Action Items for this Week (0:15:00) Facebook Update (0:07:48) May 31, Welcome to 100K Factory Ultra Session #7 workshop!

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1 May 31, 2016 Welcome to 100K Factory Ultra Session #7 workshop! In this webinar, we talk about: Contest Updates Student Success Stories Facebook Ad Examples Analysing Problems & Solutions Case Studies from YOU Gross Profit Margin and Net Profit Evaluating Each Running Ad Action Items for this Week (0:15:00) Every day - check your websites, process your orders, banking Once per week - new audiences and new product Every 4 Days - Evaluate all your ads Once Per Month - Gross Profit Margin & Net Profit Facebook Update (0:07:48) New Qualification Rules Copyright kFactory.com/Ultra All Rights Reserved 1 / 23

2 After some feedback, we decided to update the qualification rules. The whole idea of needing to qualify for the Facebook group was designed to be an incentive to motivate people to take action. fairer system for everyone. Here are now the two ways you can now qualify for access: 1. By getting ONE sale on any of your 100k Factory websites 2. By testing at least 20 ads Once you qualify, please submit your application here: Desktop Reference Infographics (0:09:32) Aidan has put together some great infographics to help you in this part of the under Session 7 Supplementary Materials, print them out and put them by your computer as handy desktop references so you can easily see the big picture: The Advertising Cheat Sheet for picking the best products and Facebook advertising. Phase 1 Blueprint A great roadmap so you can see the bigger picture of how we are doing things. Copyright kFactory.com/Ultra All Rights Reserved 2 / 23

3 Two New Videos (0:12:28) We have two new videos on the Session 7 page. The first is on Behavioral Audience Targeting, which is a more advanced targeting for your Facebook ads. For instance, you can target your ads to: Target people who spend money on Facebook Target people based on their travel habits Target people with specific phone types Target parents of toddlers (you can specify age brackets) Target people based on their relationship (married? Etc) The second video is on Broad vs. Focused Targeting, and talks about the differences. Contest Results (0:18:58) Most Revenue Before May 23rd Congratulations to Martin B., who won $500! He has done over $2,000 in sales now ($1,427 at the time of the contest): Copyright kFactory.com/Ultra All Rights Reserved 3 / 23

4 Ricardo P. won $200. He had made $ at time of contest. He has probably made over $1,000 now! Current contests: Contest #4: 21 Day Sales Challenge The most sales (sales count, not revenue) by midnight (11:59:59) ET on June 13 th First Place: $1000 cash Copyright kFactory.com/Ultra All Rights Reserved 4 / 23

5 Second Place: $500 Third Place: $200 Total of $1700 is up for grabs. $250 each for the best 10 ideas, tips or tricks (Total $2500) Many people have come up with great suggestions and strategies, which we have incorporated into the training. We would like to reward YOU for your great idea! Examples: window appear on checkout pa Submit ANY idea! What you might think is trivial may be GOLDEN to someone else! This contest will run for about the next few weeks, and we will create a report of these ideas for everyone. Details for both contests are in the Student Success Stories (0:21:28) Alan Klima Copyright kFactory.com/Ultra All Rights Reserved 5 / 23

6 Ruaidhri Prendergast Copyright kFactory.com/Ultra All Rights Reserved 6 / 23

7 Jason Clarke Facebook Ad Examples (0:22:40) Below are some of the winners from our Contest #1 Best Ads. Some things we like about these ads include: Human faces, especially eyes Eyes draw the viewer in Bold arrows Animal faces for animal lovers (and everybody who sees this ad will be animal lovers, as that is who you are targeting) Eye-catching images Products which are an impulse buy Curiosity factor (why would I have sore fingers in the first place?) Copyright kFactory.com/Ultra All Rights Reserved 7 / 23

