inability to let go of control or hire help when required, inferiority complexes, low self esteem or all manner of roadblocks can get in the way.
For those who persist long enough minor results come there way, yet after such a long journey and so much effort, they are disappointed and discouraged - they expected to be making better money by now.
Take It To The Next Level
Hard workers and people with talent often get the traffic part right and might even make some money with a front end offer or selling affiliate products, but they are working at full steam just to maintain that level. The idea of creating more product to sell for upsells and back-ends, creating sales pages, recruiting affiliates and doing even more seems impossible - the current workload is suffocating enough.
I can vouch for this because, while I’m successful to a degree (certainly above average), I am still not realizing a lot of potential - in fact I’d say I’m only realizing 10% of what I could achieve if I took the next step with my own business.
The advantage I have is I don’t see it as impossible to take the next step, nor do I feel that I am suffocating because I’ve built my business based on freedom before money. However, I do face a choice as to where my business is going to go next.
What Tiny Details Hold You Back?
It’s inevitable if I want my business to grow that I will need to make changes. The greatest potential for growth in any business is removing those things that hold it back, that constrain it. This is such a big issue that Rich Schefren decided to focus his entire new report just on constraints (I’ll get you the download link for the report at the end of this article).
As I stated earlier, it’s the details that stop people from succeeding at all points of the 3 step system for a successful Internet business. In my case, I’m held back somewhere around the step 2 and 3 area, although there is certainly potential to do a lot more at step 1 as well.
Here’s a list of the constraints holding me back -
- Lack of product to sell: I’ve got a bunch of products that are near complete or merely ideas in my head to be created that I just never get around to implementing. As a result, I don’t have anything close to a fully developed sales funnel with upsells and a back-end.
- No sales process for new products: Even with products ready to go, I can’t sell them until I have a sales page up and running with my shopping cart to take payment and deliver the goods. Plus you need autoresponders to keep the marketing system going for each new product and let’s not forget the whole “launch process” for each new product.
- Maintenance of current systems: I spend most of my time keeping the status quo going and there’s very little work on new projects. I blog, support my paying students, promote affiliate products and fix things when they break.
- I’m traveling: This one is understandable and will change soon enough, but it’s a constraint now because the little details (again with the details!) while traveling suck time too.
- I’m holding myself back: Ultimately, as a big picture answer - I need to get a whole lot of stuff done that I cannot realistic do myself - I need the help of other people.
I could break each point above into more minute details, all the tiny things that need to get done that constrain my results, but I think you get my point.
Now, how about you?
Every business owner should be able to sit down and relate a series of constraints that hold them back, based on where they currently are with their business and where they want to go next.
I suggest right now you take a look at what you focus on with your business, what the next step is to achieve your next immediate goal and what’s holding you back from getting it done.
Care to share your constraint?
If you are brave - take a few minutes to leave a comment reply to this article and list your present constraints, where you currently sit in the 3-step Internet business system and what needs to get done next.
You Need Awareness Followed By Action
Thankfully, just be reading this article to this point and reflecting on your own business situation you are getting closer to figuring out what is stopping you from successfully implement the oh-so-easy 3-step Internet business plan.
Here’s a process you can go through next to keep the momentum going -
- Become aware of the need for change
- Determine what problem has to be solved next
- Isolate the first step required to move towards solving the problem
- Collect the required resources to take that first step
- Execute
Rinse and repeat this to remove every constraint you have and you will be a millionaire. It’s that easy 
.
Need More Help Dealing With Your Constraints?
Rich Schefren has just published his latest report - The Uncertainty Syndrome - which focuses specifically on the idea that constraints are what hold us back from succeeding at business to the level we desire.
If you like the ideas discussed in this article you will love his report. You can grab it here for free -
Download the Uncertainty Syndrome Report
What’s Next?
As always, I’ll continue to reveal my entrepreneur’s journey here on this blog as I attempt to deal with my constraints and take the next step with my business.
Whenever possible I’ll report back to you what I’m up to and my results, so make sure if you haven’t already that you -
- Subscribe to my RSS feed
- Join my email newsletter
- And if you are Twitter use, follow my Twitter Feed
Yaro Starak
Taking The Next Step
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Yaro! You are awesome. I just signed up for your mastermind program, This post is exactly what 99% of beginning bloggers deal with, your #1 is the main problem for 100% of bloggers, Great point!
For a blog it is a little different. Getting traffic is one thing, getting repeat traffic is what you are really after.
When you sell something, you want people to come to your site and buy something. When you have a blog, you want people to come to your site, read and enjoy, then come back and read again.
