As entrepreneurs, we’re in the business of creating value and trading it with others.

Which is to say, the main business of running a business is selling products. That’s how you engage in trade, serve your customers, and earn a livelihood..

But the business of trading–that is, selling–can seem like a mystery. What should we sell? How can we market our products? And at the end of the day, how can we convince people to buy them?

It turns out that making sales is much less about “convincing people to buy” and much more about explaining the benefits of your product and finding a mutually agreeable price. You have to find the point at which the price is equal to, or less than, the customer’s perceived value of the product.

It’s an equation that takes the mystery out of the process, and makes it much less emotionally charged.

So how do you apply it to your business?

This month on the podcast, we’re looking at four different aspects of launching products online, one of the most common ways digital entrepreneurs, like you, sell their goods to the public.

In today’s episode, we’ll be discussing launch math, the science of calculating the potential results of your launch long before you ever run your first ad, send your first email, or even, possibly, create your product.

Listen to the full episode to hear:

• How launch math helps you set realistic expectations and can even save you from making a major investment of time or money on a product that you haven’t validated
• How to use launch math to create realistic goals for your launch, separate from expectations
• The variables you’ll need to know for each launch
• Conversion coefficients and where those numbers come from

Learn more about Gillian:

• Join Startup Society (promo code: earnmore)
• Get on the waitlist for VALIDATE
• Profit Planning Challenge
• Get in touch!

The math:

Conversion coefficients:

• Email sales conversion: 0.1% - 2% (average: 0.5%)
  • Free offers typically convert at 2-10X these rates
• Webinar showup rate: 30%
• Webinar conversion: 1% - 20% (average: 5%)
• Direct sales: 10% - 50%If you’re launching to <1,000 people, then prioritize direct selling over mass-selling tactics.

Equations:

[launch list] x 0.02 = webinar registrants

[webinar registrants] x 0.30 = webinar attendees

 

[launch list] x 0.005 = email sales

[webinar attendees] x 0.05 = webinar sales

[personally engaged leads] x 0.20 = direct sales

 

[sales] x price = total revenue

 

[sales] x cost = total cost

 

[total revenue] - [total costs] = net profits