Strategy Business Growth
Customer Value Optimisation: The System to Grow Your Business
This article is written for those without any prior experience with Customer Value Optimisation or those who want a refresh on the underpinning principles of online marketing.
This system works for small and large businesses alike and whether you sell traditional products, digital products, or services.
This system works because it exploits three ways to grow a business:
- Increase the number of customers
- Increase the average transaction value per customer
- Increase the number of transactions per customer
When you’re adding arrows to your quiver like Facebook Advertising, Google Analytics, or Search Engine Optimisation (SEO), you’ll need to constantly remind yourself of this system. There is enormous potential and profit in understanding how to apply these platforms & strategies to the Customer Value Optimisation (CVO) process.
Here are the steps:
- Determine Product/Market Fit
- Choose a Traffic Source
- Offer a Lead Magnet
- Offer a Tripwire
- Offer a Core Product
- Offer a Profit Maximiser
- Create the Return Path
We’re about to reveal the same system we use to sell products and services across multiple specialist markets including…
- Health & Fitness
- Home Improvement
… just to name a few.
Step 1 – Determine Product/Market Fit
Business is pretty simple. We get paid to move people from a “Before” state to a desired “After” state.
In the “Before” state, the customer is unhappy for any number of reasons and in the “After” state, they are free of pain, entertained, or unafraid of what previously plagued them.
People don’t buy products or services, they buy access to the “After” state, and great marketing simply articulates the move from the “Before” state to the desired “After” state.
Most businesses that fail, fail because they do not offer a desired “After” state or they are unable to articulate the movement from “Before” to “After”.
You can get that clarity by asking yourself these four questions…
- What does your prospect HAVE in the “Before” state vs “After”
- What does your prospect FEEL in the “Before” state vs “After”?
- What is an AVERAGE DAY like for your prospect in the “Before” state vs “After”?
- What is your prospect’s STATUS in the “Before” state vs “After”?
Average marketers only articulate what a customer will HAVE if they purchase their product or service. Great marketers speak to how a customer will FEEL, how their AVERAGE DAY will change and how their STATUS will elevate.
If you can’t clearly articulate how your product or service takes your customers from the “Before” to a desired “After” state you may have an issue with your Product or Market Fit.
Step 2 – Choose a Traffic Source
News Flash – Traffic is not a problem.
Google, Facebook, Bing, Twitter, Instagram and LinkedIn are jostling for position to sell you targeted traffic & your agency (hopefully Caffeinate Digital) wants to send you more traffic, both Organic and Pay Per Click.
These traffic sources include:
- Email Marketing
- Social Advertising (Facebook / Twitter / YouTube / LinkedIn Ads)
- Banner Advertising
- Organic Social Media
- Search Engine Optimisation
- Search Engine Marketing
You simply need to understand how to extract maximum immediate value from that traffic, because the goal, no matter which traffic source you choose, is to drive prospects into your Customer Value Optimisation (CVO) Funnel which begins with the Lead Magnet.
Step 3 – Offer a Lead Magnet
Lead Magnets and Tripwires help grow your business through the first method of business growth – increasing the number of customers.
The Lead Magnet should be an irresistible bribe that gives a chunk of value to a prospect in exchange for their contact information.
Don’t be deceived, although no money changes hands, this is a transaction and you will need to provide tremendous value with the Lead Magnet.
The Lead Magnet is usually offered on a web page called a landing page where you can direct your traffic. This page is usually optimized to convert even cold traffic into leads.
The Lead Magnet exists to increase leads and is imperative as it feeds the rest of funnel.
The good news is that you don’t need to create something in-depth or complicated.
In fact, the more specific your Lead Magnet is, the better it will convert and more leads means more Tripwire sales.
Step 4 – Offer a Tripwire
Remember, our first goal is to increase the number of customers. So far, we are generating leads through the Lead Magnet but we haven’t generated new customers.
The goal of the Tripwire is to fundamentally change the relationship from lead to customer.
The Tripwire offer is made to those who have displayed interest through the Lead Magnet and the key is to make a Tripwire Offer that leads are unable to resist.
The most common way to make the Tripwire irresistible is by selling it at cost and, in some cases, at a loss to you.
You are not trying to make a living from selling Tripwire Offers. You are trying to acquire buyers because there is nothing more valuable than a list of buyers.
Types of Tripwire Offers
Physical products, pieces of software, paid webinars and lastly, a deeply discounted service, works wonders at acquiring customers. e.g.
With the understanding that acquiring a paying customer will deliver profit further down the funnel, in the next three steps:
- Core Offer
- Profit Maximizer
- Return Path
Now, let’s talk about increasing the average transaction value per customer.
Step 5 – Offer a Core Product
You already have a Core Offer, your main product or service.
Most businesses try and make Core Offers to cold prospects.
Making Core Offers to cold prospects is like asking someone to marry you on the first date, its unlikely, and if you do pull it off, the relationship won’t be the strongest.
You’ll see your sales boom with the addition of the Lead Magnet and Tripwire Offer, after all, you’ve already had two successful transactions with this buyer.
Many successful businesses in the world make no profit until they reach the next two stages, Profit Maximisers, and Return Path.
Step 6 – Offer a Profit Maximizer
The second growth method is to increase the average transaction value per customer. The Profit Maximiser does just that.
Most businesses don’t have Tripwires and they don’t have Profit Maximisers. They live and die selling cold prospects on their Core Offer which is why they struggle…
Would it shock you to find out that McDonald’s makes almost no money on the hamburger? The burger is the Core Offer, but it’s the fries & drink “Profit Maximiser” that created the empire.
This type of Profit Maximiser is called an immediate upsell, but any offer made after the initial sale is a Profit Maximiser.
Amazon makes a cross-sell Profit Maximiser offer when they show you, “People who bought this product, also bought that product” and also makes a Bundle Profit Maximiser offer with their “Frequently Bought Together” offer.
Subscriptions-based services which utilize recurring billing like membership websites and other continuity offers make fantastic Profit Maximiser offers.
Find your Profit Maximiser and you begin to become very profitable. But there is one more way to grow…
Step 7 – Create the Return Path
The last way to grow a business is to increase the number of transactions per customer, by getting them to buy again and again.
The goal of the Return Path is to have frequent, strategic communication with your buyers and prospects after they’ve bought from you once.
You can offer new Lead Magnets, Tripwires, Core Offers, and Profit Maximisers that they didn’t buy the first time around.
The Return Path is anything that brings the customer or prospect back including…
- Exit Offers
- Organic Social Media
- Loyalty Programs
- Content Marketing
- Outbound Sales Calling
- Ad Re-marketing
Here is an example of re-marketing in the wild:
I recently used the free keyword research tool from WordStream and their re-marketing ads were encouraging me to take the next step down their sales funnel by consuming a Lead Magnet they created around Pay Per Click (PPC) Copywriting tips.
We use this system over and again to help grow and scale businesses by creating a structure that allows the business to leverage their current assets to capture more leads and generate more sales.
If you’re interested in how we can apply this system to your business, we’re offering a chunk of value in exchange for your contact information…