Eric Spofford sold a brick and mortar company for over $15M. When he moved online, he ended up with three different offers and ads that got worse the more he spent.
I have been on both sides of this. I ran a large addiction treatment company in New England and sold it to a private equity firm, and I built and sold a multi million dollar online business. So I sat down with Eric and broke his business apart in 26 minutes.
Here is what I told him, and why most of it applies to you too.
Eric’s three offers
Eric was running three things at once:
- A $2,000 course on investing in Section 8 housing.
- Business coaching and a mastermind called Inner Circle, at $7,500 for 90 days or $20,000 per year.
- A sober living house program. A $10,000 startup cost, taught in 30 days, pitched to produce about $5,000 a month in mostly passive cash flow. Renters rent individual beds, not whole bedrooms, and the house runs on sobriety rules and a curfew.
Three offers means three funnels, three audiences and three sets of problems. That alone is a warning sign.
Why low ticket ads break as you scale
Eric’s main complaint was that his ads got worse as he spent more. That is normal. As spend grows, targeting broadens and audience quality drops. Eventually you are paying to reach people with zero interest in your offer.
A media buyer mostly chooses targeting and creative. That is it. So the offer matters far more than the ad tactics.
Low ticket paid funnels tend to break at scale. The products that hold up are usually the ones with a lot of organic traffic behind them, like a big YouTube audience, because they get free sales on top of the paid ones.
Two ways to run a low ticket offer
If you are going to run a cheap offer on paid traffic, pick one of these and commit:
- Keep spend low and accept a small profit. I suggested Eric test $600 to $1,000 in spend. Lower stress, lower ceiling.
- Spend until you break even or take a small loss, then upsell hard on the back end. This is what larger companies do. More stress, but more money if the back end is strong.
What does not work is sitting in the middle, spending big and hoping the front end makes money on its own.
The middle of the funnel is where the money is
The biggest income driver is not a perfect ad. It is a strong follow up system. Here is the checklist I gave Eric:
- Email: a sequence pushing leads back to the webinar.
- Text: the same push by SMS.
- Phone: setters or salespeople calling leads to get them to the webinar or to sell the $2,000 package directly.
- Retargeting ads: pushing people back to the sales page.
In my own funnel, an ad leads to a DM, which sends an opt in link. The moment someone opts in, my team texts, emails and calls them. I had 12 to 15 people messaging leads individually and booking sales calls.
That staffing only works because the program is $16K. A $2,000 product usually cannot carry that cost. And costs keep rising. Two years earlier, a buyer who booked a call for my $16K program cost me about $3,000 to $4,000. It had climbed to as much as about $7,000.
Test the data and cut what does not work
My sales team used to call leads up to 10 times over a few days. Then we looked at the spreadsheet. Almost nobody picked up after the fourth dial.
So we cut it to four. Same results, a lot less staff time. Test, track the numbers, and kill what is not pulling its weight.
I also shared my plan to run ads straight to a $97 a month community called Elite University, with no opt in page. Members take a pathway quiz on where their business is and what they make, which decides what content they see. They get about four group calls a month, courses on ads and sales, and live Q&A. Then email, text and DMs push them to book calls for higher priced coaching. People who have already paid you are better buyers.
Price point decides the whole model
Sam Ovens sold a $2,000 course and converted roughly one buyer in several hundred leads on a $600 sale. Later he upsold customers into a $40,000 a year mastermind.
My friend Alex has a simple rule. Either sell a lot to people with less money, or sell very high priced offers to wealthy buyers. Eric’s middle priced offers sat in the awkward spot between the two.
Higher priced offers usually need a phone call. Very cheap offers can sell without one. Mid priced offers are the hard middle ground.
How I ranked Eric’s offers
- Sober house, the strongest. Highest upside and the shortest path. You can sell it directly without a long funnel, and the buyer does not need to own property.
- Inner Circle coaching. Better through affiliates and referrals from existing business owners than through cold ads. The narrow qualification criteria limit the market.
- Section 8 course. Heavily dependent on ads, which are hard to scale. I doubted its long term potential.
The 30 day plan
If Eric needed money fast, this is what I would do:
- Fix the middle of the funnel and optimize the webinar.
- Choose one path. Accept break even, or upsell on the back end.
- Stop doing anything that is not working.
- Sell the sober house directly on a call. The minimum price should be about $5,000, probably closer to $10,000, to cover team costs.
The takeaway
Your offer and product matter more than your ad tactics. Focus on one or two businesses instead of splitting your attention across three. And do not over optimize marketing when the product underneath it is weak.
Build the follow up system first. That is where most of the money hides.
Want to know which of your offers is actually worth scaling? Take my free 90 Day Ceiling Plan. Answer 18 questions and get a written plan, built on your own numbers, that names the one thing holding you back and what to fix first.