8 Copyright kFactory.com/Ultra All Rights Reserved 8 / 23

9 (0:29:02) Analysing Problems This business model works. So, what could go wrong with it? When things need a marketing strategy and a business goal to follow. Once you have that, you can create a corrective action plan to follow. At the end of the day, though, these are the most common reasons: The product The ad The audience Your pricing Technical website issue For those students who are still struggling, we are being like Sherlock Holmes to find out what is wrong, and following up with people and working with them to solve their issues. Brent and Mark are leading the charge, analysing the problems and implementing action plans. Website Technical Issues (0:33:16) Could it be the website? Is the cart working? Make sure you first do a test purchase to make sure everything goes through. If you have abandoned carts, then it is likely NOT a technical issue, as people do get to your cart. Copyright kFactory.com/Ultra All Rights Reserved 9 / 23

10 Product Issues (0:34:05) If you have lots of visits to your site but no sales and few abandoned carts, it is most likely the product, and not the price. When analysing your product, ask yourself these questions: Is this an impulse buy? Is it a novelty item? (Refer to the Ultra Sales Success Quadrant document in Session 5 to help with sales conversions.) You are looking for items that are an impulse buy and are novelty items. If they are more utilitarian (ie stuff you can find at Wal- -Mart, but because they DO buy them, and have already either bought them or they are Copyright kFactory.com/Ultra All Rights Reserved 10 / 23

11 Facebook and wait a few weeks. Remember, the best products that sell using the business model are impulse buys and interesting and compelling items that people were otherwise not planning to buy. Bad Products: -catching. -Mart. Copyright kFactory.com/Ultra All Rights Reserved 11 / 23

12 is, they will quickly ignore the ad. Audience (0:38:48) If the CTR (click thru rate) is bad, it could be your audience. We would like the CTR to be above 1.5%. You could also just have an ad that nobody cares to click on. ally, this adage states that if you are looking for a job and you happen to be on the elevator with your potential boss, you have to convince him to hire you in the time it takes the For our business, you have only a split-second to convince your audience to buy your item. Your ad must be clear, concise and compelling enough for them to click and buy. is targeting too many people: Copyright kFactory.com/Ultra All Rights Reserved 12 / 23

13 Student Example: His product: Copyright kFactory.com/Ultra All Rights Reserved 13 / 23

14 His ads actually pretty good, though: : Instead, change it to tea and brands of tea : Copyright kFactory.com/Ultra All Rights Reserved 14 / 23

15 Another Example: changed the target to Minions and Quadcopter: Copyright kFactory.com/Ultra All Rights Reserved 15 / 23

16 Ads (0:46:18) A bad CTR can also be due to your ad. Bad ads have the following traits: Confusing Busy and unclear what you are trying to sell (ie too many words, title is too long to instantly identify with what the product is) Bad colors jarring to the eye No price or no compelling reason to buy Ads should have the following: Short, clear description Include the price Have a hint of scarcity (Limited Time!) Contrasting colors Clean, clear image Bad Ad Examples: Copyright kFactory.com/Ultra All Rights Reserved 16 / 23

17 Too busy. Copyright kFactory.com/Ultra All Rights Reserved 17 / 23

18 Cute and will get some chuckles, enough as an impulse purchase. Too confusing, too much text, green text is hard to read. Reference to the Friends TV show probably has too little interest. Pricing (0:50:58) If you have good CTR and clicks to your website, but low or no sales and lots of abandoned carts, it is likely your price. For instance, one student had great CTR, but everybody abandoned their cart. Because many people clicked to her site and actually clicked to buy the product (but then left without finishing), we suspected the price. We decided to offer free shipping. The student then got 3 sales! Another student had a good product, good ads, good price, the ad run long enough. Action Item (0:54:15) this will be your standard business practice every day, every couple days, once a week, and once a month: Copyright kFactory.com/Ultra All Rights Reserved 18 / 23

19 Every day, or just weekdays Check on your websites Process your orders Move money from Paypal to your bank (etc) to cover your ecom bills Once per week Try out one new audience for an existing product Try out one new product for your niche website, going through all the Every 4 Days Evaluate ALL running ads Scale up, scale back, or kill the ad Once Per Month At the end of each calendar month, calculate your Gross Profit Margin for that month (When just starting out and you do not have a full month of sales, use 60%) Calculate Net Profit Gross Profit Margin and Net Profit Gross Profit = Total Revenue minus Cost of Goods Sold. Total Revenue = All money made, the total your customers pay you Cost of Goods Sold = All the money you PAY to suppliers to get the goods to the customer Example: For a defined tim Copyright kFactory.com/Ultra All Rights Reserved 19 / 23

