Supplement sales funnels speak to you with numbers. That’s how you know if they are working or not. You just need to know how to listen to them.

I don’t think most people know how to listen because, the one question I get asked most often is…

… Are our supplement sales funnel numbers good? Maybe they ask because we see a lot of funnel numbers since we work exclusively with online dietary supplement companies and they are just looking for a baseline. People love to compare themselves agains others. But what always first comes to mind when they ask is that they are not sure where their numbers need to be.

But like I said, the numbers will tell you if it’s working. It’s purely objective. Either it’s working or it needs some work to get there.

So what do your numbers need to be? First let’s back up a little and quickly define what a funnel is.

In this case I mean a front-end self-liquidating website sales funnel. This type of sales funnel is comprised of the front-end offer and one time offers, known as (OTOs).

These OTOs are the up-sells and down-sells that come after the front-end sale. They are handled after the decision to buy on the front-end is already made and processed on the order page.

The goal is to acquire and retain a new customer at a cost that is equal to expenses.

To answer the question is your sales funnel working, let’s break it down to just two numbers that tell if your supplement sales funnel is working…

Average order value and return on ad spend.

Let’s take a look at both of these…

Whats a Good Average Order Value?

First what is it?

Average order value (AOV) is the average dollar amount spent in a single order.

It’s important because the higher your AOV is, the fewer customers you’ll need to get to a breakeven funnel. Which means your traffic numbers won’t need to perform as well.

To calculate the average order value of your funnel, simply divide total revenue including the up-sells by the number of orders for the front-end product.

For example, let’s say that your funnel generated a total of $31,000 and you had a total of 1,000 front-end orders.

$31,000 / 1,000 = $31 AOV

Is that a good AOV?

In general a target AOV for a breakeven direct to consumer supplement sales funnel, should be at or above $100. A rule of thumb range is between $100 – $150.

Or you can look at it compared to your cost per acquisition (CPA). If it’s costing you $80 to acquire a new customer then any AOV above that is a slam dunk – WIN.

What’s a Good Return On Ad Spend?

Return on advertising spend (ROAS) measures the effectiveness of any ad campaign.

It lets you compare one ad campaign to another. You can use ROAS to know which ad campaign you need to stop and which to double down on.

However, when you’re comparing ROAS of one campaign to another you want to be careful. Comparing different ad campaigns in the wrong way can get you into trouble causing you to keep the wrong ad campaigns. It’s not an apples-to-apples comparison. Don’t compare ad campaigns across different products or different ad channels. Meaning, you shouldn’t compare your joint pain campaign against your fish oil campaign. Also don’t compare your Facebook ROAS to your pay per click campaign.

Only compare different marketing campaigns within the same channel and for a specific front-end product.

To calculate the return on ad spend of your supplement sales funnel take the total revenue of the funnel divided by the total spent on advertising in that same time period.

For example, if the total revenue of your funnel, including up-sells and down-sells is $31,000, as in our previous example, simply divide that by the total spent on digital advertising for that funnel. Let’s say that’s $10,000.

Your ROAS would then be: $31,000 / $10,000 = 3.1

So for every dollar spent on advertising the funnel generates $3.10 worth of revenue. You’re not including other costs like cost of goods sold, etc because those are fixed costs.

Is that a good ROAS?

It depends on your margin, and overall needs of the business.

A low funded, cash-strapped business typically requires higher margins. While businesses more committed to growth with funding can afford to spend more while in growth mode.

A higher margin means the business can survive on a lower return on ad spend.

In general I look for ROAS to be within a range of 2 – 4. That’s generally a good range for a profitable direct to consumer supplement sales funnel.

However, a ROAS of zero is breakeven which is really what you’re striving for to make a self-liquidating website sales funnel work. Then you can buy an infinite number of buyers that you can monetize on the back-end of your business.

The Reality of The Numbers

So how do your numbers look?

Now you have the knowledge to answer if your supplement sales funnel is really working.

Sometimes however, and in most cases, you’ll need to financially carry a funnel towards profitability while being ok with it losing money along the way to optimization.

This is the reality of dialing in a supplement sales funnel. No sales funnel will be break-even right out of the gate. You’ll need to carry the costs as a loss while you get a bead on the numbers. In order to fine tune and A/B test your way to a high converting funnel, you’ll need to pay for traffic while it’s underperforming. If you have enough funding and conversion funnel optimization know how, you can achieve a self liquidating funnel.