How To Maximize Your Winning Offer Step 2: Add in Subscription

Good morning 🙂
 
I had to wait a little while to write this blog post because my brain was a bit foggy this morning. 
 
What’s interesting is that I didn’t drink a whole bunch yesterday…
 
But I did eat a ton of carbs and junk food that I wouldn’t normally touch…
 
So I think I was suffering from a bit of “carb brain”…
 
Which was no fun.
 
I’m feeling a lot better now though…
 
And thank goodness…
 
Because there’s a lot I want to get done today…
 
And item number one on my list is writing you this blog post.
 
I got a lot of feedback from people after yesterday’s blog post…
 
Folks told me the content was super valuable…
 
So as a result…
 
I’m going to keep going with this series of blog posts on how I plan to optimize my newest winning offer.
 
As I mentioned in yesterday’s blog post…
 
We started averaging 200 sales a day…
 
And yesterday we actually did over 300 sales. 
 
This morning we’re at over 250 sales already…
 
And the guys who run FB and Native traffic for us are just starting to get going (we had a large email drop)…
 
So I’d guess we’ll be close to 400 front ends by the end of the day…
 
And we may even flirt with 500.  
 
What’s really exciting…
 
Is that one of our FB Partners told us he thinks he can easily get to 200 sales per day on his own (at a $30 CPA btw – HOLLA!)…
 
And Matt, who is running Native, said he thinks he can get to 200 sales a day on his end pretty easily too. 
 
So honestly…I think we’ll break 500 sales per day by the end of this week…
 
And we have a chance to average 500 front ends per day for at least the next several months to (maybe I’ll buy that Aston Martin after all?).
 
In yesterday’s blog post I talked about how given all of this…
 
One of my first goals is going to be to optimize our upsells.
 
And as I explained…
 
The reason why is that our AOV currently sits at around $140…
 
But I think we can get it to $218…
 
Which will make a massive difference.  
 
At 500 sales per day…
 
That’s the difference between $70,000 in revenue…
 
And $109,000 a day in revenue.
 
Our profit margin is typically around 30%…
 
So that’s also the difference between $21,000 a day in profit…
 
And $32,7000 a day in profit. 
 
If we can run at that scale for a year (I think we can, and I’ll talk about why in subsequent blog posts)…
 
Then getting the AOVs up and maintaining 500 sales a day would be the difference between $7,665,000 in profit…
 
And $11,935,500 in profit.
 
Sweet, right?
 
And that’s just from Step 1. 
 
Now I want to move on to the second area where I’m going to be focusing on with this offer.
 

 
Maximizing Your Winning Offer Step 2: Adding Subscription
 
The next thing we need to do is to add a subscription component to our offer.
 
There are multiple ways this can be done…
 
But the approach I want to take (at least at the start)…
 
Is to offer customers a 10% discount on the checkout if they choose to “subscribe and save.” 
 
They will have this option regardless of if they choose a one month, three months, or six months supply…
 
And for those who do choose to subscribe…
 
Instead of being taken to Upsell 1 and Downsell 1 after they buy (where they’d be sold more of the same product)…
 
They’ll instead be taken directly to the second and third upsell.
 
Why?
 
Because since they’re going to have their order auto-replenished anyways…
 
I don’t want them to have a bunch of extra bottles sitting around…
 
Otherwise, when they get their auto-shipment…
 
They’ll have too much inventory…
 
And will likely refund or cancel their subscription.
 
Now I did the math on subscription in a previous blog post…
 
But I’m going to do it for you again here too…
 
Because I want you to see how this works in the real world. 
 
Like I’ve mentioned in the past…
 
The way I do subscription is very, very compliant. 
 
The terms are very clearly written out on the checkout page…
 
And before the customer gets rebilled for the first time…
 
Not only do we send them an email telling them it’s going to happen…
 
But we also call the customer to confirm they are aware of the rebill and are cool with it. 
 
What I’ve typically found in the past when doing it this way…
 
Is that 20% of people select the subscribe and save on the checkout…
 
And then out of those who do select this option…
 
About 50% of them actually are good with the first rebill. 
 
Those numbers may not sound all that amazing…
 
But I’m fine with them…
 
Because what I’ve found is that for the people who do want to be rebilled…
 
They tend to stick around for several billing cycles…
 
Plus, because we are so transparent…
 
We don’t see any spike in refunds or chargebacks at all…
 
Which is important from a processing standpoint. 
 

 
Okay so let’s say for my current offer…
 
We are going to be able to average 200 sales a day for the next year (even though I think the average is going to be 500)…
 
How does it look when subscription gets worked in?
 
Well, 20% of 200 sales a day = 40 new subscription customers a day…
 
And out of that let’s say that: 
 
50% of people take the 6-month option (so they get rebilled every 6 months)
 
30% take the 3-month option (they get rebilled every 3 months)
 
And 20% take the 1-month option (they get rebilled monthly).
 
