Ep 20 | Win A Trip To Vancouver With 1-On-1 Coaching With Fred

The first question of the day is by Tricia Belmonte. Tricia said,

Question: I started using Pixel Bay for a client ad, which cleaned up a lot of errors – thank you!
I am trying to sell $600 high end kids bikes. After split testing, my numbers are good: CTR of 4.82%, link CTR 2.25% CPM of $14, high video watches, link clicks and landing page conversions, at $10/day ($20 didn’t do as well so I lowered it).
No sales though – So I am just starting re-targeting ads. Should I do a simple picture ad of an additional 10% off and take it to the landing page again, or direct to the shopping cart page?
Thank you Fred!!

A really great question but here’s the thing that I want to bring out to you, Tricia. You kind of gave me a false data telling me that the landing page conversions are high when you actually have not gotten a sale so we have to factor that out right now. You still have not gotten a sale o you can’t say or assume that the landing page conversion is very, very high. I can see though that the market or the audience that you’re going after are very interested on what you are selling and I can see that based on you click-through rate. I would assume your cost per click is pretty low if you’re doing a link click-through rate of 2.25% and CPM of $14. I would assume that your cost per click is going to be around 70 to 80 cents. With that you’re basically advertising $10 a day right now but you’re selling a $600 bike. You do not want to make an assumption that running an ad for a couple of days at $10 a piece can get you a sale right away because to be honest with you. If you can actually run it for five days, spend $50 and make a $600 sale, you are God, you’re golden so you don’t even have to worry about anything else but scaling up. The truth is if you’re selling a $600 bike you need a bigger budget to figure out if what the numbers are going to be in order for you to acquire a sale.

What I normally look at if you’re selling a $600 product I would actually run ads. If you’re getting a click-through rate consistent of what you are getting right now. I would run the ad up to around the profit that I actually make because at $600 you’re not going to make that entire $600. You have a cost of goods involved and you may have to say it’s going to be free shipping because you’re selling a $600 product. I don’t think any person who expects to pay $600 for product will pay for the shipping because that’s a very, very high amount. $600 is really out of the norm, to be very upfront and honest with you on average Facebook average order value right out the gate is around $50. Right now you are like 12x of what the industry average is going to be at $600. You need a lot more data points to tell you if that is going to actually confirm for you or not.

Let me assume things right now. Let me assume that your cost of goods for that bike is going to be 50% so for every $600 sale you make you basically have to pay $300 to the supplier to fulfill that product or you’re at wholesale I don’t know how you’re handling it. With that you have $300 profit to actually play around with your ads. To be very upfront and honest with you, you have to spend that full $300 to identify if you are going to break even or if you are going to actually get a sale or not. If you basically have good click-through rate and you’re selling a $600 bike and you already run $300 at the end of the day the next click may also generate a sale for you. I normally do 2x of my profit not including the ad costs. In this case, I would run the ad up to $600 in order to see if I actually get a sale or not. It may sound that’s a lot of money; well you’re selling a high-end product. And when you sell a high end product you definitely need a lot more data and a longer data points to actually distinguish if that product is going to sell or not.

It is very wise of you that you are thinking about running retargeting. It is super important if you are selling a high ticket product. Even if you’re not selling a high ticket product, you still want to have retargeting in place.

Based on what you’re asking should you be offering 10% off and direct the person back to the landing page or direct to the shopping cart? That’s a very great question that you asked. You have to identify the customer journey first. So, when the person actually clicks on your ad, they go to your landing page. When they go to your landing page they may add to cart. When they go ad to cart, they will be brought to the cart page to review the product and then they click check out then at that point they are asked to put in their customer detail. The journey is going from a landing page, a cart page, a check out page and lastly the thank you page because they have actually purchased from you.

You basically have four steps in your customer journey; Step 1. is going to be the page that people actually went to the landing page but they didn’t move forward. With retargeting it is very important to actually drive them back to where they have left off. In your case, if you say that the person actually went to your landing page and you want to retarget them, you don’t want to retarget back to the carts you have to retarget them back to the actual landing page. So, in this case in your ad you may actually give away a 10% coupon code right into the ad and when they click on it, it goes to the landing page you have to select whatever variance or selection that you have and then they go to the cart where they actually fill out the discount coupon and moving forward from there. Again because you’re selling such a high-ticket product you have four steps in place. Now that you’ve got the landing page covered you have basically now the Add to Cart, there’s going to be a lot of people that will actually leave the carts only because for some reason. At the cart level if they left the carts, they did not go to check out they left the cart, then again you want to direct them back right to the cart at the same time. Now for check out it is pretty hard for you because all of the dynamic URLs and everything in place you can really do a check out but you already offered a 10% so I would offer to actually go back to the carts because of all the cookies and everything so if you are going back to the cart it should be fine. Ultimately at the end of the day you still have the thank you page. Now here’s the important part when you’re running a retargeting you want to make sure that you run an exclusion so that any person that actually bought it without a discount or with a discount they’re not seeing your 10% ad anymore or else you are going to actually cause a lot of trouble you are going to be asked for a lot of trouble because people are going to say “What on earth is happening, I just bought your product now I’m served with a 10%off ad. That is not what you want. It’s very important that you have to make sure that you have exclusions. I really hope that helped you out. Again, if you want to look at where they are at in their customer journey and then direct them back to where they left off.

