Cost of Acquisition Ep 9

In the Gym Secrets podcast, the host delves into the strategy of maximizing earnings per click (EPC) to afford various traffic sources for marketing. Using Trey Llewellyn's successful flashlight campaign as an example, the host explains how a high-converting offer can allow affiliates to profit by sending traffic for less than the EPC. The discussion emphasizes the importance of a sales pipeline with upsells and downsells, conversion rates, and pricing strategies. The host argues that businesses, like local gyms, can dominate their markets by spending more on customer acquisition, backed by a robust conversion process and appropriate pricing. The host also touches on perceived value, suggesting that higher prices can lead to better customer experiences and results. The episode concludes by encouraging listeners to focus on their conversion process and upfront customer value to confidently spend on customer acquisition and outcompete others in their market.

• Traffic acquisition is crucial for any business, and the ability to afford it can be a game changer.
• Cheaper traffic options are often sought after due to lack of a profitable conversion process.
• Understanding the numbers, such as earnings per click (EPCs), is essential for gauging the value of traffic.

"So whether that be tv, radio, Facebook, YouTube, whatever, right? How you can afford any type of traffic."

This quote introduces the main topic of being able to afford various types of traffic for marketing purposes, emphasizing the importance regardless of the platform.

"Obviously, places where traffic is the most cheaply priced is where most people will go because they don't have a conversion process."

The quote highlights the tendency for businesses to gravitate towards cheaper traffic sources when they lack an effective conversion process.

• EPCs are a metric used in affiliate and online marketing to measure the average earnings received for each click on a link.
• A good EPC means the offer is converting well to cold traffic, which is desirable for both the owner and affiliates.
• Higher EPCs allow affiliates to profit by sending traffic at a lower cost than what they earn per click.

"In the affiliate world, in the online marketing world, there's something called epcs, which is earnings per click."

This quote explains the concept of EPCs as a key performance indicator in online marketing, used to measure profitability of clicks.

"And so if you have an offer that converts really well to cold traffic... for every click that he would get to the page, he was able to pay out something like $2 or $3 to the affiliates."

The quote illustrates the significance of a high converting offer to cold traffic, which allows for a profitable payout to affiliates per click.

• The conversion percentage and the price point of the offer are pivotal in the sales pipeline.
• A strong conversion process can significantly increase the profitability per lead or applicant.
• Having a profitable offer and process strengthens a business's position in the marketplace.

"And so the same concept applies to how you're building your sales pipeline. Right. And that's why having, so there's two main things that will feed into this, right? One is the conversion percentage, the percentage of, in this case, clicks converted into sales, and then obviously the price."

This quote explains that the principles of EPCs also apply to building a sales pipeline, with conversion percentage and price being key factors.

• The ability to spend more on customer acquisition can be a competitive advantage.
• Businesses that can afford to pay more for leads or customers can outperform competitors in acquiring market share.

"The person who can spend the most to acquire their customers, to acquire leads, will win."

The quote encapsulates the competitive edge gained by businesses that can afford higher customer acquisition costs, which can lead to market dominance.

• The principles of traffic affordability and conversion can be applied across various industries, including fitness.
• By using an example from a different industry, one can draw parallels and adapt the strategy to their own business model.

"So in Trey's example, his average cart value for his flashlight, I'm just going to make it this number. Let's just say it was $100."

This quote sets up an example from another industry (flashlights) with a specific average cart value to illustrate how the concept works in practice.

• EPC is a metric used to measure the average earnings generated from each click to a sales page.
• For a $100 merchandise, an EPC of $3 means 1 out of 30 visitors would make a purchase.
• This ratio can be used to estimate the number of sales and revenue based on website traffic.

"And so we can back out that number that for however many people would click to that page, one out of 30, right? Because if it was $3 epcs, right. Earnings per click, one out of 30 or so, 3.33, whatever, would buy $100 worth of merchandise, right?"

The quote explains the calculation of EPC and how it can be used to determine the number of people out of a given set of website visitors who will make a purchase, specifically relating to a scenario where the product is worth $100.

