Questions

You don't sound confident about building your own funnel. Why is that?

The cost of a lead is irrelevant on its own. It has meaning in relation to something: the value of the sale, and the lifetime value of the customer (LTV).

If your lead cost is averaging $100, and your margin on a sale is $500, then you can afford about 5 leads to convert that sale and break even. That means you need a 20% conversion rate, which further means these leads had better be good ie. pre-qualified.

If your margin is $5000, then the $100 lead price pales in comparison. You have a large number of "at bats" to convert one sale and it doesn't really matter how many you need as long as it is reasonable. For instance, even if 20 leads are required on average to get a sale, and that adds up to about $2000, you still make $3000 profit and that's the name of the game.

Get it running first so you can measure and therefore manage the funnel you've got. Then you can optimize for higher conversions and/or better pre-qualified traffic sources.

Right now I don't see an understanding of how a funnel works, or a baseline. I highly recommend getting those things straightened out first.


Answered 8 years ago

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