What do you do when you have a high-performing paid ad and all of a sudden it stops working? In this episode the guys talk about the importance of recovering Ad costs and the importance of knowing your product’s price point. They go through how to capture QUALITY emails through paid traffic in an efficient and creative way, and what to do if they stop performing.
This is a direct transcript. Please forgive any grammar or spelling errors.
Jason: You know your price point, you should never fall in love with your price point, your price point, especially when you’re new is really going to be determined by what people want to spend on the product.
Kevin:It doesn’t really matter where you want to price your product. It’s bad when people are going to pay for, people are going to pay for it.
Jason: If you could spend a dollar and get a dollar. For every dollar that you spend, there is no marketing budget.
Jen: You’re listening to e-commerce uncensored with Kevin Monell and Jason Caruso.
Kevin: Hey everyone. And thank you for joining us. On another episode of eCommerce Uncensored. My name is Kevin Monell and I’m here with.
Jason: Jason Caruso for take two.
Kevin: You’re starting over. This is take two this episode. Um, first, before we get started, I wanted to mention something that I forgot to also mention on our first take of this podcast is the new question and actions section of our website.
So, and we have a few questions that are coming in. So our website e-commerce on sensor.com has a new. Uh, link at the top for question and answer, you guys can go in there, fill out a little form, submit your question that you’d like us to answer on the podcast coming up in 2022, we’re going to try to do like a little short little snippet, email emails, snippet, a podcast that answer these questions.
So head over there, you can submit a question and we’ll do our best to make it a podcast and answer your question. So today’s podcast. Um, I could lead up into it is what you said earlier, Jason is that we don’t always practice what we preach. And I think that’s what we’ve, we’ve experienced with these latest campaigns that we’re running.
Jason: But, but Kev, I was, like we said in the first take that it’s not always our, um, it’s not always under our control. Like we have partners, we have clients that we can’t make all the decisions on our own. So. Sometimes it’s not as easy to practice what we preach, uh, as it sounds, but, you know, in this case, you know, we, we have this, this company called the journal of wildlife photography and it is a very, very, very expensive digital magazine.
And the first year of that business, we went from zero to $2 million. If you’ve been, if you’ve been listening to us for any amount of time, you know, It’s the first year we were a multi-million dollar business. And, you know, since then some of the things that were working for us just kind of stopped working, right?
Like we were running like these offers and they were like killing it and then just kind of stopped working. And, you know, I think I get a lot of emails from people who listen to this podcast. Some people I get, like some people I get multiple emails from like often. You know, I think a lot of people get caught up.
Like when something stops working, they kind of give up and you’re like, they throw their hands up and like, oh my God, like, what do I do now? But what we’re going to talk about today is actually an evolution in our business because one thing that Kevin and I, uh, you know, we’re always learning. And the nice thing about what we do cab is like, we have a lot of different experiences, right?
We have our own businesses. We have clients. We have consulting business like we do with the podcast. There’s a lot of things that we are exposed to, which we can learn from. But one thing that we talk about religiously is how important it is to grow an email
Kevin: list. Before you go, go ahead. I think like, A lot of people out there and including us, they have this aspiration of having this thing or this brand that kind of, you know, runs on autopilot.
So to speak, you know, that you have this offer that just continues to work. And we say how important the offer is. And once you find it, you can kind of scale up on it and keep doing it. But I think the truth of the matter is that that’s kind of. You know, that’s hard to find that’s rare. So you’re always going to have to change and evolve and do new things, testing things.
Yeah. Yeah. And like you were leading into like, one of the things that we we’ve always done is the email capture and it’s been always such an important part of what we’ve done.
Jason: Yeah. There is a capturing email. There’s a lot of ways to do it, right. Like if you have a big brand where you’re getting lots of organic traffic, You know, you can have pop-ups on your website that, that give 10% off or 20% off for people’s first order.
I mean, that’s a way to do it. Right. But you need the traffic to do that. What we’re talking about in this episode is how do you afford to get emails from paid traffic? Right? Because that’s completely different. And you know, when you’re starting a new business, I would say Kevin, probably 10 times out of 10.
The first thing we do is go to email. Yeah. And right,
Kevin: right. That’s email capture. Yeah. Email capture, like finding ways to bring people in, through paid traffic and have them give us their email. And for us, you know, for our business, uh, we’ve been able to collect email addresses at a. At a reasonable cost.
Our thought was always, they would always took like 40 to 45 days for these people who came in to actually purchase something from us. So even at the beginning, yeah, the beginning, when we didn’t know that we’re like, well, we can’t do this forever. And it was always the thing that you and I had were like, well, I would always like go into Cleveland and be like, well, these guys are worth this much now.
