Keyword Profit Formula
Use this simple formula. It helps you know how much money you can make before you finalize your keyword phrase selections.
- EXACT MATCH LMS x PERCENT OF TRAFFIC x 65% x CONVERSION RATE x PROFIT PER SALE = $ PER MONTH IN THE BANK
The Exact Match LMS (Local Monthly Searches) is that reported by your Keyword Tool. Exact Match searches are more accurate than Broad Match searches.
While there is considerable debate among experts, the table at the right should provide some guidance regarding your traffic depending on the ranking of your keyword.
Be aware that these values are somewhat dated and will certainly vary niche to niche, but they may serve as a starting point for planning estimates and income projections.
One source claims that as much as 35% of the traffic goes to paid ads, leaving only 65% available to organic results. Plan accordingly.
Although efforts can be made to improve the initial conversion rate, you should expect something around 1% to start. Highly targeted Keywords will certainly do better.
Profit per sale is NOT the price your customer pays. It’s the portion that comes to you after the sale. So. How much do you want to average each month from your site?
Let’s say you have a ClickBank product lined up that pays you $37 for every sale and you decide you want to make $500/month.
Assuming you are able to grab the #1 spot, the calculation goes like this, $500/.424 /.65 /.01 /$37 = 4903 searches per month.
Therefore, you will need Buyer Keywords with 5000 Exact Match Local Monthly Searches to reach your goal.
If, on the other hand, you can only manage to reach the #5 position, the story is quite different. In that case, $500/.049 /.65 /.01 /$37 = 42,429 LMS are required.
This is not an exact science. Nonetheless, it should be obvious that you are shooting for that #1 Google position. A #1 ranking is the only one that counts.
If you can’t manage to get that spot, don’t use that keyword (or better yet, plan on using different traffic sources to make up the difference).
Now we move on to the Keyword Research Tools module.
