The foundational activities of any successful online business is to “Get MORE buyers to buy MORE, more OFTEN”.
So what does that mean? Well, let’s take time to discuss each component as a definition. The three parts in that phrase can be broken down simply like this:
This is where you are increasing the amount of buyers/customers/clients that come into your business. You can think of this as generating more leads and then closing more sales with whatever method you use to close the transaction. “How do I get more customers” is THE most common question business owners ask without understanding the other Profit Levers, like you’ll soon come to understand.
This is where you are increasing the amount of money someone spends with you in a single transaction. The most commonly used term to express this is called” Average Order Value”. It’s simply the value of the order/transaction that an average (out of a sample size) customer purchases.
This is where you are increasing the frequency or amount of purchases that your customer makes with you. The most common term for this is called “Lifetime Value”. Coined by one of our mentors, Jay Abraham, it’s simply a measurement for how much you can expect a customer to spend with you over XYZ timeframe. (Normally expressed as a year at minimum, then over the duration of your business when talking long term).
Knowing each component is critical to understanding how we “pull on the Profit Levers”. Let’s talk about the ways that you can increase each category in your business TODAY.
#1: Getting More BUYERS Into Your Business
Let’s first look at ways that you can increase your customer/client base…essentially how you can pick up new buyers. There are a handful of activities that you can start doing today that will do so:
- Implement a Referral System
- Create a way for someone to easily refer you business
- Create templated messages/posts/emails/graphics
- Give referral commissions, percentages of received revenue, or referral prizes
- Acquiring new customers/clients at break even up front and make a profit on the back end
- Get someone to purchase a valuable low ticket offer (front-end) around a $7 to $47 price point. Your goal is to break even acquiring that new customer because they are at least 6X more likely to purchase again (i.e. remember LTV).
- Partnership Marketing
- Offer to host a webinar to someone else’s audience that you know has a pool of your perfect customers/clients
- Offer to host someone on your podcast or online “show”.
- Online Advertising
- Utilize Facebook or Google Ads when ready (Ads Amplify – don’t “amplify” a system or sales funnel that doesn’t convert)
- Direct Mail
- Sending “personalized” letters or packages in the mail to prospects/leads can greatly reduce the sales cycle.
- Outbound Sales
- Cold Calling
- Cold Emailing
- Cold Messaging on Social
- Running special events
- Virtual Summits are a great way to share lists, build massive rapport, and convert prospects into buyers at a rapid pace
- Utilizing Email Lists
- You can purchase lists to use as retargeting ads (we do not recommend spamming lists).
- Purchase an “ad” on someone else’s list (This is called “Solo Ads”)
- Develop a Unique Selling Proposition
- What sets you apart from your competition, what’s your differentiator?
- Increasing the perceived value of your product/service through better client education
- Write a book or a guide: Focus on educating your market to be seen as THE preeminent company so you can stand out from the crowd.
- Using P.R.
- Get published on well known news sites and other publications.
- Get on other people’s podcasts to build massive rapport with their audience.
If you have clients (or people who pay you repeatedly to perform a service), then you are always looking for ways to keep them around (stick rate). Next, let’s look at ways that you can keep your clients on for longer periods of time (decreasing churn):
- ‘White Glove’ Treatment
- Think of the difference between buying a Mercedes versus buying a Honda. Both great cars, but the level of service you expect is vastly different between the two. How can you provide the best “perceived” service? Maybe it’s having a weekly check in call or maybe it’s creating a customer service support hotline/help desk for “24/7” support.
- Frequent Communication
- For Clients: Keep clients on a communication program (other than email) to show them that they have a perceived 24/7 access to you. Of course, don’t check it 24/7, but show them that you are available.
- For Customers: put them in a Facebook group with other customers (i.e. Peloton purchasers), and keep them updated on any new company happenings.
- Gift Giving
- One of my mentors, Michael Ovitz, the founder of Creative Arts Agency, had an entire department just for gift giving to his clients and vendors. Think about the ways that you can collect personal information from your people to send out personalized gifts on major occasions (birthdays, anniversaries, holidays, etc.). This does not have to be large, extravagant gifts, just something thoughtful.
As we are striving to be “better” at sales, we always desire to increase the percentage of people who buy versus those who are just prospects/inquiring. Let’s look at some of the ways you can increase your close rate:
- Increasing sales skills levels of your staff
- Get or give sales training that actually works well (remember, there are a lot of “gurus” out there who want to sell you their sales training – look at who they learned from, then look another level up to find what we call the “mentor’s mentor”. AKA primary source material).
- Hire better salespeople. The effect of this is that the average level salespeople will either rise up to become better or drop out.
