Product Launch Advice #5: How much money will I make from my launch?
Click play for audio version! (14 minutes)
This is long. Read it anyway.
Many a client has come to us asking how much money they stand to make from a particular launch. Usually, they’ve got some data in tow – a certain list size, some anecdotal numbers on what a typical sales page converts at, some stats about the affiliates that may be promoting for them.
The hope is that all that data will help us come up with a number that represents what they will make when they launch their product, and that we are in possession of a formula that will reveal what that number is.
But launches don’t fit a formula, ever. Yes, launches are relatively simple in concept, so you can call the structure of it a formula if you want, but it’s the execution of the launch that ends up being the deciding factor in how much money actually comes in. The better you handle the execution, the better your chances are of getting people to click your buy button.
It’s kind of like a job interview. You can do a lot to influence the decision by how much you prepare and optimize.
Wearing a suit and typing up your resume on clean paper and answering questions when asked are part of the formula, in a sense, but your results come down to how much preparation and optimization you do in all the moving pieces of your launch.
Researching the company so you know what they consider relevant increases your chances. Wearing specific clothes that fit their company culture increases your chances. Adjusting the wording of your cover letter and resume to fit what they are looking for increases your chances.
But being in possession of a suit and a resume and the ability to speak when spoken to do not give you any indication of your chances.
So let’s talk about what does. Let’s talk about a few things that influence how much money you can expect to make from your next launch.
First, let’s talk about the data.
The only data you can remotely rely on is the data that comes from your own selling experience. The way your particular audience has responded to your particular promotions and launches in the past is the only useful information you can really get your hands on.
You’ll often hear from people that a “good” sales page should convert between 2% and 5% of visitors. But you won’t really hear the data that goes into that.
Was the sales page written for warm traffic or cold traffic? There’s a big difference between the two. Was the traffic that actually went to the page warm or cold as well? Your conversion will go up if they match, and way down if they don’t.
So if you’ve written a page that’s geared to your warm list, and you have affiliates send relatively cold traffic, that’s going to skew your numbers. If you write a page for cold traffic because you’ve got a lot of affiliates in tow, the warm traffic you send from your own list will muddy up the conversion numbers as well.
(This is why many people will create one sales page for their own list and another for affiliate traffic. It makes targeting and measuring a little easier.)
So you can’t necessarily trust stats from other people if you don’t know what the stats were generated from and whether they’re relevant to your situation. You could trust it if all things were equal. But you don’t have a chance of all things being equal.
Your own data, however, is very different.
If you’ve run multiple launches and promotions, you’ve developed a general sense of the patterns. You begin to see how many people typically buy during one of your launches. You begin to see what your own conversion rate tends to be, and your own click-through rate, and the way people on your list respond to different price points.
And what that tells you is basically your baseline. It tells you what you can expect if you don’t change a lot about how you run your launch and not too much about the market changes. If 25 people usually sign up for your classes, if you don’t change much, don’t expect more out of your next class launch.
But if you’ve built your list by 25% since your last launch, if you’ve hired someone to beef up your copy, if you’ve decided that this time you’re going to mail twice on the last day instead of just once, then you can take your existing data and adjust upwards.
But really, that’s all you can do on that front. You can’t get any hard and fast numbers that even come close to what anyone would call a guarantee, but you can at least start predicting what your upcoming launches might be like depending on the changes you put into place.
But what if I don’t have any launch data?
Then you’re probably in the same boat as the majority of ittybiz owners. You’re starting from scratch, or maybe you’ve launched so infrequently that your data is meaningless because too many things have changed over the course of your business.
If that’s you, then we have a few things you can pay attention to that can help you adjust your expectations up or down as to how much money you might make.
1. How good a sales job are you doing?
This comes down to sales page copy and your email copy. If you’ve put significant effort into making the best sales page and promotional emails you can, you can adjust your numbers upward.
We see a lot of people who create their own sales pages and emails based on what they’ve seen other people do, and they’re kind of taking someone else’s copy as a template and just plugging their own stuff in.
This isn’t necessarily a bad approach to start with, but doing a lot of cut-and-paste is hardly “the best you can do.” Doing a good sales job means digging into buyer psychology and understanding the flow of a sales page and presenting an offer that is appealing to the buyer, which requires a fair bit of thinking. (And caring, come to that.)
If you’re not confident in your own ability to do a good sales job via your copy and your emails, you’re going to want to get outside help or start learning how to boost your skills here. A good product rarely sells itself. So you need to get honest about how your particular skill at selling will impact your final numbers.
2. How well-targeted is your list?
If you have a list of 5,000 people and you don’t know where they came from and why they got on your list in the first place, it’s going to be a bit hard to predict how much money you’re going to make with your launch.
That’s one of the reasons we tell people to make sure your list name and/or your list incentive reflect what your most likely buyers are looking for from you, and not something generic that casts too wide a net. If you do that, your list is much more targeted and that much more likely to buy the thing you’re launching.
But the more randomness you have in your list, the harder it is to guess what kind of conversion you’re looking at. If this is your situation, then what you’ll want to do is to get your list more targeted moving forward. Basically, you’ll want to cull your list.
