Watch the video, or read the Blog Post below.
How do you optimize your ads in terms of breakeven ROAS?
What is ClickFunnels?
ClickFunnels makes marketing so much easier for dropshippers and eCommerce website owners worldwide. Basically, it is a software that allows you to sell more products while advertising just one, which in turn saves you a lot more money that can be put to better use.
With it, you can offer up sells and down sells, which are products similar or related to your main offer. However, you should know that offering these products will significantly change your margins and therefore the boundaries within which you can play with your money in terms of ad spend. If you will offer additional products, more than likely, you will be offering them at slightly decreased prices — those which are not optimized for your ads.
This is the part where most dropshippers make their mistake: they fail to realize this and end up losing money, because they are solely relying on the ROAS based on the obvious elements and not including those that are costing them behind the scenes.
If you don’t want to make the same mistake, it is important for you to learn how to price your up sells and down sells the right way.
Pricing Your Up Sells and Down Sells The Right Way
Let’s get down to business. Here, we will discuss how you can optimize your products to secure high margins and low BE ROAS.
First, let’s have a bit of context; I want to show you how I’ve set up my own funnel through one of my stores, and as we go, I will discuss every bit of detail that you will need when applying it to your own store.
Here is a sample of my sales page. I am offering a product for $39.95 and buying it for $13, giving me a BE ROAS of 1.48.
Remember that your order form must be kept clean and simple so as to avoid having your customers shy away from what you really want them to do: to convert into buying ones. There should be no distractions at all, and all fields must be clear in terms of what information is required.
Here’s a bonus tip: if there is but a tiny bit of opportunity to get more money out of your customers, why not grab it? You can add a feature called “Order Bump” wherein you are giving your customers the option to have their orders jump your queue and have their orders prioritized for processing and shipping. Personally, I apply this to all of my stores and it allowed me to earn an extra $5 per transaction, WITHOUT having to make an extra effort!
Here I am offering more of the same product for a slightly lower cost. Simple and straightforward — and the most units they add to their cart, the higher discount they get to enjoy.
In case the customer refuses to purchase the up sell, I have one last chance to entice them into making another purchase, and that is through my down sell, which is a different product at a discounted price. The down sell should complement the front end offer so the customer will think that the two would definitely go well together.
Know that each one of these products have different margins, and different margins would equate to different breakeven ROAS. Yep, that means there are different calculations for each, and if you are not wary of the numbers, you might be losing more money on ads than you are earning on your up sells.
Optimizing Your Ads for Maximum Profitability
So, let’s get to the main topic. How do you optimize your ads for maximum profitability if your ROAS is changing throughout every step of your funnel?
What I recommend is keeping it simple and trying to reach the goal of having a single ROAS for every step. By doing so, you will be able to work with the same margins and therefore have but one concrete number for a budget for your ad spends.
How do you do this? Let’s have a look.
Of course we can’t do anything about our cost of goods, but what we can do is to slightly increase the price of our main product with the up sell without going over the original price. Again, we are selling the main product for $40; by offering two units of the same product for $74.95 plus a $5 shipping fee, we became a step closer to our original BE ROAS. If someone purchases our front end offer and takes up one of these “More of the Same” products, overall, we are working on the same margins and therefore the same ROAS, and therefore, we should be able to make money. You don’t run the risk of only optimizing through the front end product and not factoring in the lower margins for the up sell products.
So, short and sweet: keep your up sells and down sells at the same margin as your front end offer and you will be good to go. This will make optimizing your ads a whole lot easier as you go. Over time, track your performance over a 7-day period or more and analyze your profit and loss, and eventually, you will realize the beauty of working with a single number as a guideline for your ad spend and total budget.
Let’s Wrap It Up!
I do hope that this video post has enlightened you on the importance of having a single integer to be on the lookout for when optimizing your ads. These small percentages of your total profit might not be felt during your first few days of operation, but once you start scaling up and spending more on your ads, you will eventually realize that with the improper calculations, you might be losing more money than you are actually making.
If you have any more questions about ClickFunnels and how you can set up your up sells and down sells, why you should be using the software in the first place, calculating your BE ROAS the right way, finding and selling winning products, creating the most profitable dropshipping stores, dropshipping in Australia or anything regarding this video, feel free to personally contact me via the Contact Form HERE. You can also leave your comments and feedback below, and our team over at WagePirate will definitely get back to you with a response. For more reviews, news and updates, do not forget to subscribe to my YouTube channel!