17 replies to this topic

[drtrmiller]

It's a common occurrence to hear many in the antkeeping community grumble and gripe over the prices charged by specialist antkeeping shops.  In fact, about 1 in 3 antkeepers surveyed said that price was the #1 determining factor in deciding whether to purchase a product for their antkeeping hobby.  As such, I've occasionally tried my best to address these concerns by temporarily lowering prices, or by offering items at steep discounts.  This post will attempt to measure the success of such attempts.

 

Power Hour

 

Yesterday, byFormica posted an announcement about a special "Power Hour," where byFormica products were discounted an average of 20%, and users could apply an additional discount by using a 15%- to 25%-off coupon on top of these sales prices simply by completing a few tasks, such as watching a YouTube video and answering a question.  The result was that all items could be purchased at 30-50% off regular prices.

 

Conversion rate to complete survey during 6-hour window: 1%

(Number of people who entered the giveaway, versus the number of viewed it)

 

Conversion rate to purchase items at steeply discounted prices during 6-hour window: 0%

(Number of people who responded to the offer by purchasing a discounted item)

 

Sweet Treat Giveaway

 

With regard to the aforementioned "Sweet Treat Giveaway," where anyone can save 15% to 25%, or even receive a virtually free bottle of Sunburst Ant Nectar by simply completing a few steps that take about 5 minutes, here are some metrics, over the course of the past 2 weeks:

 

Giveaway conversion rate: 7%

(Number of people who entered the giveaway, versus the number of viewed it)

 

Giveaway coupon redemption rate: 3%

(Number of people who redeemed the giveaway coupon (to date), versus the number who received a coupon)

 

Eligible orders who did not apply a coupon code: 98%

(Number of customers who bought byFormica items at full price, without using a discount code received via participating in the giveaway)

 

Now, I don't know about you, but those are some pitiful metrics for a 1 in 16 chance at winning a free bottle of Sunburst, and a 100% chance of winning some sort of discount, simply by watching a video and clicking a few things.  

 

Further, only 2% of US customers over the past 2 weeks applied a discount to their byFormica order on Amazon.com (98% purchased at full price), despite 100% of customers being eligible for the giveaway where they would be guaranteed to win a minimum 15% discount.

 

Three percent (coupons redeemed) multiplied by seven percent (coupons received) results in a virtually non-existent 0.2% overall conversion rate for the giveaway during the first 2 weeks.

 

Effect of General Repricings

 

A few weeks ago, I lowered the price of 240 ml bottles of Sunburst Ant Nectar to $27, down from $35.  There was no change in the conversion rate, despite the roughly 23% standard price reduction.

 

Similar effects have been observed during other repricings in the past (see conclusion).

 

75% off Sunburst Ant Nectar

 

In December, byFormica offered small bottles of Sunburst Ant Nectar for only $3.99, a roughly 75% discount with public coupon code redemption, via Facebook and this forum.

 

75% off coupon code redemption rate: 0.5%

(Number of people who redeemed the 75%-off coupon, versus the number who viewed the offer)

 

Eligible orders who did not apply the public 75%-off coupon: 89%

(Number of customers who bought the eligible item at full price, without using the public, 75%-off discount)

 

Forum-only Discount Bundle

 

During the fall of 2016, byFormica offered a special, forum-only bundle offer which included Sunburst, Liquid Feeders, and Fluon for a set price which equated to a 50% discount compared to buying the items separately on Amazon.com.  The conversion rate for that offer was 0%.

 

Black Friday Formicarium Discount

 

During the fall of 2015, byFormica sent an email newsletter and accompanying forum post advertising steeply discounted GroTube/Glassbox formicaries.  The conversion rate for that offer was 0.3%.

 

CONCLUSION

 

 

During over 2.5 years of selling these antkeeping products, I've observed that lowering the advertised price by most any amount, results in no meaningful change to the overall conversion rate (USA only).  This indicates to me that there is little relationship between price and demand.  In economics terms, this would indicate that the goods are inelastic, meaning demand is not very responsive to changes in price.

