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8 June 2011 0 Comments

Conversion Confidence Intervals

Almost all online campaigns need to be optimized. While there are a number of software packages available to assist you with this, most beginning internet marketers do it manually.

One of the most common questions is, “When do you know whether a test was successful or not?”

The precise answer is, “It depends.”

Obviously, the more data you collect, the more information you’ll have and the better decisions you can make.

But this is expensive.

You can run very short tests to save money, but the chances you’ll make bad decisions increases considerably.

There is a free online tool you can use to get a better feel for the statistical significance of a test you run. In other words, it will estimate the range of your result, allowing you to decide if it makes sense to continue a test.

The website is the Exact Binomial and Poisson Confidence Intervals page. (Don’t let the title scare you. It’s easy to use.)

Here is how you can use the page to determine whether you should stop or continue a test.

First, scroll to the bottom of the page and change the confidence interval from 95 to 90%. While 95% might be good for scientific research, it is just too expensive for most of the internet marketing you’ll be doing. (A 90% confidence interval means you’ll only be wrong about your decision 1 time out of 10.)

Binomial Confidence Interval

The actual calculation is easy. Go to the Binomial Confidence Interval section of the page. Enter the number of conversions you got from your landing pages in the top box, and the number of visitors to your page in the bottom box. Then click compute.

You’ll get back the exact ratio (in this case, 0.030, or 30%). The important numbers are below that. They represent the upper and lower estimate of how your page actually converts.

In this case, if you get 3 conversions after 100 visitors, your actual conversion may be as low as 0.8% and as high as 7.6%.

Binomial Confidence

So, should you continue your test? It depends!

If you’ve calculated an acceptable ROI at 4% conversion, it totally makes sense to continue the test. On the other hand, if you need a 7% conversion for an acceptable ROI, it probably makes sense to stop the test.

Have any questions? Leave them in the comments and I’ll get back to you!

1 May 2011 0 Comments

Task Analysis – Creating Unstoppable Success for Your Business

I’ve been fortunate to have attended the last two System Seminars on Internet marketing. Ken McCarthy, who puts on the seminar, was one of the original pioneers to promote the opportunity of marketing on-line. He sponsored the first conference on the subject in 1994 with the cofounder of Netscape Mark Andreessen.

I attended my first system seminar in 2010, held in Chicago, as well as in 2011, when it was held in New York City. (The 2011 event was the last System Seminar open to the public!)

In the year between the two seminars, I participated in the weekly Smart Beginners coaching course. This training takes you, hands-on, through the basics of Internet marketing. We covered such topics as WordPress blogs, article publishing, auto responders, getting traffic, etc.

Towards the end of the year, it became clear to me that one of the largest barriers for somebody trying to market online is not with learning any of the parts or pieces. Rather, the challenge is putting all the parts and pieces together into a cohesive whole that works. Or, if things don’t work, figuring out what peace needs to be strengthened.

I volunteered one Saturday morning to take the class through a method that I use to simplify work processes. The method is generically called hierarchal function analysis, but it also goes by different names such as task analysis. While there are a number of different flavors of the method , the basic idea is that you link together what you want to accomplish with why you are doing it, and then specify how to do it. By linking activity to purpose, and purpose to activity, you ensure the most effective use of your time as well as identify those areas in your process that need to be strengthened.

I’m posting the video below in its unedited form so that others can benefit from this training. You can download the Task Analysis slides here.

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