In this section we are will be looking at generating more leads for our business.

As you have seen up to now, we have concentrated solely on optimizing our existing business to squeeze as much revenue out of it as possible, usually with the only cost being some of our time.

In most businesses that have not been optimized in the ways we have discussed up to this point, its very easy to increase profits up to 50% by implementing the previous steps.

Now that our back end and conversions are up to scratch, we can concentrate on generating more leads with the knowledge that we will be converting the greatest amount of those leads as possible, while at the same time generating as much revenue down the line as we can from those exact same leads.

You can’t buy that kind of piece of mind.

So without further delay, lets look at our first lead generation source, referrals.

I’m almost 90% sure that you don’t already offer a 100% money back guarantee on your services or product. What this also means is that competitors most likely don’t do this either.

This means you have a huge opportunity to gain incredible advantage over your competition by offering a very compelling guarantee that far outshines anything your competitors may be offering.

The fact is most businesses are terrified of offering any type of guarantee at the risk of losing profits due to a high amount of returns.

I can however guarantee YOU that if you have a good quality product or service, this will not be the case.

If you don’t, well, you should stop trying to market any further and go back to work on developing a better product. No amount of good marketing can make up for a low quality product or service.

I’m sure however that you have a great product, and thus can benefit incredibly from offering a great guarantee. The fact is that the additional sales your will receive will far outweigh any false returns from dishonest individuals taking advantage of your guarantee. This has been tried and tested in almost all types of businesses.

A great guarantee works so well as it addresses all the perceived risks the customer may have with regards to doing business with you, and builds incredible trust in the fact that you are offering a quality product that will live up to your marketing.

You really can’t beat the benefits and increased sales you can get from offering a great guarantee.

Obviously all business are different and you need to take a good look at your business and work out exactly what type of guarantee is viable for you to offer.

This also comes back to one of the most important aspects of marketing and that is to TEST EVERYTHING.

Let’s look a the fitness business for example.

If I ask you why you don’t offer a guarantee, you may explain that in your business it was up to your clients to achieve results. For example, you or your team can’t guarantee your customers put the necessary effort in and follow the recommended diet which will result in their success.

All your competitors probably feel the same. I’m sure none of them offer a guarantee.

Fine, but perhaps you are looking at it the wrong way.

If your clients give you honest and accurate information, follow your advice, and put in enough effort, (and other factors remain the same) can you guarantee they will increase their chances of achieving better results?

The key point here is that you can guarantee your ‘process’ works to help clients achieve results. Of course you can’t guarantee clients will always reach their goals. In your case perhaps, that is up to every client to work on.

Here is an example of wording for a guarantee in this specific case:

“If you follow our guidance, put in the work required, and be honest with us about your commitment, we guarantee you will have better prospects of reaching your goals. We’ll do everything we can to help you realize your potential. If you not completely satisfied that following our process achieved the results promised, you will receive 100% money back”

The guarantee provides specific details on what the client needs to do for the guarantee to be applicable.

The main point of this is that you demonstrate faith in your product or service. As I’ve said before, the objective is to minimize the perceived risk in purchasing from you.

If you have faith in your product or service, you should not have any problem offering a guarantee such as the one above.

So far we have gone over how to increase the lifetime value of each customer by increasing the number of purchases (part 1) and then we discussed increasing the value of each sale (part 2)

Part 1 and 2 focused on great cost effective ways to leverage your existing business to increase your profits and I hope you got some great ideas already, but more importantly, I hope you have taken action on what you have learned so far.

Part 3 will be looking at leveraging existing lead generation sources such as advertising or referrals, direct marketing etc (don’t worry, well discuss those in part 4) and increasing the number of sales you get from existing leads.

You may have wondered previously why generating more leads has been the last section we discuss and the simple reason behind this is that generating new leads and prospects is the most expensive and time consuming activity in your marketing plan.

Additionally there is much less value in generating new leads if you have no back end sales funnel to generate additional sales from these new customers, no sale value increasing strategies in place to maximize the value of each sale, and lastly, no optimized sales process to maximize the percentage of new leads which convert to sales.

You see, once you have the first 3 steps implemented & optimized you will have much more leverage and power when it comes to lead generation, since you will be able to spend much more on advertising and other lead sources simply because you now make much more revenue per new customer than ever before!

So, let’s begin with your incoming call script.

If you’re not already doing this you’re almost guaranteed to increase your profits by implementing this strategy, and the great thing is, it’s really easy to do so.

