| High Priced Selling - Why You Should Sell Your Product For More, Not Less Part III |
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If you're struggling with something, bring it up and we can talk about it. So for right now let's use 1% for this number. 1,000 visitors x 1.5%, how many sales would that be?
If you're struggling with something, bring it up and we can talk about it. So for right now let's use 1% for this number. 1,000 visitors x 1.5%, how many sales would that be? Caller: 1% is 10. Sean: If 1% is 10, then 1.5% would be 15, right? If we use 1.5% for this. 15 sales x $100, what do we come up with? Caller: $1,500. Sean If we move to a $500 product, what rate did we say we'd agree on here, 0.5%? Did we say that was a good number to use for a conversion rate? Caller: The range you stated was 0.3% to 1%, so somewhere between. Sean: Ok. We can use 0.5 or 0.6. If we use 0.5% we're kind of on the conservative side of splitting the difference, so let's use 0.5%. So we've got 1,000 visitors and a 0.5% conversion rate, gives us how many sales? Caller: 5 sales. Sean: We're going to have 5 sales x $500 is going to give us how much revenue? Caller: $2,500. Sean: $2,500. Is anybody noticing a pattern here as you're drawing out your spreadsheet? Caller: A smaller conversion rate with a higher end item means your revenue is still increasing. Sean: Your revenue is still increasing, so your conversion rate is going down but your conversion rate is dropping at a lower rate than your price is increasing, so what happens is you end up with more income. Before we go to a $5,000 product, let's imagine that you are generating 1,000 visitors a month right now. This can be a time period - some of you may have 1,000 visitors a day, but let's use a month. If you personally have 1,000 visitors a month and you're selling a $50 product, then you're probably making about $1,000 a month. That's pretty much what I see typically, somewhere in the neighborhood of $1 per visitor is how most people monetize their websites. Just to give you an idea of myself, I monetize my website at around $5 per visitor, so every unique visitor that I get that's fresh I monetize at around $5, and that number is going up over time, but just as a reference point. If we go back to this and say 1,000 visitors, you have a $50 product, your revenue is probably right at $1,000. Now if you don't make any changes at all - people talk so much about, "Boy, if I just had more traffic I'd make more money," and in some sense that's true. Obviously if you're only getting 10 visitors a month then the answer is very much true that if you had more visitors you'd make more money. But if you already are getting 1,000 visitors or 5,000 or 10,000, a lot of times more visitors isn't the answer. Just throwing more visitors at your system may or may not make you more money. Sometimes making some conversion rate tweaks is where the real money lies. |
