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The Biggest Secret to Running a Successful Online Business

The biggest secret to running a successful online business is to acquire your customers at a profit.

What does this mean?

It means that the money you use to grow your business doesn’t have to be your money.

It has to be your customer’s money.

Unless you have super deep pockets (think Amazon), this is the only real way to grow an online business.

Let’s take an example.

Let’s say you are running an e-commerce website that sells health supplements.

You run an advertising campaign (using Google Adwords/Facebook ads) to attract traffic and customers to your website.

Let’s say you spend Rs.X on your advertising campaign.

And let’s say you earn Y from immediate sales.

It’s a no-brainer that Y-X has to be a +ve figure for you to sustain your business.

If it is, then great for you.

But for a lot of people, that won’t be the case. That’s the reason most businesses shut down.

So what can you do if you are making a loss?


What’s this new strategy?

The strategy is that when you advertise your products/services, don’t create an ad that sells your products at the original price.

Run an ad that is giving a mega discount.

Why? Because of the following reasons:

  1. People love discounts so they are more likely to click on your ads. The more they click, the higher the CTR (click through ratio) of your ad. The more the CTR, the lesser the CPC (cost per click). If all this is sounding like Chinese, then to simply put, the more “seductive” you can make your ad, the lesser you will have to pay. So Rs.X goes down.
  2. People who click through the ad and come on your website are more likely to buy that product because it’s at a discount. Who doesn’t love a discount?

But more conversions doesn’t necessarily mean a higher Rs.Y since you are selling at a discount. But this is where you have to think long term. Right now, your only aim should be to let (Y-X) > Zero , i,e, even if you break even, that’s fine. Even if you do incur a loss but it’s not that huge, that’s also fine. And any profit is a bonus.


Because your real sales are not these first ones.

This initial advertising campaign is not to be run for sales. It has to be run for two very important reasons:

  1. To build your customer list (since visitors will be giving you their e-mail address, which you will ask in exchange for the discount coupon code.)
  2. To be able to run a retargeting advertising campaign later on . A retargeting campaign allows you to show ads to people who visited your website by using the pixel tracking mechanism. For example, if I’m running a Facebook ad, I can install a pixel code given by Facebook on my website, which tracks the visitors and allows me to create ads that can specifically be shown only to people who visited my website. In fact you have seen this type of retargeting everywhere. Haven’t you seen that when you check out a certain product on Amazon, you start seeing Amazon’s ad for that same product everywhere. That’s retargeting or remarketing for you.

Through sending follow-up e-mails to your list and using retargeting, you start to get into your customer’s minds.

That’s the time they start knowing you and trusting you.

And that’s when the repeat sales happen.

And that’s when you make real profit.

The initial profit that you have earned was only to acquire the ability to reach your customers anytime you want.

And even after you make profit, a significant chunk of it has to go back into the starting advertising campaign?

Why? Because that’s what is building your LIST, the lifeline of your business.

So don’t rush and apply for a home or car loan and spend all your profit.

Invest some percentage of it back. Re-investing your profits back to the first step is what makes sure that this cycle keeps going.

This same model can be applied to any business.

The execution and strategies will differ but the concept will remain the same.

Once you do things this way, you will, after practice, start to make every step efficient and then turn this process into a never-ending cycle.

Finding this process is the engine for your business.

Sometimes it’s easy and sometimes it’s not.

But it’s the only thing that separates a business that lasts from the one that does not.

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