Maximum Monetization And My Purple Mohawk

August 1st, 2007 by John

Hey guys,

John here with the next installment of the 7 Figures Newsletter.

First, I know we promised numbers for you, and I promised to get a purple Mohawk if we didn’t hit them.  And as Liz so kindly pointed out in the last letter, chances are, that’s gonna happen.

Maybe I’ll turn this into a contest or something where I fly out to the winner, do some lunch, maybe a couple of drinks, and then we head over to your hairstylist for the new purple Mohawk, and you film it for everybody else.

I’ll let you decide on that possibility with your comments to this post, but I digress.

Yes, the pre-year plan was $1 million dollars.  And at my current rate, it may be just about half that.  Nothing to cry about, but obviously as Liz mentioned, we have work to do to make sure that we come back and beat the hell out of that goal in ‘08.

So on to today’s subject - I had some other cool stuff to share with you originally, but, something arose out of the launch that Liz and I just did, that got me thinking… and got me wanting to share with you - so that you could consider this for your own business.

Our recent launch did just shy of $65,000.  A respectable launch for us, and we had a solid team of affiliate partners to back us up.

Before I go into where I felt we fell short, let me share where I feel we were strong…

1) Product - Liz does a hell of a job with creating solid content and this package was a huge value.

2) Copy - I’m not a cat that usually blows my own horn, but for launch dissection sake, the copy did its job and did it well.

3) Partners - Liz and I both have built relationships with several top marketers and they came willingly to help us launch.

4) Support - Don’t know if you know this, but Liz’s husband Jamie is the support for our customers, among many other things, and he just knows how to get things done.  Also, our programmer is like eternally on call, and it’s fantastic to know that when something bad happens on the tech side we can pull him in and make it go away.

All in all, some pretty sweet stuff happened during this launch.

However, here’s where I feel like we could have kicked some major ass - and where we did not.  The back end.  Now Liz has done a great job of bringing together relevant and quality back end offers to tie to this launch, but that is not exactly what I am talking about here.

Because this launch was on a PLR product, we had to limit the front end customers in order to keep from diluting the value of the PLR product.

And once you limit the front end, then you obviously limit the One Time Offer.  Now, I’m a copy dude, so I think in terms of percentages all the time.  I do this because I have to make sure that my copy converts, so that my clients or Liz and me are making the maximum money we can per customer.

Now, go back to what I said before - we limited the front end.  By default that means the most OTO’s that could be sold were to as many people that bought the front end, a limited amount.

But that is a perfect world and will NEVER happen for anyone.  100% OTO conversion is ridiculous…  In the IM community converting at over 10% at the pricepoint we were at is considered pretty solid (not a hard fast rule but good gauge).

We did around 20%.  Good conversion rate, but that means if you sell 1000 on the front end, the best you can really hope for on the OTO is 200 on the back end.  Then you’re done.  Finished.

Starting to see where I am going here?  Good if you are - and if you are not - well, here’s one of my points… Had we not done a product with a limited front end, we could very well have sold far more units on the back end.  Bottom line = better monetization.

That’s not all though.  My second point, is that we did a fairly conservative back end price of $97 per unit.  Makes conversions easier sure, but what if we had done a $497 OTO, or a $997 OTO?

Sure, not everyone would have been able to afford it.  Sure the conversions might not have been as good, but let’s math this out for a second.

Using our number 20% at $97 per unit - 20% of the original 1000 that bought the front end is 200 units * $97 = $19,400. 

But 200 units at $497 = $99400.  And 200 units at $997 = $199,400.  Whoa.  Big difference, right?

But, hold on, that’s not exactly apples to apples.  Because I said the conversions could drop.  Now, here’s where I am being more speculative, because I really cannot be sure what the conversions would have been at those price points, without actually running them - but I have enough history with this stuff to probably ballpark it pretty nicely.

What if we slipped down to 10% conversions?  That would have been 100 buyers at $497 = $49,700.  And 100 buyers at $997 would have been $99,700.  Still pretty damn good.

Hey, let’s say that we only converted at 5% at $497.  That’s 50 people and $24,850.  And if we did 5% at $49850.  Either way, still more money on the back, for the same amount of work.  And at $997 it’s a significant amount more.

And remember, that this is based on a limited front end.  If there was no limit, then these numbers could go off the charts.

In closing, I’d just like to suggest that you bear in mind the limitations of scarcity.  Sure, it may get people to move quicker to a sale, but you have said in no uncertain terms that you can only make X dollars and no more.

And, of course, try your hand at some higher ticket back end products.  It’s not as hard as you think it is, in fact, you can do it so that other people do almost all of the work for you (that’s my next letter).

Hope this one finds you well, and hope this gets you thinking and strategizing.  Let me know on the Mohawk contest.  I will say this - if I do it, unfortunately I am limited to travel in the US.  While I love the idea of heading out of town for a Mohawk… I don’t know if I could get the wife green light for an overseas trip:)

Cheers to you,

John & Liz

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