 

The 1-in-3 antkeepers who complain about wanting lower prices probably won't purchase at any reasonable price.  In contrast, the 2-in-3 antkeepers to whom price is not the #1 purchasing factor, will purchase antkeeping goods at any reasonable price, so long as any or some of the following are true (in order of importance):

• The products were recommended by a friend or on social media
• The products appear to be high quality
• The product is more convenient than alternative options
• The vendor has a good reputation
• There is no perceived alternative to the product

byFormica is a very small company, and I simply do not have the resources or energy to research and create high-impact advertising campaigns that yield a high conversion rate.  The few attempts at reaching out to members of the antkeeping community via Facebook, email, and this forum, have resulted in less than a 1% response rate, on average—far, far lower than the actual conversion rate on the Amazon product pages, themselves.  While offers to receive a completely free product are very popular, offers to purchase a product at a steep discount—even 75%—are essentially not worth doing—at least in the ways which I have attempted in the past.

 

If anyone who has not purchased or tried byFormica accessories has any feedback on what I can do to encourage meaningful participation in limited-time price promotional offers, don't hesitate to reply here or to write pr@byformica.com with your feedback and suggestions.

Edited by drtrmiller, March 12 2017 - 5:51 AM.

[dspdrew]

Well I just looked all this over, and it appears there actually is a price at which the 30% of customers you are referring to will purchase your products. it's apparently 0 dollars.

 

Edit: Oh sorry. You said "reasonable".

Edited by dspdrew, March 12 2017 - 4:47 AM.

[Serafine]

My case might be special but I didn't use a code (I wasn't eligible for any of the above discounts cause I live in Europe but I could have used the RobJ code) because I bought a 50€ prepaid amazon gift card and it would have made no sense for me to use a discount that results in 5€ lying useless on my amazon account for half an eternity.

[drtrmiller]

My case might be special but I didn't use a code (I wasn't eligible for any of the above discounts cause I live in Europe but I could have used the RobJ code) because I bought a 50€ prepaid amazon gift card and it would have made no sense for me to use a discount that results in 5€ lying useless on my amazon account for half an eternity.

 

Not sure about Amazon in Europe, but when you exhaust your gift card, you can spend the remainder on any purchase, and pay for the difference with another payment method.

 

Also, I didn't mention it in the post, but I have observed that prices play a much bigger role in Europe than in the US.  Consequently, I charge less money in Europe than in the US, even though the costs of importing the product there take away a great deal from my bottom line.

Edited by drtrmiller, March 12 2017 - 6:10 AM.

[Serafine]

Not sure about Amazon in Europe, but when you exhaust your gift card, you can spend the remainder on any purchase, and pay for the difference with another payment method.

Yes, but I don't want to use any other payment methods due to safety reasons.

Also, I didn't mention it in the post, but I have observed that prices play a much bigger role in Europe than in the US.  Consequently, I charge less money in Europe than in the US, even though the costs of importing the product there take away a great deal from my bottom line.

That's most definitely true. I assume discounts would also have a much larger impact on european sales if accompanied by a small advertising campaign (Facebook, Twitter, the largest ant forums).

[drtrmiller]

I assume discounts would also have a much larger impact on european sales if accompanied by a small advertising campaign (Facebook, Twitter, the largest ant forums).

Thanks, planning on it.  Just had new inventory received last week, so European audience targeting should be coming soon.

[Kevin]

 

Not sure about Amazon in Europe, but when you exhaust your gift card, you can spend the remainder on any purchase, and pay for the difference with another payment method.

Yes, but I don't want to use any other payment methods due to safety reasons.

Also, I didn't mention it in the post, but I have observed that prices play a much bigger role in Europe than in the US.  Consequently, I charge less money in Europe than in the US, even though the costs of importing the product there take away a great deal from my bottom line.

That's most definitely true. I assume discounts would also have a much larger impact on european sales if accompanied by a small advertising campaign (Facebook, Twitter, the largest ant forums).

 

So you bought an Amazon gift card from Amazon, but it's not safe to make a purchase from them else wise? Either way, 5$ saved is 5$ haha.

Edited by Kevin, March 12 2017 - 6:42 AM.