To describe it simply, it’s the process whereby you attempt to get a customer to purchase more then they originally intended by recommending additional products or services that add value to the original sale, once they have already decided to purchase something, or right before they are about to do so. The important thing to note that this must occur at the same time the original sale is taking place.

Here are some easy examples of some common up sells you may have already encountered:

• adding side dishes to a food order
• suggesting a premium brand of alcohol when a brand is not specified by a customer (such as offering Captain Morgan if a customer simply requests a “Rum and Coke“).
• selling an extended service contract for an appliance
• suggesting a customer purchase more RAM or a larger hard drive when servicing his or her computer
• selling luxury finishing on a vehicle
• offering tripod, filters, and lens wipes with a purchase of a camera
• suggesting a brand of watch that the customer hasn’t previously heard of as an alternative to the one they are considering.

As you can see up selling is used almost everywhere by everybody, simply because it really is that powerful.

Once the customer has already decided to make a purchase, psychologically he is committed to spending money with you and will be wide open for adding something else to the sale.

Here is another great example that shows how a pet store drastically increased the value of a sale while at the same time leaving the customer thinking what a great deal they got, and as a result, very satisfied.

When the clerk sees Sam looking at the budget-priced gold fish, she leads him over to the much more impressive tropical fish.

“As you probably know, you will need a fish tank,” she says. “These beautiful fish only live in salt water. We have these $75 salt water tanks on sale for just $49.95.”

By the time Sam exits the store, he has purchased much more than the twenty cent gold fish he originally came in to get. He is proudly carrying home several exotic species, a $50 fish tank, fish food, a light, and other accessories. The sale went from a tiny twenty cent transaction to nearly $100. The store’s profit margin rose right along with it.

As you can see upselling is a great strategy that not only increases your average sale price per customer, but also ads additional value to your customer purchase.

Keep in mind that as an expert in your business, you need to become a trusted advisor to your customers, and make sure you use upselling to offer a more complete solution to your customers needs.

In many causes a customer will choose to purchase something for a specific need that they perceive will resolve their problem, however in many cases, its simply not enough, and it’s your duty (for your customer and your bank account) to recommend a more complete solution to resolve their needs.

Remember upselling is as much getting customers to purchase additional products or services from you, then it is for them to purchase an upgrade on their initial sale.

A good example in the fitness business is the guy who advertises a low priced once a week personal training session which has good response, and then recommending a more advanced intensive service you provide that may consist of 2 days per week:

It can go something like this:

“This program works well, however if you get on program XXX you should be able to get double the results in half the time.” If a product or service works much better with a complimenting item or upgraded version, be sure to tell customers about it.

You should always have a mode “advanced” version for every product or service you offer that you can recommend to prospective or existing customers, or you missing out on additional revenue.

Pricing can be an incredibly advanced and complicated topic that has many books completely dedicated to it, but don’t let this scare you away.

The question most people ask themselves is:

“Do I price my products low, to get more sales volume and increase my profits that way, or do I price my products high, taking advantage of perceived value and thus increase my profits in this manner?

There is one really simple answer to this. It’s to TEST.

There are many different pricing strategies and models out there, and we will be looking at many of these in future, but right now the way to gain the most benefit for the least amount of time spent, is to test different offer prices.

There really is no way to know how your specific market and customers will respond to different pricing. When you make assumptions about pricing, in many cases you are leaving money on the table. The reality is that most people actually price their products to low.

The truth is that unless you are selling a commodity product that needs to compete with rock bottom prices, then you really do have a lot of flexibility when it comes to your pricing.

As we have mentioned before, your customers perception of your product or service will play a part in determining their own opinion of the “correct price”. There is usually a sweet spot which is the maximum value you can raise your price to while maintaining the same quantity of sales.

If you have an existing business making sales from an existing lead generation source (advertising for example), you can easily begin to test your current pricing by slowly increasing your price until sales start to drop.

The volume of sales you have will determine the duration you test a particular price. For example if you have many sales within 1 month, you could test a new price each month and have enough sales data to make accurate decisions, however if you have a high priced product that makes say 1 sale each month, you may only be able to test new prices every 6 months or so.

In most cases you will find you can increase your price a reasonable amount before you have any noticeable reduction in sales. This is already a quick win for you and will increase the value of each sale with very minimal effort.

Once you are ready to proceed, you can begin increasing your pricing, (making sure to track the results of each price point!) beyond the point where sales begin to drop, until you reach the point where revenue is exactly equal to your original lower price before testing began.

You will then analyze and graph the data and will easily be able to tell at exactly what price/volume ratio point you hit the highest revenue.