20 These 300 sales brought in $6,000 in product sales and $1,500 in shipping charges. Together, that makes $7500. Gross Profit = $4500 ($ $3000) The margin is Gross Profit divided by the Total Revenue: Gross Profit Margin = 60% ($4500 / $7500 = 0.6) was $7,500 In standard business accounting, Gross Profit Margin is simply this number. The costs of ads, costs of your website, hosting and other administrative costs Net Profit = Total Revenue Cost of Goods Sold ALL other expenses (mostly advertising, in our case) In the Month of April, our advertising expenses were $2000. Net Profit = $ $ $2000 Net Profit = $2,500 Evaluate Each Running Ad (1:08:08) For the defined period (every 4 days), track the following for EVERY ad you are currently running. Track and compare: Ad spend Revenue brought in (total for traffic coming from THAT ad) You want to make sure all your ads are profitable. If not, scale them up or down, or kill them. Make sure your ads are profitable while you are scaling them. This will replace the generic 1.5x rule. Copyright kFactory.com/Ultra All Rights Reserved 20 / 23

21 To evaluate your ad: 1. Take your Total Revenue and multiply by your most recent Gross Profit Margin In our case for April, the Gross Profit Margin is 60% (or just use 60% if ) 2. Take the resulting number and subtract the ad spend from it If the result is > 0, keep scaling otherwise revert back to lower budget Example #1: For a given ad over a 4 day time period The total revenue generated by that ad = $3,000 The most recent Gross Profit Margin = 60% (0.6) The ad spend = $1,200 Take the Total Revenue and multiply by your most recent Gross Profit Margin $3,000 *.6 = $1,800 Take this number and subtract the ad spend from it $1,800 - $1,200 = $600 If the result is greater than 0, keep scaling your ad. Otherwise, revert back to the lower budget. In this case, keep scaling, because $600 is greater than 0. Example #2: For a given ad over a 4 day time period Total revenue generated by that ad = $1,000 Most recent Gross Profit Margin = 65% (0.65) Ad spend = $700 Take Total Revenue and multiply by your most recent Gross Profit Margin $1,000 *.65 = $650 Take this number and subtract the ad spend from it $650 - $700 = - $50 Copyright kFactory.com/Ultra All Rights Reserved 21 / 23

22 If the result is greater than 0, keep scaling your ad. Otherwise, revert back to the lower budget. Revert back to previous budget Evaluation Steps: Increase the budget 1.5x rounding up - $1 to $2, $3 to $5, $5 - $8 etc Run this budget for 4 full days Evaluate ads with the new evaluation formula (ad spend and revenue) If scaling is in order Repeat the Process Otherwise LOWER budget back to previous level If the reach is ZERO, kill the ad Why the 4 Day Rule? You could go to 5 days or one week, but not less than 4 days. Why? Because all days are NOT created equally. For example, for most of our sites, Tuesday AM through Thursday afternoon may not be good, but Friday could be great. Selected Q & A (1:21:28) Q: We winners no longer sell well on my niche site. Should I start a new product and niche? A: Check and test to see what is happening. Did you change the Q: Does a bad CTR mean lack of clicks? A: clicked on it. Q: Do you need a CTR right from day one, or the average through a few days? A: but then the good days make up for it. Q: I have a good CTR, but no sales. The price is on my ad. Is it the price that is causing no sales? Copyright kFactory.com/Ultra All Rights Reserved 22 / 23

23 A: If the pricing is on y reaching your site. Also check to make sure your images are attractive, the presentation and description on your site is great, and that the product matches the ad to avoid confusion. Q: Are we calculating Gross Profit Margin per product, or the overall business? A: You could do per product, but it would take a lot of unnecessary time. We mean for your whole 100K Ultra business. Copyright kFactory.com/Ultra All Rights Reserved 23 / 23