- The Marketing Minds Newsletter by Aleric Heck
- Posts
- How he Turned a "Free" Book Into $1 Million in Sales
How he Turned a "Free" Book Into $1 Million in Sales
The Secret Low-Ticket to High-Ticket Funnel Strategy That's Breaking All the Rules
Aleric Heck
July 25, 2025
Imagine this: You're selling a FREE book... and it generates over $1 Million in revenue.
Sounds impossible? That's exactly what I thought when Derek Tsuboi first told me when he came on my Marketing Minds Podcast!
But here's the kicker — it's not just possible, it's REPEATABLE. And today, I'm going to break down the exact funnel strategy that made it happen.
Derek Tsuboi isn't just any marketer. He's the Managing Partner at Rediscover Digital, a multi-time Two Comma Club Award winner (including the prestigious X and C awards for $25M+ funnels), and someone who's been quietly revolutionizing how we think about low-ticket offers.
Oh, and fun fact: Derek used to be on our AdOutreach dream team years ago, so I've seen firsthand how incredibly smart he is. When Derek shares a strategy, I listen — and you should too.
As a Reminder, Our Goal with this Newsletter is to Give You the Highest Level of Value Possible. That's my Promise to you & I intend to Over-Deliver!
Here's a Sneak Peek at What's Inside This Email:
The $1M Free Book Funnel Blueprint (with exact numbers & conversion rates)
Why Your Upsells Are Probably Afterthoughts (and how to fix that)
The "Two Bucket" Lead Quality System that increased backend conversions by 30-40%
Facebook Live Ads Strategy Update for 2025 (what's working NOW)
The #1 AI Tool Derek's Team Uses to Write Converting Ad Copy
A Critical Business Lesson About Not Letting Your Ego Kill Your Revenue
Alright, let's Dive In...
The Million-Dollar "Free" Book Funnel Breakdown
Let me paint you a picture of pure marketing genius...
Derek's team created a book about getting started in real estate with little to no money. They offered it completely FREE (customers just pay $7.95 shipping).
Here's where it gets interesting:
The Funnel Structure:
Front End: Free book + $7.95 shipping
Upsell 1: Companion course for $197 (positioned as "skip the reading, get results faster")
Downsell 1: Deluxe book bundle with audiobook for $9.95
Downsell 2: Same course at $97
Final Downsell: Additional bonus content
The Results That Blew My Mind:
35%+ take rate on the first $197 upsell (that's INSANE for that price point)
60-110% ad spend liquidation on the front end
Average cart value jumped from $7.95 to $250-300
But here's the secret sauce that most people miss...
The "Two Bucket" Lead Quality System (This Is Gold!)
Derek shared something that completely changed how I think about buyer leads:
Not all buyers are created equal.
His team discovered that customers who bought the $197 upsell were 30-40% more likely to purchase their high-ticket backend offer compared to those who only bought downsells.
So they created two separate follow-up sequences:
High-Quality Bucket: Bought the main upsell
Lower-Quality Bucket: Only bought downsells
This segmentation alone dramatically improved their backend conversions.
Here's the kicker: Derek himself would fall into the "lower quality" bucket because he'd buy the audiobook but not the course — yet he'd be a perfect high-ticket customer!
The lesson? Use data to guide decisions, but don't let it blind you to exceptions.
Why Most Upsells Fail (And How to Fix Yours)
During our conversation, Derek dropped a truth bomb:
"I feel like a lot of times upsells and downsells are afterthoughts for most companies, most people, and most businesses, which is why they don't work nearly as well."
Your upsells need to be:
Congruent with your front-end offer
High-quality products that deliver real value
Positioned as the logical next step (not random add-ons)
Think about it: If someone just claimed a free book about real estate investing, offering them a course that helps them implement faster is a no-brainer. But if that course looks thrown together? Game over.
The Facebook Live Ad Strategy (2025 Update)
This strategy had me on the edge of my seat...
Derek's been using Facebook Live videos as ads since 2018, getting 3X the organic reach of regular videos. The strategy was pure gold — until recently.
What Changed: Facebook now only keeps live content for 60 days (instead of indefinitely). This creates challenges with ad IDs and long-term campaigns.
What's Working Now: Instead of relying on the live feature, Derek's team:
Records videos that LOOK live (using Loom or similar tools)
Focuses on not making ads look like ads
Validates ads first, THEN turns high-performers into organic posts
Maintains successful ad IDs across campaigns
Pro Tip: Use Loom's free account to record yourself, download the video, and upload directly to Facebook. The casual, unpolished look actually IMPROVES performance!
