Traffic, conversion and economics are the Big Three steps to a successful business.  Today, let’s look at the economics because I think it’s the most overlooked of the Big Three.  Economics really boils down to extracting more money from every customer over the “lifetime” of that customer.  There are many ways to accomplish this.  You could do this on the first sale by raising the price of your product or you could sell them a lower priced product and sell them a more higher priced item as an upsell.

The bottom line is that the more profit you make from each customer, the more you’re able to spend on generating more traffic and working on getting your sales machine to convert better.  Economics drives the equation.

It’s almost impossible to make the equation work with low-priced items.  The first problem is that because they’re low priced, you have to sell a lot of them to succeed.  This means you have to pay for a lot more traffic than with a higher priced item.  The second problem is that you have to sell a lot of them.  The transaction, processing, shipping and supporting 150 $10 sales costs more than processing one $1500 sale.  The third issue is that low-pried items whether information products or physical items are notoriously low-margin thanks to Wal-Mart and amazon.com.  I don’t know why anyone would want to sell a product that can be put in a box and shipped these days.  The Big A will eventually erode your already-miniscule profit margins.

The best way to approach the economics part of the sales equation is with high-priced, high profit products and services.  Like the one Click Funnels offers.  Products that generate commissions of $1,000 – $4,000 a month.

Direct marketing legend, Dan Kennedy, is fond of saying that the answer to every marketing problem is to “raise your prices”.  He was right.

Click here to check out Click Funnels.

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