- Guaranteeing purchases through risk reversal
- Money Back Guarantees
- 0% Interest
- Performance Based Compensation Models
#2: Getting Those People To BUY MORE From You
Next, we’ll turn our attention to how we can increase the average transaction or order size from a customer. The definition of this is called Average Order Value (AOV), and it’s one that we want you to memorize and study in your own financials. The following activities will help you increase the average amount someone spends with you during a single transaction:
- Implementing Up-sells, down-sells, and cross-sells
- Upsell: “Do you want fries with that?”. The upsell is the #1 way to increase the amount that someone spends with you. This is as easy giving someone the opportunity, right after they purchased the initial product/service to upgrade their purchase. Think of a product or service you can offer them that will ADD TO what they just bought and just put it in your sales process.
- Downsell: So the person didn’t want the upsell, huh? That’s okay, because you can offer them something that’s lower priced, just to see if they’ll bite one more time. For example, if you sell a course + group access as an upsell for $197, then offer just the course videos or a handful of those videos (minimum viable) for $97 or so.
- Cross-sells: Let’s say someone purchased “Instagram Management Services” from you. Well, a great cross-sell to that would be “Hey, we can also run some advertising campaigns for you so you can be seen more online…getting more leads, etc.”. This is an example of a great cross-sell to a complementary or related service. Other examples include, credit cards offered to people who just opened checking accounts, a brush offered to people who just bought a blow dryer, Amazon’s “related items” box right before you check out, and SO much more.
- Using point-of-sale promotions
- Packaging complementary products and services together
- Increasing your pricing and hence your margins
- Changing the profile of your products or services to be more “up market”
- Offering greater/larger units of purchase
#3: Getting Your People To Buy More OFTEN (REPEATEDLY)
The final category we want to cover is all about increasing the transaction frequency, or simply how many times someone buys repeatedly from you in a given timeframe. The definition of this is called Lifetime Value (LTV). This is the most important definition that we want you to memorize and analyze in your own financials. Let’s look at some ways that you can get people to purchase again and again:
- Creating a subscription or continuity model for a product or service
- One of our most successful clients, Michelle, has a product that she sells on a monthly payment plan. As of the date this was written, each month she collects around $40,000 in monthly recurring revenue (MRR). Why is this important? Well, if we (and she) were to stop promoting everything cold turkey, then she would still have that money coming in each month, decreasing due to churn, until the last person stopped paying. When you have a subscription offer, you can directly increase the lifetime value without having to keep adding on more products or services.
- Developing a back end of products that you can go back to your clients with
- This directly correlates to your “Value Ladder”, or as we like to call it, your “Value Escalator”. Simply put, this is your suite or products or services that you can ascend or descend people to. For example, at Be Known, we ascend people from these blogs to scheduling a Strategy Call with us to performing a deep-dive audit to building out the online business foundations to acting as their “back pocket marketing team”….and then if they want my Team & I to fly out to them, we offer that as well. As the value increases, so does the investment they pay at each step.
- Communicating personally with your clients (by telephone, letter) to maintain a positive relationship
- There’s nothing like picking up the phone to have a friendly conversation with your clients. At Be Known, we try to do this at least once every other week just to check in with our people. But…if your client or customer base is too large to do so, then you can mass email a “personalized” video talking about updates, or even assign a dedicated “Relationship Manager” to act on your behalf.
- Endorsing other people’s products to your list
- This is a combination of affiliate marketing and cross-sells. When you find someone with a great, complementary product, you can offer to promote it to your audience for xx% of revenue or profit. You will be seen as someone who cares about their success to your audience while building a relationship with a potential long-term partner.
- Running special events such as “closed door sales,” limited pre-release and so on
- When you have a new product or service coming out, make sure your audience is well informed, so they can take immediate action when it’s open. This is also a great way to implement urgency/scarcity along with the promotion.
Alright, there you have it. Even if you only focus on implementing two or three of those activities over the next few months…you would be miles ahead of your competitors.
Now, it’s normally never a lack of continuous 1st time buyers (increasing your customer/client base) coming in the top that leads to business death…
Instead, it’s how you are increasing the amount they spend (AOV) with you and the pace at which they repeatedly buy (LTV).
That leads us directly into your Value Ladder or as we refer to is: the “Value Escalator”.
The Value Escalator is all about what products/services (your offers) you have available for them to purchase in an ascending fashion.
At Be Known, we like to think of this more like an “Escalator” instead of a “Ladder” because YOU control the speed at which they see the offers and can ascend to higher priced products/services along their customer journey.
Of course, we don’t want to force the journey to go faster than needed (otherwise, you’ll fling them off the escalator).
So, if after reading through this, you think to yourself, “Hey, I would love to implement these in my online business but I have no idea where to start…”
…Then I would love to get on a quick Zoom call and give you some professional advice & a few pointers.
Let’s chat more here: https://beknown.agency/book-a-call/