I personally think blog traffic is a lot harder than product selling traffic.
Let’s put it this way, as long as you want traffic, you need content. Yes, it is true you can do PPC campaign and SEO, but when competitor comes…you need to keep up as well.
I use to do SEO for my affiliate sales, but I still found that is none ending contest between affiliates!
You need loyalty customer who will buy from you again and again, that’s where email marketing is important, but blog gives you both…
You get search engine traffic, you build relationship with reader and you sell to them over and over again!
I don’t think there is any “easy” way to build traffic, unless you have your own product and affiliates army to sell for you!
I guess everything is difficult at the beginning, once you get the wheel rolling, it’ll be much easier to roll on.
Don’t worry about getting traffic;)
take baby steps… & enjoy the blogging process
My blog was a series of experiments that have somehow turned out well:)
My initial intention was to start a blog about travel, food, and product reviews - to earn revenue via advertising (Google Adsense, sponsored advertising, and freebies, of course!)
Apart from blogging, I’m also doing part-time MBA studies & work full-time in the PR/Sales/Marketing field. So, I don’t have as much time for blog maintenance compared to a full-tim blogger, and thus - ad revenues did not flow in as quickly as I had hoped. But the great thing is
:) 
, through participation in social networking, Google Groups, and comments posting, the blog has turned into a launch pad for occasional freelance projects with more immediate benefits 
;)
You can try doing that too!
Hi Yaro.
Still going thru your blog course, and applying things as I go.
As far as constraints go, I have most of the ones you mentioned above, along with health issues just to make things interesting…but after a deserved vacation, I started to follow thru with my plans to implement two other blogs and eventually get around to monitize the both of them.
And of course, I agree with your # problem to most bloggers ( beginner or not ) Traffic.
Traffic is king, and leads to everything else, and for me with my blog being a bit more than a year old, it is still my major problem to deal with.
Lew
I think my major constraint is getting my blog out there so I can get more traffic. I’m getting some but not nearly enough to monetize my blog. Sometimes I’m just bewildered as to how to go about getting past this hump. I’m commenting on blogs similar to mine and in forums and this is helping, but it’s just slow going. I guess I just need to take a more aggressive proactive approach. Going forward, there are some site improvements I need to address and I’m working on making my content better.
I’m Brave, so I’ll tell you my challenges.
I’m a website developer so the technical aspects don’t phase me. I’m not held back by time because I work very hard and long hours - daytime is for web work, evening is my blogging time.
I don’t have the traffic at the moment so that is a major limiting factor. No traffic means I don’t have a lot of the other things in place either because I’m trying to grow readership, for example I don’t have my autoresponder series of follow up emails set up yet as my focus is elsewhere.
But… and while I realised I should… I don’t have the funds to outsource which could help me solve some of my issues.
I think that’s a problem that most will face, so until the first trickle of cash comes in it’s difficult to really make your blog fly. I think for many the growth is a steady analogue curve which becomes a logarithmic jump once all the bits come together. It sounds like you Yaro are at the base of a logarithmic jump (and I wish you well). I think most of us will emulate your journey and probably in the same timescale and I also suspect that you knew most of what you have just written before but you hadn’t reached your tipping point yet.
So as you say in your post knowing what you have to do and being able to do it are two very different things, but I firmly believe that when it’s right it will happen.
Keep these posts coming Yaro - I’m looking forward to your Stella rise!
I hear you. I am in the same boat. I wish I had more money to spend on my Internet Business, but when it comes down to it, I don’t. I have some that use to on my proven money making methods, but when it comes to money for my blogs or new projects, I just don’t have it.
Great article! Why is it we never hear about you or see you at these big blog events John and Jeremy are at?
It would have been great to see you on the big money bloggers panel at IzeaFest.
I’ve been invited to a few of them Steven, but most of the time while in Australia I decline. It’s a long way to go and as much as I like traveling, I’m not a big fan of long flights for only one reason.
Maybe if something in Europe comes up in October or November I will make it as I’m coming through on my way back to Oz.
I was hoping to see you at IzeaFest as well, but figured with you living on the bottom of the planet, you might not have wanted to spend all that travel time. Flying has become such a chore, even for short flights.
First of all, Ian, I feel you. And I think your description of Yaro being at the edge of a logarithmic jump was brilliant.
I’ll be brave, too.
I just started my blog and designed my partner’s blog over the past couple of weeks. I have lots of ideas and the education available has been fabulous, but my constraints are as follows:
1) A full time job. Everyone who has one knows how much physical and mental space that takes up.
