In a world of big marketing budgets and increasing advertising numbness by consumers, how can you and your small business compete and win market share with advertising and immediately make profit in the process?
“Do you want fries with that?”
Those of us who have given in to those late-night cravings or the need for a quick lunch from McDonalds know this question all too well.
However, what we don’t think about (or know) when we are ordering our cheap meal is that McDonalds spends about $1.91 to get us in the drive thru with advertising, earning them about an $0.18 profit on a $2.09 hamburger sale.
How does McDonalds stay in business? They upsell fries and a coke with their hamburgers to make and additional $1.14 and increase their immediate average transaction value.
You can use this same concept to earn a profit from the customers you acquire.
A tool you can use to execute this concept is called a funnel.
What the heck is a funnel?
A funnel is a defined series of steps people take while interacting with your business. It’s a defined journey you take people on to better serve them with your message and products.
There are different types of funnels you can use in your business but the funnel we are going to be talking about today is a sales funnel.
CAUTION: Sales funnels are only used by smart and wealthy business owners who like making money.
Here is an example of a successful sales funnel.
Imagine you have a $100 product offer and you acquire 100 customers for a total revenue of $10,000.
Now, imagine if you give those 100 customers the opportunity to immediately purchase your second offer for $300 and 30% took that offer, you would generate an additional $9,000 in revenue.
If you payed $5,000 in advertising to acquire those 100 customers you would have just profited $14,000.
So many business owners are not asking their new customers if they’d “like fries with that”. They are leaving thousands on the table.
But you don’t have to be like them! You’re smarter than that, right?
3 Things you need to understand to make this work for your business
To be a smart business owner (like I know you are) and start using sales funnels to increase average transaction value in your business you need to understand the following:
- The Value Ladder
- Sales Funnels
- Email Automation
The Value Ladder – How You Can Help Customers
A great value ladder consists of a bait offer (lead magnet), a front-end offer, middle offer, and back end offer.
As a customer moves up the ladder the price and value of each offer increases.
Take some time right now to think about your current product or service offers and create your value ladder.
Sales Funnels – How You Deliver Value Offers to Customers
Sales funnels are tools you use in your business to make offers to new and potential customers.
Once you have defined your value ladder you can turn your value steps into sales funnels and start running traffic to your offers. You could create a sales funnel that attracts a new customer with a lead magnet and then immediately make a front-end offer. Some leads will immediately take you up on your front-end offer ($100) and might even take you up on your upsell for your middle offer ($300-500).
You can use your new sales funnel to get paid to acquire customers because (if you set everything up right) you’ll be earning a profit for each person who is introduced to your funnel.
Email Automation – How You Follow Up & Nurture Relationships with Leads and Customers
The real secret to this strategy, and how you will really increase ROI, is the emails that are sent to new leads and customers.
These emails should be used to build and nurture a relationship with the prospect while also making some value offers that lead to more funnels.
Are you starting to see the power and impact that implementing a sales funnel will have on your business?
I hope so.
If you think you can’t implement all this because you’re not techy enough or maybe you need some help setting up your sales funnel and driving traffic – we can help.
We’d love to help you (a smart business owner) get set up and get started getting paid to acquire customers.
Contact us today!