As an online marketer, you have to stay on top of all the latest trends in internet marketing, but once in a while, it’s also a great idea to refresh your mind on the foundational principles of online marketing.
This article is designed to be a sort of road map for those who are total noobs, but it’s also aimed at marketers who have experience in the online marketing world but want a little ‘refresher course’ to help them stay on top of their game.
The thing is, online entrepreneurs and marketers out there are at different levels of struck thanks to the sheer amount of information there is to learn. Beginners, seasoned, and pro marketers are all looking to improve upon the things they do and they’re always looking for an edge. It’s their defining characteristic.
This article is going to help you master the online marketing stuff.
And ‘stuff’ here means…
The Business System – which is the same one that Amazon uses to dominate e-commerce. It’s the same system that McDonald’s uses to corner the hamburger market, and it’s also the one used by Starbucks to crush it in the coffee market. This particular system works for both small and enterprise-level businesses and has been used by a lot of brands all over the world to become household names.
Whether you’re a mom and pop shop or a billion-dollar retailer, and whether you sell digital products, physical products, or services, this system brings results. We’re going to talk about how you can implement it into your own online business to grow your revenue.
The Incontrovertible Law of Growing A Business
This irrefutable law states that there are only three ways of growing any business:
- By increasing the number of your customers
- By increasing the average value of each customer’s transaction
- By increasing each customer’s number of transactions
This is very important information and well worth committing to memory if you didn’t already know it. Whatever tactics you use in your online marketing, from Facebook Ads to Google Analytics, and SEO, you will need to keep this formula for optimizing your customer value in mind. This is the only way you will get effective results in your efforts to grow your business.
The truth is that there is very little gain in your understanding of tactics like SEO or Social Media Marketing in and of themselves. But, there is huge benefits in knowing how to apply such traffic generation strategies to the process of customer value optimization.
Steps to Follow For Optimizing the Value of Your Customers:
- Ascertain Product/Market Fit
- Choose a Traffic Source
- Offer them a Lead Magnet
- Offer them a Tripwire
- Offer them a Core Product
- Offer them a Profit Maximizer
- Create a Return Path for Them
Let’s dive deeper into the steps:
Step 1: Ascertain Product/Market Fit
Running an online business (any business, really) is pretty simple. It all comes down to getting paid to move customers from ‘before’ states to their desired ‘after’ states. That’s it!
While in their ‘before’ state, the person feels discontent. This may manifest as pain, boredom, fear, depression, unhappiness, or any other negative emotions. Their ‘after’ state is where their life is much better and they are free of pain, they feel entertained, they are unafraid – basically, whatever plagued them previously is gone.
Remember, people do not buy products and services… They buy results. Outcomes. They pay for access to that ‘after’ state.
Your offer should genuinely move your customers into that desired ‘after’ state and your marketing should simply but effectively articulate that move from ‘before’ to ‘after’.
A lot of online businesses that fail, whether at start up or when they enter new markets, do so because they either fail to offer their prospects an ‘after’ state that is desirable, or they fail to make that movement from ‘before’ to ‘after’ clear to their potential customers.
Basically, their offer’s no good, or their marketing’s no good. But either way, the fundamental way to succeed is to get clear on the desired outcome that your offer delivers. But how do you get that clarity?
8 Questions To Help You Determine the Before and After States:
- What do your prospects HAVE in their ‘before’ states?
- What do they HAVE in their ‘after’ states?
- How do your prospects FEEL in their ‘before’ states?
- How do they FEEL in their ‘after’ states?
- What does an AVERAGE DAY look like in your prospects’ ‘before’ states?
- What does an AVERAGE DAY look like in their ‘after’ states?
- What STATUS do your prospects have in their ‘before’ states?
- What STATUS do they have in their ‘after’ states?
The vast majority of (average) marketers articulate only what the customer will HAVE after purchasing the product or service, but great marketers talk about how the customer will FEEL and how their AVERAGE DAY will be better, and how even their STATUS will be elevated, and so on.
When you answer these eight simple questions, you will be able to craft an effective marketing message that will have the maximum impact even if you’re not an expert copywriter. When you’re clear on the two states – before and after – the marketing copy basically writes itself.
But, that’s far from the only benefit that you derive from understanding the process of how you will transform your customers into their ‘after’ states. This also has a huge impact on how much you can charge.
Value – The Distance Between Your Customers’ Before and After States
Value comes from the distance between the two states. If you want to be able to charge more for your product or service, then simply create greater distance between those states. To do this, you can either create an improved product or service, or you could articulate that movement from ‘before’ to ‘after’ more clearly or differently.
This basically means that if you want to charge more, then you either create a better offer or you improve your marketing.
Step 2: Choose Traffic Sources
I’ve said this before, and I will say it again: You DON’T have a traffic problem.
What you might have is a problem with your business model, your offer, or a problem with your measurement, but you definitely do not have a traffic problem in your business.
Let me explain…
If I were to tell you that every single time a visitor comes to a page on your site you’d make ten bucks in profit, wouldn’t you get traffic to that page? You bet you would! You would be able to pay anything up to $10 for that visitor and you’d still break even. (In fact, if you really understand the process of customer value optimization, you’d be able to pay more than that and still make a profit in the long run.)
So, traffic isn’t really a problem, is it? You have Google, Facebook, Twitter, LinkedIn, Pinterest and all the rest lined up to sell you extremely targeted, affordable traffic. You have SEO agencies eager to send you tons of traffic. You also have PPC (Pay Per Click) agencies who can’t wait to send you clicks…
You just need to do the following:
- Learn to measure what your traffic is actually worth
- Learn how to extract the maximum immediate value that you can from that traffic
- Understand that traffic generation tactics are worthless without a firm understanding of the customer value optimization process.
