How to Launch Self-Liquidating Offers That Generate Customers Virtually for Free

In the context of an SLO, upsells are responsible for increasing the average order value. They’re the reason why SLOs can break even or even become profitable.

4. Downsells

Did your customer turn down your upsell?

Downsells are the opposite of an upsell: they’re a lower-value product that you can offer when your customer didn’t purchase the original upsell.

So even if a low percentage of customers purchase an upsell, you can still increase your average order value if they add your downsell to their order.

5. A solid welcome sequence

Last but not least, you’ll also need to welcome your new buyers via email. Not only should they receive an order confirmation, but you should also introduce your brand and let them know what they can expect from your emails.

4 Benefits of implementing self-liquidating offers for ecommerce

So what’s the point of creating an SLO instead of advertising your products the traditional way or simply getting people to opt-in using a freebie? Here are the four main benefits to consider when deciding whether this strategy is right for your ecommerce business.

1. Grow your email list virtually for free by offsetting your ad costs

When you capture email addresses on your website, you gain a valuable marketing asset that you can leverage over and over again to grow your ecommerce business.

But growing an email list takes time. It can also be expensive if you choose to take the paid ads route.

On the other hand, an SLO offsets your ad costs. This means that you can grow your email list virtually for free. So, when you make sales from your email list, they’re all profit!

2. Get a return on your ad spend much faster

It can take a long time to get a return on your ad spend with ecommerce ads. That’s because you usually need to spend more to acquire a first-time customer than what each customer is worth.

Because of this, the next sales you make with those new customers don’t really generate profit – they pay off the cost of your advertising campaigns.

With a self-liquidating funnel, you either make a small profit right away, or you break even. All purchases your new customers make after that go towards increasing your ROI.

3. Scale more quickly

If you don’t have a huge advertising budget, it’s difficult to pour lots of money into ads right away, especially if you make a loss on the front end.

You have to wait much later to scale your investment because you’re not making a profit right away.

That’s different with SLO funnels. Because you’re either breaking even or making a profit, you can recoup your investment much more quickly and invest your profits back into your ads.

4. Focus on buyers, not freebie seekers

When you use a lead magnet to grow your ecommerce email list, you can get a higher volume of subscribers than you would if you only use paid products to get people to opt-in.

But not everyone who’s attracted by a lead magnet will become a buyer. Most are only looking for free things.

That doesn’t mean they won’t become a customer eventually – especially if you nurture them well with consistent email marketing.

But when you use a self-liquidating offer to attract new subscribers, you’re attracting buyers.

Of course, you’ll still have to do some work to retain those customers. The average customer retention rate for ecommerce is 38%. This means that on average, only about three out of ten of your newly acquired customers will purchase from you again. But if you consider that on average only 2.5% of Ecommerce website visitors convert into buyers, the odds are much more in your favor if you focus your email marketing efforts on existing buyers instead of new customers.

How to create and launch your own ecommerce self-liquidating offer funnel (with examples)

If the idea of breaking even while generating a list of customers sounds appealing to you, then here’s how you can create your own SLO funnel.

1. Find a high-value, low-ticket product with high margins

The product you choose for your SLO is what will make or break your funnel, so choose wisely.

In order for you to break even with your funnel, your conversion rate needs to be relatively high – or your click-through rate needs to be low.

And if you want to achieve that, you need your potential customers to perceive your product as extremely valuable for the price tag.

What’s considered high-value will be different for every type of audience. For instance, this product by Wonderbly could be seen as highly valuable by new parents who value books and other educational activities.

Let’s break down an example to see how this works.

Remember that the average conversion rate is 2.5%. Great. Now let’s look at the average cost per click (CPC) for Facebook ads. According to the latest data, the average CPC for Facebook ads across industries in 2024 is 0.83 USD.

Now, let’s assume you have a product retailing for $35 with a profit margin of $15. If you get 1000 people to click on your ad at the average CPC, you’ll spend:

1000 x $0.44 = $440

And if you get the average conversion rate of 2.17%, here’s what you’ll make:

1000 x 2.17% = 21 customers

21 x $15 = $315 in profit margin

With this scenario, you’re losing $125 per 1000 customers. That’s because each customer is worth $15 in profit, but they cost nearly $21 to acquire.

But don’t despair – we’re just at the first step of your SLO funnel. Your front-end product shouldn’t have to break even on its own – that’s what the rest of the funnel is for!

2. Brainstorm what problems someone with this product might have

You’ll need other products in your funnel for your SLO to break even or even turn a profit.

But don’t just randomly add just any products to your front-end offer. The products need to make sense together.

To come up with product ideas, start thinking of potential problems someone might run into if they use your product.