By doing this easy pricing test you can easily increase the value of each sale up to 50% in some cases over a small period of time, depending on your sales volume.

This would have cost you nothing but time, since you would have stopped the testing once you hit the revenue you began with in the first place. Except now, you have effectively increased the value of each sale in future indefinitely all else remaining equal.

Always keep in mind your profit margin when it comes to selling physical products or services.

Lets say you are selling a physical product and your test results in R20000 revenue at R200 per item and R20500 revenue for R450 per item. Obviously the R450 price made less sales then the R200 price to equal out at almost the same revenue, however the R450 pricing made exceptionally more profit since it would have a higher profit margin per item, and is thus the price you want to keep.

The other side to this is that you are not taking into account the back end sales, which we have discussed in part 1. For example let’s say the highest price made higher upfront revenue, but a lot less new customers, we may actually be making less in the long run due to less customers entering our back end sales funnel and taking advantages of our back end offers.

Thus it’s always best to test pricing and take into account all revenue generated for that customer BEYOND the initial sale. Or lifetime customer value (link).

This can take some time however as you need to track results over a long period of time.

To get the quickest results it is recommended to stick with price that gained you the highest number of new customers to revenue per sale ratio. If price 3 earned you R50k and got 200 customers, and price 2 earned you R35k but got you 800 new customers, price 3 may be the better option to stick with as long as you have a good back end sales funnel.

These simple tests can have incredible impact on your bottom line with very minimal effort, and no additional cost.

Once you have completed you price testing for your first initial sale, you simply begin the same exercise for your back end sales products, to further increase your revenue.

This may sound very simple but so many business simply don’t do this type of testing and will miss out on the easy rewards, so make sure you start doing this in your business right away.

Here are some tests and explanations from marketingexperiments.com

Experiment #1:

In our first experiment, we worked with a leading psychiatrist and author to determine how to maximize the online sales of his newly published book.

The three price points we tested were:

1. $7.95
2. $14.00
3. $24.95

Which price point was best? Which price point yielded the most revenue?

To answer these questions, we conducted a simple three-day pricing test. We drove a large volume of traffic to our site using just five search terms on Google AdWords. Using an A/B/C split test, we evenly distributed this traffic to three pages showing different pricing information.

Here are the results of this three-day micro-test:

What You Need to UNDERSTAND: Based on number or orders, it appears that the $7.95 price point was perceived as a lesser value and that the $24.95 price point was too high. The $14.00 price point generated significantly more orders. But because of the larger price point, the $24.95 offer actually generated the most revenue.

An important additional point: the higher price on the same book created a much higher profit margin, which resulted in greater profit generated on less physical units sold.

KEY POINT: For physical products, profit margin should always be taken into account. For subscription-based services, this is much less of an issue.

However, marketing costs should always be taken into account. In our next experiment, we weigh the pay-per-click (PPC) marketing costs against the revenue generated.

But first, one final note on this test: It is important to weigh the benefits of additional new customers against that of higher revenue. In the example above the additional 180 customers at the $14.00 price point may actually be worth more in the long run than the additional $765 of immediate revenue generated at the $24.95 price point. In other words, the additional revenue made in subsequent sales to these customers may more than make up for slightly less revenue on the first sale.

KEY POINT: It may be to your greatest advantage to select a price that generates slightly less revenue if that price also generates significantly more new customers. The average lifetime value of your customers and your ability to make additional sales to them will be the determining factors here.

Experiment #2:

In this test, we used three different price points for a paid-subscription site. Again, we split the traffic evenly between three landing pages. The only thing that was altered was the price.

The three subscription price points we tested were:

1. $10.00 per month
2. $12.50 per month
3. $14.95 per month

Here are the initial testing results gathered over a four-day period:

What You Need to UNDERSTAND: The $10 price point generated 33% more revenue than the next best price point.

Here is an ROI analysis of all three price points based on a $0.09 average CPC:

What You Need to UNDERSTAND: While the PPC campaign remained profitable at all three price points, the ROI generated on the $10 price point was more than double that of the next best price.

When ROI is calculated, it becomes even more obvious that the $10 price point is significantly better than the more expensive prices. And these numbers do not take into consideration recurring revenue.

These results are even more dramatic when you factor in recurring revenue:

What You Need to UNDERSTAND: At a 4.5-month average subscriber lifetime, the $10 price point generated 32.8% ($38,981.25) more revenue than the next best price point. However, because of the increased retention, the $10 price point actually generates closer to 77.0% ($91,631.25) more than the $12.50 price point.