The AI Revolution in Ad Copy (With a Surprising Winner)
I always ask my guests about AI, and Derek's answer surprised me...
After testing ChatGPT, Claude, Gemini, and others head-to-head using actual client results, the winner was... ChatGPT (connected to his Google Drive).
But here's the key insight:
"We start with gold or silver... We'll write one solid piece of copy first, then use AI to create iterations."
They're not using AI to generate ideas from scratch. They're using it to amplify what already works.
Derek's AI Stack:
ChatGPT: Ad copy (connected to Google Drive with years of winning ads)
ElevenLabs: Voice cloning for video content
Opus AI: Video editing and optimization
🚨 BREAKING: The Video Ad Game Just Changed Forever
Speaking of AI revolutionizing advertising...
Google just dropped Veo 3, and it's making traditional video production OBSOLETE.
We've been quietly testing it, and our AI-generated ad hooks are now beating ALL our previous controls — at 10X less cost.
That's why I'm hosting a FREE 2-hour workshop to show you exactly how to create viral AI video ads that convert like crazy.
The Exact 5-Step Veo3 Framework we use to generate professional AI videos
5 Signature Prompts you can use immediately
10 Proven AI Ad Hooks that are crushing it right now
Live demonstrations of creating ads in real-time
No theory. No fluff. Just the exact process that's revolutionizing how we create video ads.
(Seriously, I created 127 ad variations last week. My video editor asked if he should be worried. I told him he should be EXCITED because now he can 10X his output!)
The $100K Mistake That Almost Killed His Business
This is why I love asking about failures...
Derek had a client representing 60% of his revenue. When he let his ego get in the way of smart business decisions, he lost that client unexpectedly.
The lesson he learned:
"You really can't let your ego get the better of you, especially when you're in the service-based business. You're there to serve."
Instead of grandfathering in projects or transitioning gracefully, he tried to force changes too quickly. It nearly destroyed his agency.
The Silver Lining: They rebuilt stronger, never again depending too heavily on one client, and Derek even repaired the relationship — that client hired them again later!
Your Action Plan: How to Implement These Strategies
Here's exactly what you should do after reading this newsletter:
1. Audit Your Current Funnel
Are your upsells afterthoughts or integral parts of the journey?
Do you have clear segmentation for different buyer types?
What's your front-end liquidation percentage?
2. Test the "Casual Video" Approach
Record a simple Loom video teaching something valuable
Upload it as a regular video ad (not live)
Compare performance to your polished ads
3. Upgrade Your AI Usage
Stop asking AI to create from scratch
Write one great piece of copy first
Use AI to create 6-8 variations
Test them all
4. Calculate Your TRUE Ad Spend
If you're spending $100/day on ads but making back $75 in front-end sales, you're really only spending $25/day. This means you could 4X your ad spend without increasing your net cost!
Golden Nuggets from Derek
Before we wrap up, here are Derek's two final pieces of wisdom:
1. "The only true failure is the failure to learn." (Fun fact: Derek learned this from me years ago and still uses it in his agency today! 🙏)
2. "People aren't testing enough." Allocate 10-20% of your budget to testing. If you're testing everything, you're testing nothing. Have a control and variations.
Book Your Complimentary YouTube Ads Strategy Call!
Want to implement these strategies in YOUR business with YouTube Ads?
Our team will map out a custom YouTube Ads & Video Marketing Strategy specifically for your business in a 20-minute strategy call.
Before you go, I have to share this...
Remember how Derek talked about testing being crucial? Well, we've been testing something GAME-CHANGING with Google's new Veo 3 AI, and the results are insane.
Our AI-generated video ads are now outperforming EVERYTHING else — at a fraction of the cost.
I'm so excited about this that I'm hosting a FREE 2-hour workshop to share our exact process.
What You'll Learn:
✅ How to create unlimited video ad variations without filming
✅ The 5-Step Veo3 Framework that's beating all our controls
✅ 5 ready-to-use prompts + 10 proven AI ad hooks
✅ Live demos creating viral ads in real-time
This is the future of video advertising, and it's happening NOW.
(Limited spots available — we cap attendance to keep it interactive)
More Value Coming Next Friday!
Next week, I'm breaking down our brand new "Authority Hijacking" strategy that's generating 10X ROAS for our top clients...
Plus, I'll share the exact script template we use for YouTube Ads that are converting at 2-3X industry standards.
Stay tuned — it's going to be FIRE! 🔥
To Your Success,
- Aleric Heck | Founder & CEO of AdOutreach
Watch The Full Video on YouTube:
How Did You Like This Week's Newsletter?Your Feedback helps us Improve the Marketing Minds Newsletter! |