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How To Set And Attain Smart Goals For Your eBiz The Way Experts Do It

Proper sales goal setting means to set measurable sales goals for your online business. Take all the mystery (and the hard work) out of this essential exercise by using the simple M=TCVR formula.

This page describes the sales goal setting services I offer and/or recommend to set measurable sales goals. It's the second of the five pillars of my total package of professional services.

  1. How To Build eBiz Web Sites (Web Work)
  2. How To Set Smart eBiz Goals (Goal Setting)
  3. How To Write For eBiz Results (Biz Writing)
  4. How To Manage eBiz Cashflow (Cash Flow)
  5. How To Learn More About eBiz (Training)

The "magic formula" embodies tried and true business basics that have worked for centuries. Those golden principles are still golden whether your business is offline or online.

Although its business principles are ancient, the actual M=TCVR formula is relatively new. It made its first appearance at an online business conference in 2009 in beautiful San Diego.

Now here it is fully explained. So let's get on with it!

Formula Overview

The formula is simplicity itself...

M = T x C x V x R
M = the money you make in dollars per month
T = your site traffic in visitors per month
C = the conversion rate of visitors to buyers/clickers
V = the value to you of the product/ad in dollars
R = the recurring sale factor as a number 1.0 or greater

We've used "per month" in the formula, but you can just as easily use per day, per week, per year or any period of time you're looking at.

Sure, it looks like algebra, but it's really just simple arithmetic.

Three Powerful Ways To Use The Formula

There are three extremely powerful ways to use the formula:

  1. Maintain A Monetization Focus. The formula is simple. It's easy to keep at the forefront of your consciousness. With this formula awareness, you can ensure that everything you do on your website contributes to some aspect of monetization.
  2. Set Specific Objectives. Because the formula works with actual numbers, you can set specific monetization objectives. You can also use the numbers to evaluate whatever aspect of your site you're working on.
  3. Optimize Each Step. Each step involves some uncertainty/unknowns that need to be measured... where the traffic comes from, how it's converting, how different pages perform and so on.

Anyone serious about mastering Internet business cash flow will find that the formula is an indispensable sales goal setting tool.

1. Maintain A Monetization Focus

Create within yourself an atmosphere of constant awareness of each letter of the formula, and what steps you do daily, weekly, monthly, or yearly to realize your website's full monetization potential.

[T] Traffic can be free from search engines and referrals OR it can come at a cost from paid traffic sources. You won't make money if you don't have traffic that you can convert into sales.
[C] Ask yourself if the words and pictures you have from lead capture pages to all content pages build trust with your visitors while inciting them to take the action you want.
[V] How is the page monetizing? What's the value when someone buys or clicks? Combined with the traffic and the conversion rate, will the money you earn justify the effort you're putting in?
[R] The recurring factor, in other words, additional sales beyond the first one is key to making real money. Are you set up for a one-time sale or as the first of a number of sales you can make?

Fully understand the impact of each letter you're working on in every move you make to build your business. In time, you'll find yourself working naturally and maybe even effortlessly toward effective monetization.

You'll find that the sales goal setting you MUST do will materialize more consistently, and possibly in ways you had not thought of.

2. Set Specific Objectives

Being aware is one thing. Setting specific monetization objectives is another. Having a specific number constantly staring back at us is a great motivator. We'll keep working at it until we have the satisfaction of attaining it.

Then, once reached, we'll set another objective. It's human nature. Use the formula to set a specific sales goal for yourself.

Formula Example 1

Here's a simple application of the formula for setting measurable sales goals. How much would you be making per month if you had these values for T, C, V and R?

T = 6,000 visitors per month
C = .01 (one of every 100 visitors buys)
V = $20 commission on every sale
R = 1.0 because each sale is a one-time sale

Simply apply the formula to calculate how much you would make per month:

M = T x C x V x R
M = 6,000 x .01 x $20 x 1.0 = $1,200 per month

Formula Example 2

Now let's imagine you wanted to earn more than $1,200 a month. Let's say you wanted to earn $5,000 a month. In other words:

M = $5,000 per month
T = the number of visitors per month
C = the fraction of those visitors who buy
V = the dollar value of what visitors buy
R = the factor taking into account repeat buying

So, if you had a product worth $50 to you for every sale, it was a one-time sale, and 1% of your visitors bought, here's what the numbers would look like when you apply the formula with $5,000 a month as your target.

M = T x C x V x R = $5,000 per month
T = what we want to know
C = 0.01
V = $50
R = 1.0


T = M/(CVR) = 5000/(.01 x 50 x 1.0) = 10,000 visitors per month

This is a great example of using the formula for practical, measurable sales goal setting.

Formula Example 3

Let's look at an example of making money with AdSense. The numbers are:

T = 10,000 visitors per month
C = .05 (five of every 100 visitors click)
V = $0.60 average value per click
R = 1.0 because each click is a one-time click

Simply apply the formula to calculate how much you would make per month:

M = T x C x V x R
M = 10,000 x .05 x $0.60 x 1.0 = $300 per month

This is another great example of using the formula to set sales goals you can work with.

Use the simple math to monitor your progress. Identify your business's strengths and weaknesses. Take corrective actions. Become more efficient. Do some legitimate sales goal setting!

3. Optimize Each Step

A key part of achieving a goal you've set is to optimize every element that contributes to it. This involves measuring and testing everything.

See this article on LinkedIn for a brief introduction to the subject of testing and why you must do it.

More On Sales Goal Setting

Learn more about sales goal setting...

As much as I try to get the right information on the page, it's possible that it's not specific enough for YOUR purposes. So once again, contact me if you have any questions or comments.