The Magic Of Internet Marketing Math

What's up everybody? Good morning, I hope I woke you up. Welcome to Marketing in Your Car.

Welcome to the Marketing in Your Car podcast, where you can increase your traffic, conversions, and sales in just 10 minutes a day. And now, here's your host, Russell Brunson.

All right everybody, I hope things are going amazing for y'all today. I just wanted to jump on today, head to the office, I'm about to, I'm so bad at preparing. Anyway, I've got a webinar webinar in 40 minutes for the network marketing group we're taking through ClickFunnels. So I gotta get in and get that all prepped. And then I'm doing a webinar for ClickFunnels today. And got some jiu-jitsu practice tonight. And talking to Robert Kiyosaki's people today. Anyway, a lot of fun stuff happening. So I'm excited. But what I wanna talk to you guys about today is something that's even more important. And it's one of the things that's my favorite part in the funnel building process, yet it's the part that stresses most people out, right? So typically we create a funnel, we do our best foot forward, and then we launch it to the world. And we wait to see what happens. And this is where most Mentor Circle people freak out, like, "Oh Russell, my funnel doesn't work, oh, this is a scam." No, just kidding, they don't say that, but a lot of people in the ClickFunnels community or whatever, they launch something and it doesn't make money overnight and they're like, "Oh, this funnel thing doesn't work." Anyway, so it's always kind of funny. So I wanna walk you through what's been happening with the Biohacking Secrets funnel because we're going through that phase right now. So we officially launched it, started launching ads to it about a week ago. And so, I think John's spending about $100 a day just driving ads, kind of seeing where things shake out, right? And so this is the thing, normal people like, they drive ads for like, they do one of two things. One, they drive ads for a day and then they're like, oh, it didn't work, and they freak out and they want to shut it down. Or number two, they drive ads for like 2 months and it doesn't work and then they come back like, I spent $20 grand and I didn't make any money. I'm like, dude, why did you not stop? So this is how we do it. So we drive some ads, $100 a day or so for about a week, just to see. So we're spending, you know, $500 to $1,000 just to kind of get some initial data and see what's happening, right? So from that, yesterday we had a call with Anthony, had a look over the numbers. So the numbers were basically this: we were spending on average about $20 to— on Facebook ads, give away a free book. Some sources were cheaper, some were more expensive, but as a whole, about $20 per book was the average. And then our average cart value— so that's the first metric, which is the key— is the cost to acquire a customer. So if you ever watch Shark Tank, they always say, "What's your cost to acquire a customer?" and none of the entrepreneurs ever know because the entrepreneurs are typically idiots, right? They just don't pay attention. So the first number you have to know in your business is what is your cost to acquire a customer. So I get a baseline cost to acquire a customer from that initial week-long test, right? So boom, that's metric number 1 that I need to know. Then metric number 2 I need to know is what is my average cart value. So from every person that buys a front-end product, what's the average how much money they spend? So all you do is take all the money you collected from this campaign, divide it by the number of front-end sales you have, and that gives gives you your average cart value. Are you guys impressed? I'm like a mathematician over here. Anyway, says Russell who barely passed math in high school and college. That gives you your average cart value. So our average cart value is $17. Alright, so wherein lies the issue, my friends? If you're paying attention, right? We're spending $20 to acquire a customer that's worth, at point of sale, $17. Now obviously, like, long-term customer value, lifetime customer, all that kind of crap is good to know, right? It's like, yeah, we may have lost We made $3 on every book we sold, but you know, people are always like thinking about long-term customer value, right? Lifetime value of a customer, the LTV. And those things are good to know, but for me when I'm building a funnel, I don't care about LTV because I want a funnel that at least breaks even up front, otherwise it's not worth running for me. Excuse me. And that should be kind of the case for you as well, okay? So like yeah, lifetime value is cool, but don't make that a metric you drive your business on right now because it's just stupid. Otherwise you're just gambling, hoping that in the next year or two you make more money, which you probably will, but like I want to be breakeven at point of sale. Otherwise, it's not worth it, right? Alright, so right now we're not at breakeven. We're losing $3. Plus you look up, we also have the book printing plus the shipping. So another probably $10 or so in printing and shipping. So we're actually negative $13 on every book we sell right now. Okay, so we're not at breakeven. So this is when most people are like, oh, this sucks. I spent all this time and effort. I quit. But instead you look at it and say, okay, I said, "Let's look at all the pieces. There's only 3 core drivers in this thing, right? Maybe 4." So the first one is ad costs. Right now, most of our sources we were spending, like I said, up to $20, on average $20 to acquire a book customer. These are from static