What has to happen to have the conversion in the first two weeks and be profitable? Here are two extreme examples, one on the low end and one on the high end just so you can see that contrast.
What we see with most marketing online, we see a product where we have a free giveaway in the beginning, we have a low ticket item in the beginning. The theory with this is that we get a small percentage of people to invest in the very first product. A percentage of them will invest at a high level in the future. What happens is, over time we do get a return on investment. However, it looks a lot like our one year strategy that I shared a little bit earlier. For example, what I have found when we start with a low ticket item, we get more initial buyers on the front end immediately.
Let’s imagine if we have 1,000 subscribers (scale this up or down depending) let’s say your first item is a $10 item. You’ll sell maybe 10%, those are my numbers for my first year after marketing a $10 item. The average person purchased their first $10 item from me within the first few weeks. A percentage of those people would then upgrade into a coaching program. The average time frame is about 4-6 weeks before the average person would invest in the monthly coaching programs. Remember there’s payments associated with this. Payments are a good thing because they allow us to stabilize our income.
So instead of having a huge cash flow one month, then have two or three months with no cash flow, you’ll have a more stabilized monthly income. However when you look at what I just shared, 10% are converting to $10 in the first few weeks. We could be aggressive with that and get the bulk of those literally within the first 14 days. Then, the next sale occurs within 4-6 weeks. So, people purchase the first item, they consume it, once they’ve consumed it they say, “Hey, I want more!” they then go on to invest in more. If that’s monthly payments, let’s just say that’s $100 per month, in order for us to generate $1,000 on that one transaction, we have to wait a full year for all of that revenue to come in. This spreads the revenue out over the course of the year. Having said that, does that make it not profitable? No. It just prolongs the time period in which we can actually get paid.