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Are pop-ups worth having on your website? This is actually a conversation that happened in our communities a couple of weeks ago, and it was a really, really hot topic. And maybe you've asked this question yourself. Maybe you've said, hey, I have all these people coming, and they are using the pop-up to get a discount on their first order. Why would I give them a discount versus just not giving them a discount? And maybe you would like, hey, I want to get my gross profit margin up and I don't want to charge as much. And so this is a really, really good conversation. And I'm going to dive into the impact of pop-ups, if they're good, if they're bad. I'm going to run some different scenarios and talk through how we think about pop-ups when it comes to optimizing our stores. Now, before we get too deep, this podcast episode is a little different. In fact, I'm sitting in my office right now, and now we we've been doing video podcasts for a couple of months now. So I'm kind of sitting in my office here, and I'm here because Dylan is sick. So I'm not in the studio and I'm going to be running this podcast solo. So it's just me. I hope that's okay. And I'm going to be screen sharing, uh, I'm going to be screen sharing a PDF document that kind of breaks down some of the math. So as I'm talking through the math, for anyone who's listening on the go, don't worry, I'm going to talk through it verbally, but visually, you can also see what I'm covering in live time. Now, I wanna I wanna take us back a little bit. I actually want to go all the way back to World War II. And I want to talk, I want to talk about this thing called survivorship bias. If you're not familiar with survivorship bias, back in World War II, the military, they really wanted to figure out where to add armor to its planes. And so what they did is they examined all of the planes that were returning from combat and they mapped where the bullet holes were in the planes so that that way they can add more armor to where the planes were getting hit. But this statistician Abraham Wald was his name. He spotted this problem. The problem was they were only studying the planes that made it back, which is a big no pun intended there. It's a hole in the in the entire process, right? Because the bullet holes are shown to planes that took the damage and they survived. But there were many more planes that did not make it back, that the bullet holes may have been somewhere else. And so this is where survivorship bias starts to come in. It's where you're drawing conclusions from the survivors while overlooking those that overlooking those that never actually even made it. And people contemplating not doing pop-ups, I would say this is the core frame of thinking. It's saying, hey, I know that some people don't use my welcome offer of 10 or 15% or free gift with purchase or whatever the heck your welcome pop-up is. And it's saying, there are people that do not use that and they still buy from me, right? So people will buy without a discount. So why don't I just remove the discount? And the biggest challenge with this is that you're not considering all of the people that would have left and would have purchased if there was a welcome offer. And so as a result, you have no way to follow up with those people because you never captured their information. So this is really important because when it comes to running ads, we see a pretty strong correlation when you drive paid traffic to a page and having some kind of a pop-up with it. And if you remove that pop-up, you can lose conversion rate, which then raises your CPA. And so I want to kind of talk through this. And as you could probably gather, I am a fan of pop-ups, but I'm a fan of using them really intentionally and letting the data tell the story, not just my emotions. And another thing I'm gonna talk about in this episode, by the way, is I wanna talk through the math of this. I want to show you kind of what we recommend, ways to start to think about. I'm gonna talk about the trail effect of pop-ups, and I'm also going to talk about some different types of pop-ups you can use because most people only think of pop-ups as that welcome offer, which is the first time somebody goes to your website or the first order you're trying to get them to place. And so I'm gonna talk through some other types of pop-ups that you have not thought about that are built around your customer's life cycle that actually make them worth a lot more money uh way faster if you use them. So, first things first, let's go ahead and dive in. I want to talk about just simple math. If you're spending $10,000 on ads, and let's say you got a dollar cost per click, you'd get 10,000 new visitors. And if you had no offer, you might have a 3% conversion rate. So $10,000 in spend, you get 300 buyers that would make your CPA $33.33. And if you had a $65 AOV, it would put you to about $19,500 in sales collected. Now let's say you had a 15% welcome offer, which by the way, I'm a fan of doing more than 10% only because everybody does 10, and 15 usually gets a pretty substantial lift from 10%. So let's say you did a 15% welcome offer. Let's assume that the day one buyers rose to 4%. So from 3 to 4%. Well, this now means you get 400 buyers, which is a hundred additional buyers just by having something enticing for somebody on their first order. On top of that, because you got 400 buyers, that $10,000 now lowered your CPA to $25. So you go from $33,33 down to $25 as a CPA because you simply made a more enticing opening offer. That then would result in $22,100 in sales, which is about a $55 AOV. So your AOV actually