You can do that by sending out more targeted content over time (which will get people who aren’t the right fit for your products to unsubscribe), and that will help that culling happen faster. Then you’ll have more accurate data in the future, because the people who stay on your list are more likely to theoretically buy from you.
This doesn’t help you now, though. But at least it can help you not freak out and think you screwed something major up if your conversion numbers look lower than you thought they’d be. If your list isn’t targeted, you can run a great launch and still have lousy stats. But as your list gets more pure, your stats will stabilize.
3. How well-targeted is your product to your current list?
This is an area where we see a lot of people get very surprised come launch time. The most common example is a mismatch between beginner and advanced customer needs.
Here’s an example. Let’s say you run a yoga blog, and the people on your list are relatively intermediate. They’ve been doing yoga for a while, and they’re familiar with how it works, and what they like are all of these neat poses you show them and that thing with the deep breathing? That makes things so much easier. All of these people love you.
And then one day you think to yourself, “You know what? I want even MORE people to get into yoga. So I’m going to make a yoga DVD for beginners!” And you make a frankly fantastic yoga DVD. You show it to people and they’re all excited and they tell you it’s great, and you’re great, and everything’s coming up roses.
And then you launch it. To your list. And it flops, because you’re launching a beginner product to an intermediate audience. You’re going to sell nothing. Sometimes literally nothing. (We’ve seen it happen.)
Was the product bad? No. Was the launch bad? Maybe not. But the product wasn’t targeted to the list. Now, once launch is over, that yoga DVD may sell a copy a day from your incoming traffic. But it won’t sell to the list that you already have, and you’ll be wondering what the hell went wrong with your launch.
So you want to take that into account. You can have a great product, but if it’s not the right fit for the people you’re launching to, that’s going to pull your numbers way down.
Remember that stat we mentioned earlier that said a good sales page should convert at 2% to 5% of traffic? I’ve seen stats as high as 18% of the ENTIRE LIST buying someone’s product when the list is targeted and the product is targeted.
4. Is this your first launch?
First launches tend to either wildly exceed expectations or wildly underperform. In our experience, we’ve rarely seen a first launch just do “okay.”
Exceeding expectations tends to be a function of list loyalty (they buy because they love you), anticipation (they’ve been waiting for you to finally come out with something to buy), and a great launch (they’ve had a chance to see you shine and they’re all in a glow).
Underperforming tends to be a function of bad positioning (the product seemed a little generic or it seemed like a nice-to-have), inadequate launch preparation (thrown together at the last minute), or a little too much behind the scenes information (the upcoming product gets talked about for so long that people get tired of it before it’s even out. Authors, I’m talking to you.)
So if this is your first launch, and you have a list that reasonably likes you well enough, then you have the “first product ever” factor working in your favor, provided you run your launch competently. We see a lot of positive examples of this happening. So that’s nice.
But one thing you have to keep in mind about your first launch is that if it wildly exceeds expectations, your next launch may not. That doesn’t mean your next launch might go poorly – you may well make a lot more the second time around.
But if you made five times your prediction in your first launch, it might because you “finally” had a product for sale. So don’t expect your second launch to make five times your prediction, because that “finally” factor is gone. You can still make good money, even more money, but that will be because you ran a better launch the second time, or had a better product, or saw list growth.
5. What kinds of upsells are you offering?
There are a lot of ways to pad the final numbers of your launch, and a lot of people don’t consider this when they’re thinking of how much money they’re going to make.
They get very focused on the price point and the number of sales they need to make. So if they’re looking for $20,000 and they’re selling a $100 product, all they think of is hitting 200 sales, and that can lead to some unnecessary stress.
Not every launch has upsells built into it, but if yours does you need to think of how those upsells affect your total take-home. A typical upsell might be something that’s 30% – 50% of the price of the original product, and convert at say, 15%.
So if you’ve got a $100 product and an upsell for $50, and you have a decent shot at getting 15% conversion, you don’t need to sell 200 copies to get to $20,000. You only need to sell 186 copies. So you might not quite make your original hope of 200 copies but still end up making the $20,000 as a result of the upsells.
Some upsells are quite significant – especially if consulting or service becomes an upsell or a follow-up sale. So keep those in mind when you’re figuring out what your final numbers look like.
If you’re not confident you’ll meet your numbers just based on initial product sales, then you may want to add an upsell as a bit of insurance. And if you are confident you can meet a certain target on base sales, don’t forget to factor in the additional upsells or you’ll go through your launch thinking you’re not doing as well as you are.
So, how much money are you going to make with your launch?
Assuming your product is adequately targeted, you mail enough, your sales page is appropriate for the relationship with the list, and the price point isn’t insane? And your launch isn’t too long or too short? And you mail on the last day?
And you don’t have a massive list (brings conversion down) or a tiny list (can also bring conversion down)?
Good money. ☺
This is part five of our launch advice series. Stay tuned for part six.
Naomi writes more things like this in The Letter. Get it for free today. (It also comes with free marketing courses. You can’t move for free here.)