Does the idea of doubling your business’s income seem out of reach or far-fetched? It may be far more achievable than you think. Your business’s growth potential is a product of four factors: leads, conversions, profit margin, and buyer frequency. Doubling just one of these will double your growth. Double them all and your potential grows by 16 times. (Giving credit where credit is due, my friends at Digital Market shared this formula with me)
Maybe doubling any single factor doesn’t seem realistic, but consider that increasing each of these factors in small increments compounds to create big results. Let’s see how a solid online marketing strategy can help you accomplish what you may have thought was impossible.
Use the calculator below to illustrate this compounding effect. The “Current” column indicates the current rate of leads, conversions, profit margin, and buyer frequency. The “Multiplier” column is where you’ll enter a target increase for each factor. The “New” column calculates the target factor’s growth. Note the Target growth potential in the lower right.
I’ve set values in the example to illustrate a 16X growth, but you can adjust them as you like. The intent is to illustrate how even slight increases in one or more factor can have dramatic affects.
STEP 1: Let’s start by leaving “100” in the Leads/Multiplier cell. Set the Multiplier values for Conversions, Margin, and Frequency to “0”. This equates to doubling our leads and leaving all other factors unchanged. Note the Growth Potential increase in the lower right of twice the current value.
STEP 2: Next increase any other factor and note the compounding affect on the Growth Potential value.
STEP 3: Play around with different values and see the effects, for example, try entering an increase of just 10% in each factor and note the result.
Try the Calculator
Watch the Demonstration Video
Doubling your leads doesn’t necessarily mean you need to spend twice the amount you currently spend to acquire them. You can accomplish the same objective by cutting your lead cost in half. Effectively, this increases profit margin, since we spend less to acquire a customer. For example, if you’re currently acquiring 100 leads a month at a cost of $10.00 per lead, then your monthly spend is $1,000. If you were to achieve a 50% reduction in lead cost, in this case $5.00 per lead, then you would be generating twice the number of leads, 200, each month for the same acquisition spend.
There are many ways to lower your acquisition cost while increasing the quality of your leads. Paid advertising platforms such as FaceBook, AdWords, and Bing allow for very specific targeting, enabling you to get your message in front of the right prospect at the right time. The key is in optimizing the acquisition funnel. Here are some things to look at.
- Choosing the right channel
- Good targeting
- Good copywriting
- Good ad creative
- Offer a Lead Magnet
- High converting landing page (download our landing page checklist)
- Clear calls to action
- Are you re-targeting?
- Are you using email to follow-up?
- Is your message meeting your prospect where he/she is? (are they a cold, warm, or hot prospect?)
Optimize the Lead Magnet
Lead magnets are a must. A lead magnet provides your prospect with a small piece of value that solves a specific problem he’s facing in exchange for his contact information (typically, an email address). Some lead magnet examples are:
- Free eBook addressing a specific problem or making a specific promise (e.g., lose 10 pounds in a month)
- A free checklist (e.g., 20-point hiking checklist)
- Free template (e.g., an excel workbook for calculating board feet)
- Free download for image optimization
- A free catalog
- A specific discount (30% off lunch on Mother’s Day)
Now that we’ve increased the number of quality leads we’re getting, it’s time to continue nurturing them through the sales funnel. We need to continue to provide value and earn trust. The goal here isn’t to immediately offer them your flagship product, but rather to offer them a low-ticket, value-added item, that’s often referred to as a “tripwire”.
“A tripwire is an irresistible, super-low-ticket offer that exists for one reason and one reason only…to convert prospects into buyers.” Digital Marketer
The psychology behind the tripwire is that once someone has purchased from you, they’re more likely to purchase again. It’s there to help overcome the prospect’s suspicion and doubts about you and your brand. People buy for emotional reasons and then justify their purchase with logic. Once they’ve purchased with you, there’s a deeper connection. So, tripwires increase the intimacy of the relationship with your prospects.