Facebook ads. And so one thing that I've been doing in my business that's working really good right now is Facebook Live. So he said, "Hey Anthony, do a Facebook Live that we can then drive traffic to the book through Facebook Live." So he did that, and lo and behold, The first test was amazing. He dropped from $20 to acquire a customer down to the ads coming through his Facebook Live were $6. Huge, huge, huge difference. So we told Anthony, every single day now you're gonna do a Facebook Live and when the Live, and all of them are pushing to the book offer, and when they're done we're gonna put $5 to $10 in advertising behind it and the ones that take off we'll then ramp up advertising and the ones that don't we won't. So that's the thing about Facebook Live. Some videos hit, some videos don't. So the key is just doing one a day, putting $10 behind each one, and the ones that get some traction, then dump as much money as you can behind them. So that's number one. So that's lowering the cost to acquire a customer. Number two metric was conversion rates on the landing page. Our conversion rates weren't bad, I'm pretty happy with them, so I wasn't stressing about that. But the order form bump conversion rates were lower than I wanted. Right now we're at 11%, we're taking the order form bump. And so I looked at it and I think that the copy and stuff I had was confusing, and so what we did is we simplified the copy, simplified the message, it made that easier. So I don't know what the conversions on that yet will be, we're gonna run this for another week, but my goal is to get that from 11% to about 20. If we get to about 20%, that alone will get us to a break-even funnel. Especially considering the cost to acquire is dropping through the Facebook Live, so that's a big thing. And the second metric was our upsell rate, and our upsell rate sucked. It was real bad. So I looked at that, I said okay, right now the upsell was selling for $197, and it's a weight loss, biohacking weight loss, like lost course, I'm like, okay, this is, the conversions are horrible. So I'm like, what do we do? I'm like, well, I think that the pitch was wrong. So I just re-recorded a pitch myself and threw it in there on behalf of Anthony. We threw up some B-roll of Anthony and me and then we had him, took an outro from him. So we kind of tweaked the pitch, which I think is much better. So that was number one. And then we changed the pricing strategy from $197 up front to basically made it where it's a free trial. You put in your, you know, you say yes and we bill you $0 right now and then 7 days later you get billed $97. Or you can save $20 and get it for $77. So that would change the upsell pricing strategy to that, as opposed to just a straight $197. And it's funny because I think Anthony was worried like, well, what, man, if we drop it, if we drop the price, are we gonna make as much money? And said, I was basically like, well, you think about it this way, like at $197, you know, if we're getting 1% conversion rate, you know, 1 out of 100 are buying it, it's only adding like What's it gonna be, $2 to your average cart value if you get a 1% conversion rate? But let's say it's $97 and we get to 10% conversion rate, that means 1 out of 10 are buying it. That means, let's see, what's the math on that? That means we are making, at $100, making $10. That increases our average cart value by $10 per person. So if we drop the price in half and we get the conversion rate up to 10%, that changes the whole metrics. That adds $10 average cart value to every single person. I think the math's right on that. I might be wrong. I'm wrong. There's a good chance I'm wrong, but conceptually I hope that makes sense. And so we made those little tweaks and now we're doing the next test. So we're gonna test this next week and we'll look at numbers again at the end of that and see where we're at. And hopefully between lowering cost to acquire, increasing order form bump take rates, and, and, and increasing the upsell take rates, we will be at breakeven or profitable. And the second that we are at breakeven or profitable, now we've got something that we can grow and we can scale and we can have a lot of fun with. So, there you go. That is the magic of internet marketing math. Hope you guys enjoyed that. Have some fun with that with your next funnels, and we'll talk to you guys all again soon.

Hey everyone, this is Russell Brunson again. I wanna thank you for listening to Marketing Your Car, and I wanna make sure that you're plugging into everything that we're doing on a daily basis. And so make sure that every morning you're plugging into the Marketing Your Car training. If you go to marketingyourcar.com, you can join the email list and make sure you get email notifications when new episodes come out.

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But then every night, well not every night, but most every night, I also do a Periscope show called the Marketing Quickie Show. And it's really fun. You can go to Periscope and search my name Russell Brunson and subscribe. And every single night you'll get a notification. It'll kind of chirp on your phone and you'll have me jump on there and give you kind of the end of the day thoughts and ideas and marketing strategies we've been playing with during the day. Or maybe even and, say and/or you should go to marketingquickieshow.com and over there you can subscribe, you can see past episodes, you can read the transcripts, you can have a bunch of fun. So thanks so much for being faithful listeners. Again, register at marketinginyourcar.com and also marketingquickieshow.com.