2) My partner was laid off Monday, for the second time this year. We NEED that income. So. Stress. Financial, emotional, and the need to provide emotional support to another.
My company is faltering, as well - I don’t know if I will have a job next month, or the month after that, or by 2009. It’s amazing the mental and creative space that financial stress takes up, and it makes you want to hurry, hurry, HURRY instead of being methodical. Getting foreclosed could be very distracting. Yes, I’m in the U.S. I’m working toward my freedom, but my wings are still wet and the nest is crumbling beneath me.
3) Self-doubt. What I really love is marketing. I specialized in marketing in my degree program, and have studied sales and marketing throughout my career - yet it is such a competitive field. Yep. Self-doubt. Causes analysis paralysis.
4) Cash constraints - see item #2.
I’m in the content-building stage, and I need to find that first sub-$50 affiliate product to cut my teeth on.
Despite the layoff, I’m still going to find a way to pay for and complete my final four months of Blog Mastermind!
Great to see a great blog like yours. I like what you say and it is amazing how many people are struggling to get their businesses on the go. Thanks for great content!
Yaro!!!
This is exactly my problem at the moment and you have given me so much to think about. I am just in the process of creating my first front end product but I have no idea yet what to do for the back end because I feel like I don’t have enough skills to create a back end product.
However, I will keep pondering and keep working on it. Because all I need to make to work full time online is $30,000/year which is not a lot but that covers all my expenses. So if I can sell 30 backend products each year for $1,000 then I will be laughing
Ryan
Great info Yaro, thank you, it reminded me of Dr. Goldratt’s Theory of Constraints.
I think our biggest constraint is converting traffic to conversions as customers need to send in a physically signed form.
Often people forget or don’t bother when they are no longer in that frame of mind. Any suggestions to overcome this?
Thanks
David
I really like your articles, they are simple and do help to get you thinking the right way.
I also agree with the what you discuss in this article. A lot of it translates well to life in general. I think the majority of us get into a mind set of “its to hard” or “I’m not unique enough”.
If you write about what you like, and enjoy the process the rest is a bonus.
Great article! I think that traffic is #1 in driving sales and seach engine optimization is key as well. The step by step has been very helpful and will be a great incentive for launching my own intenet business model.
Thanks for all the awesome advice! Having the step by step approach is very helpful.
Sarah Smith
I definitely identify with what you have to say in this article Yaro. I’ve been in internet marketing since January and have been able to maintain a consistent level of income since around May. I too have sooo many ideas that can work.
My main problem that has been holding me back is spreading myself too thin with what I’m doing right now. I have a full time job that seems more than full time, and what I do online is pretty much part time. It’s great that I’m able to make money part time, but there’s so much more that can be done.
I too have a few products and websites that are all partially developed. I think it’s better to focus on one and building it so that it has what it needs, and then add on one at a time.
Thanks for the article. Gives me more to think about.
Hi Yarro,
Thanks for a great article, and thanks for your own honesty, I can resonate with a lot of your issues myself.
I have specialised in using Facebook as a marketing tool, having spent up to 8 hours a day on it for several months I am considered by many of my friends as an expert. I initially built up my blog on a blogger platform and was getting good traffic and building my reputation. Only later did I realise that while my alexa rank had risen to under 300,000 I wasn’t benefiting from this at all. I have since switched to wordpress and have gone through a whole new learning curve.
I have been creating my own front end product for several months now, a facebook advanced strategies guide, most of it is finished I am just stuck on the presentation and repurposing the content, I want to create powerpoints and mp3’s to include in the package.
My main constraint is finding the time to just buckle down and get everything finished. I spend most of my time writing new articles and maintaining my current connections.
I have built up a small list of optins from my blog and from the first two chapters of my book that I have been giving away for free. I haven’t spent the time to create an automated followup sequence on my autoresponder so many of these prospects might now be a lot colder than they were when they first signed up.
I spend a lot of my time developing relatiosnhips and helping people in my online communities, while this is important it means I am not focussing on the areas that are going to bring the most profit.
I have some very good connections and solid relationships with some great marketers who have agreed to help promote me. I just need to get everything finished so I can really take advantage of all the potential I am not fully utilising.
Thanks again for sharing, I love Rich’s work, I am in the middle of writing my own analysis of his latest report.
Ian David Chapman
First of all, thanks for the concise and clear overview of the whole process and philosophy of internet marketing. As you drift around various blogs, you see people promoting this or that product, and hear that they’re coining it, so jump to the conclusion that all you have to do to make millions is promote a few affiliate products here and there, join up with some advertising networks, then sit back and wait for the cash to roll in. As you’ve shown here, there’s a lot more strategy behind the scenes.