Tripwires don’t necessarily have to gain a monetary commitment from the prospect. They can also secure a commitment of the prospect’s time, such as a webinar or seminar, a free consultation, or demonstration.
The best tripwires are often “splinters” of the core offer. For example, if you offer an online course on QuickBooks, you could offer an eBook, “The Ultimate QuickBooks Cheat Sheet” or a subset of the flagship product.
- Detail shop that sells tire shine
- Heating and cooling company that sells filter replacement at cost
- A dentist that sells whitening at cost
- Golf course that offers a discount on driving range tokens
- Music store that offers sheet music at a discount
Tripwires need to have a high perceived value as well as a high actual value. They should be useful and logically connect to your core offer.
Now that we’ve nurtured our prospects to become buyers, let’s increase our margin by getting them to purchase more of our products and services. Remember, we’ve already paid to acquire them and they’re on our email list, so we can communicate with them (i.e., place offers in front of them) at little to no cost. This is where we can really begin to grow earnings. These offers come in the form of immediate upsells, cross-sells, related products, subscriptions, and other backend offers that increase customer value.
The classic example of an immediate upsell is the fast-food upsell. When you order a sandwich, the worker asks if you’d like fries and a drink.
Product bundles are a good example of a way to increase customer value. An example of this is the cable, internet, phone bundle.
You could offer a membership, for example a vineyard offering a wine club membership, or offering a membership on your website where you provide valuable tools, resources, or information.
Some other examples are:
- expedited delivery or service
- software that makes something faster and easier
- tools or equipment related to the initial products
Have you spent lots and lots of money to acquire leads only to see them not purchase and simply fade away? The truth is, most prospects won’t buy on the first visit. That’s why it’s so important to continue to follow-up and build the relationship with them. The ability to capture leads and follow-up with them is one of the biggest advantages of online marketing.
Once you’ve acquired a lead, you need to be in constant communication with them. And thanks to all the hard work you’ve done to this point, you have several ways to do it. Let’s talk about a few of them.
No doubt, if you’ve visited any eCommerce site, you’ve probably seen an exit pop-up. These are the pop-ups that appear when your cursor breaks a certain plane on the website, like the menu bar, to remind you there are items in your shopping cart, or “are you sure you want to leave?”, etc. There’s a right way and a wrong way to implement exit pop-ups. First and foremost, you don’t want them to be annoying. Never, never, never set an exit pop-up to prevent a visitor from leaving your site.
Retargeting is a powerful way to keep your message in front of your audience. It works through the implementation of a “pixel”, or a snippet of html code. The pixel is provided by your advertising platform, for example AdWords or FaceBook and is installed on each page of your website. As people visit your site, the pixel is installed as a cookie to their browser to register their visit on the pages they visit. You can add them to custom audiences that you’ve previously set up on you advertising platform. Knowing which pages they’ve visited gives you insights into what they’re interested in which enables you to deliver specific ads to them as the go about the internet. Because these audiences are much smaller and defined by interest, the cost to place ads in front of them is extremely low.
Email marketing is a powerful, extremely low-cost way to stay connected with your leads. Some of it’s advantages are:
- allows for sending to specific subscriber segments
- can be highly automated
- is a very personal form of communication
- great for story-telling
- supports promoting a variety of forms of content
- can send at whatever frequency is appropriate
Like all forms of content, your emails need to have a purpose. A well-designed email follow-up series should be a part of every sales funnel or campaign. Each one should seek to drive some action, for example, a click, a download, a purchase, brand engagement, etc.
Hopefully, this high-level view has given you real confidence that there’s great potential to increase your business growth with a well-designed and executed online marketing strategy.
Founder and CEO, Southern Arizona Digital Marketing and DecideToBeFreeOnline
Scott Anders is a digital marketing trainer and consultant living in Southern Arizona. After more than 30 years in corporate life, including the US Army, he began pursuing his passions as an entrepreneur in 2016. He loves helping small businesses and aspiring entrepreneurs take advantage of the incredible opportunities available in the digital economy to enjoy greater freedom and fulfillment.