• The pricing of fitness programs can vary significantly and is not always reflective of the market's ability to pay.
• An example is given of a boot camp priced at $99 per month versus a six-week program sold for $600, demonstrating the potential for higher pricing in the same market.
• A salesperson without preconceived notions about pricing or market limitations successfully sold the higher-priced program.

"One of my first clients, Monica Matar, she was selling her boot camp at the time for $99 a month. And she had a program, like an eight week challenge or something she selled for like $200. Right? And I sent my sales guy there who was, this was his first month, but I had just told him that this is the price he was selling it for."

The quote recounts a real-life example of a fitness program's pricing strategy, illustrating how a new salesperson could effectively sell a program at a higher price point by not being influenced by limiting beliefs about what the market could afford.

• Conversion rates are crucial when evaluating the success of online sales and marketing efforts.
• A hypothetical scenario is discussed where a $1,000 fitness program's webpage receives 1,000 clicks.
• If the page has a conversion rate of 20%, it would result in 200 leads.
• The quality of these leads and the effectiveness of the subsequent sales process are implied to be important for the overall success.

"Now let's say that you can get a thousand clicks to your page, okay, from whatever traffic source you want. I'm trying to be traffic agnostic right now, but from whatever traffic source you want, you get 1000 clicks to the page. Now here's where the conversion starts to matter, right? So from those thousand clicks, let's say your page converts at 20%, okay? So that means you get 200 leads for your campaign, okay?"

This quote discusses the significance of conversion rates in the context of an online sales campaign, emphasizing that the percentage of visitors who become leads is a key factor in the campaign's potential success.

• The author promotes their book '100 million dollar offers' with over 800 five-star reviews on Amazon.
• The book is presented as a valuable resource for the community, reflecting the author's extensive effort in writing it.
• The promotion is framed as a 'give' to the audience, with the ulterior motive of fostering a positive relationship for potential future business partnerships.

"Hey, guys, real quick, if you're new to the podcast, I have a book on Amazon, it's called 100 million dollar offers that over 8005 star reviews. It has almost a perfect score. You can get it for Kindle. The reason I bring it up is that I put over 1000 hours into writing that book and it's my biggest give to our community."

The quote is a promotion for the author's book, which is positioned as a substantial contribution to the community and an investment of the author's time, aimed at building goodwill and future business relationships with the audience.

• Discusses the conversion of leads to customers and the revenue generated from a specific number of clicks.
• Breaks down the math of converting 200 leads from 1000 clicks at a 20% conversion rate, resulting in 40 sales of a $1,000 program.
• Highlights the profitability of brick-and-mortar services over online retail due to higher margins per click.

"u, and of those 200 leads, you convert 20%. Okay, so you get 40 people to buy your $1,000 program, right? You make $40,000 from those 1000 clicks, right? Which means that you're making $40 per click."

This quote explains the calculation of earnings per click (EPC) based on a given conversion rate and product price, which in this case amounts to $40 per click.

• Advocates for the advantage brick-and-mortar businesses have in setting higher price points due to personal customer interactions.
• Suggests that the perceived value of a service increases with price, leading to a better customer experience.
• Encourages raising prices to enhance perceived value and customer satisfaction.

"And this is where I always believe that brick and mortar selling services will always be very protected because the amount of margin that you can make per click, especially in the online marketing space, outdoes that anything in the online world has ever seen."

The speaker emphasizes the competitive edge brick-and-mortar businesses have in generating higher margins per click compared to online businesses.

• Discusses the psychological effect of price on customer perception and satisfaction.
• Uses the example of wine tasting to illustrate how higher prices can lead to increased enjoyment and perceived value.
• Encourages businesses to charge more for better customer results and experiences.

"Like, you have three bottles wine. They've already tested this, right? Three bottles of wine, all exactly the same one. They charged $10, $150 and one $200. The people who drank it and thought it was $200 enjoyed it more than everyone else."

This quote exemplifies how perceived value influenced by price can affect customer satisfaction, with those believing they consumed more expensive wine enjoying it more.