[Serafine]

I can buy Amazon gift cards at drug stores and gas stations here (it's those cards where you rub free a code and enter that at the amazon page) so I don't have to give my bank account data to amazon. That means if my account gets hacked there is no bank data and nobody can order anything in my name.

Edited by Serafine, March 12 2017 - 6:58 AM.

[soulsynapse]

Thanks for sharing all of this. I'm one of the people that don't respond to your promotions. I greatly respect your ability to be completely upfront with your problems and the mutual respect you show the community despite us not being receptive to your products.

 

I got into this hobby about 4 months ago. I've seen your products, and I've even openly criticized your products in one of your threads.

 

The following is a completely frank assessment of your problems from an ant keeper's perspective.

 

---

 

PROOF.

 

Ants are known for their ability to scavenge. Your product claims that ants prefer it, but my ants will go after wet cat food if I offer it to them. You make claims that your product offers nutrients they don't have access to, but there is no proof of that either. What follows then, is that you must not have the proof. There isn't another conclusion to draw as having proof would be an overwhelming draw for your product, yet it is completely omitted.

 

Potential solution:

 

Make a time lapse video with many different foods in an arena and show which the ants pick. If they're going after sunburst, I'd probably buy sunburst as a rare treat for my ants. But if you put something like diluted honey or sugar water next to it and they don't prefer sunburst over that, I don't have any reason to buy your product.

 

Another solution would be to make a video showing how ants fed sunburst will grow in population vs ants that are fed sugar water and bugs. If sunburst is substantially better then I'd probably feed my ants diet with a lot of sunburst in it.

 

A less persuasive form of proof is utilizing the reputation the customers you already have. I know drew buys your product, for example. If all the veteran ant keepers are buying your product, then there must be something to it, but I only know this because I can piece together that picture from reading these forums a lot. The average person has no clue.

 

I realize the last solution is much easier than the first two. I encourage you to endeavor to provide the first two as the last is a fallacious proof (appeal to authority) and not actual proof, though people will still fall for it.

 

---

 

PRICE.

 

If I'm going to test your product, I'm going to buy the smallest container. That makes sense, that's how most people will test products. Your smallest container, if I remember correctly, goes for 25c per ml. The average bottle of wine is 750ml, so it follows that to test your product I need to fork up the per ml equivalent of a $187.50 bottle of wine.

 

I will sooner find, slay and drain the blood from a unicorn myself.

 

Your more expensive products offer a much, much better value. If the above problem of proof is solved, I wouldn't mind buying a test container to see the results myself, but not at those prices.

 

Potential solution:

 

In the fountain pen ink industry it is not uncommon to offer sampler kits with many different inks. Since you only have one product, you can't exactly offer a sampler kit, but there isn't reason you couldn't offer more than one product as well.

 

Another solution is to offer small samples at very low prices. This is still predicated on proof, however.

 

---

 

MARKETING

 

Reading your posts, you do not know the first thing about selling a product. You sound like a used car salesman. If your product is good, it will speak for itself. If you aren't here to treat us like customers, then treat the people here as your friends. How would you sell this product to an acquaintance? Your posts should sound like that. Look around you. Nobody else that sells products in the anting community makes posts that look and sound like yours. Your posts are more professional by far, and I believe you're genuinely trying to help people but they're detached from the reality of your customers.

 

---

 

PERSONAL CREDIBILITY

 

I dunno who you are at all. Even without proof, all I know is you're a guy that only sells ant food and nothing else. Do you have a lot of experience with keeping ants? What was your process like creating this product? I have no clue. That goes for all of your potential customers. If mikey bustos tried to sell your product he'd see crazy success even without proof. Assuming you're not a professional actor by trade like he is, you'll need to shore up the other deficits.

 

---

 

VENDOR VALIDATION

 

In the reptile community, if everybody is selling your product then it's already validated. If I go to any of the many vendors for formicariums, some of them offer food, but none of them offer yours. Why? I can only conclude that they don't feel that your food has any real value to their customers.

 

---

 

Writing this I can't help but wonder why you can't see these problems for yourself. I know that this post was hard to read, and if you truly want to do good within the ant keeping community then many things need to change and these points are what you needed to hear.

 

Good luck!

Edited by soulsynapse, March 12 2017 - 1:16 PM.

