Well that deescalated rapidly. Ad clickthrough costs went up to 40 cents, and no more purchases. ROI is negative again.
Well well well. We have 2 sales in the last 3 days now. That makes 11/15/17 to now 11/17/17 we have:
- Ad spend: $23.16
- Link Clicks: 146
- $0.16 CPC
- Sales: 2
- Revenue: $69.9
- Cost of goods sold: $23
- Profit: $23.74
- Conversion rate: 1.34%
- Cost per customer acquision: $11.58
This is the most successful attempt so far, and the only one with positive ROI.
Starting around 11pm the day before yesterday I made some minor changes to the copy on my landing pages. I’m going to say this experiment started on 11/15/17 and use those stats. The traffic is split 50/50 between a version of my first landing page, and the newer one. So far 12.50 spent for 71 clicks, with one sale of the more expensive pen set. Unfortunately I don’t think the changes I made are responsible for this. If I look at all the data I spent about 48.19 and generated 35 in sales. The cost of shipping and materials subtracted only 24 dollars generated. That’s still a -100% ROI. I made one more change last night, instead of saying “A Complete Set” I said “Buy a Complete Set” as a headline on the landing page. This was based on the statement in a book by Scott Adams that when selling you should always directly state what you want at least once.
Well the landing page is not converting. 53 dollars and 234 clicks later I have lots of page likes but no purchases to show for it. On the bright side my ad is working well. That means that the problem is my landing page. I’m tweaking that now.
The new landing page attempt is another fountain pen one. This time for a set. The numbers are: 34.95 sale price, $8 cost, $3.5 shipping, so about $23 advertising budget per conversion. That’s tight but it’s close to what I was getting on one of my other pens.
The failure of the first tube amp landing page isn’t a great lesson for me unfortunately. Other than that it utterly failed I didn’t manage to get much information about why it failed. The following are the data I have:
- I only received one facebook comment, it was that the page contained no technical specs and not enough photos.
- I received several likes
- I had a very high bounce rate (95%), but later found out that google analytics can not properly measure this for a single page site.
- My past sales funnel attempt had a 1.5% conversion rate
My working theories are:
- Technical specs and photos are important to this market. It’s near christmas, I thought I would be receiving clicks from people who didn’t know much about this and simply would think a tube amp would make a nice gift for their husband, son, daughter, etc. This matched what I thought I knew based on members of my target market in real life.
- Site not trustworthy- the logo and banner aren’t at the top, and there is no link to a larger site with more stuff. This makes people think it’s not a “real” business (people seem very concerned about businesses being “real” but I don’t know what they think that means)
- Targeting is hard
Experiment failed (ish). I cut it somewhat short with only 200 site views but no sales. I think it’s safe to say I’m not getting the 1% conversion I was hoping for. Onward and upward. I also learned that bounce rate does not actually get measured correctly for one page sites.
3 ads placed for the new landing page for the headphone amp. For what it’s worth the calculation is as follows:
- Cost $40
- Shipping $10
- Customer acquisition budget $30/customer
- sales price $120
- profit per sale $40
Operating margin is 33 percent based on those estimates.
I budgeted 100 dollars for the test ads, stay tuned results in a few days.
This shouldn’t be as hard as it is, but it’s kind of like the first time you play big boy poker at a real casino. Your whole feeling is different when you have money on the table. Burning through a hundred or so dollars in a day or two of ads with no guarantee of any return is emotionally more difficult than you think.
Sales funnels reborn. My theory is that the cost of customer acquisition does not depend all that much on the sales price. In order to make money I need to have a product that has I large enough profit per sale to be able to at least break even on customer acquisition (primarily advertising) cost.
After contemplating this for some time I came up with custom branded headphone amplifiers. Many people prefer the sound of tubes, almost everyone thinks tube amplifiers look cool. Buying them in bulk from a manufacturer in china these can be had at a reasonable price, allowing for 40 or 50 dollars of profit per sale. Subtract from that 30 or so for advertising and I will still be making good money.
Plan is as follows:
- Get a logo from fiverr (done)
- Get a domain name (done)
- Get a landing page template from fiverr (ordered)
- Set up the landing page
- Set up a facebook page
- Advertise on facebook to audiophiles, engineers, and electronics enthusiasts
If any sales occur I will immediately order the amplifiers from china by DHL, and ship them as soon as possible to the customers. After this initial just in time market test (assuming success) I will keep 1 months worth in stock. The first set will be generic without branding, but after the market test I will get my logo laser etched into the product.
The time line for all this is a few weeks, so if this works I’ll be able to spawn a new business in less than a month.
Sales funnel was a mixture of success and failure.
- 150 vistors in one day
- 2 sales in one day
- 1.5% conversion (significantly higher than directing traffic to front page of my web site)
- 33 cents per clickthrough on the facebook ad
- $25 spent per customer acquisition
- $12.50 per sale – $6 dollar shipping and product cost
- lost $37 on the experiment