Paid traffic on low price point products? Help?!

[LifestyleGem]

Has anyone had any success selling $10-$15 products on paid traffic? I feel like the cpc's on adwords would be too high to make it profitable. Even if you had a cpc of $0.20/click and a 2% conversion rate, you'd be breaking even assuming a 100% profit margin.

If not adwords then what advertising methods would be best for lower price point products?

 

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[DrkSide]

It's hard to make paid traffic work with that price point of products. Overall my AOV is $35 and it is still hard to make it work.

A couple things that you can do:
1. Look at the average customer value. Once they checkout you can then market to them via email and raise the longterm customer value.
2. Capture emails with a popup. I hate popups but I have one on my site. Know why? It works and I can market to them even if they didn't place the order.
3. Upsell - Get products that complement your current ones. If you can take the $10-15 and move it to $20-$30 you can spend more on the customer to aquire.

 

[happybhoy]

As a Facebook ads freelancer, you would struggle on Facebook unless you can increase the average order/lifetime value of each customer up. could your product work with upsells or recurring revenues?

 

[The-J]

It's hard to make paid traffic work with that price point of products. Overall my AOV is $35 and it is still hard to make it work.

A couple things that you can do:
1. Look at the average customer value. Once they checkout you can then market to them via email and raise the longterm customer value.
2. Capture emails with a popup. I hate popups but I have one on my site. Know why? It works and I can market to them even if they didn't place the order.
3. Upsell - Get products that complement your current ones. If you can take the $10-15 and move it to $20-$30 you can spend more on the customer to aquire.

Bingo.

Improve your sales funnel. Low price points are only going to work on cheap traffic sources or in cheap niches. Facebook and Google are going to be very, very difficult for you.

If your AOV is $15 and your margin is 50%, that means you gotta pay less than $7.5 per sale. That's not impossible, but it's too hard of a task to be worth it. Now, if your AOV is $15 but your CLTV is $150, still at a 50% margin, then we're talking $75 per sale. Much, much easier to make work and a much better proposition.

 

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[LifestyleGem]

It's hard to make paid traffic work with that price point of products. Overall my AOV is $35 and it is still hard to make it work.

A couple things that you can do:
1. Look at the average customer value. Once they checkout you can then market to them via email and raise the longterm customer value.
2. Capture emails with a popup. I hate popups but I have one on my site. Know why? It works and I can market to them even if they didn't place the order.
3. Upsell - Get products that complement your current ones. If you can take the $10-15 and move it to $20-$30 you can spend more on the customer to aquire.

Thanks, I like the popup idea! How much of an increase in conversions does that usually bring? (Just so I can get an idea of the impact)

And what ROI are you getting on the $35 AOV campaign? I can maybbeee get it up to a $35 order value if I work on upsells, increased conversions, maybe add a live chat etc.

As a Facebook ads freelancer, you would struggle on Facebook unless you can increase the average order/lifetime value of each customer up. could your product work with upsells or recurring revenues?

It's possible I could add upsells, but not that much. Maybe an extra $10-$15.

Bingo.

Improve your sales funnel. Low price points are only going to work on cheap traffic sources or in cheap niches. Facebook and Google are going to be very, very difficult for you.

If your AOV is $15 and your margin is 50%, that means you gotta pay less than $7.5 per sale. That's not impossible, but it's too hard of a task to be worth it. Now, if your AOV is $15 but your CLTV is $150, still at a 50% margin, then we're talking $75 per sale. Much, much easier to make work and a much better proposition.

Yeah, I might need to switch up the niche if I want to go the paid traffic route. There's no way I can get the lifetime value that high.

 

[The-J]

Yeah, I might need to switch up the niche if I want to go the paid traffic route. There's no way I can get the lifetime value that high.

With paid traffic, the general rule is that the higher your AOV is, the higher your conversion cost will be. It's worth it to optimize your back end funnel (email, retargeting, engagement) as much as possible.

Your problem isn't your niche or even your traffic source. It's probably your business model.

 

[sparechange]

My thoughts might be wrong but making profit on the front end isn't so important maybe, bigger companies will take a loss on acquiring a customer and retarget them and generate a recurring revenue in the long term. So If you are selling a product for $15 and pay $20 to make that sale (random number) if your stuff is good you can retarget sell or upsell in the future. Don't take my word on it but please someone correct me if I'm wrong, I believe this is the strategy of all large brands. Oh... And why not have paid advertising for fb and insta? Seems like the best way

 

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[eliquid]

I've always preached LTV in ecom.

Some stores and companies are just poorly setup and the owner is very shallow thinking, only concerned about selling product X today and what margin he can make on it today.

The products are generally less than $50 each, so let's assume he has to generate a sale every $15-$22 to break even or eek some profit out with his PPC spend.

Starting out in month 1, maybe their cost per click is $2 because of having no history and no Quality Score ( -- ) when they begin. Over the month you get data in and can start optimizing.

Well at $2 a click, you can only get 10 clicks or so before you go bust.

The average Conversion Rate for ecom in Adwords generally is about 2.5-3%. At that rate starting out, you might need 33 clicks to get a sale. 33 clicks x$2 a click is $66. 3-4x more than the $15-$22 goal.

Once you get data in, you can whittle that down to the $15-$22 goal, but even then it can be tough depending on niche and margin.

At both examples ( starting out and once hitting goal ) you need to count on LTV, which means your upsell game has to be tight.

When I was doing affiliate marketing, LTV is what made me 7 figures NET profit in less than six months.

With SaaS, the LTV is what makes it possible to scale things quickly and out market competitors and get to 6-7 figures ARR in less than a year.

In ecommerce, LTV is what will keep you in business for more than 12 months.

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