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The 5-Step Profit Formula Explained
In several of our previous posts, we’ve been discussing the 5-Step Profit Formula.
There are five critical steps that every small business owner MUST address in order to attract new clients and generate more revenue… leads, conversions, average sale value, number of transactions and profit margins. We want to show you how to increase each of these 5 critical metrics for your coaching practice as well as your client’s business.
In our last post, we discussed lead generation and how using a Val-Pak strategy, you could direct mail more than 50,000 targeted prospects for free. Now let’s tackle that second critical step… your conversion rate. Your conversion rate is where a prospect becomes a client. They agree to buy what you sell. This simply means you found a way to compel their decision making process so they chose you over your competition. What if we could help you convert your leads… and close the sale… every time?
There are a multitude of ways to generate all the leads your business can handle. But here’s the problem. Like it or not, only 3% of those leads are what you might call “now” buyers. They’re the ones ready to make an immediate purchase.
The remaining 97% of your leads are “future” buyers… IF you continue to nurture them by staying in touch with them on an on-going basis. Some of these future buyers will be ready to buy what you sell within 24 to 48 hours, while others may be ready in 24 to 48 months. Staying in constant contact with all of them is the little known secret to assuring the future success of your business… and exploding your revenue and profits.
If you or your business aren’t there at the exact moment when a prospective buyer is actively seeking a solution, then any and all future sales will go to your competitors. Unfortunately, the vast majority of small business owners rarely follow up with their prospects after their initial contact with them.
In fact, if a prospect tells the business owner that they’re not interested or fails to call the business owner back, or refuses to meet with them or doesn’t complete their specific marketing process… most business owners write the prospect off as someone who isn’t interested in buying from them. These business owners are setting themselves up to miss out on a LOT of future sales.
So what’s the answer? It’s absolutely vital that all small business owners create a strategic “drip campaign” based on their specific marketing process.
A drip campaign describes a campaign that automatically delivers a form of communication to customers or prospects on a predetermined and scheduled basis. In essence, you continuously drip various forms of communication to your prospects. The form of communication can vary depending on your prospects preferences and your marketing process.
For example, some small business owners use strictly email since there’s no cost involved in executing an email drip campaign. Others like Pottery Barn, Land’s End and Victoria’s Secret prefer to use direct mail. And others may use a combination of these, including direct phone calls or through the use of voice broadcasting where you can hire a company to leave your prospects a voice message on their answering machines.
In the past, these events would continue through a pre-programmed linear series of deployments until they reached the end of their cycle. This typical process basically assumes your prospects are lemmings… and that they will all respond the same way to your communications. They won’t.
In today’s media saturated world, you’re dealing with much more sophisticated consumers; so smart business owners will develop a much more advanced drip campaign to assure success.
The purpose of developing a drip campaign for your business is to not only help you and your salespeople close more hot prospects, but to also help your business automatically stay in touch with its largest percentage of future buyers… those buyers that are typically written off as simply not interested.
But here’s the real secret to developing a revenue-generating drip campaign. When you send out your pre-determined series of communications, none of them should EVER attempt to sell your prospects. People love to buy… but they hate to be sold to. Be sure you fully understand human nature when it comes to the marketing process.
Prospects today want to find the “best deal.” It doesn’t matter if they’re buying a stick of gum or a new car, everyone wants to feel as though they’re getting the best deal. Now believe it or not, the best deal does NOT mean the lowest price. Most small business owners today think price is ALL that prospects consider these days. Nothing could be further from the truth.
Prospects want the most VALUE for the price they pay. They will gladly pay double the price if they feel they’re receiving four times the value. The reason most business owners feel that price is everything is they have given their prospects no other choice than to make price their sole buying criteria. Let’s face it… most businesses today offer the exact same products or services to their prospects.
The smartest thing ANY small business owner can do today is find innovative ways to increase the value of their product or service. Find what your prospects will consider to be added value but that represents little to no additional cost to you as the business owner.
For example, you often see restaurants today offering a free appetizer with the purchase of two meals. The prospect sees that the average appetizer on the menu has a price of $7.95. They see themselves saving that amount on their bill, and feel they are getting a great deal. However, that $7.95 appetizer only costs the restaurant about a dollar, but by offering that appetizer for free, they attract 30% more patrons to their restaurant. Everyone wins.
That’s what every small business owner must do today. Innovate their business to create as much added value as they can, and then create an entire series of pre-determined communications to constantly remind their prospects of the added value they offer… especially added value that their competition doesn’t offer.
That’s what I meant earlier when I said your drip campaign should never attempt to sell your prospects. People hate to be sold to, but they love to buy. They just want to find the best deal… so communicate with them on a regular basis and remind them that you have the best deal waiting for them. You want to create a drip campaign that continuously and repetitiously informs and educates your prospect regarding the value your business offers that your competition doesn’t.
And by the way, a drip campaign doesn’t just apply to selling your product or service. You can use this to cross-sell your current prospects and customers additional products and services… both your products and services or your affiliate partners. You can also use a drip campaign to ask for referrals or to survey your prospects to find out what else you could do to provide them with additional value.
A well-coordinated drip campaign can increase conversions 20% to 50% or more depending on the type of business you’re dealing with. Implement this conversion strategy and watch sales soar. In our next post, we’ll discuss ways you and your clients can generate more transaction..
Until next time,
About Adrian Ulsh
Adrian Ulsh is the CEO for Leader Publishing Worldwide, the largest online provider of coaching services worldwide. Adrian currently works with more than 500 coaches in 24 countries advising them on building 6 and 7 figure coaching practices.
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