dropped, right? We're doing a 15% welcome offer. So AOV, just using simple linear math here, would have dropped and you still would have collected more. You would have collected $2,600 actually in additional sales as a result of this. Now, what I want to go further in is I want to talk a little bit about the impact of this with a pop-up versus without a pop-up. So if you had a a pop-up versus no pop-up, people come in and we're gonna assume a 10% conversion rate on the pop-up, which by the way, eight to 10% is kind of the benchmark. If you're under 8%, you generally need to make a better offer. If you're over 10%, you might be you might be giving away too much of the farm and you need to reduce your offer, add a little bit more friction because you're just losing margin. So we try to aim for like eight to 10%. Now let's assume you're you've kind of optimized this and you've figured out a good way to do it, and you have 10% of people opting in. If you had 10,000 visitors, you would add a thousand contacts to your database. But remember, only 400 of them would buy, right? On day one with that offer, that offer moves them across the finish line and you get 400 to buy in day one. There's still 600 people that haven't bought yet. So if you were to have no pop-up, you would have had 300 buyer profiles, all 300 customers. But with a pop-up, because you have this offer, you now have 400 people buy. So you have 100 more customers. But more importantly than that, the extra hundred customers is amazing. But more importantly than that, we actually have 600 people that have not yet purchased. But we have a way to communicate with them. We have their email. And if you play it right, you would also have most of their phone numbers that you could do SMS marketing to. So then what happens is we have this trail effect that can kick in. And this is where the other 600 people that didn't buy today are the opportunity, right? And this is where you someone could even argue that let's say instead of 300 customers, or instead of 400, you actually got the same amount. You got 300 customers as a result of having it. It's like, well, now I'm losing some margin on the front end and get for the same amount of customers. But this is where the opportunity comes in. When you have 600 additional people that have not yet bought from you, you, with good email marketing, will begin to convert them over a period of time. So I'm gonna use some generic metrics that are pretty common if you're doing, if you have a product that is not a one-off. This is another thing, by the way. If you have a product that's like one-off, then your repeat buyers will it'll change this equation a little bit. But most people can sell multiple of their product, they can sell a new variant of their product, or it's replenishable, et cetera. So I'm just using basic math here. We can assume that about 30% of those 600 will buy within 90 days if we're sending regular weekly emails and we're doing monthly promos, which is something we highly recommend. What that means is of the 600, within three months, we'll add an additional 180 customers. Now, in a typical AOV, we had put us to about $9,945 in first order sales, even though these first order sales come in over the next three months. So remember, we have 400 on the front end, and then we have 180 additional over the following three months, which brings us to a grand total of 580 customers. But this is a really important thing because obviously we we forget to calculate these things, right? We think of cost per acquisition on the front end is like the only thing that matters. But there is this trail effect. And so if I took $10,000 now and I divide that instead of by $400, I divide it by 580. That puts my cost per acquisition at $17.24. And that is getting pretty incredible. But let's talk about what happens beyond that. Some customers keep coming back. And a simple rule of thumb, by the way, is that you can take a cohort of customers and you could, after you get that first purchase, we can assume that second purchase is generally, now these are just rules of thumb I'm giving you here, is generally about 40%. And then you could slash it in half every cohort after that. So every purchase after that. So I could say that of the 600, we can get about 30% of them typically to buy from good email marketing over a period of time. And we're just gonna assume that only 30% ever buy from us out of the 600 in the first 90 days. That gives us 180 additional customers. Typically, rule of thumb, 40% place a second order, and then it starts halving after that. So of the 180, in a 12-month window of time, we can assume that we can get about 40% to place a second order, which is another 72 buyers. Then 50% of that for the third order, 50% of that for the fourth order, and 50% of those for the fifth order. So if you're actually visually following, I'll talk you through this. Of the 600, we'll get about 180 of them to place the first order. Then we'll get about 72 of them to place a second order. And of those 72, we'll get half of them, about 36 to place a third order, 18 to place a fourth, and nine to place a fifth order. It just starts to cut in half as just a simple rule of thumb, which is what we typically see when it comes to like lifetime value. And so if I were to go in and add all of this up, those 600 emails that we captured additionally that did not buy on day one, over the coming months and into the future would have converted into 180 additional unique buyers who would have placed an addition, would have placed 315 orders. And using our simple, our first order AOV of $55 and a repeat order of $65, we would have made an