What’s important here is that in addition to generating more sales, the lower price point also increases retention, which creates even more profit over the long term.

KEY POINT: For subscription-based sites, consider selling long-term memberships as well. For more on this topic, see our report on Subscription Revenue.

Even with retail sites, the lifetime value of a customer shouldn’t be ignored. The additional sales you can make to existing customers may be significantly more valuable than the immediate additional sales.

In these two tests, we have seen that intuition cannot be relied upon to predict optimal pricing. Sometimes a higher price creates more revenue, while other times a lower price will generate not only more immediate sales, but more recurring revenue as well.

We have provided a downloadable spreadsheet tool that helps you calculate your revenue and profit for a number of price points:

MEC Price Testing Analysis Tool

In our recent web clinic, we covered the functionality of this spreadsheet in great detail. Download the clinic recording, Price Testing Clinic.

While testing your product or service pricing, keep the following key guidelines in mind:

1. If you are selling a physical product, you will need to know what your competitors are charging for the same or a similar product, and get a feel for whatever “added value” a prospect might perceive when buying from you instead of anyone else. Is your brand stronger? Is your reputation stronger? Do people trust you more? Is your service superior? Do you provide services or bonuses along with the product? Do you offer better deals on shipping costs or warranties? All these elements can influence the perceived value of your products.

For retail products, one excellent way to see what your competitors are charging is to go to a price comparison site like http://www.PriceGrabber.com/

1. If you are selling a service or subscription, it is harder to make such a clear comparison with competitors. The perceived value of your service will depend on many factors. In the case of a service or “soft good,” like an ebook, you should test a much wider range of price points.
2. For a product, a service, or a subscription, one key goal is to find the price that is “too high.” In other words, keep raising the price until the results clearly show you are charging too much. Then slowly inch back from there until you find the highest price the market will bear, giving you the highest revenue on sales.

However, note that this highest effective price point, which will have the highest profit margin, may not necessarily be the best way to generate the greatest amount of new customers, as has been noted above.

KEY POINT: If you haven’t overcharged at least once, you may not be charging enough. Always take a price test beyond where you think the consumer’s threshold is. The only way to zero in on your ideal price is by elevating it beyond the optimum and nudging it back down.

1. Conduct reliable A/B split testing on your pages, and test for a long enough period to be sure of the validity of your results.
2. Once you have found your optimum price point, try testing it again a few months later. Markets keep changing, and today’s best price may not be the best price six months from now.

When evaluating your offer price, intuition will usually fail to deliver the ideal results. Testing is the only way to determine which approach will produce the most profit: a lower price that drives more traffic and buyers, or a higher price that may attract fewer buyers but deliver more income per sale. Every business is unique, and the above testing guidelines will help you determine your own ideal pricing structure.

Well we are going to make good use of this information to really maximize the profits you can generate from your business.

A very effective strategy is to offer much higher value and profit services or products on the back end, to customers who have already purchased from you one or more times.

Since we now already know you are more likely to get a sale from existing recent customers, it makes sense to take advantage of this and offer high value product or service to these customers, with the assumption that you will get a better conversion rate then if you had offered these high ticket items upfront.

These are the type of services or products that would be a very hard sell to a new prospect.

Imagine you see ad in the paper for a book on weight loss that costs R4500. You may think that there may be something of value to this product since it costs so much, however would you really invest this much in a product from somebody you know nothing about, who is making promises you don’t know if you can trust or not? Not likely.

However, let’s say you have been a fitness customer of Jim for 6 weeks, have started to see great results from his training sessions as well as the 2 supplements he has recommended so far.

This means you can already see the first 3 purchases you have made from Jim paying off and the “promises” made in the marketing of his original lower priced products have not been false.

In month 3 Jim now tells you about an advanced fitness training program he has for R7000, and shows you proof and testimonials of other satisfied customers that have completed the program.

You will be far more likely to do whatever is necessary to find the funds to invest in this program since you trust that Jims promises are real, since has delivered on previous promises so far!

The idea is to use lower priced products to obtain customers and get them into your sales funnel. You then begin to build their trust in you. If you do this by over delivering in every way on the purchases already made, you will be in a position to nurture a loyal customer who will truly trust in anything you say, and will buy anything you offer them. I promise you this (trust me J )

Actions:

1. Take a look at your current business and try and come up with ideas on an advanced product, course or service you can offer on the back end to existing customers.
2. You may be thinking that what you are already offering is as advanced and as high priced as can create. This is usually not the case. If you’re selling something people are buying on their first purchase, then there is always an opportunity to create a new advanced version or complementary service or product you can offer these customers on the back end. Use your imagination!
3. Before you begin offering any higher priced products (or anything at all) on the back end, you need to make 100% sure you are delivering (over delivering!) on your current front end products.

