Economics of buying buyers


Had a couple of people reach out on social and through emails to explain some of the stuff about using ads to scale.

Decided creating an email about my thoughts and experiences on "buying buyers" is easier.

Here we go...

Why buy customers?

Cause it's way faster and easier for like 99% of people to buy customers than try to play the organic game.

How does it work?

There are only 2 key metrics you need to focus on at the macro level for the front end.

  1. Average order value (or lifetime value if you're tracking through past the front end)
  2. Customer acquisition cost

#2 is how much you spend to attract a customer.

#1 is how much they spend with you.

You just have to make sure #1 is bigger than #2.

Why low-cost items?

Why do I push things that are low ticket like in the $1 product challenge?

Because they fall within the impulse buy bracket.

A lot of people will spend $27 for something without thinking.

They rarely do that with something $2k+.

The funny thing is, when you get someone to pay you $27 (or whatever) they're the people who are more likely to pay you $5k+ in a week, month, or year.

Which brings me to the next point.

How do you sell the high-ticket stuff then?

You've got 2 ways of selling the high ticket stuff in my experience.

First, you can build a paid ad system. I know people selling products worth $2k+ through ads.

I consulted a guy who was doing $2.4M / year with this.

However, he had to pay ~$700 to acquire the customer and it would be weeks between first ad click and purchase.

It's a completely viable system, but you have to have the runway to spend big and wait for the return to come your way.

Not to mention you have to have a really solid system in place.

My preferred method is to sell low-ticket stuff on the front end to get rid of the window shoppers.

Then to use something like frequent emails to introduce them to the new offers and higher ticket purchases (this is your engage stage).

It's much easier in my experience to make better money when you have a big list of buyers and you're promoting stuff that will actually help them.

I also find it easier to then sell really high ticket stuff as you're building that relationship - but only with people who you know are willing to buy.

So, in short...

  • Buying customers is the fastest way to add more money to your biz
  • AoV needs to be bigger than CaC to keep things sweet
  • When you've bought yourself a list of buyers with low-cost offers, selling high-ticket stuff to them is much easier

Any Qs, hit reply or comment here in the communtity.

P.S.

Want a little more direct help from me? Here's a few ways I could help out.

Vagrants, Vagabonds, and Villains Ltd, Unit 16535, 13 Freeland Park, Wareham Road, Poole, Dorset BH16 6FA
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I've spent ~10 years helping digital brands grow. I share what I know and what I'm experimenting with in this newsletter.

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