LSF Interactive Blog

One of the hardest products to sell and build a business around is a low-ticket item. When I talk about low-ticket commerce, I am speaking primarily about websites that sell limited SKUs at a price point of less than $50. This could be a health product, diet pill, t-shirt, cheap jewelry, etc.

The problem all starts at conversion rates. Unless you are a big brand, or people are using your site as an extension of an offline relationship, chances are you are not going to exceed a conversion rate of 3-4%, meaning only 3-4 out of every 100 people will eventually purchase from you the first time they come to your website. That is if you are lucky. Most sites will never crack the 2% conversion barrier.

With the average cost of search engine traffic hovering at about $.45, that puts your minimum cost per acquisition (cost per customer, CPA) at roughly $12. If you are selling at a price point in the high teens, there is little or no margin left over to operate the business.

So what is one to do if they are stuck with a product at this price point? Maybe consider dropping the emphasis of the sale. I know; I am crazy talking. Hear me out.

The problem with online commerce is commitment. Online shoppers are just not as committed as offline. There are too many distractions; shoppers can talk themselves out of a purchase easier when no one is standing in front of them selling a product; their phone rings; the list goes on. Think of this statistic. The average ecommerce conversion rate hovers at 1.5%; the average rate at which an in-store shopper buys from you when coming to your store, is 25%.

So the real question is how do you turn more shoppers into EVENTUAL buyers? Don’t focus on getting them to buy up front.

If you focus on simply converting your traffic into a lead, you can obtain conversion rates as high as 15-20%. The second you ask for a credit card, you have lost most of your chances of converting. If you can figure out a way to get their contact information first, then remarket to them later, you could have a much better long-term conversion rate. Here is a scenario I have seen first hand in the diet product niche:

• 20% conversion rate by offering a free download giving out free information.
• Remarketing campaign that converted 25% of shoppers into buyers.
• Net output was a site-wide 6.25% conversion rate, something that is practically unachievable for non-brands with no offline presence.

Even if you look at the numbers in a less drastic standpoint, they still work.

Here are 5 good ideas you could implement right now to focus on driving leads via your website:

1. Build a 1-2 page download that offers good advice in your space. In the case of the above diet company, they offered a top 10 list of how to lose weight naturally.
2. If you have a multi-step checkout, have the first step capture just the name and email. Make sure your database stores this if they do not complete the checkout.
3. Offer an instant coupon via email. This will not only allow you to collect their information but will probably increase same day conversions a bit as well.
4. Newsletter subscription – much less effective than it used to be, but in some industries it still works.
5. Contest – people love to win stuff; create a monthly ongoing contest.

After you get these leads, you need to be prolific about remarketing to them. Here are 5 good ideas on converting these leads into customers:

1. Survey – email shoppers a follow up asking them what they think about your site. Be sure to make these loaded questions that then get them back into a buying funnel. When they get back into the funnel, give them an offer for another, relevant product. As an example, if you were selling a diet pill, perhaps you would try to cross sell them on a heart rate monitor, a diet plan, something like that.
2. Timed discounts – email them timed discounts that have a short, fixed expiration date.
3. Call / email them – if your staff has time on their hands, don’t be afraid to reach out to shoppers.
4. Engage them socially – encourage them to fan your Facebook or follow you on Twitter.
5. Drip, drip – set up a drip email marketing system that automates all of these tasks. I like StreamSend; AWeber works well too.

At the end of the day, don’t try to cram a sale down your visitor’s throat. You need to think outside of the box. The only thing that counts is revenue. How you get there might be beyond a simple add-to-cart button.

-Danny DeMichele
Managing Director, LSFInteractive.com