Moving on to Winnie Pang. Winnie said that

Started a $5 ad: 1st day – definitely no sales 2nd day – most sales day! Like 3-5 in one day. 3rd – 5th day/ weekends – definitely no sales 6th day / back to Monday again – 1 sales 7th day onward – 1 sale on and off, ad slowly dies off. It happens to most of my ad. Why is the main reason causing this unstable sale?

Great question that you brought out. Based on the Math I’m not sure what you’re selling is and based on what I see you should be breaking even right now. So, why are you getting a sale-no sale-sale-no sale? Again, just like I said earlier it’s a roller coaster when it comes to ads. What you want to do is find the average, now that you run the ads for more than 7 days and you’ve been getting sales you want to basically look at the average of what your cost-per-purchase is. If your cost-per-purchase is breaking even then that gives you the length of the tunnel where you can actually create a landing page, create up sells to actually maximize your AOV. Why does it cost this roller coaster? Like I said it affect based on the time of the day, based on the day of the week, based on seasonality and based on behaviors. It is based on a lot of things.

Let’s say that we’re going after Mr. Robert Kiyosaki as a targeting. I express interest in Mr. Robert Kiyosaki, you may express interest in Mr. Robert Kiyosaki but your behavior online is very different than me. Although Facebook put you and I into the same pool but at the end of the day it’s not going to be all 100% the same because each person is unique. What happens is that when you’re going after such an audience size Facebook only goes segments at a time. They can’t go to the entire audience unless if you budget is massive. Now you’re only doing like $5 a day so you’re only having a tiny portion within the audience that you’re going after. With that being said sometimes you’re going like maybe 1% of the audience is doing well and then it’s starting to exhaust then Facebook move to another 1%. Facebook keeps finding audience within your audience because at the end of the day previous audience may already be exhausted since they already seen your ad. Facebook is also trying to figure out who you should be targeting and who the best person is going to be.

When you actually hit 25 to 50 sales that’s when the steadiness will come at play. Since Facebook has so much more data and they can have more data to identify who your customers really going to be and at that point your ads will be more stable when it comes to sales. In the beginning it’s a roller coaster because Facebook is trying to figure things out. They’re trying to figure out within your audience who those people are, who are the ones who will most likely to respond and they’re going to test like different segment of things. But like I said you want to run back the average on the life time that you have been running the ad or the last couple of days  to see if you’re breaking even because that’s going to be the key. You’re job is to focus on increasing the Average Order Value (AOV) so that you can continue to make profit while Facebook is still figuring things out. I hope that really helped you out.

Moving forward to the third question. It’s by Yana Paltseva.

Hello Fred,
What do you think of a new Shopify Product – Kit which helps to manage social media channels and is directly connected to Shopify store? After having heard your Daily Huddles, I am afraid to spend much money for testing. Would you recommend Kit like a reliable managing tool for a new shopify store?
Thanks for your reply,
Have a great day!
Yana

I don’t use Shopify kit. I never use Shopify kit so I’m not in the position of answering that. If any of you who are watching this right now tell me your experience down into the comment box and in YouTube if you have used Shopify kit. What is you feedback and what results have you been getting? I’ll be honest with you I don’t know because I want to have things in my control rather than on someone else’s who doesn’t understand my business as much as I do and knowing my audience as much as I do.

For me the reason why I won’t even use Shopify kit because I want control. It’s spending your money. It’s basically using your presence so why would you want to give a control to someone when you are still starting out and you have to figure out what is happening and experiencing it first. It’s kind of like a pilot. Planes now a days are on auto-pilot but at the end of the day the pilot still needs to know how to fly a plane. If there is any emergency they know how to actually handle it, they understand the process, and they can actually see what may go wrong with the auto-pilot. So, I would assume that that’s what Shopify kit does. It basically does your stuff more automated and helping advertise on your behalf.

Robert Smith said, “Don’t use kit. It doesn’t optimize correctly.” I know that Robert is a pretty savvy Facebook advertiser now. He is actually one of our members inside Zero Up and has been making tremendous comments and helping people out inside our community so I would expect that Robert had tested it out.

If I were you it maybe something that I will look at in the future because you still need to understand the process and what is happening and experiencing it yourself so that if the automation messed up you can actually fix it and you know what is going on.

