Despite fluctuations in the economy, eCommerce continues to flourish – and with technological advances expanding the use of online communities and bringing digital media consumption to the mainstream, it’s no wonder that digital products are still on the rise. Digital products have become so pervasive that nearly all of the top professional bloggers, speakers, and other influential public figures have taken advantage of the trend, releasing sought-after content like PDF guides, eBooks, podcasts, and videos. So what are the advantages of selling digital product over physical products?
- High profit margin
- No shipping cost
- No shipping restrictions
- No storage space and cost
- No inventory shortage
How can you start selling digital products? Well first you need to understand that on an average, customers take 6-7 interactions before they purchase your product. It could start from your squeeze page or even an affiliate website. At whatever major touchpoint a random peruser interacts with your product, you’d have to strategically plan out how you meet them. One important touchpoint that you shouldn’t ever ignore is the live chat. It gives you the opportunity to convert fast. If you want to successfully convert them, you’d have to follow these steps:
- Find and position product/market fit
- Tap into on-demand traffic
- Offer a lead magnet
- Offer a tripwire
- Bring in your core product
- Maximize customer lifetime value
- Marketing automation
Find and Position Product/Market Fit
80% of e-commerce startups fail and one reason for that is lack of product/market fit. You wouldn’t have to be part of that number if you ensure that your product fit the needs of the market. Buyers don’t buy products, they buy outcomes. The promise of a feeling; I read your book, I am able to make $5000 dollars or I feel this way. If you find product/market fit – you’ll be able to sell digital and physical products.
If you are going to sell digital, the first thing you’ll need to do is find your product fit. The best way to go about it is to look out for a product that’s in demand and in a growing market niche. You also need to ensure that you can compete with current sellers of that product and actually sell. Once you get that down, you have found product/market fit. But it’s more than just finding it, you have to position yourself to potential customers that you have a product that fits their need. That’s where your brand comes in. Your brand’s message should be clear on what your product gives to the user. That is the before and after. For instance your customer might think: “Before your product, I was frustrated with my lack of income, after your product, I know how to make money, I am motivated and happy.”
You also have to know your customers. You can use a storyboard to do this. Read the thought blog titled “Buyer Journey Map Format” to help map out a persona of your average customer and think about what they are in need of and how your product fits that need. This gives you an angle to work with.
Generating On Demand Traffic
If you’ve had your website/store for a while and already have SEO (Search Engine Optimization) traffic, that’s great. If you just set up your online store, on the other hand, you’ll need to look at other sources besides SEO. Don’t get me wrong, SEO is great but it takes time to kick in; it could be months before you finally get the number of people you need to view your products.
The best way to get on-demand traffic at the start-up stage is through:
- Social media ads – Facebook works great here due to the demographics.
- Influencer/blogger/third-party-endorsor outreach
- Other online ads
You need to know that when choosing which to work with, you have to choose the right audience. You’ll determine this by asking yourself who your average customer is, what they care about, and social media platforms they frequent. As you get this down, also start working on SEO so that it kicks in along the way.
Offer A Lead Magnet
A lead magnet is an offering of value in exchange for your potential customer’s information. When ‘lead-magneting’ (if that is a word), you are offering an immediate free value. Essentially, the goal is to get their email address as targeted leads. A good example of a lead magnet is your email marketing list. No, you don’t just say ‘subscribe to my list’. Doing that will leave you high and dry. You have to give them a free offer that leaves them eager and wanting more of what you have. If you are selling an online course, you could offer a very short ebook for free that would put them on the path to wanting your course. Lead magnets are thoughtful and targeted.
Offer A Tripwire
Tripwires are offers that are given at a lower price. It includes giving them a discount or showing them a ‘best deal’. Don’t think about how much is leaving your pocket right now. It’s more expensive to get a customer than retain one after all so you’re going to spend. Jeff Bezos once said ‘your margin, my opportunity’. So if you are thinking of your margin first without getting buyers, you are only pushing your potential customers to competitors who are offering that trip wire.
A tripwire comes after your lead magnet. When you have acquired new leads using your free offer, you can now warm a sales relationship through the tripwire. The aim of a tripwire is to convert a maximum number of your leads into customers. With your tripwire, you give an irresistible low-ticket offer as a taster to your main offering. You would see the value this brings as we go through to the next steps. After new customers checkout, you can offer them a one-click up-sell of your core product.
Bring In Your Core Product
Your subscribers have gotten a taste of your lead magnet and tripwire. You have built trust in them, it’s time to give them something more. This is where your core product comes in.
Your core product is your main offering. Although it sits at a higher price point than the tripwire, you don’t necessarily have to make a profit from them. I am not saying you wouldn’t, but you don’t have to. This is the mistake most of your competitors are making – trying to make profits from their core offer, and you can leverage on this. I prefer to put it into acquiring more customers. You are probably wondering if there is any point in the process where you make huge profit…maximize customer lifetime value.
Maximize Customer Lifetime Value
While most businesses are focused on the core offer, smart and insanely profitable businesses are creating funnels and increasing profit with value maximizers. The goal here is to get more sales of your product or an immediate sale of your second product. Think of it as what you offer to immediately raise transaction value. I like using one-click up-sells and subscriptions/recurring billings. There’s also cross-sells.
An up-sell is getting more for a lower price. It can be the same product or a different product that’s related to the product they bought. McDonald’s core product is the hamburgers, but their up-sell is the fries and coke.
A cross-sell is offering a different product. The more related they are, the closer your chances of selling. If you’re selling an eBook for a business plan, your cross-sell could be a marketing ebook. This is the holy grail of selling because they make revenue more predictable since they come in monthly/yearly subscriptions. A lot of businesses use it. Dollar Shave Club and Netflix are a good example of how to use recurring billings. The good thing is that you can use more than one type, so think of what works best with your core product and offer it.
Scale Sales With Marketing Automation
The purpose of your marketing automation is to drive people through your sales funnel. Convert leads into customers and convert customers into repeat buyers. Using email automation, you can notify your leads/customers of new lead magnets, tripwires, core offers, and cross up sells. One mistake some businesses make is sending offers only. You have gotten these leads/customers, don’t lose them by being in their faces with sales content all the time. There should also be a mix of brand messaging in there. Not having marketing automation is simply leaving money behind!
For more thoughts on selling digital products, just search the Thoughts Library.
Copyright ©John Trenary 2021