So Envato’s March Madness campaign has just ended and I reviewed all the data on my item (I only have one theme on sale and it was featured in this campaign). The results didn’t surprise me, but I wanted to share them with you. Curious if it worked better for you.
My item is priced at $49. During the campaign it was discounted to $29 (40%). Given my current author fee (21.25%) and the fixed buyer fee ($12) these is the revenue per sale before and during the campaign:
(49 - 12) x 0.7875 = $28.14
(29 - 12) x 0.7875 = $13.39
28.14 / 13.39 = 2.1
This means that I needed to make at least twice the sales as before, just to break even.
I’m sure everyone did this calculations when ADP was first announced.
Considering the bad feedback I read on this forum about ADP, I didn’t expect to make way more than twice the sales, but I was expecting at least break-even. Of course this didn’t happen.
The reality was that I made roughly the same sales as before, with one or two extra sales on some days (average is 4 sales / day).
Funny part is that the traffic to the item was exactly the same as before. Item analytics (themeforest) shows that I only had 15 visits from March Madness campaign, which is basically nothing.
So I guess those extra sales were just extra conversions due to the price.
One other interesting fact worth noticing: on Google Analytics, there are two top countries on page views. First one has ~33% of the total traffic and also ~33% of the total revenue. Second country has ~30% of the traffic but no revenue (not present in Your top countries on earnings tab on themeforest). During this campaign it seems I got some sales from this country, because I had some unusual support tickets and I checked their location. All of them asked for immediate fix on some issues that were server related (file permissions), and one of them even threatened to give a 1 star review and report to Envato. I decided to refund that user and he agreed.
So what I learned from this campaign, given I never did discounts before:
- most businesses here are built around the $49 - $59 price point; there’s no price flexibility (meaning that half the price won’t bring twice the sales) mostly because of the buyer fee and because:
- people are used to spend $49 or more for a theme here, because they get at least decent quality + support, which is a lot for the money to be honest
- ADP was intended to target a new market (people not willing to pay more than $29 for a theme) but this only lead to less sales / more support requests for authors, that’s why we still see the same prices as before ADP.
4. What can be improved
I think the campaign would have been a success if the number of items promoted was way lower, somewhere around 50 - 70. Instead of allowing anyone who met the minimum requirements to participate, it could have been done like this:
- allow a two week timeframe for authors to enrol their items based on some performance requirements (total sales, sales in the past month, reviews, last updated).
- randomly choose 50 items
- promote those items on all channels (font page, landing page, email, facebook) so authors get maximum exposure and actually see an increase in sales.