Like we need to just keep getting them. But like, We’re not going to be able to support the ads if it’s going to take this long to, well, now we can, but now, and now we know about it, but you can’t do it at the beginning. So that’s why this process of collecting emails was like an evolution always changed.
We always needed to do new things because the price of emails started going up and we started getting less people. So it didn’t really add up. So,
Jason: yeah. And the thing. We had this conversation yesterday with one of our partners, we, we, we are collecting email addresses for one of our businesses at like $9 a pop, which is very, very expensive, but the product is expensive.
So, you know, we don’t really have to, we don’t really know what our KPI really is for that business yet. So we’re just testing and we’re just trying. So, but going back to our original premise, With, you know, being able to pay to collect email addresses, right? Cause that’s the secret Russell Brunson talks a lot about this from ClickFunnels.
He talks a lot about how, if you could spend a dollar and get a dollar back for every dollar that you spend, there is no marketing budget, right? So as things start changing in your business and you have to get more creative about doing things. That’s kind of where we are with our, our wildlife photography business.
It’s like we had this thing that was working really well and it kind of stopped working. So we shifted gears actually quite recently, Kev, right? Like we started what, what we did was we, and, you know, we were getting like, we’re getting like hundreds or thousands of new email addresses every whatever week or month or day or whatever the number is.
Um, and what we’ve done is. So let’s say you get a thousand people coming onto your email list. Every single one of those people have to go to a thank you page after they
Kevin: sign up right now. Yeah. Yeah. And like G like Jason was saying before we get into that as like, we, like we said, we had that 40 day window, so we could, we could show that we were getting, uh, you know, a two X return on our money, like 45 days after they had signed up.
But the secret is to like, try to close up that window a little bit, you know, make it closer in time. So you’re not waiting for that return. So you can, you can really prove that process out and say like, I’m gonna, I’m paying this for the email and then I’m paying this for, you know, I’m getting that in return for that money.
Jason: .Right. So, so we were getting email addresses or emails and we, we, we did, we looked at the lifetime value. And it looked like, and what we found was that it took about 40 days for people to buy. So like you said, you can go broke in those 40 days, depending on what you’re spending and how new your business is and how much capital you have and all those other things.
Uh, but closing that gap, like you said, is important. So we’ve, we’ve, we, we found that people weren’t buying. On Facebook from our ads as quickly as they used to. We don’t know if that’s a COVID thing. We don’t really know why, but we do hear that people don’t have money and they’re losing their jobs and that kind of stuff.
But, you know, we don’t really quite know why they’re not buying so much right from Facebook, like they used to. Um, so what we’ve decided to do is just collect email addresses, and then try to sell them something. Recently, uh, our magazine is $97 a year for a digital magazine. You get all the back issues over four years now.
I think it is you get, you get some video trainings, you get some other things, but it’s a $97 magazine. And, um, what we decided to do was like, like, say like, look, why don’t we collect email justice and try to get that money. Like right away. So we did this $50 off the $97. So it came out to $47. And basically what we did was we put this offer on the thank you page of the, uh,
Kevin: sign up after they sign up for the right to the list and think about thinking about how important.
That page is right. You you’ve, you’ve actually convinced somebody that you have a viable piece of information that they want to get from you. In this case, we’re doing, uh, we have a, like an ebook that we’re giving away. That’s how we get people over from our ad to assign a page that has, you know, Social proof on it and things like that, that people finally are convinced that they’re going to give us their email address, which people really value.
I mean, people hold tight onto their email address, especially nowadays when they’re getting inundated with marketing. Communications all the time, um, from email and now SMS. So it’s not an easy thing for someone to come out and they’d be like, okay, I’m going to give you my name and email address, knowing that at this point, basically, they’re going to get more emails from us.
So they’ve committed at that point. And then you’re, you’re taking their eyes over to a thank you page. And that I feel like it’s such an important, it’s like, it’s almost like free real estate free attention that you’re getting from them at that point.
Jason: never, to be honest with you, like, this is something I learned from Russell Brunson and.
Thought about it before, like all of those people, like the thousand people a day, at some point we were spending money a thousand, we were getting a thousand people a day would see that. Thank you page. And they’re there. The thing about it is like this business or this industry is, is mostly about psychology, right?
It’s it’s, it’s the frame of mind people are in when they see your offer. The interesting thing about having an offer on the thank you page is that people are actually waiting to see that their email went through properly and that they were going to get the thing that they want. So on our thank you page of this email capture campaign, it basically says thank you for downloading the PDF or what you know, and I have the name of the PD.
And then it says, um, this is a one-time offer. You will never see this again, take $50 off. And then it has like, you know, kind of like the sales page underneath it.
Kevin: Yeah. And I think sometimes people too, I think to your point about people actually like paying attention to that. ’cause a lot of times and we’ve done it.