And no, I don’t mean you should create a sub-par product that creates problems for your customers. Let’s consider some examples to illustrate this point:

• Someone who buys foundation for makeup may need a tool to apply it on their face
• Someone who gets a gift will need to wrap it
• Someone who purchases a new dishware set may want matching accessories to get a more complete look
• Someone who buys loose-leaf tea may need a steeper

Keep all your ideas on hand so that you have various things to test out.

3. Add order bumps, upsells, and downsells to the funnel using your brainstorm

From your brainstorm list, you can get to work with your order bumps, upsells, and downsells.

The best moment to display these offers is right before your customers proceed to checkout. And don’t worry, you don’t need to be a tech wizard to implement that. For instance, you can use a zero-code app like Getsitecontrol to add a popup and set it to appear right in the shopping cart or on the first page of checkout:

The purpose of these additional products is to hike up the value of each buyer. If we go back to our previous calculations, remember that each customer costs $21 to acquire while only generating $15 in profit.

Now, if we add:

• An order bump that costs $15 with a profit margin of $10
• An upsell that costs $50 with a profit margin of $30
• A downsell that costs $20 with a profit margin of $10

And if:

• 20% of buyers get the order bump – an additional $42 per 1000 customers
• 10% of buyers get the upsell – an additional $60 per 1000 customers
• 15% of buyers get the downsell – an additional $31 per 1000 customers

With those numbers, you now generate $448 in profit margins per 1000 customers. Because they cost you $440, you’re now breaking even.

Of course, this doesn’t mean you’ll reach those conversion numbers right away. You may need to tweak your offers, try different variations of your products, or test different pricing strategies. But this gives you an idea of what to aim for.

Let’s look at what Wonderbly does to increase the value of each customer. First, they let customers choose between different types of covers for their custom book. Higher quality covers cost more. And they even add an option with extra pages.

Next, they give customers the option to gift-wrap the book with two fun choices.

Finally, they have three upsell options you can add to your book order.

When you check out, they also add a call-to-action to let customers know they can easily add another book to their order. This is a great order bump that can easily double the value of an order!

Some customers may choose to only get one softcover book, and that’s okay. But the customers who choose to get additional products like gift wrap and a coloring book will help Wonderbly offset their ad costs.

4. Promote your SLO funnel

Once everything is in place, it’s time to drive some traffic to your brand new SLO funnel!

If you already get organic traffic to your website, make sure to highlight your new offer on your home page – especially if you’re using a brand new product for your SLO. New visitors who land on your site organically will be more likely to check out your offer if you make it obvious on the front page.

However, self-liquidating offers are usually promoted with paid ads.

When you promote your offer, make sure you drive traffic to a landing page that only has a single purpose – selling your front-end offer.

You shouldn’t drive traffic to your home page or to a page with a huge list of products. That’s because you’ll end up paying for clicks, but those people who click will likely get distracted. Too many choices can discourage people from taking action.

Facebook and Instagram ads are popular options for ecommerce self-liquidating offers. But as competition grows and prices increase, you may want to consider other platforms, including:

• Youtube
• Tiktok
• Pinterest
• Snapchat

Of course, the platform you choose should also depend on who you’re targeting. For instance, Tiktok’s active user base is on the young side, with 44.4% of U.S. users being under 24 years of age.

If your product is well-suited to a young audience, then perhaps Tiktok could be an interesting platform to try out for your SLO.

Here’s something important to remember about promoting your SLO funnel using paid ads: you’ll have to adjust the funnel, especially in the beginning. Rarely do funnels break even on the first try.

This means you’ll need to test out different ad creatives, audiences, and placements to see what works best with your audience. You may have to A/B test your product pages as well.

5. Follow up with your customers consistently using email marketing

When you’ve acquired your customers, it’s vital to cultivate your relationship with them to drive customer retention. One of the ways you can do this is by establishing a consistent email marketing schedule.

If you email consistently, your customers will get used to receiving and reading your emails.

And when you run a sales promotion, those subscribers will be more likely to read your emails if they’re already in the habit of doing so.

Keep in mind that even as an ecommerce brand, you can embrace text-based emails to grow a relationship with your customers. HTML emails with lots of design elements are eye-catching and allow you to showcase your products, but text-based newsletters give your emails a more personalized touch.

Not sure which approach is best for you? Test it out! Whenever you’re in doubt, just run a test to see what gets you the best responses.

With that being said, don’t rely too heavily on open rates when you run your tests. Recent iOS updates make it difficult to track all opens correctly.

Transform your ecommerce business with a self-liquidating offer

When done right, self-liquidating funnels can absolutely transform your ecommerce business. Of course, they require a lot of work upfront to get set up, especially if you’ve never created ads and upsells before.

However, with apps like Getsitecontrol, you can make sure your ecommerce website is optimized for conversions. Getsitecontrol will help you create email signup forms, order bumps, and upsell offers without a line of code. Sign up for free to try it out for yourself!