Moving on to the fourth question by Anh. Anh said,

How do I win a dispute with my bank if Customer received their package but claimed that they never received an item even though it showed on the USPS tracking site that it was delivered in their inbox?

It’s a really great question Anh. What you want to do is the following. This is basically for those of you who are fighting what we call disputes or chargebacks. The brutal truth is that all credit card companies are going to actually always side on the favour of the buyer and not the seller. I don’t get why these credit card companies don’t go on the seller side when the sellers are actually making sure that there are trades happening back and forth and they are the ones who are making these credit card companies money, not the customer. Anyway, you have to know that first.

How you handle it is very important. I win a lot of my disputes and chargebacks. There is a particular process that I had in place. Number 1. Tracking number which you already have in showcasing that the customer have received it. This is a super important piece of data. Number 2. The IP address of the customer who bought your product. Is it around where they live? Number 3 is the AVS match. You have to make sure that the address verification is matching. Credit card companies can be an a***l if they said, “Well the credit card went through but the address does not match the credit card that’s on file.” They will favor again the buyer. So you want to have AVS match in place. Number 4 is any email communication that you have with your customers. These are the four critical information that we submit to our bank and at that point it’s up to the bank to decide what they want to do with it. But as a seller and as an entrepreneur and as small business owner that’s everything that you can do. There’s nothing else you can do but providing this information especially the tracking number, the AVS match, the IP address; it will help you drastically on winning those disputes and chargebacks.

Moving on to the last question.

Hi Fred! I know you have a difficult time pronouncing names so have a blast with mine! I have a shopify store and thinking about installing PixelBay. I get the general idea of it but can you explain little bit more how you should use it for targeting (not retargeting). Is the best practice to target lookalikes?
Thanks and keep doing what you´re doing!

One thing about PixelBay is that it doesn’t help you with your targeting. What it does is that it creates a custom purchase conversion based on the product in your Shopify store. When you are telling Facebook to optimize your ad, it is not optimizing based on the purchase of everything in your store. It is particularly and specifically to that one product or a set of products that you have told Facebook to optimize [inaudible 26:14]. That’s what it is. If you don’t have a lot of data right out the gate you can’t even run lookalikes. I’m not sure where you are at in your ecommerce adventure or what stages you are at. But if you are new, you will not have such thing as lookalikes right away. You can’t be really testing lookalike right out the gate. What you want to start testing is basically the flex targeting and also the precise targeting right out the bat have around under 500k audience size to figure out your niche, figure out your product before you move on to get bigger audience size in place.

Most importantly get your feet wet. PixelBay is basically created to help Facebook be smarter on optimizing based on all purchases on your store but a particular product that ypu specifically created an ad for inside Facebook and that’s what it does. I hope that helped you put and answered your question correctly.

Put in the WOW into the comment box if you guys love our daily huddle today. Today is actually our 20th episode. I can’t believe that I am actually doing this for almost a month now.

I just announced yesterday how you can actually win a trip to Vancouver where again I’ll pay for your flight and hotel and we spend a day and you get a one on one consultation of full day with me. If you will love that put in the word ME right into the comment box and right into YouTube on the chat box so I can explain a little bit more again on how you can actually win a trip to Vancouver. We can spend a full day together and talk about your business, scale your business or if you have a business idea that you want to bring up with me or if you want me to dissect your Facebook ads of Google ads. We’ll have some fun together at the same time.

Here’s the deal a lot of you guys have already done this. For those of you who have not, in order for you to actually enter for a raffle to get a full day with me and have your hotel and plane tickets paid for, the first thing you have to do is simply go to the link above this video on Facebook and right below on YouTube and sign up for the rich dad summit. It’s only $1 ad you are going to learn directly from Mr. Robert Kiyosaki himself, the bestselling author of “Rich Dad, Poor Dad” and also his network of industry titans who talk about real estate, bitcoin, stocks, entrepreneurship anything that you can think of that you absolutely need and things that you won’t learn in school. If you want to escape the rat race, invest this $1. Then what’s going to happen is that I’m going to basically find out from their team who basically signed up and I will put all the names inside a box and then I’ll do a raffle on Monday, December 11 at 6PM Pacific and 9PM Eastern in our daily huddle and during our announcement of our kick start 500.

Listen, I charge an arm and a leg just for one day consultation with me but I’m going to give this away because I want to inspire you guys to move the first step to learn more about money. There’s a lot more about money than what is this of paper right here. You have to master that if you really want to be successful online.

That’s it for today’s daily huddle. If you guys want more questions answered simply go to www.fredlam.com/ask and everyday I’ll answer five questions in great detail as possible so that I can help you get your business pushing forward. Keep hustling. Go, go, go. You have to take action in order to turn your business into reality. Other than that, I’ll see you guys tomorrow.