This is the kind of thing you can’t afford to NOT know…
If you’re a copywriter or online marketer today… Especially in competitive markets… Especially if you’re putting out marketing through paid traffic sources…
You really, really, really need to know about cart value.
I briefly mentioned this in yesterday’s post, on the easiest way to get website traffic.
But today it’s been so prevalent in multiple campaigns I’m working on… Plus I’ve been buried in cart value research… So I wanted to go deep.
As I said yesterday, I actually have a promo that beat the control, but didn’t.
It’s one I worked on with a junior copywriter. It’s for a client that puts most of their money behind their biggest, most successful promotion, while giving far less rotation in their paid traffic to other promos. (Which means the BIG royalties come from sitting in that throne, and every other promo gets comparative peanuts.)
Well, they have an unbeatable control, that we just beat. Meaning, they get more new customers per dollar spent by sending our promo than this unbeatable control.
Here’s the big, fat BUT…
But that other unbeatable control still brings in a higher ROI on Day Zero (the day they spend money on traffic) than ours. So no matter that lifetime value may work out in our favor, we don’t get that top spot unless we figure out how to get our Day Zero revenue up.
And that’s all about cart value.
Cart value is the secret weapon of the world’s most successful marketers…
Stansberry Research has an absolute behemoth of a promotion going right now, that could end up rivaling End of America for its impact on their business.
The promotion is a book promo for American Jubilee.
When you buy the book, you are literally paying just $5 for a physical as well as a downloadable copy of the book. And they’re running ads for this EVERYWHERE.
Now I’ll tell you this: they are not making money sending you hardcover book for $5. In fact, I’m sure they’re losing a decent amount of money on every $5 order.
There’s the advertising expenses. Plus the cost of the book they’re sending. Plus the shipping costs. It would not surprise me if they’re spending at least $10 to $15 on those three items, for every $5 in revenue they get.
And actually, it wouldn’t surprise me if they’re spending as much as $50 to get $5 in revenue, based on cart value and the fact that they’re really smart, sophisticated marketers.
How does this work?
Here’s how to maximize cart value…
I can’t speak from insider knowledge here. But I did just go through the purchasing process on this particular funnel, and analyzed everything I saw.
I’m not going to give you my full detailed analysis here, but I’ll give you some important details.
When I bought the book for $5, that’s the TOTAL I was obligating myself to spend. There was no trial, no autobill, nothing else.
But another really important thing happened. They got my credit card number, and were explicit that they’d hold it on file to make any future purchases more convenient. (This is important to what comes next.)
The next page I landed on confirmed my purchase, and immediately made a big offer centered around a $49 1-year subscription to their flagship newsletter.
This included YES and NO links at the bottom.
I clicked NO, and I’ll tell you what happened in a minute. But if I’d clicked YES, I would’ve automatically been billed $49 and then likely been shown another offer.
So everyone who clicks YES is suddenly worth not $5 but $54.
Because I clicked NO, they instead offered me a free trial to that same newsletter. But here’s what’s really interesting about that. By accepting the free trial, I was also authorizing them to bill me $49 in 30 days, unless I cancel.
Again, this was as simple as a YES and NO link, and this time I clicked YES. Not sure what would’ve happened if I clicked NO.
So assuming I don’t cancel (and I won’t, but probably 50% of people will), I’m also now worth $54 to them — albeit, over 30 days instead of on Day Zero.
But it gets better. Because once I accepted the trial, they immediately offered me a higher-end trading service at a rate of $55 per month. Again, with YES and NO links, which would start my subscription with a single click on YES.
I chose NO, and was then offered a free trial of the $55 per month service, which would start billing me in 30 days.
The math on this gets really interesting…
It also gets pretty complex, so I’ll do my best…
There are a ton of different possibilities — including the possibility of offers that I didn’t see based on what I said YES and NO to.
But let’s imagine a few different groups.
(And I’m only looking at Day Zero customer value and 61-day customer value — after 3 monthly billings — although other numbers would be relevant if this were more than an example.)
First off, there’s the straight book buyers. They’re worth $5 in revenue on Day Zero, and assuming they don’t respond to anything else, they’re still worth $5 61 days in.
But let’s say 50% of the book buyers respond to the $49 offer. Suddenly they’re worth $54 on Day Zero… And still $54 after 61 days (again, not factoring in anything else they may buy).
And let’s say half of the people who say no to the $49 offer do the free trial, and half of them stick after the trial. Again, these buyers are all still worth $5 on the first day, but they’re worth $29.50 within 61 days.
And then there’s the people who take both upsells. And here’s where the 61-day value gets interesting. They’re worth $109 on the first day, and $204 in their first 61 days. (Assuming some churn in both offers.)
And then there’s the people who take both trials as part of the upsell process. Again, they’re only worth $5 on Day Zero, but by 61 days I estimate they’d be worth about $82.
This may sound like a bunch of gobbledygook number crunching, and because it’s hypothetical that’s at least kind of right.
But it’s also at least somewhat realistic that out of every 100 people who spend $5 to get the book…
— The average Day Zero “cart value” could easily be somewhere near $42…
— And within 61 days, that average value could easily climb to $60 and beyond…
AND that’s likely just scratching the surface, because there are many other offers that will be made to these new customers.
Getting back to cart value…
As you can see, a $5 book offer isn’t necessarily a $5 book offer.
If you’re trying to figure out how to make an offer like this work to cold traffic, you have to understand that there’s so much more going on behind the scenes.
If you figure out how to make each $5 customer worth $42 before they leave your site, you’re suddenly playing a completely different game.
Recall near the beginning of this article I said…
“It would not surprise me if they’re spending at least $10 to $15 on those three items, for every $5 in revenue they get. And actually, it wouldn’t surprise me if they’re spending as much as $50 to get $5 in revenue, based on cart value and the fact that they’re really smart, sophisticated marketers.”
Even if you don’t have deep pockets, you’d probably be happy to spend $20-$35 all day long to get $42 in revenue back that day.
And if you’ve got a war chest built up you can spend on acquiring customers, you’d be happy to spend $50 per customer, knowing you’re getting $42 of that back within the day, and $60 total revenue within 61 days.
Here’s why this is CRITICAL knowledge…
Even if you think you’re just a copywriter, you’re not.
Because your copy is going up against people who are copywriters AND funnel designers AND offer creators.
And they understand this stuff.
They know cart value.
They know how to maximize it.
And they’re willing to spend $40 to get $5 in revenue.
If you’re just trying to write better copy to make a $5 offer work, you’re going to get RUN OVER every day of the week.
If you want to play on the big kids’ playground, you have to play by their rules.
Got it? Good.
Yours for bigger breakthroughs,
Like This? Get More...
Get daily marketing tips by email... Enter your info below!