1. Traffic
Most business owners focus
the majority of their marketing energy on traffic generation. However,
most focus on the wrong questions. For example, the number one question
is NOT “how much traffic do you get per month to your website?”
The three questions to
ask are:
1. How many different and consistent
sources of traffic do you have?
2. How much traffic do you get from each
source per month?
3. How qualified is each source of traffic
measured by sales and/or leads?
As you can see, the
emphasis should be on the diversification and quality of your traffic. If
you’re relying solely on one source of traffic, like SEO, then you’re
putting your business at risk. When (not “if”) Google makes another
algorithm update, you could lose some of that traffic overnight.
And quality is more
important than quantity. There are plenty of tricks and shady companies
out there that claim to drive thousands of visitors to your website,
but what good is that if none of them make a purchase? So whenever
you’re testing new traffic sources, make sure you have a system in
place to measure the quality of every visitor.
2. Lead Capture
Lead capture is the
process of collecting information from visitors who are not yet ready
to make a purchase. The most common example is to offer a free report
in exchange for the visitor’s email address so you can follow up via
email marketing.
If you’re reading this
and there’s no lead capture on your website, then one of your top
marketing priorities will be to set this up. The vast majority of your
visitors are not ready to buy from you so it’s critical to capture
their information and nurture them until they are ready to buy.
For everyone with lead
capture, the three questions to ask are:
1. How many lead capture mechanisms do you
have for each product or service?
2. What is your opt-in rate for each lead
capture?
3. What is your sales conversion rate for
each lead capture?
The first question
highlights the fact that you should have a lead capture for every
product or service you offer. And in some cases you should have a few
lead captures that appeal to different types of prospects. For example,
some prospects want to see case studies, but others may want to read a
guide to learn how to avoid common mistakes in your industry. If you
only have one of these lead captures, then you’ll miss a segment of
your target market.
The second and third
questions are key performance indicators to measure the effectiveness
of each lead capture and help you make improvements. If you can double
your lead opt-in rate, then you can double your sales WITHOUT
increasing your traffic. That means you could double your business
without any additional investment in advertising!
3. Prospect
Follow-up
Once you capture the
information from your lead, then it’s time to follow-up until she is
ready to make a purchase.
A recent study across
multiple industries showed that 50% of leads will buy within 18 months
and 85% of those buyers will make the purchase 3 – 18 months after
expressing initial interest.
So if you don’t have a
consistent follow-up system in place, you’re missing out on at least
42% of your potential sales. Or in other words, if you can set up and
optimize your follow-up system, then again you can significantly
increase your sales with no additional traffic.
Here are the questions
you need to ask to optimize your follow-up system:
1. What is your prospect sales conversion
rate after opting into your lead capture?
2. What is the average length of time on
your prospect list before purchasing?
3. What is the average purchase price?
The combination of
these questions is what’s important. Once you understand all three of
these metrics, then you can calculate the average value of a lead over
a certain amount of time. Armed with this knowledge, you can identify
every opportunity to acquire leads at a price below your value per
lead.
For example, if 10% of
your prospects buy your $500 service within 3 months, then you know a
lead is worth $50 over three months. Now you just need to find lead
sources for less than $50 and you can profitably scale up your marketing!
4. Sales
As business owners, we
all know the importance of making sales. However, not everyone creates
a system to test and optimize the sales process.
It’s common to see businesses
invest tons of time and money to optimize their advertising and
websites, yet almost ignore the most critical step, which is the
process from the first phone call to the closing call. Sales calls can
and should be scripted, tested, and edited to optimize conversion
rates. Again, this is an area where you can double your business
without any increase in traffic.
So the questions you
should ask are:
1. What is your scripted sales process for
each type of lead who contacts you?
2. What is your conversion rate by lead
source?
3. What is your average sales cycle?
Once you have your
sales script and you’re measuring your conversion rates and sales
cycles, then you systematically test to make improvements each month.
5.
Product/Service Delivery
The sale is really just
the beginning in your customer lifecycle. Now it’s time to over-deliver
on your promises so you create customers for life.
At this stage in your
marketing system, you want to ask:
1. What is your system to WOW your
customers?
2. What is your system to get testimonials?
3. What is your return, refund, or
complaint rate?
If you really think
through question #1 and set up a system to impress your customers, then
#3 will not be an issue. There are many options, but here are a few
that we recommend:
·
call customers to say “thank you”
·
send customers a “thank you” letter or card in the mail
·
send a small gift as a way to show appreciation for their
business
These small investments
will produce returns because your customers will become champions and
ambassadors for your business. They’ll be more likely to take the time
to give you a testimonial and they’ll gladly refer family and friends.
Also, by implementing a
system to WOW your customers, you’ll see a considerable decrease in
returns, refunds, and complaints, which you must measure to identify
potential problems in your product/service delivery.
6. Upsells
Upsells are one of the
fastest and easiest ways to increase the lifetime value of your
customers. If you’re not currently upselling, then I would argue you’re
doing both yourself AND some of your customers a disservice.
The reason I think
you’re doing some of your customers a disservice is that you could be
providing them with even more value. That’s what upselling is all
about. It’s not about how to squeeze money out of your customers. It’s
about giving your customer exactly what she wants in order to make her
life even better than it would be with your original product or
service.
Here’s what you need to
ask to improve your upsells:
1. What additional products or services can
you provide to speed up the process or eliminate work for your
customer?
2. What is your upsell conversion rate?
3. What is the average price of your
upsell?
By answering and delivering
on question #1, you should be able to upsell about 20 – 30% of your
customers. Now depending on the price point, that could have a huge
impact on the lifetime value of your customers.
As your lifetime value
goes up, so does the value of a lead that you calculated in stage 2 of
the customer lifecycle. That means you’ll be able to invest more money
to acquire leads than your competitors can, and that’s how you start to
dominate your market!
7. Referrals
OK, now we’re at the
final stage of the customer lifecycle: referrals. The biggest mistake
businesses make is they simply do not ask for referrals. If you don’t
ask, then you can’t complain when you don’t get any (or as many as
you’d like).
So here are the three
questions to assess your referral system:
1. What is your system for requesting
referrals?
2. What is your referral conversion rate?
3. What is the value of a referral?
As I said before, you
need a system to ask customers for referrals. As long as you’re
over-delivering, your customers will be more than happy to refer
friends and family to your business. People naturally want to refer
remarkable, high-quality products and services to their contacts
because it makes them feel
good.
In some cases, you may
need or want to invest money to generate more referrals. For example,
if you know the value of a referral is at least $750 and your
conversion rate is 30%, then you can spend up to $225 to spark
referrals.
Depending on your
numbers, it may make sense to give a free or discounted product or
service to people who refer you a customer. Even small incentives can
have an enormous impact because referred prospects are typically
pre-sold and less price sensitive. That means you’ll close more sales
(and at higher prices) to referred prospects versus prospects generated
by other marketing channels.
I hope by thinking
through these 21 questions you now have a handful of action items to
improve your marketing systems.
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