The most common question I get is “How do I increase sales for my business?”
The question most people should be asking is “How do I create a system or a marketing funnel that generates leads, nurtures them and converts them into sales?”
I believe most businesses go through these primary stages.
Stage 1: Life Support
The business has just started, the founders are using their life savings to keep the business alive. It’s a very critical stage, a few mistakes here and there can cost you your entire business. It’s important to be frugal and focused during this stage. There is a very low margin of error during this time.
Stage 2: Break-even
Here is when the business is making enough sales to cover expenses. The business owners are slightly better off during this stage, but they are not out of the waters yet. It’s still a critical stage. Every expense still needs to be monitored and kept low. It’s easy to lose focus and go on a spending spree and fall back into stage 1. So be careful.
Stage 3: Breathing a little
Now the company is not just covering costs, but making a slight profit. The founders can breathe a little, take home a basic salary and can afford instant noodles.
Stage 4: The Corolla stage
The company is growing; the founders are taking home dividends; now they can upgrade from using public transport to buying their budget cars.
Stage 5: The Prosperity stage
During this stage, the business is flourishing. The founders can luxuriate. They can afford a BMW, a luxury vacation and can upgrade themselves to a better neighborhood.
Stage 6: Stagnation point
Here is when the business matures and reaches a stagnation point. The growth curve is flat. That’s when the founders decide to sell the business or choose to get outside professionals to run the company.
Not all companies go through these six stages. Some of them may die in stage 1; others may get stuck in stage 3 and never move ahead, and so on.
Why is it important to know these stages?
A lot of businesses start without much planning, that is okay in the beginning. But once they start, it’s important to put processes in place so the business can scale up, and generate leads and sales consistently.
The Sales System and Marketing Funnel
Most companies do not have a sales system in place. The founders have no clue about a marketing funnel.
In this article, I am going to discuss how to put a system in place so that you can generate leads, nurture them and eventually convert them into sales. Typically, some marketers call it the marketing funnel, and sometimes even the sales funnel.
People ask me, is it the same for every business? No, it isn’t. But the underlying philosophy is the same. You can tweak it and customize it for your own business.
Step 1: Commitment
I believe every business or individual should be committed to something bigger than themselves. What’s the mission of your business besides making money? What change do you want to bring to people’s lives?
Darren Hardy in his article why ambitious people rarely succeed said, “It isn’t enough if you are ambitious. It’s far more important to be committed.”
Many of us change and evolve over a period. When we commit, we are willing to change and do whatever it takes to get things done.
Step 2: Your ideal audience
Marketing is much easier when you know your tribe. If you are sure who you are targeting, it’s much easier to identify your channels of communication.
Step 3: Where are you going to get your leads from?
Initially, there is a bit of experimentation. I like to focus on multiple sources because if one of them dry up, I still have other sources of leads.
Step 4: Money is in the back door
One of my mentors early in my internet marketing career told me, “Amateurs make money at the front door, professionals make money at the back door.”
What does this mean?
Let’s say you are selling product X.
You place an ad, and your customers land on a page with a buy now button. Their only option is to buy the product or leave the page. Will they purchase the product?
If they’ve heard about it from a friend, or if you are a well-known brand, the probability of a sale is high.
But if you are not a well-known brand, and he hasn’t heard of you before, then it might require a more sophisticated approach.
Here’s another approach. Instead of pitching your product directly, you offer free consulting or something of value in exchange for subscribing to your mailing list.
Once they subscribe to your list, demonstrate your value. As you occupy mind space and start benefitting your prospect with your expertise, they start warming up to a sale. That’s when you send them a trial offer, where they can try out your service for a small fee.
At check out, do an upsell, with a more significant offer.
The sequence is something like this.
First step: Place an ad, give them something of value (for free) in exchange for their email and contact information.
Second step: Demonstrate value.
Third step: Make a trial offer.
Fourth step: Upsell, and run a trip wire.
All this is applicable not just to digital products, but it can be customized for retail and nearly any business.
Take McDonald’s for example, it costs them $1.91 in advertising to get you in their door, and they make just $0.18 per sale of their burger which costs them $2.09, but they sell you fries and coke for an additional $1.77. That’s where they make their money.
How many times have you walked into a retail store during a sale, and bought products at full price because you loved it? Successful restaurants, retailers, and digital marketers all follow this concept.
The concept is elementary. You sell a low-priced item, even if it is just $1, the lead is opening up his wallet and starting a relationship with you. He is no longer just a lead; he is now your buyer. Existing customers are more likely to buy from you again. That is why it is so important to deliver exceptional value at a low price.
Once he purchases your low-cost item, pitch him your core product. That’s where you make your money. Some marketers will go even further and sell them an add-on product.
I used this same system for my business. I sold an ebook for $1 and upsold an online course for $19. And an in-person course for $75. A simple system of incremental investments while demonstrating outstanding value.