Before you sell an information product

14 replies
As a copywriter, there's a very common problem I come across. And that is... marketers NOT knowing their numbers.

For example, if...

1) Your product sells for: $27

2) Your sales conversion rate is: 2%

3) Your traffic cost per site visitor is: $1.00

4) Your refund rate is: 5%

What will your PROFIT be?

In this case, for every 100 visitors you send to your sales page, you will LOSE $49.

Not good.

Furthermore, I didn't even take into account PayPal (or other merchant account) fees, or any fixed costs such as page design or copywriting.

In addition, to keep things simple, this example assumes that you don't have any affiliates. (But, often, affiliates want to know that a product will convert well before they jump on board in a big way.)

OK, the good news is, now that we have forecast the loss, you can work to see what you can change to improve that result.

For example, if you:

* Raise your price somewhat.
* Improve your conversion rate (perhaps with better sales copy or a better bonus).
* Reduce your traffic cost (maybe by split-testing your ads).
* And reduce your refund rate (by addressing some of the concerns your refunders may have had)...

... your result can suddenly change for the better.

Using these numbers...

1) Your product sells for: $37

2) Your sales conversion rate is: 3%

3) Your traffic cost per site visitor is: $ .75

4) Your refund rate is: 3%

If you sent 100 visitors to your sales page, your PROFIT would now be $33.

Much better.

In a nutshell, to profit online, you need to drive traffic to your page and convert it.

Therefore, you must...

* Have a good product that is in demand.
* Have an effective sales letter.
* Make your offer attractive.
* Test your traffic sources.
* Remember to monetize your back-end.

And...

KNOW YOUR NUMBERS.

-John
#information #launch #product #read
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  • Profile picture of the author Janice Sperry
    The numbers (stats) are so important if you really want to succeed. It applies to marketing your own product, affiliate marketing or providing a service. It is so easy to incorrectly use just some of the numbers and be way off base. Your simple examples show how important it is to use ALL the numbers to really know what is going on and then to adjust accordingly.

    Speculation or incorrectly interpreting your data is a sure way to fail.
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  • Profile picture of the author dave_hermansen
    It's amazing to me how many people don't run the numbers - especially with advertising - to figure out ahead of time what the maximum cost per click is for a break-even scenario. Instead, they bid far more than they can ever recoup and then label the advertising platform as bad when it was their lack of preparation that caused the failure..

    Even campaigns that are overall profitable need to be tweaked. There are almost always plenty of losers in the campaign that need to be eliminated and winners that need to be invested in more.
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    • Profile picture of the author Johnny12345
      Originally Posted by dave_hermansen View Post

      ...they bid far more than they can ever recoup and then label the advertising platform as bad when it was their lack of preparation that caused the failure.

      I think what commonly happens is that so much time and energy goes into creating the product (and often a very good one), that the marketing is rushed.

      Which is unfortunate. Because a little bit of math can save the day... and turn around marketing campaigns that would otherwise have very little chance of success.

      John
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  • Profile picture of the author spartan14
    Thats are so simply advices but they are so efective for your profit online
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  • Profile picture of the author Jason Kanigan
    Good post from the OP...unfortunately most people will never do anything with the ideas.

    I've been trying to show people here how to understand the math of their business for years...really, for years...and except for a few of the experienced pros who understand the value I get crickets.

    "I'm waiting for the real gold," people will say. As if success is some single step magic trick and the method is being withheld from them by the guru.

    Call me jaded, but from what I've seen people want pushbutton riches. They aren't willing to commit and do any work. They certainly don't want to learn something.

    Often I'll see people saying they won't read a post or watch a video because it's "too long." Sure there's a case for brevity ...it's also true that expertise cannot be summed up in one sentence. When I see someone unwilling to invest the time to learn about a thing (eg. trigger question: "How long will this take?" --and the answer is, "Less time than you'll be spending looking for the magic bullet"), I know they won't get anywhere.

    I don't want to be all doom and gloom. There will be a sliver of forum visitors who appreciate your post. Just don't expect to light the world on fire.
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    • Profile picture of the author Johnny12345
      Originally Posted by Jason Kanigan View Post

      I've been trying to show people here how to understand the math of their business for years...really, for years...and except for a few of the experienced pros who understand the value I get crickets.

      Some people learn the hard way that a little math is essential to business success. I used to assume that every marketer knew their numbers... but was surprised to find that simply isn't the case.

      John
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      • Profile picture of the author Jason Kanigan
        Originally Posted by Johnny12345 View Post

        Some people learn the hard way that a little math is essential to business success. I used to assume that every marketer knew their numbers... but was surprised to find that simply isn't the case.

        John
        Wish it were true...(had to look up 'were vs was' to make sure which was right lol) but that's right, the large majority of marketers are simply throwing stuff at the wall and hoping something sticks.

        Then they get mad when the latest miracle cure doesn't work.

        I hope to goad a reader into changing their perspective a little bit ;-)

        Go back to basics, folks...develop a baseline...make single variable changes to test improving performance.

        It's not rocket science, but it is just a little math.

        Unqualified Leads >> Qualified Leads >> Sales.

        Just noticed what Dave said about calculating your max CPC bid before you begin, to ensure the worst that happens is you break even...I am certain people out there can't even imagine how you would go about this.
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  • Profile picture of the author tryinhere
    The biggest "maths" problem there is the cost per lead, that one element can be changed almost instantly over and above the other that might take time, the quickest way to calculate that is to work your break even point is yes some simple maths.

    # Leads = 100 (always 100)
    Current Cost Per Lead $ = 1 = 100
    Con Rate % = 2 = 2
    Sell $ = 27 = 54
    Refund % = 5 = 51.3

    Simply divid that last number by 100 = .513 and that is your break even when buying ads (.51 cents) based on those numbers, anything more and you are in test and refine mode, so where possible spend less than .532 per lead and you will at least not loose money.

    If you were able to shift your con rate to 3 it would move the number / BE to .769 for example
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    • Profile picture of the author Johnny12345
      Originally Posted by tryinhere View Post

      # Leads = 100 (always 100)
      Current Cost Per Lead $ = 1 = 100
      Con Rate % = 2 = 2
      Sell $ = 27 = 54
      Refund % = 5 = 51.3

      My example was a simplified one -- I omitted several variables. However, in that example, the LOSS would be $48.70 (I rounded it to $49).

      Opinions will vary, but I don't find the break-even point to be extremely useful in this type of specific calculation, since there are multiple variables that could change simultaneously.

      (The problem becomes even more pronounced and cumbersome with ecommerce calculations that include the product cost, shipping collected, and actual shipping spent.)

      That said, I agree that B/E analysis is extremely useful for setting general sales goals.

      John
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  • Profile picture of the author writeaway
    The point about building businesses on CRUCIAL STATISTICAL ANALYSIS and the right ROI = SOLID advice.

    Still, there's a missing piece: The most important step (not mentioned in the original post)
    Build your business around EXISTING DEMAND

    Build it and they will come, regardless of well-written your content and sales funnels may be, will lead to DISAPPOINTMENT and even LOSS OF MONEY

    Find existing demand and build your business around it

    This is not sexy but thanks to places like Reddit and Quora and FB groups, this has become so much easier.

    There are also a number of tools out there that make this otherwise long and trying process so much more manageable.
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  • I think you guys are on the wrong forum.
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