Start at the end and ask yourself the following question

[shaownhasan]

On my blog, for example, I normally create a process that brings traffic like this:

People Read What I Write (A Review)

They click on the “Visit site” button

They are redirected to the site of the product I reviewed (followed by affiliate cookies)

They land on the landing page and connect with the reviewed company

If they are interested, they create an account and become their customers.

My site is rewarded with an affiliate commission

(for more information you can read my post How to earn money with a blog using affiliations and SEO )

It's a simple 6-step process that anyone could put together in a few days of why vnpay database is important for marketing work. But the hard part is figuring out how much of the profit to attribute to the content that brought the reader to the product I reviewed.

In other words, if my affiliate commission is worth 50 Euros (made up number), what monetary value can I attribute to my content? What is the ROI?

To understand this, you need to establish what the value of a visitor is , and to do this you have to proceed backwards, like a crab.


“What is the monetary value of each individual visitor who becomes a customer – the one that earned me the commission?”

We are talking about Lifetime Value (LTV) , a concept as old as the hills, but often overlooked, that everyone should deal with if they run a profitable website. In other words, you should know how much money a visitor spends while they are your customer.

How to Calculate a Customer's Lifetime Value
We could also call it "average spending" or "average purchase value", referring to the "lifetime" as the duration of the customer relationship. It is sufficient to analyze past data and see how much a certain customer has spent on average with you. Then take this sum and multiply it by how many times on average the sale is repeated. You will have as a result the Lifetime Value.

Example:
Let's say an e-commerce site's LTV is 100 Euros.

Take a step back and ask yourself: what is the visit/newsletter conversion rate?

Let's say it's 10%.

Of this 10%, how many actually bought something?

Let's say, for example, 3%.

Now we can put a monetary value for the Newsletter .

Let's say that every month we manage to bring about 50,000 visitors to the blog pages. Using the same conversion rate (10%), 5,000 sign up for the newsletter so we have 5,000 leads. Of these 5,000, 3% (always using the same conversion rate), 150, have actually bought something. We multiply 150 by the LTV number and we get 15,000 Euro = monthly value of the blog .

Always going backwards, to understand the value of each individual visitor, just apply this formula.