additional $18,720 in sales. So we would have made 99, almost $10,000 on the first orders, and then another $8,700, $8,800 additional over a period of time from the people that trickle down through that cohort. And this is really, really powerful because we have to remember like day one is important, but we also need to fuel the pipeline with custom with future customers and growing that email list, especially when you start to get to prime sales moments of the year. When you start getting into Q4, the people with the biggest list are the ones that make the most money. Yes, you can spend aggressively, but you know what? CPMs are up accordingly. Like you're gonna pay a lot more for CPMs in Q4 than you will in Q1. It's just supply and demand. But the larger your email list, the more people you have direct access to to email, or if you're capturing their SMS, which you should, you can text them and start to print money. And this is this is by the way, using all this math puts the lifetime value of about at about $104 per customer based on all those cohorts that I just described. And so welcome. I'm a huge fan of pop-ups if you haven't gathered, because I just have to follow the math. If I didn't have it, yes, I can make more. However, it could really hurt me in the long run because mathematically it generally I can make more on maybe day one, but what we don't take into consideration is the people they don't buy because there's no offer. We don't take into consideration the the cost per acquisition rising because we don't have a higher conversion rate. And so these are things to keep in mind. Now I do want to bring something up. There are some thoughts that we have to consider when it comes to uh when it comes to pop-ups, right? We have to think about hey, do pop-ups annoy people? Right? Does it cheapen my brand? Would these people buy anywhere? Does it only attract coupon hunters? And I think those are probably the most common common objections I hear when it comes to pop-ups, that it's like, yeah, does it annoy people? You could say yes, because some people that might be the answer, but it's so it's so standardized, the same way like uh free shipping has been standardized by Amazon. So sorry, everybody, everybody expects free shipping. So, or you should have a free shipping threshold because of that. Amazon just standardized it. Uh, pop-ups are so common now that I would say, do they annoy people? Okay, maybe, but people are just so used to pop-ups at this point. And and you could look at all of the people that are opting in in the math of the situation to say, hey, if I annoy them, but I get them to come back and I make way more money, or I don't annoy them and they leave and never come back and they never see me again anyway, because I have no way of contacting them. I would rather do the former. Now, when it comes to your brand, you may have a brand that you are really hesitant to discount. Maybe you only discount like once or twice a year in these big sales moments. That's okay. You can still use pop-ups, but just change the offer. So this is where free gift with purchase becomes a really valuable thing. Sometimes free shipping becomes a valuable thing. Sometimes you just do a giveaway once a month and have them opt in to get access to the giveaway. So there are different types of offers you can piece together in the pop-up itself. But the most important thing is that you say, you run the math and say, okay, probably makes sense to capture as many people as possible. Number two, will this offer work against me now or in the future? Because sometimes the offers will work against you now. If I go and in the future, if I do a 50% off offer, uh it's gonna work against me now because my margins are gonna go to crap and I'm gonna have to have a really, really high break-even CPA or ROAS to survive. And number two, it's probably gonna attract it will attract people that are likely not gonna place another order because they're only buying because of the steep deal. So it's gonna hurt me now and in the future. So you need to test offers to start to identify what offer gets me the best efficiency and performance when it comes to acquisition, but then also has a balance of it, it attracts the right customer. And so if you're concerned about that, this is where you need to start to brainstorm different types of offers you can do. And it can be as simple as you give away product every month of your product. So somebody that's opting into this giveaway would be interested in your product or they wouldn't opt in. And you could just do a giveaway once a month. And maybe you just make the giveaway value $200. Maybe you give away a $100 gift card to your store once a month, or you you do these bigger giveaways once a year. You're gonna get so many people opting in for that, but yet you're not cheapening the brand because you're not giving anything away. You can also find good free gifts with purchase that works really, really well. But the most standard, by the way, is about 15% off first order. It works like gangbusters. It's super, super easy. If you don't know where to start, that's a good starting point. Most of our clients do that. We can get to that 8 to 10% or opt-in rate as a result of that. And so when it comes to pop-ups, the question of should I do pop-ups? Are pop-ups worth it? I believe they are. And I believe the math tells the story, but to make them really, really worth it, I want to give you a little, this little hack, and I'll kind of close after this. Match the message of the pop-up to the person and where they're at in the life cycle with you. So here's an example. You have a welcome incentive offer. We're