We get this question a lot:
“I’m thinking about getting your full Done-For-You Traffic campaign build, but my product is for $20 so will you be able to get me profitable traffic to that?”
The short answer is NO. hellz no.
Lemme show you how we can make a profit in ANY market and with ANY product, regardless of how expensive or cheap.
Like one lady we built an ad campaign for, we also now manage her traffic…we found one keyword alone that was responsible for 300 leads at 40 cents a pop in a single week. WOW!
Ok let’s math it up a bit…
That’s 300 leads x 0.4 = 120$ total spent that week on ads.
She also has us on a writing retainer to help her convert those leads. She got one sale come through that week.
That’s only a 0.33% conversion. Sounds like crap 🙁
Because she sold the customer a $7,700.00 dollar product without even picking up the phone once.
So let’s do a bit more simple arithmetic together ok?
$120 in ad expense. $7,700 in revenue. $7,700 – $120 = $7,580.00 dollars in PROFIT.
WOOW! Yay her.
But you don’t have a 7,700 dollar product to sell and you suck. Haha kidding, kidding.
Lemme show you another case just like you:
We had another client whose lead cost was $15/lead. And he was selling a $25 product.
My immediate reaction was to ask the traffic manager I assigned to his account:
“Yo what other stuff has he got to sell?”
Why? Because …
You can drop a lead cost quick sometimes. But other times it takes patience.
For example, suppose you had some bug in your landing page and it doesn’t look right in Internet Explorer but in the browsers you tested it looks coo’.
You’ll probably find that fixing the page will give you a HUGE drop in lead cost. Say to $9 or $5 a lead.
Makes sense, yah? If 70% of internet users are using Internet Explorer, then 70% of the hits won’t even see the page, let alone become prospects, yet they contribute to an increase in cost.
Now we don’t make dumb mistakes like that because we test all our DFYT landing pages in all major browsers.
But it’s an extreme example of something that could cause a significant drop in lead cost.
On the other hand, if you’re down to $5/lead, making the drop down to $4 is gonna take like 3 months.
You don’t have thousands of dollars lying around to keep pumping into ads while you wait for that drop to happen.
So what to do?
Let’s come back to that question in a sec.
Like I was saying, the guy with the $15/lead cost is likely to see a significant drop in cost at some point. But let’s not wait around for that.
Money is a-wasting and ad budgets are a-dwindlin’.
The smart thing to do as soon as you have ANY steady lead-flow, is look at your lead cost and compare it to your expected revenue.
When your leads are costing $15 each and you expect to break even with a $20 sale, you’re asking for a conversion every 1.6 leads.
$20/$15 = 1.3 lead to sale ratio.
Expressed as a conversion rate, you’re expecting 1 sale/1.3 leads = 75% conversion rate.
DAaaaaaaaaayum! FUGK THAT.
Can you get a 75% lead to sale rate? No.
I can get you maybe 30% but I’m superman.
Most top copywriters are happy to get 1-3% on first contact. But if they follow up, their rate goes up big time. Which is what we do to maximize conversion.
Just think about the feasibility here for a sec…
Even if your leads are really targeted (which when we generate your traffic they always will be), then you can only realistically expect about MAX 50% of them to receive, open, read, and buy from your follow-up by email, provided you’re consistent about it.
Theoretically, you can PROBABLY get at most 50% of your leads buying without phone contact, even with our help.
So expecting 75% conversion from cold leads, by email alone, is not only unlikely…
What to do?
Like I said, I asked my traffic guy to find out from the client if he had any other products to sell.
He did. He had a $250 product.
Suppose he keeps getting $15 leads forever (which he won’t as long as we’re managing his campaign; we can always drop it, it’s a matter of time)…but just suppose.
Why leave it to chance?
By selling his $250 product FIRST, he only has to get 1 conversion for every 16.6 leads ($250/$15). Meaning, he only needs 1 sale in 16.7 leads to break even.
That’s nearly 6% target conversion rate.
Provided he follows up, he’ll do more than break even. He’ll profit. Remember our best rate is 30%. Even if we only do half that, we’ll still more than double his money.
Now that’s smart.
At this point, some douche is going to say but hey you’ll get a higher conversion with a $25 product than $250…
But I say to douche, “You’ll have to sell 10 times as frequently to the same leads to make the same money … and that’s taking a big risk when your ad budget is being depleted faster than you can replenish it.”
Covering your expenses should be your TOP priority when your budget is slender… NOT increasing conversion rate, because you’re paying for all the testing.
Remember, changing the product or finding a new one is something you do AFTER you’ve established an actual lead cost. You adjust.
So even if you have no product other than the $25 product, and you’re too lazy to find a new one, as soon as you know the lead cost for your target market, you have all the incentive in the world and a good idea of how expensive a product you’ll have to sell to replenish the ad budget asap.
Anyway, if you’re still reading and didn’t freak out from all the math, you’re my hero.
Otherwise you probably need the link below most (sadly you didn’t see it haha):
[interested_link form=”subscribe_form” document=”18045″]Learn UN-ORTHODOX Marketing & Traffic from Jim, the controversial Ex-Silicon Valley TRAFFIC GOBBLER – Free here …[/interested_link]
That’s where you get us to do the math and get an ROI for you, regardless of how cheap your products are, and regardless of how expensive your advertising is.