[FSTP]

I"ve never minded paying what some would consider "a lot" for quality products. But they have to be quality. The few byformica products I have seem to be just that...

[benjiwuf]

seeing as Byformica has been around considerably longer than you think, I would highly suggest looking back into older posts and threads as many of your questions and points have been answered some time ago.

[Kevin]

I can buy Amazon gift cards at drug stores and gas stations here (it's those cards where you rub free a code and enter that at the amazon page) so I don't have to give my bank account data to amazon. That means if my account gets hacked there is no bank data and nobody can order anything in my name.

I can slightly understand that, but there are precautions to go against account theft. If you login from a new location, it will display part of your information (like ************1234 VISA) or such, and ask to reenter the information.

 

There is a very low chance of getting "hacked" and financial information stolen, I mean it's not like millions of others use Amazon.

 

 

MARKETING

 

Reading your posts, you do not know the first thing about selling a product. You sound like a used car salesman. If your product is good, it will speak for itself. If you aren't here to treat us like customers, then treat the people here as your friends. How would you sell this product to an acquaintance? Your posts should sound like that. Look around you. Nobody else that sells products in the anting community makes posts that look and sound like yours. Your posts are more professional by far, and I believe you're genuinely trying to help people but they're detached from the reality of your customers.

If you want to criticize someone for their marketing capabilities, at least sound intelligent and don't insult them. "A used car salesman" make you sound a bit ignorant, no?

[Serafine]

Just a thought but you could add a tiny test sample of Sunburst to your feeders (or fill one of the feeder bottles with it and add a removable cap), that way even people who buy only the feeders get into contact with it - and if they see that their ants love it they might be inclined to buy some more.

Edited by Serafine, March 12 2017 - 4:47 PM.

[soulsynapse]

 

I can buy Amazon gift cards at drug stores and gas stations here (it's those cards where you rub free a code and enter that at the amazon page) so I don't have to give my bank account data to amazon. That means if my account gets hacked there is no bank data and nobody can order anything in my name.

I can slightly understand that, but there are precautions to go against account theft. If you login from a new location, it will display part of your information (like ************1234 VISA) or such, and ask to reenter the information.

 

There is a very low chance of getting "hacked" and financial information stolen, I mean it's not like millions of others use Amazon.

 

 

MARKETING

 

Reading your posts, you do not know the first thing about selling a product. You sound like a used car salesman. If your product is good, it will speak for itself. If you aren't here to treat us like customers, then treat the people here as your friends. How would you sell this product to an acquaintance? Your posts should sound like that. Look around you. Nobody else that sells products in the anting community makes posts that look and sound like yours. Your posts are more professional by far, and I believe you're genuinely trying to help people but they're detached from the reality of your customers.

If you want to criticize someone for their marketing capabilities, at least sound intelligent and don't insult them. "A used car salesman" make you sound a bit ignorant, no?

 

 

Does it?

 

 

I guess a bad infomercial would be a better analogy. My post might sound hostile but I offered fair, honest, constructive criticism.

 

Thinly veiled personal attacks with 0 value and no constructive criticism is a lot more ignorant, in my view.

Edited by soulsynapse, March 12 2017 - 5:45 PM.

[Serafine]

The feeders speak for themselves - they are really well-designed, print quality is perfect, and there's no way that any ant could ever get stuck or drown in them.

 

I agree however that it would help if we'd get a better explanation of why the stuff that's in Sunburst is in there. What I had found out on my own is:

- Saccharose is the best sugar for ants

- Soidum chloride is salt which is obviously needed for a lot of stuff (like the Na-Cl pump that keeps our nervous system running)

- Sodium hydroxide is used as a cleaning agent and is the primary building block of many organic compounds including formic acid (so I assume it's good for all Formicine ants like Camponotus, Lasius, Formica, Prenolepis, etc.), also it's probably something that is not too easy to obtain from regular food

- Sodium Triphosphat can be used to build a lot of enzyme complexes including ATP (our biological energy carrier)

- Methylparaben is a natural anti-fungal agent that prevents mold and bacteria from spoiling the the food (it's use is widespread in laboratories to preserve insect food)

- Tartrazin is a coloring substance that can cause allergic reactions and is suspected to trigger hyperactivity in children, no idea what effect it has on ants (they might be able to split off the Sodium hydroxide group from it)

 

Yes, better information on this product would be nice...