Constraints? Well, for me that’s easy - just got started, so traffic, content and time. I know what I have to do for the next x number of months - no difficult decisions to make really, just get down and do the graft. As you get further down the road though, I think one faces more difficult, strategic decisions like the ones you’ve mentioned, and if you’re not careful all the conflicting demands can keep you more or less standing still.
people are sporadic workers at best
That’s my problem in a nutshell … I have terrible trouble focusing, and I find it hard not to turn aside to look at a different “bright, shiny thing” over on another screen … and that’s it, the moment is lost.
This can best be described as a quality crash-course. The whole information can be digested in less than 10minutes, but it will take years to exhaust the principles outlined.
Man, you’re getting better. Keep up the good work.
I’d have to say I suffer from most of the constraints listed also. Full time job and family take a lot of time, also the full time job is a little shaky so there’s that whole stress like a previous comment mentioned.
All that being said I’m still moving forward with some online ventures. Need to develop/find some sort of product to offer and of course build some content in the hopes of finding some of that elusive traffic.
You are so true. There are a lot of details involved in just driving traffic. And that can be very discouraging if people are in the wrong mindset from the start.
I have a nice little business going and my blog simply supports it.
Heck of an article. You shined a light on a lot of details that usually go noticed until after you start the business.
Haha, wow. Great article, seriously. It’s for stuff like this I keep coming back.
My biggest problem, by far, is my project ADD. It is very hard for me to focus on a project for very long before I lose attention and want to launch another.
Great article, like usual.
Dear Yaro Starak,
I know you a lot, I have read and heard your creations, but this is the first time I am communicating from my side in a significant manner.
Giving away a free product, selling a front end and then a high profit back end is the path of a sale of an information product. You may have adopted this from Eben Pagan’s ‘moving the free line’ concept, but I am not sure.
Rich already talked about constraints in his audio conference with Internet gurus (including you) and it is good that you brushed up that concept again a little bit.
My Constraint:
I can’t focus on one project. While I am working on one, a ‘BIG idea’ pops up into my mind and I start registering a domain and hosting a website for it, work on it for 2-3 days and leave it (abandon!). I have registered nearly 50 - 60 domains for such great ideas and all the money and if it had been put into one main project, I would have been making thousands per month with little or no work.
I need to clean the clutter for clarity and focus. I guess many IMers need to do this.
Success,
Deepak
WOW! Yaro this is another great blog post, Really valuable stuff thanks I appreciate you big time.
Thanks’
Albert
Lovely stuff Yaro as always you have nailed it right on the head. Am already member of your mastermind program and you are doing great
Yep - I’m a brave one too. First and foremost it’s “write, write, write” and then it’s “traffic, traffic, traffic”. I think my biggest constraint is impatience. I too have day job that seems to want my time. I’m staying focus, listening to the blog mastermind daily, have outsourced some of the technical work, and am writing content almost as fast I can. I believe it will come together, but I’m impatient and want it NOW. That gets in my way because it gives the little negative voice living inside my head the opportunity to tell me it’s not working.
My strategy - make Yaro’s voice louder than the little negative one in my head. Thanks for keeping it so real….
Thank you again, Yaro.
It seems you are always a day ahead of my production.
This very topic is
to be discussed this evening Thursday, September 18 on the Beginners Marketing Class Talk Show.
I hope our presentation will be as eloquent.
I have evolved to a simple 3 Major Accomplishment Day over the past 50 years in business. And I have developed and represented consumable products, that do not necessitate the constant re-invention of something new.
And since we have always emphasized relationship marketing, it is comfortable to have client back for 4 plus decades.
Of course, our modest Life Style does not require Large Volume.
I honor your intelligence and skills at communication and am referring you often. You should be a primary resource, FIRST, for anyone desiring the formation of a REAL business.
Yaro - great stuff! This is a very simple 3-part process for building a successful business online indeed.
I think you’re right that traffic is very important. But it seems the biggest problem aspiring web marketers have lies mostly in step two. The real key, after all, is to have something of VALUE to exchange for money.
From there, the build towards the back end is a no-brainer!
-Jason Clegg
Yaro,
Great read, but I feel as though much of your audience probably has yet to launch their new online business. With that being said - the first thing to consider is ACTION. Stop the procrastination and act on your ambitions. From there, Rich’s book would come in handy.
Sparky