Obviously you won’t be very successful on the back end if you’re not delivering on your initial promises, as your customers will probably trust you even less then if they had never bought from you before.

This is simply a way to increase your conversion rate on back end offers. You conversion rate is simply the % of customers you make an offer to, that accept the offer and proceed with the purchase.

For example, as a fitness professional who offers a group class training session (such as spinning class) as well as one on one training, you can offer all your group class students 20% discount on your one on one training simply because they are already in your group class.

Discounts are great, and people always want to save a buck where they can.

I would recommend first recommending an additional service or product to existing customers without a discount. Track the conversion you receive over 3 months and the additional profit generated.

Then offer the same product at a discount and record you conversion and additional profit.

In most cases your conversion will be higher with the discount then without, but if it is not high enough, the revenue you loose offering the discount may put the total profit generated below what was generated at the lower conversion, but without the discount.

You should always track results, conversion, profits and test test test test offers and discounts until you reach the highest profit to discount ratio.

At this point I’m going to stress something very important. You always need to track results, conversion and profits so you can accurately gauge the results you receive from your marketing efforts.

If you don’t do this you could be wasting your time for minimal results, or even do your business harm. Its very easy to do this, so there is no excuse not to, as it has direct effect on your bottom line.

Go here for an article on marketing tracking and metrics.

Next we will discuss service plans.

If you already have an existing business that generates sales, chances are you are leaving a lot of money on the table by not attempting to optimize generating additional sales from existing customers.

It’s a fact that it is very much easier to sell something to somebody who has already made a recent purchase with you.

Psychologically, once a customer makes a purchase from you, they have give you their approval and trust, and will be far more likely to make another purchase from you, since they have already gone through the mental process of deciding if they should buy from you or not.

Once the first purchase was made, and the product offered value to them, you now have their trust.

Therefore with good marketing and follow up communications it’s very easy to get at least 30-40% of first time customers to purchase something additional from you again.

You will now want to set up an automated process (if possible) where you send additional communications to these existing customers with the purpose of generating additional sales. This is called making sales on the back end or back end sales.

The front end is the product you try to sell to a new prospect, which will then put them in the back end sales funnel (which can be completely automated) where you will market additional services or products to them.

In the following articles we will go over the different methods and strategies for making additional sales on the back end.

The sad thing is that most small business owners simply don’t understand most of these strategies and many even think of marketing as handing out fliers or branding coffee mugs.

In so many cases understanding these fundamentals can be the difference between running a successful profitable business or failing miserably.

This course will contain easy to understand actions you can implement to obtain measurable results in your business, so I implore you to read through it all carefully and TAKE ACTION by implementing these steps.

The course is broken up into 4 parts, which, incidentally, are the only 4 ways you can possibly grow your business:

1. Generate more sales from existing customers
2. Increase the value of each sale
3. Convert more leads to customers
4. Generate more leads

We begin with part 1 which covers leveraging your existing business to increase revenue generated from existing customers.

Its a well known fact that it can be up to 10 times easier selling to existing customers or those that have purchased from you before, then it is to obtain a new customer.

This means that the fastest way to grow your business and increase revenue right now is to focus on generating additional sales from existing customers.

In part 2 we focus on increasing the value of each sale. By doing this we attempt to get prospects who have already decided to buy from us, to spend more then they may originally have intended.

Part 3 focuses on converting more existing leads into customers. This leverages existing lead generation sources such as your current advertising, and attempts to convert as many of these leads into paying customers as possible.

By doing this we generate more sales and profits with a minimal increase in marketing expense.

Lastly we look at generating more leads for our business.

You will see that our initial focus is maximizing our return on current business, customers and marketing spend, before we invest any additional spend in generating more leads.

This allow you to easily increase revenue sometimes up to 100% without spending a single cent more on lead generation then you are spending right now.

This also means there is no longer any excuse to not implement these steps right away, since most of them can be done with only time invested, and not cash.

Now, before we begin with Part 1, we need to first take a look at your offer as well as your USP (unique selling proposition). Every bit of our marketing will be leveraging your USP and thus its critical that we get this right first.

CLICK HERE TO CONTINUE WITH PART 1 – UNIQUE SELLING PROPOSITION