Samcart has released some spectacularly detailed data about where Sales really come from in information product businesses.
They’ve gone the extra mile by breaking down the differences between small sellers who are doing a few hundred pounds each month and the biggest sellers who are doing over $50,000 each month.
The differences between the two are quite stark, and that’s what I want to go through today, summarising the changes, you can make to your business to enter the ranks of the million dollar sellers.
The Data
The data includes sales of over over $3.5 billion worth of products by 17,507 creators across 14 industries.
It might be biased towards the type of people who use SamCart (mostly information product sellers), but within this market, that’s definitely a solid enough slice of data to see some really strong patterns.
Orders & Revenue
our first Chart compares the number of orders each month to the average monthly revenue.
apart from the fact that the big sellers are obviously miles ahead of the smaller ones, another pattern emerges when you use these figures to work out the average order value.
The big sellers are making sales that average $182, compared with $23.75 for the smaller ones.
Difference #1.
Big sellers focus on bigger average order values more than the smallest ones do.
We’ll dig into how they get these big orders later on.
Conversion Rates
You might have thought that the biggest creators would have the highest conversion rates.
After all, they have the power of their personal brand, and years of marketing mastery behind them.
But not so.
The conversion rates drop off sharply for creators who are doing more than about $10,000 every month.
If you’ve run a big Campaign, you’ll know that the conversion rates when you talk to a small pool of social followers, who know you well are way higher than when you start to scale into a small audience. The creators know that, and use tactics that make them more profitable, so they can afford these lower conversion rates.
Difference #2
Big creators cast the net wider. They understand that halving and your conversion rate is okay if you 10x your volume at the same time.
Conversion by channel
When is a little tricky. Email and website look like the best converting channels, but you need that traffic to come from somewhere.
The overwhelming winner as a traffic source is Facebook. This is true for ads, and for organic traffic.
But remember this chart represents conversion rates and not the total volume of sales. Instagram organic and YouTube both keep converting well as they scale up.
Difference #3
Don’t sleep on Facebook as a traffic source, but make sure you’re also mastering the other video-sharing platforms.
Affiliates
This is probably the most stark difference in the whole report.
Bigger creators make far more use of Affiliate to grow their business than small creators do.
they recognise that Affiliate aren’t just a source of risk, free traffic, but they put effort in to recruit motivate and reward their affiliate partners.
When we look at the value of products being sold a bit further down, you’ll see why these top creators are much more attractive to affiliates.
Difference #4
Learn to recruit an active army of affiliates for your products.
Affiliate Average Order Values
this is why we see just how the bigger creators are able to motivate the best Affiliate.
The creators doing the biggest volume are promoting products that are worth more than $2000
The cretors doing the most overall value are promoting very high-value products worth more than $10,000 per sale.
Difference #5
Build high value products if you want to attract the very best affilates
A/B tests
Big creators, don’t just rely on gut feel for what works.
They test and they make decisions based on data.
Big creators have an endless feedback loop.
They sell more so they buy more traffic. The more traffic they have the quicker they can get the results from tests and faster their results go up.
Successful creators are people who understand this, and build in a culture of testing from the start of their business.
Difference #6
Build a culture of testing
Upsells
Upsells are the secret weapon of direct response businesses. It’s how they manage to run campaigns that might even be losing money on the first sale.
The difference between the people who use, or don’t use upsells is more than 4x.
Difference #7
Work out what you can sell someone immediately after they’ve made their first purchase.
Upsell & Bump usage
Across the board, bigger creators make more use of bumps and upsells.
Bumps or smaller items shown at the checkout. Upells are bigger items that help the buyer get a bigger or faster or more reliable result.
Difference #8
Use small orde, bumps and large upsells to radically increase your average order value.
Upsell value
there are some surprising differences by industry in this chart.
The fact that real estate has the highest typical order value and the highest AOV after up cells isn’t that surprising after all real estate is all about six and seven figure deals.
What’s interesting is that industries like self-help and wellness or sport have such high values when there is no obvious financial ROI to these activities.
These are activities that fit, Frank Kern’s, perfect market criteria of “irrationally, passionate, large in number and easy to find”.
[nb the chart lagels are incorrect and should be: green – original product price, blue – final avg order value]
Difference #9
Make sure you are marketing to a market who really loves buying your type of product.
Repeat customer revenues
customer acquisition is hard work and expensive, so the best creators take careful care of their customers to make sure that they come back in by again and again. The top two tiers of creators stand apart on this tactic.
Difference #10
Pay careful attention to your existing customers and find out what are the products you can sell them. It’s easier to build a new product for an existing customer than it is to find new customers.
Summary
Six and seven figure creators, do 10 things that small creators don’t, in order to grow their businesses. Here they are.
- Focus on bigger average order values more than the smallest creators do.
- Cast the net wider. Recognise that halving and your conversion rate is okay if you 10x your volume at the same time.
- Don’t sleep on Facebook as a traffic source, but make sure you’re also mastering the other video-sharing platforms.
- Learn to recruit an active army of affiliates for your products.
- Build high value products if you want to attract the very best affilates
- Build a culture of testing
- Work out what you can sell someone immediately after they’ve made their first purchase.
- Use small order bumps and large upsells to radically increase your average order value.
- Make sure you are marketing to a market who really loves buying your type of product.
- Pay careful attention to your existing customers and find out what are the next products you can sell them.