If you know how much your average customer spends with you, then you know how much money you can spend to acquire that customer.
For example, if the average customer spends $3.00, then you can afford to pay as much as $2.99 to acquire those customers.
Of course, who wants to work for pennies?
So let’s say you’re willing to go as high as $2.00 to acquire these $3.00 customers, giving you a profit of $1.00
This means, of course, that you can buy any and all advertising that converts well enough to buy yourself customers for $2.00 apiece, or less.
Some advertising works better than others, but because you know your metrics, you know exactly what you can spend and still make money.
Naturally, with traditional advertising you have to come out of pocket. And if you don’t realize that $3.00 average profit for a period of weeks or months, then it’s difficult to reinvest profits to get more customers because the profits are coming in too slowly.
When this happens you have one of two choices: Either further optimize your sales funnel so that customers are spending more money and spending it more quickly, or…
Take a different approach.
This approach is not something new. You’ve no doubt heard of it before, but when you did, you may have thought it was a bit crazy.
The trick is to look at it in a different light.
Tell me – would you be willing to pay me $0 to send you a list of buyers – buyers who have proven they will buy YOUR products?
Of course you would.
That list of buyers is highly valuable. Your metrics have already shown that your average customer spends $3.00 with you, and that’s the AVERAGE customer. These are proven buyers.
And spending $0 to get new customers instead of spending $2.00 is an infinite improvement.
Have you guessed what I’m talking about it? If not, here it is:
Giving affiliates 100% commissions on your products.
You have lost nothing in giving away 100% commissions. Chances are you’ve already launched the product yourself and made a bunch of your own sales and the money that came with those sales.
Now you allow affiliates to promote your products and keep all of the commission. They do the work of promoting. The customer is essentially paying the affiliate. All you do is collect the buyers – and continue to sell to them over and over again.
Have you ever seen a marketer pay 200% or even 300% commission on products?
They know their metrics. They know the lifetime value of their average customer.
And what they are doing isn’t all that different than using PPC advertising. Except instead of paying Google or Facebook, they are paying the affiliate – for results.
Think about it. If you have products that convert well, and especially products you’re no longer promoting, why not let affiliates earn 100% commissions? You’ll attract far more affiliates than if you only offer 50% or 75%. And you’ll build your list of buyers without much of an effort. It’s a win-win all around.
And the next time you launch a new product, you’ll have a lot more affiliates you can contact to join your launch. Even if you’re paying the traditional 50-75% on the new product, you now have a relationship with these affiliates and they will be far more likely to promote for you again.
And again, and again.
Pay 100%. Attract far more affiliates. And grow your list of buyers. I don’t know why everyone isn’t doing this.