Like sometimes as soon as they sign up, they’ll get what they asked for. So they’re almost assuming that they go from signing up to your email list to getting what they give their email address to. Right. Immediately,
Jason: sometimes people give them the download link on the thank you.
Kevin: Yeah, just something you can test, you could do that.
And maybe that works better for you. Maybe people are more engaged at that point for the piece of depends on really what it is. I guess at that point, we like to send it to people via email. Yeah.
Jason: We like to send it to people, you know, for a couple of reasons. Like we want their email address to be the right email address, to be a good email address.
We don’t want them to give us a spam email. So I’ll, I’ll say, where would you like us to send your free PDF? Yada, yada, yada. This offer we did was $50 off, which is almost like 50% off. It’s the same thing. Um, brought our journal from 97 to $47. And what we found, which is pretty interesting is that. People are actually taking us up on that offer and our ads are basically free right now.
We are making more money from that offer than we are spending on the
Kevin: And I think this is where you can come in and kind of really do some, some, some deep discounts and to test different things because it is so it’s so important to like, just have some.
Take out their credit feel confident enough in you and trust you enough to take out their credit card and give you whatever it is, whatever the dollar amount is. It doesn’t really matter, whatever it is for them to commit to that. Just taking off the card is a commitment. Yeah. And it’s important to understand too, at this point, like we have an idea of.
You know, we’re going to be able to sell them other things. We have some other products. And that was another thing when we first did this, Jason is like, why we didn’t really do this. That much is because we didn’t have anything else to sell them. So like, if we’re giving this, this deep, deep discount on the one product we have, how are we going to ever like really recoup enough money from people.
Jason: Right. But it is a subscription. So you hope that the next year, but that’s a long time to wait, you know? Right. But now we have. Other things to sell them. Like we can sell them a lifetime subscription. We can sell them this new, uh, wildlife photography course that we have. So now we have other products, so we’re not so reliant on that initial $97 investment into our brand.
Like we were right. We were just not, because now we have other things to sell. So this is actually working out exactly how we intended it to work out. We want to get people on our email list, not everybody’s going to buy. But we hope that enough people buy. To pay for our ads and that’s, what’s happening.
We’re getting like a 2.8 X return on some, some days, some days it’s a little higher, somebody, a ] little lower, but
Kevin: it’s paying. Yeah. I think people get hung up on the fact that they need to get, they have the, they, you know, they hold their products so tightly that they feel like they can’t discount it that much.
They needed to get, they need to get that, that initial and they need to make that money on that product right away. And I think that’s, what’s the most important thing you gotta understand. That there is more to come after that person has committed to paying you that initial, like on that initial offer.
And I think that’s the, like the lifetime value of a customer is so important understanding that because you can get them to take out their car for seven bucks, for whatever product you have that obviously ties into what you’ve got them in to your ecosystem to begin with, get them, to spend whatever it takes.
And even if you’re your break even point at that, you’re not making any money in return from your Facebook ads. You’re just breaking even, you know, that next sale will come in a week or in a month or in six months or whatever. Well, I mean, you
Jason: can wait the 40 days, once you re recouping your ad spend, it doesn’t really matter.
Even if it took them a year, you know, you’re, you’re still getting them on for free. And even if you get a 2.8 X return, You’re still making money. I mean, it’s not like, I mean, we’re even making money. It’s not like we’re even breaking even it’s like that a 2.8 extra turn we’re doubling almost tripling our money.
Kevin: Yeah. Right. What took so long to actually do this? Jason,
Jason: we got pushed back. I think, I think there’s pushback to bring in the journal to $47, but you know, it’s an interesting thing is like, as the business grows, And you, you get more employees and you get more, uh, you know, your team grows so to speak and your expenses grow with that.
You know, sometimes you have to just do what you have to
Kevin: do, so to speak or an employees aren’t gonna wait 40 days to, uh, to get paid. Now. Now
Jason: here’s the thing about this, this, this offer is we talk a lot about creating irresistible offers. Okay. That solve real problems. This offer would not work at $97.
We’ve tried that. Yeah, it doesn’t work at $97 because first of all, people don’t know who you are and it’s a lot of money to invest $47. I think it’s like one of those, one of those price points that like, yeah. You know, if it’s not exactly what you thought it would be, not the end of the world, but it’s a really good way.
You know, to get people.
Kevin: Yeah. It tells you, you learn a lot about what your price point should be and, and you said it before we got on you’re like, maybe it’s just too expensive. Maybe this isn’t where it needs to be. Um, and maybe just selling directly on Facebook would work better just at this price point.
Well, I think about
Jason: one of our clients, right? We have been telling them since the minute we started working with them, that the price point of their. Needs to be about $299, right. It’s an expensive product. So I get that their KPI needs to be higher than that, but we. See these, these, this product flying off the shelves at the 2 99 price.