Edited by Serafine, March 12 2017 - 11:03 PM.

[Superant33]

My ants prefer sunburst over my own concoctions (organic fruit juice with sugar and sometimes a protein). Byformica liquid feeders probably saved my ants lives. I went on vacation to Florida for a week and left two filled feeders for every colony (other the honey pots-that's what repleates are for!). Terry makes high quality products. I only wish that he had more products available. Like the old formula blue. And the new formula blue. Also waiting on a new website.

[Serafine]

My ants prefer sunburst over my own concoctions (organic fruit juice with sugar and sometimes a protein).

The question is does Sunburst actually have a nutrient advantage over your regular sugary ant food (honey, honey water, marple syrup, sugar water, coconut blossom syrup, whatever) or does it just drug the ants into thinking it's great for them (it's certainly not bad for them, the question is is it particularly good for them).
 

Terry makes high quality products. I only wish that he had more products available.

I can agree on that (even larger feeders for huge colonies or Sunburst in different colors would be great). But it's probably a lot more efficient to produce only a small range of products and keep them available.
 

Like the old formula blue. And the new formula blue. Also waiting on a new website.

Terry himself said that it wasn't a very good product and didn't meet his quality standards (the ants ate it because of the sugar that was mixed into it and not because the protein contained was particularly good for them).

Edited by Serafine, March 13 2017 - 5:23 PM.

[Tyrael]

I'm providing a frank assessment as soulsynapse did, to explain why I find your products unappealing. Likewise my intent is not hostile.

 

 

Does it?

 

 

 

I guess a bad infomercial would be a better analogy. My post might sound hostile but I offered fair, honest, constructive criticism.

 

Thinly veiled personal attacks with 0 value and no constructive criticism is a lot more ignorant, in my view.

 

I would have to agree. He pasted this paragraph on a thread I made asking about honey. His response put me off his product immediately. Later I checked what it was because I saw a few people on this forum praising it. For me, dyed sugar-water with preservatives in it is not worth $0.15 per ml. You can purchase sugar for less than $2 per kilogram. I'm unsure what sugar to water ratio Sunburst uses. Assuming its 1:1, I could make roughly 1000ml of sugar-water with 1kg of sugar. He sells 240ml for $35. So, with $2 worth of sugar, I could make just over 4 containers of his solution, and sell it for $146 with his retail value. Of course, the price is higher or lower depending on how much sugar he actually uses, but the disparity is massive regardless. This does not account for the trace amounts of other ingredients, but I think you would agree they are not worth ~$144. Also, this is being somewhat charitable, as I'm using $2/kg, and you could find sugar for ~$1.30/kg

 

Another problem I have is this: http://www.formicult...-on-the-planet/

I know it's a joke, but the intent was to justify the price of his products by showing that Fisher Scientific sells sugar for a seemingly insane price. However, there are a number of things wrong with this. Firstly, the website says that the prices listed are not accurate unless you login with your account number. Secondly, this is ACS grade sucrose. ACS grade is very high purity and intended to be used for delicate applications like scientific experiments that demand such purity. Comparing sugar you buy from Walmart to certified ACS grade sucrose is like comparing bathtub gin to alcohol produced from a professional distillery. 

 

I just can't believe some people believed I was selling plain sugar, at 40 or more times the cost, on April Fool's day, but for real.

It's not just plain sugar, it's very high purity sucrose. Fisher is selling 12kg for $483.31. This is $40.28/kg. Fisher's price for ACS sucrose is 20x higher than normal sugar. You use $0.48 worth of sugar and sell it for $35. Your price is 73x higher than normal sugar. You condemn Fisher for selling high purity sugar for 40x the cost when it is actually 20x, meanwhile you are selling lower grade sugar for 73x the cost. Again, this does not take into account the other ingredients within your Sunburst or the quantity of sugar. If you clarify the sugar to water ratio, and the price + quantity of the other ingredients we can more accurately determine the cost.