• Discusses the concept of EPC in the context of affiliate marketing.
• Compares EPCs from the speaker's business model to a highly successful affiliate offer.
• Highlights the importance of EPC for buying traffic and the flexibility it provides even with varying lead costs.

"And he was able to get EPCs that were like $3. Okay. The funnel that I just explained to you is something that we do in our business all the time, and we're getting $40 apcs, ten times the greatest affiliate offer of all time."

The speaker compares their business's EPC of $40 to another successful affiliate offer, demonstrating the effectiveness of their business model in generating higher earnings per click.

• Understanding the conversion process is crucial for business profitability.
• A high conversion rate with a significant profit margin can protect a business in the market.
• Focusing on lead cost reduction may not be as important as improving the conversion process and pricing strategy.
• Knowing the upfront earnings per customer is essential for determining the viable cost of customer acquisition.

But you're going to have to disprove my next point, which is that he paid $40 a lead and he converted 52% of his leads.

This quote highlights a specific example where a high conversion rate of leads to sales was achieved, implying the effectiveness of the conversion process.

So he paid $80 and got $2,500 back.

The speaker provides a clear example of the return on investment for the leads, demonstrating the potential profitability of a well-managed conversion process.

So he made $130,000 in 22 days.

The quote emphasizes the total gross revenue generated in a short period, underlining the success of the conversion strategy.

Most people don't have that kind of return.

This statement acknowledges that the described level of return is not common, suggesting that the conversion process used is exceptionally effective.

Because you don't have a conversion process where your earnings per click, earnings per lead are sufficient that you'd be able to play in that ball game.

The speaker identifies the conversion process and earnings per lead as key factors that enable competitive pricing and market positioning.

And so if you're constantly monitoring, trying to get your lead cost down, a lot of times the focus doesn't really need to be there.

The quote suggests that businesses may be overly focused on reducing lead costs rather than improving their conversion processes and pricing strategies.

What are you making on the actual program? You're selling them up front, right? Because that will allow you to see how much you can really spend to acquire a customer and do so profitably.

Here, the speaker stresses the importance of knowing the upfront profit from a program to understand how much can be spent on customer acquisition while remaining profitable.

If you know that, then you can start spending more confidently.

This quote implies that understanding the conversion process and profitability allows for more confident investment in customer acquisition.

You can acquire more customers, you can do it faster, do it with more confidence, and then ultimately, in your marketplace, you can be far more strongly positioned to outbid all of your competition, and they won't know what hit them.

The speaker concludes by stating that detailed knowledge of conversion rates and profitability can lead to a strong market position and the ability to outperform competitors.

• A high conversion rate and substantial profit per sale can create a strong market position.
• Understanding profitability allows for aggressive customer acquisition strategies.
• Businesses can outbid competitors and dominate the market by mastering the conversion process and pricing.

And now, do I think that Ryan is going to be very protected in his marketplace and not really have to worry about any competitors trying to outbid him? Probably not.

This quote suggests that Ryan's business may not be immune to competition despite its current success, indicating the need for ongoing strategic management.

But he can do it all day.

The speaker indicates that Ryan's business model is sustainable, allowing for continuous customer acquisition due to the successful conversion process.

And then ultimately, in your marketplace, you can be far more strongly positioned to outbid all of your competition, and they won't know what hit them.

The quote encapsulates the competitive advantage gained from a strong conversion process and pricing strategy, leading to market dominance.

• Analyzing front-end earnings per customer is vital for determining customer acquisition costs.
• Overestimating back-end earnings can lead to exaggerated expectations and potential financial missteps.
• Focusing on immediate profitability provides a clearer picture of business health and investment capacity.

I don't like doing back end numbers because then people get really exaggerated and all that kind of stuff.

This quote expresses the speaker's preference for focusing on immediate profitability rather than potential long-term earnings, which can be speculative.

Look at the pricing models, look at how much you're converting, what percentage of the leads you're converting, and then you can back out how much you can pay for acquisition of a customer.

The speaker advises examining pricing, conversion rates, and lead conversion percentages to calculate the sustainable cost of customer acquisition.

All right, so hope that was useful for you.

The speaker concludes by expressing the hope that the insights shared will be beneficial to the listener.