Kevin: Yeah. Right. It really matter where you want to price your product. It’s bad when people are going to pay, people are going to pay for it.
Jason: Dude, I’m seeing it right now, man. Like if you look at the housing market, right. Um, people got so crazy over pricing, their houses that I started now, I get emails like, cause.
Uh, I get emails a lot about like, how prices have decreased. Like, oh, then they’re not really decreasing. It’s just that people are just not paying 500% more than they were before. So they have to kind of bring the prices down a little bit. So, you know, your price point, you should never fall in love with your price point, your price point, especially when you’re new.
Is is really going to be determined by what people want to spend on the product. I mean, you know, and we, you know, I know a lot of people out there talk about how discounting is bad and it eats into margin. And, uh, and it does, I get that. But when you have a new product, You’ve got to figure out what people want to pay for it.
And discounting stuff is a really good way to see where you’re supposed to be at. If you have a thousand dollar product and you can’t sell it, but you find when you give a 50% off that people buy it at $500. Okay. Now, you know, you’re getting a little closer, you can keep testing. Okay. Let me try $600.
Okay. We still have the same amount of sales. Okay. Cool. 700 sales are starting to slow down a bit. Okay. Let’s stay at 5 99. It’s a really good way because you know, my stepfather told me this, you know, he’s a pretty smart guy, not just the best entrepreneur that I know, but very smart guy. I told him, I’m like, oh man, I want to, I want to get into computers because I can charge a hundred dollars an hour.
He’s like, Jay, you can charge a thousand dollars an hour. I don’t care. It doesn’t mean they’re going to pay for it. So I always remembered that like, Yeah, you can charge whatever you want. Like just, you want to say you charge a thousand dollars an hour. That’s more than I charge as a lawyer. He said, do it.
Kevin: No worries. It makes me think of my, uh, during COVID you know, this cause you see you were at the office. When I had them, I dug up my old baseball cards and I started going through them. And um, as I’m looking through my phone, like a Derek Jeter rookie card, right. And I’m like, I look it up online. I’m like, oh, it’s worth.
I’m like, oh, I have this card. It’s worth this much money. And I’m like, no, it’s not. It’s just a piece of paper until someone actually buys it from you or you’re able to sell it. Right. Or my crypto investments that I started investing like, oh, look at how much my crypto is worth. You’re like, it’s still enough not worth that until you actually take it out. Right. And put it in your bank account.
Jason: Yeah, exactly. And, uh, you know, I, um, you would think. That business owners or entrepreneurs would understand this concept a little bit better, but it doesn’t matter who it is, who it is, who we are, who we work with. Everybody falls in love with price. And, you know, I think that we are from sort of like the school of thought, like, look like sell it for what people want to pay for it.
And you should figure, you could figure that out. And it’s clear that people who don’t know the journal want to pay $47. They don’t want to pay 97. Right?
Kevin: Right. So keep learning, keep learning,
Jason: keep going. So moral of that story Kev is that you could recoup, or you should try to recoup your, your. For your ads as quickly as you can.
And sometimes that’s just a matter of playing with the numbers a little bit, and sometimes it’s just a matter of, you know, uh, Trying to give someone such a good offer that they can’t say no to. And that’s kind of, what’s working for us
Kevin: Just take advantage of the opportunity you have when you have that person’s attention on your website.
Jason: Do whatever one thing I will. One thing I will add is that where this is working is a very, very clear defined person. Like, so it’s a wildlife photographer. It. If, if you don’t have the right person coming to that landing page, that’s a whole nother problem. Like our other business that we’re working on right now with somebody else, we’re still trying to figure out if the lead magnet that we’re using is the right lead Madigan.
We don’t quite know yet. We’re, we’re testing it. So we we’ve decided to spend a thousand dollars to test that. Right. Uh, So that’s a whole nother thing. This particular product we know who the people are. It’s very, very easily defined. It’s very well-defined. Um, so it’s,
Kevin: it’s a process. It works. Right anyway.
So we want to say Merry Christmas to everybody out there
Jason: to everyone, a happy new year. Are we going to do another one next week? Yeah.
Kevin: I mean, we’re going to be together next week. So I don’t, I know I’m just not gonna have my mic. If it doesn’t work. I don’t know. We’ll try it. I mean, we’re going to do probably a a year recap.
I hope talk about all the things we did in 2021 and all the things we learned. So make sure you subscribe to the podcast. Make sure you don’t miss that. Maybe that one will be next week somehow. Yes, we’ll be, we’ll be, we’ll be sitting right next to each other. So yeah, I dunno. I have, I have a couple extra Mike’s here that maybe we can, I don’t know.
We’ll figure it out. If not, if we don’t speak to you guys next week, have a great new year as well. Anyway. Thank you guys so much for listening as always. You can check us out at e-commerce uncensored.com and we’ll talk to you guys real soon.
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