8 Systems to Grow Business Profits

CUSTOMER VALUE OPTIMIZATION

The goal of marketing is to create a predictable system that can acquire customers, monetize those customers and bring them back to buy again and again. To do that, your marketing must follow the structure and sequence humans have used for millennia to develop normal, healthy relationships. Too often we use our marketing to “propose marriage” to a prospect we’ve just met. When we intentionally structure our marketing to move a prospect seamlessly and subtly toward a great product or service, we win.

This system is called Customer Value Optimization (CVO) and it is made up of 5 phases:

1. Lead Magnet – an irresistible bribe that gives a specific chunk of value to a prospect in exchange for theircontact information. (e.g. white paper, free template, pricing catalog)
2. Entry Point Offer (Tripwire) – a low-risk, high-value offer that significantly increases the amount of engagement and commitment a prospect has given your company. (e.g. physical product, webinar, book)
3. Core Offer – the flagship offer. This is where most businesses begin and end their marketing. Adding a Lead Magnet and/or Tripwire offer will explode Core Offer sales.
4. Profit Maximizer – A relevant offer made after the Core Offer that increases the average value of a customer. (e.g. an upsell, cross-sell or bundle offer)
5. Return path – The process by which a prospect or customer is brought back to buy again and again. (e.g. email marketing, ad retargeting and exit offers)

The formula for Growth Potential is: L x C x M x f = Growth Potential

L = leads C = customers M = margin f = frequency of purchase

Doubling any of the variables above (leads, customers, margin, frequency of purchase) will double your sales. Double them all and you will 16X your business. Can you double them all? Doubtful. Can you double one of them? Two of them? Even 3 of them? Absolutely.

In other words, there are 4 levers you have available to grow your business and each of those levers is mapped back to a phase of the CVO process:

 

• Increase the number of leads (Lead Magnet phase)
• Increase the number of customers (Tripwire phase)
• Increase the margin (Core Offer and Profit Maximizer phase)
• Increase the frequency of purchase (Return Path phase)

CONTENT MARKETING

For an ice-cold prospect to become a customer they will need to travel through three stages:

1. Awareness – The prospect must first become aware that there is a problem and that YOU or your organization have a solution for it.
2. Evaluation – Those that move through the Awareness Stage must now evaluate the various choices available to them, including your competitor’s solutions.
3. Conversion – Those that move through the Evaluation Stage are now at the moment of truth — purchase.

A cold prospect cannot evaluate your solution until they are first aware of the problem AND your solution. And conversion is impossible until the prospect has first evaluated the possible courses of action.

To move a prospect through a marketing funnel, they will need content designed to satisfy their needs at each of the three stages.

• They need content at the top of the funnel (TOFU) that facilitates awareness.
• They need content in the middle of the funnel (MOFU) that facilitates evaluation.
• They need content at the bottom of the funnel (BOFU) that facilitates conversion.

To move prospects through the middle (MOFU) and bottom of the funnel (BOFU) you’ll need content types like blogs, webinars, events, product demos, and product comparisons.

PAID TRAFFIC MARKETING

Cold prospects from Paid Marketing must travel through the same 3 stages as in Content Marketing above… Awareness, Evaluation & Conversion.

A successful paid traffic system consists of multiple advertising campaigns that work together to acquire leads and sales for your business at break even or better. Using a series of well-orchestrated ads and offers, you’ll transform ice cold prospects into loyal customers.

To move prospects through a marketing funnel they will need advertising designed to satisfy their needs at each of the three stages.

1. The cold prospect 
   should be made offers that create awareness, build authority and establish trust.
2. The warm prospect should be made offers that facilitate evaluation and convince the prospect to take action.
3. The hot prospect should be made offers that encourage higher dollar, more complex or repeat purchases.

To move prospects though the three stages your advertising and messaging must be responsive to the prospect’s stage in the “customer journey.”

EMAIL MARKETING

Every email your business sends will fall into one of these three categories:

1. Transactional Email – Emails sent containing information about a transaction or a process such as shipping notifications, purchase receipts and support tickets. According to Experian, the average revenue per transactional email is 2X – 5X higher than standard bulk email. Most marketers are underutilizing this type of email.
2. Relational Email – Any email that follows through on a promise made to a subscriber including new subscriber welcome emails and newsletters containing valuable content.
3. Promotional Email – Emails sent to generate leads or sales including sale announcements, webinar or event announcements and new product releases.

Each of these email categories has an obvious primary goal:

• Transactional email provides customer service.
• Relational email increases engagement and nurturing.
• Promotional email is responsible for generating sales.

But each category of email actually accomplishes much more than its primary purpose. In addition to these obvious primary benefits, email also provides brand awareness, lead generation, and an increase in the retention of your existing customers.

SOCIAL MEDIA MARKETING

Social media marketing is made up of four equally important parts:

1. SocialListening– Monitoring and responding to customer service and reputation management issues on the social web.
2. Social Influencing – Establishing authority on the social web, often through the distribution and sharing of valuable content.
3. Social Networking – Finding and associating with authoritative and influential individuals and brands on the social web.
4. Social Selling – Generating leads and sales from existing customers and prospects on the social web.

Each of the above activities meets very different business goals.

• Social Listening: Manage reputation; Decrease churn; Reduce refunds; Identify product gaps; Identify content gaps
• Social Influencing: Increase engagement; Increase website traffic; Increase offer awareness; Grow retargeting lists
• Social Networking: Earn media mentions; Develop strategic partnerships
• Social Selling: Generate leads; Grow email list; Acquire customers; Upsell/Cross-sell existing customers; Increase buyer frequency

To get results from social media marketing, first determine the goals you want to achieve. Then, focus time, money and effort on the corresponding social media activity. For example, if the company goals are to manage reputation and reduce churn, the focus should be on developing a strong social listening program.