Most bloggers and online business owners have no context and no system, and that’s why they are frustrated. Once you understand this system, you will start to see real results from your traffic generation efforts such as blogging, social media marketing, email marketing and so on.
No matter which sources of traffic you decide to go with, the goal is to drive prospects into your customer value optimization funnel. A word of caution on choosing traffic sources: Some marketers try to do too many things at the same time and end up being ineffective in all of them.
You should choose just one steady source of traffic and focus on it until you know it through and through. Once you have mastered it, you can then move on to a second one and then a third, and so on.
Traffic sources to choose from include:
- Email Marketing
- Organic Social Media
- Social Media Ads (Twitter/Facebook/YouTube ads,..)
- Banner Ads
- Search Engine Optimization
- and so on
Step 3: Offer them a Lead Magnet
If your traffic strategy goal is to acquire new leads and customers, then you obviously want to drive visitors into your customer value optimization funnel and that begins with an effective lead magnet. In this and the next section on offering a tripwire, you will learn how to grow your online business by increasing the number of customers.
A lead magnet is something of value that you offer prospects in exchange for their email address or other contact info. Even though no money changes hands here, this is still a very important transaction and you need to provide enormous value with your lead magnet.
A lead magnet is often offered on a landing page or a squeeze page. Such pages are optimized for converting even cold traffic to leads. Since the lead magnet is at the top of your funnel for customer value optimization, when you increase opt-ins, it will enhance the entire system.
The lead magnets that perform the best have one thing in common: They are specific.
They don’t have to be complex or lengthy, but they do have to be specific and laser focused on your ideal customers. Lead magnets that solve specific problems for specific people will result in more leads, and more leads mean more tripwire sales…
Step 4: Offer them a Tripwire
The fourth step in the process of optimizing the value of your customers involves offering a tripwire, which is an offer that you make to those who displayed an interest via your lead magnet. Keep in mind that the main goal involves increasing the number of customers, and although (so far) we’ve generated leads by way of the Lead Magnet, no new customers have yet been generated.
This is where the tripwire comes in and when executed effectively, you will be able to convert prospects into buyers. The best way to do this is by offering an extremely low-ticket product or service. This could cost anything between $1 and $20 depending on your market. Make this offer irresistible. The decision to buy it should be a no-brainer for your prospects.
How to make Irresistible Tripwire Offers:
One of the ways to make a tripwire irresistible is to sell it at cost (or even at a loss to you, in some cases). Yes, you heard right. You’re not going to be making a living from selling tripwires, but you do want to acquire buyers. You don’t just want a list of possible buyers, you need a valuable list of actual buyers, and this is how you get it.
Once you get to the end of this customer value optimization process, you’ll understand how this part of the funnel is vital to the success of your business even though you don’t make any direct profit from it.
The trick is to convert as many people as possible into paying customers (from the Lead Magnet). Even if it costs you your profit margin, it’s going to be worth it in the end because getting a paying customer will actually deliver more profit through these next three steps:
- The Core Offer
- The Profit Maximizer
- The Return Path
Now that you have a firm understanding of the process of increasing the number of actual customers, we can talk about how to increase the average value of each customer transaction.
Step 5 – Offer a Core Product
Your flagship product(s) is your core offer. Most marketers make the mistake of offering their core offer to cold prospects. If you want to see the sales of your core offer explode, then add a lead magnet as well as a tripwire offer. After all, you have already had not one, but two successful transactions with the customer at this point, so the odds of them buying your core offer are very good.
Step 6 – Offer a Profit Maximizer
This is where things get very interesting. Remember the second method for growing your business? It’s by increasing the average transaction value of each customer. This is exactly what the profit maximizer does.
When your business lives and dies selling its core offer to cold prospect, you’re letting yourself struggle when really you should be prospering. You need Tripwires and Profit Maximizers in order to get the best results from the least effort.
Take McDonald’s, for instance. Do you know that they make next to no profit on their hamburgers? That is their core offer, but their profit maximizers are the fries and the sodas. This is called an immediate upsell. Another example of this is Amazon’s profit maximizer:’People who bought that product also bought this product… ‘ This increases their average basket value.
They also use the ‘Frequently Bought Together’, which is a Bundle profit maximizer, to achieve that same purpose. Subscription offers also make great profit maximizers.
As you can see, between upsells, cross-sells, bundle offers, and subscription offers, there is a lot you could do to ensure that you don’t just rely on your core offer to make a living. But, that’s not all. There’s still one more way to grow your business:
Step 7: Create A Return Path
The final way of growing a business is by increasing the number of each customer’s transactions. This is where the Return Path comes in. A return path refers to anything that you can do to bring the customers or prospects back to your funnel more frequently.
The aim here is to frequently have strategic communication with your prospects and buyers in an effort to make them buy from you again and again. You have their contact info (through the lead magnet) and now it’s time to continue marketing.
Offer them new lead magnets, tripwires, different core offers, and other profit maximizers. You can even bring them right back to those tripwires, core offers, and profit maximizers that they did not buy first time around.
Return Path Example Include:
- Exit Offers
- Organic Social Media
- Loyalty Programs
- Content Marketing
- Outbound Sales Calling
- Ad Retargeting
And that, fellow online marketers, is the entire system that you can use to massively grow and scale your business.
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