If you write it, will they come?

[miketpowell]

Your site/funnel probably coverts like crap compared to your competition. A good design does not mean you will covert as good as the competition that has done years of A/B testing right off the bat. There really isn't much you can do about it either besides spend the time/money to make it better through A/B testing.

In big competitive niches that means you lose money until you are optimized.

But even outside of that you mentioned you are building a twitter following. Does that mean the niche lends itself to repeat customers?

If that's the case your competition could very much be running at a loss on paid ads to get that new customer and turn them into a recurring customer. Once again in pretty much any large niche that has potential for recurring revenue the paid SERP listings are bid to be negative off the first sale. At that point it becomes all about understanding the LTVs of a new customer and being willing to lose money on that first transaction with them.

 

[jamessmith110]

Look at your competitors. Are they also bidding on Adwords/Bing? How are they managing to do that and still stay in profit, if you can't?

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Assuming your bidding on the right stuff, even if your competition is outbidding you and loosing money....

The real secret no one has mentioned is LCV (Lifetime Customer Value),

They know that x people buy x amount over a x period, or per x email, that even if they lose money to acquire the customer they know they make money on their next order, or
sometimes you are even automatically subbed to a re-bill like its 2005 all over again....

 

[lschmidt]

Yeah, it's definitely a repeat sale type of niche.

Without lots of money and time, I won't be able to know the lifetime customer value. Or how much time it takes to extract that lifetime customer value.

That sounds like the most reasonable explanation for the PPC behavior. First sale is a loss, customers do not become profitable until some time in the future.