Community management on the social web is all about building relationships around mutual common interests that decrease churn, increase retention, spur word-of-mouth referrals, and increase sales.

To get results from your online community, you must first understand the Relationship Model, community positioning, and how to influence the way your members experience your tribe through the Sense of Community Theory.

SEARCH MARKETING

No discipline in digital marketing has evolved over the years quite as dramatically as search marketing.

Today, search engines like Google consider hundreds of factors in deciding which web page to display for a search. In the current search marketing landscape, the best web pages usually win.

Much like bloodhounds on a hunt, people often search the web until they find what they are looking for. To compete for search traffic, a marketer simply needs to create a web page or asset that satisfies the searcher’s query. That web page or asset could be anything from a blog post or podcast to a product demonstration video or map to a brick and mortar store.

A sound search marketing program will anticipate the intent of potential and existing customers and build optimized assets on the web that satisfy that intent. For example, a Software as a Service company like Quickbooks might anticipate that its potential customers often go to the web with the intent of finding out how Quickbooks compares to a competitor like Freshbooks. As a result, the marketing team at Quickbooks should build an optimized web page that can be easily found if a potential customer searches Google with a query like ‘quickbooks vs freshbooks’.

When determining the intent that will be targeted and the asset that will be created to satisfy that intent, it must also be determined on what channel that asset will “live.”

Search marketing today isn’t limited to big search engines like Google and Bing. Social media sites such as Facebook and Pinterest also have search capabilities. Also, Amazon, iTunes, TripAdvisor, and thousands of other sites provide search to their users. Depending on your business, it can be more valuable to understand how search operates on channels like YouTube or Amazon than on Google or Bing. Taking time to learn how each of these search engines structures their ranking algorithm is critical to success in today’s search marketing landscape.

ANALYTICS AND DATA

If your business is running without the full benefit of a well-run data and analytics program there is usually one of two issues:

• You don’t know what to measure and/or don’t have time or resources to measure it if you did. As a result, you measure nothing and make business decisions with “gut instinct.”
• You measure everything and are overwhelmed with an avalanche of data. As a result, business decisions aren’t made due to “analysis paralysis.”

As with most things, the optimal level of access to data is somewhere in the middle. Whether it’s a lack of data or a glut, your organization needs to organize its metrics into two groups:

• Key Metrics – A small number of metrics that are critical to meeting business goals. These metrics are monitored regularly.
• Drill-Down Metrics – A larger number of metrics that are only analyzed if a Key Metric changes significantly. These metrics are granular in comparison to the Key Metrics they are associated with.

For example, a company might be monitoring a Key Metric called ‘New Website Visitors’. If that metric changes significantly, the analyst would investigate why by analyzing the Drill-Down Metrics of ‘Traffic by Channel’ or ‘Share of Search’.

Key Metrics should be represented by data dashboards that can be monitored at a glance.

Key and Deep Dive Metrics should be organized by the different stages of the marketing and sales funnel. Organizing business metrics in different stages of the funnel so that issues can be identified and investigated quickly.

Create categories of metrics such as:

 

• Top of Funnel Metrics (TOFU Metrics) – Metrics that track the goal of raising awareness for your company and the solutions it provides.
• Middle of Funnel Metrics (MOFU Metrics) – Metrics that monitor the health of marketing campaigns designed to generate leads.
• Bottom of Funnel Metrics (BOFU Metrics) – Metrics that measure the conversion of leads into customers and existing customers into more valuable buyers.
• Retention and Monetization Metrics – Metrics that monitor the companies ability to keep an existing customer and encouraging people who have bought to buy more frequently.

OPTIMIZATION AND TESTING

When a website visitor takes a desired action, it is called a conversion. Common conversions on a web page are: filling out a lead form, adding a product to a shopping cart, or registering for a webinar.

Conversion Rate Optimization (CRO) is a process designed to intentionally increase the number of conversions on your website or on a specific web page. A well-designed CRO program is comprised of an 8-step process:

• Step 1: Identify Goals– You need to identify metrics and goals first. Without a goal or KPI to measure, you cannot optimize.
• Step 2: Gather Data – Gather the data that is relevant to the goals and metrics you have identified.
• Step 3: Analyze Data – Analyze the data looking for anomalies, patterns or ?…….?
• Step 4: Create a Hypothesis – Use your observation of the data to form a supposition for the competing variant.
• Step 5: Design Variants – Create variations that will be tested. Heads up! This part of the process often involves outside help from web developers and others. As a result, CRO campaigns can get stalled in this step.
• Step 6: Implement Tech – Use a testing application (often called a “Testing Tech”) to run your test.
• Step 7: Test – This is the fun part. Run your experiment.
• Step 8: Analyze Results – Dig into the results and either implement the variation or leave the control in place.

The CRO process is cyclical. After results are analyzed in Step 8, the process begins again with identifying goals.

Perhaps the most critical skill in CRO is knowing whether a split should be conducted at all. In some cases, this decision is driven by simple math. For example, to run a reliable test of two variants over a 7-day period, you’ll need 29 conversions per variant, per day to reach a reliable conclusion. If you don’t have that number of conversions on that page, the math simply doesn’t work and the test should not be run.

Even in cases where the math points to a reliable test, there are times that a test should not be run. For example, if something simply doesn’t function properly on a web page, it should be fixed rather than tested.

The good news is that split testing is just one way to optimize for conversions even if you have very little traffic. There are other, often simpler and more lucrative, conversion rate optimization tactics such as: 

 

• User Surveys – Asking users to answer a question or series of questions that yield qualitative data for analysis.
• Session Recordings – A recording of a website visitor interacting with your website.
• Heatmaps – A graphical representation of the mouse clicks (and often scrolling patterns) on a web page.