Out of that, we know that 20 of those subscribers will actually rebill…
 
And that: 
 
– 10 people are going to rebill at the 6-month package (let’s call it $156 per rebill)
– 6 people are going to rebill at the 3-month package (let’s call it $105 per rebill)
– 4 people are going to rebill at the 1-month package (let’s call it 44 per rebill)
 
That’s an extra $2,366 in expected revenue we’ll get from those customers on their FIRST billing cycle…
 
But realistically it’s fair to assume they’ll rebill at least twice (should be way more)…
 
So this doubles our expected revenue to $4,732…
 
Which means for every day that we do 200 sales and add 40 new subscribers…
 
That’s another $4,732 we can expect to collect in the next year. 
 
Over the course of a year…
 
That leads to another $1,727,180 in revenue (at like an 80% profit margin)…
 
And if we’re able to maintain an average of 500 sales per day…
 
That number jumps up to $4,317,950. 
 
Pretty nifty!
 
And this is why adding a subscription to the funnel is going to be one of the very next things I focus on after we dial in upsells.  
 

 
At the risk of being repetitive, let me put all of this together for you so far: 
 
Step 1 is to get the AOVs up to $218. 
 
On 200 sales per day that would lead to $43,600 in revenue per day and $13,080 in profit per day…
 
Or $15,914,000 in revenue per year and $4,774,200 in profit per year.
 
At 500 sales per day that would lead to $109,000 in revenue per day and $32,700 in profit per day…
 
Or $39,785,000 in revenue per year, and $11,935,500 in profit. 
 
Now let’s include Step 2 – Adding Subscription.
 
When we do that…
 
At 200 sales a day with a $218 AOV and a 20% take rate on subscription…
 
The revenue goes from $15,914,000 to $17,641,180…
 
And profit goes from $4,774,200 to $6,155,944 (assuming 80% profit on subscription sales). 
 
Meanwhile at 500 sales a day with a $218 AOV and a 20% take rate…
 
The revenue goes from $39,785,000 to $44,102,950…
 
While profit goes from $11,935,500 to $15,389,860…
 
And those are pretty big jumps without having to implement a whole ton of work!
 
— 
 
Now of course…
 
Getting a single health supplement sales funnel to gross $45MM in one year…
 
Is SUPER freaking rare. 
 
I’m fully aware of this…
 
But here’s the really crazy thing to think about…
 
We actually don’t need THAT many customers to do it. 
 
200 customers a day = 73,000 customers in a year
 
While 500 customers a day = 182,500 in a year.
 
There are 320,000,000 people in the US…
 
Out of that about 210,000,000 of them are adults…
 
And data shows us that a full-on 70% of US Adults are Overweight.
 
So our market size is about 147,000,000 people…
 
And out of that, we’re just trying to make between 73,000 and 182,500 sales. 
 
That means if we want to average 200 sales per day…
 
We just need to sell our product to 0.049% of our target market…
 
While if we want to average 500 sales per day…
 
We need to sell our product to 0.12% of our target market. 
 
In other words, at the most, we need to sell to about one-tenth-of-a-percent of our market to net over $15MM. 
 
Pretty crazy right?
 
And what all this goes to show you…
 
Is that when it comes to your sales funnel and getting rich…
 
It has a LOT less to do with the number of customers you bring in…
 
Then it does with the value of those customers…
 
Or your overall profitability. 
 

 
Alright this blog post is getting long and I’m going to wrap it up.
 
As I’ve mentioned…
 
There’s still a lot more stuff to go through in future blog posts on this topic.
 
We haven’t even started to talk about: 
 

  • Monetizing our data yet (should lead to several million more in profit)…
  • Managing refunds and chargebacks…
  • Increasing compliance and minimizing risk (HUGE, especially as you get big)
  • Along with creating new VSLs, refreshing ad creatives, eliminating single points of failure, and making sure we actually put money in the bank.

Those are just some of the additional topics I need to write about here…

So I hope you stay tuned 🙂
 
 
– SPG
 
P.S. If you want to know more about how to maximize the conversions and take rates on your upsells, then I’ve got good news. Justin and I recorded the replay from our Zoom call last week about the 2 biggest upsell mistakes costing you money. Justin is a master at this, and you can check that out here on my YouTube channel.

On the call, Justin broke down the biggest mistakes with upsells (one has to do with your offer and the second has to do with the length of your copy).

 

He even busted out some LIVE example of the difference between a really good upsell and an average upsell.

 

So if you want to check that out, head over to my YouTube channel and watch it.

 

P.P.S. Can I be really honest with you? After writing yesterday's and today's blog posts, there's a part of me that really feels like I need to be charging for this content. Like even if I did a $97 a month newsletter with this stuff, I feel like a TON of people would join right? For now, though I am going to keep this stuff “free” and keep giving. But one thing you can do to help keep it free for right now is to help me continue to grow my audience. So if you know someone who would benefit from these blog posts – can you please forward this to them. Or better yet, send them to the form where they can apply to be on my list where they can receive content like this before everyone else does, which is here. 

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