like, hey, you subscribe, you enter it in, and then your first purchase, you get this. But there are people that have subscribed to you, but they've never actually bought. They opted into that welcome offer, never used it. They got the welcome email series or texts, and they never used it. So this is really, really cool. I love this one. This is where we can help them cross that first order finish line by making a reminder pop-up that targets people who opted in and join the welcome offer list, but have not yet placed an order. So here's what that looks like. Let's say I go to your website and I give you my information and it's 15% off. I'm like, oh, awesome, I'm ready to buy and I got busy and I didn't get to it. But then I see one of your emails or an ad and I click on the thing and I go back. Well, technically you already have my information, so I'm not going to see that welcome offer again. So we show a welcome back offer, knowing that they didn't buy. And so it says, hey, don't forget to use your 15% off. They don't have to enter any information because we have that on them. They just clip the coupon and they use the coupon. This is the second type of offer that I, or second type of pop-up that I love because we can take pop-ups and we can we can use different targeting criteria to then engineer them to the life cycle stage of that customer. So the second type is people who subscribe but never bought. The third type is people that bought once, but we want to move them further down the funnel with a lesser discount or a lesser cost to us. So this is where we could show them relevant product or we can give them a free shipping perk. And so this is where somebody has come in, they've bought, they see your ads, whatever it is, they click on the thing, and then now they get down to the website and we build an offer for people that have purchased one time to try to move them to that second purchase even faster. So to try to get that 40% to buy again faster, we make a pop-up for people that bought once but have not yet bought twice. And so we could show them a particular thing. And so this is where like we're literally orchestrating pop-ups based on their life cycle they're in with us. So we can show relevant products. We could also, I love doing like, hey, free shipping on your next order. And so this is a really simple one where the cost of free, it depends on what you sell. If it's expensive shipping for you, you may want may not want to do this. But this is where we just create a separate offer pop-up for people who bought once. Then we do a the fourth type of pop-up is gonna be based on people that have bought two or more times. This is where we then start pushing loyalty or have have an invitation to join our subscription where they show up on the website and we know that they bought twice already. And so it's gonna show them a pop-up to try to get them to join a loyalty program, to try to get them to maybe even subscribe to ongoing shipments from us because we know they bought two times already. So we can grow that repeat relationship. And then the final one pop-up that I love is a live promotion pop-up. This is where you're running a live promotion. Maybe it's a week, maybe it's two, three days. If it's Black Friday, Cyber Monday, by the way, I highly recommend you remove your welcome offer so people don't think that that's stacking on top of Black Friday, Cyber Monday. And then all you do is use the offer for everybody to explain what the current live offer is for that promotional cycle. And so all we're gonna do is we're just gonna show everybody what the actual offer is. And this is just gonna further uh amplify the performance of whatever that that live promo is that you're doing. And so this is where once we get somebody to opt in uh from that first welcome offer pop-up, we now start to walk the journey with them to get them to use the coupon, to get them to go from one purchase to two purchase and go to two purchase to loyalty or subscription with us. And then in live promos, we do the exact same thing. So when it comes to pop-ups, I am a fan of them. If you get real smart about them, use the math, run the numbers. Maybe your discounts are way too much and you have to back it down. If the math makes sense, then do the thing. You will get more people on your email list if you ask them for their email, and then if you incentivize them for their email, you're gonna get way more people. And if you do good email marketing, then you're gonna long term make way more money than if you didn't do it because you're afraid to annoy people or you believe that you can't discount your brand and you can't come up with an offer that doesn't discount your brand. I would disagree with you. You could do a giveaway and it doesn't discount your brand. If if a luxury brand was doing a giveaway, they'd get a lot of people to opt in, but they didn't discount a single thing. There are plenty of offers. Go use AI, explore all the different things. But I believe pop-ups are worth it. What do you think? Do you think pop-ups are worth it? If you think that they're not worth it, I'm actually curious to see why you don't think pop-ups are worth it. So if you're watching on YouTube, drop a comment below with your thoughts on pop-ups. And if you're listening, go check me out on Instagram at Josh Coffee, C O F F Y, and shoot me a DM about this podcast. Let me know you listen. Let me know what your thoughts are on pop-ups. And if this was helpful, then that would mean the world to me. If you could please go ahead and rate this podcast or give this video a thumbs up. Thanks for listening, and I will see you in the next episode.