As we start the New Year, it’s important to take inventory of where you are right now with your online marketing so you can set aggressive, yet attainable goals for the coming year.
To help you in this process, I put together 21 questions that need to be answered honestly and accurately. The questions go through the 7 core stages of your sales funnel and when you’re done you should have a clear picture of where you need to improve.
The 7 stages of your sales funnel we’ll walk through are:
- Lead Capture
- Prospect Follow-up
- Product/Service Delivery
In each stage, I’ll provide 3 key questions (so a total of 21) for you to answer. If you’re not sure about the answer or don’t have proper tracking in place, then it’s absolutely critical to set up proper tracking so you can answer these questions as quickly as possible.
Most business owners focus the majority of their marketing energy on traffic generation. However, most focus on the wrong questions. For example, the number one question is NOT “how much traffic do you get per month to your website?”
The three questions to ask are:
- How many different and consistent sources of traffic do you have?
- How much traffic do you get from each source per month?
- How qualified is each source of traffic measured by sales and/or leads?
As you can see, the emphasis should be on the diversification and quality of your traffic. If you’re relying solely on one source of traffic, like SEO, then you’re putting your business at risk. When (not “if”) Google makes another algorithm update, you could lose some of that traffic overnight.
And quality is more important than quantity. There are plenty of tricks and shady companies out there that claim to drive thousands of visitors to your website, but what good is that if none of them make a purchase? So whenever you’re testing new traffic sources, make sure you have a system in place to measure the quality of every visitor.
2. Lead Capture
Lead capture is the process of collecting information from visitors who are not yet ready to make a purchase. The most common example is to offer a free report in exchange for the visitor’s email address so you can follow up via email marketing.
If you’re reading this and there’s no lead capture on your website, then one of your top marketing priorities will be to set this up. The vast majority of your visitors are not ready to buy from you so it’s critical to capture their information and nurture them until they are ready to buy.
For everyone with lead capture, the three questions to ask are:
- How many lead capture mechanisms do you have for each product or service?
- What is your opt-in rate for each lead capture?
- What is your sales conversion rate for each lead capture?
The first question highlights the fact that you should have a lead capture for every product or service you offer. And in some cases you should have a few lead captures that appeal to different types of prospects. For example, some prospects want to see case studies, but others may want to read a guide to learn how to avoid common mistakes in your industry. If you only have one of these lead captures, then you’ll miss a segment of your target market.
The second and third questions are key performance indicators to measure the effectiveness of each lead capture and help you make improvements. If you can double your lead opt-in rate, then you can double your sales WITHOUT increasing your traffic. That means you could double your business without any additional investment in advertising!
3. Prospect Follow-up
Once you capture the information from your lead, then it’s time to follow up until she is ready to make a purchase.
A recent study across multiple industries showed that 50% of leads will buy within 18 months and 85% of those buyers will make the purchase 3 – 18 months after expressing initial interest.
So if you don’t have a consistent follow-up system in place, you’re missing out on at least 42% of your potential sales. Or in other words, if you can set up and optimize your follow-up system, then again you can significantly increase your sales with no additional traffic.
Here are the questions you need to ask to optimize your follow-up system:
- What is your prospect sales conversion rate after opting into your lead capture?
- What is the average length of time on your prospect list before purchasing?
- What is the average purchase price?
The combination of these questions is what’s important. Once you understand all three of these metrics, then you can calculate the average value of a lead over a certain amount of time. Armed with this knowledge, you can identify every opportunity to acquire leads at a price below your value per lead.
For example, if 10% of your prospects buy your $500 service within 3 months, then you know a lead is worth $50 over three months. Now you just need to find lead sources for less than $50 and you can profitably scale up your marketing!
As business owners, we all know the importance of making sales. However, not everyone creates a system to test and optimize the sales process.
It’s common to see businesses invest tons of time and money to optimize their advertising and websites, yet almost ignore the most critical step, which is the process from the first phone call to the closing call. Sales calls can and should be scripted, tested, and edited to optimize conversion rates. Again, this is an area where you can double your business without any increase in traffic.
So the questions you should ask are:
- What is your scripted sales process for each type of lead who contacts you?
- What is your conversion rate by lead source?
- What is your average sales cycle?
Once you have your sales script and you’re measuring your conversion rates and sales cycles, then you systematically test to make improvements each month.
5. Product/Service Delivery
The sale is really just the beginning of your customer lifecycle. Now it’s time to over-deliver on your promises so you create customers for life.
At this stage in your marketing system, you want to ask:
- What is your system to WOW your customers?
- What is your system for getting testimonials?
- What is your return, refund, or complaint rate?
If you really think through question #1 and set up a system to impress your customers, then #3 will not be an issue. There are many options, but here are a few that we recommend:
- call customers to say “thank you”
- send customers a “thank you” letter or card in the mail
- send a small gift as a way to show appreciation for their business
These small investments will produce returns because your customers will become champions and ambassadors for your business. They’ll be more likely to take the time to give you a testimonial and they’ll gladly refer family and friends.
Also, by implementing a system to WOW your customers, you’ll see a considerable decrease in returns, refunds, and complaints, which you must measure to identify potential problems in your product/service delivery.
Upsells are one of the fastest and easiest ways to increase the lifetime value of your customers. If you’re not currently upselling, then I would argue you’re doing both yourself AND some of your customers a disservice.
The reason I think you’re doing some of your customers a disservice is that you could be providing them with even more value. That’s what upselling is all about. It’s not about how to squeeze money out of your customers. It’s about giving your customer exactly what she wants in order to make her life even better than it would be with your original product or service.
Here’s what you need to ask to improve your upsells:
- What additional products or services can you provide to speed up the process or eliminate work for your customer?
- What is your upsell conversion rate?
- What is the average price of your upsell?
By answering and delivering on question #1, you should be able to upsell about 20 – 30% of your customers. Now depending on the price point, that could have a huge impact on the lifetime value of your customers.
As your lifetime value goes up, so does the value of a lead that you calculated in stage 2 of the customer lifecycle. That means you’ll be able to invest more money to acquire leads than your competitors can, and that’s how you start to dominate your market!
OK, now we’re at the final stage of the customer lifecycle: referrals. The biggest mistake businesses make is they simply do not ask for referrals. If you don’t ask, then you can’t complain when you don’t get any (or as many as you’d like).
So here are the three questions to assess your referral system:
- What is your system for requesting referrals?
- What is your referral conversion rate?
- What is the value of a referral?
As I said before, you need a system to ask customers for referrals. As long as you’re over-delivering, your customers will be more than happy to refer friends and family to your business. People naturally want to refer remarkable, high-quality products and services to their contacts because it makes them feel good.
In some cases, you may need or want to invest money to generate more referrals. For example, if you know the value of a referral is at least $750 and your conversion rate is 30%, then you can spend up to $225 to spark referrals.
Depending on your numbers, it may make sense to give a free or discounted product or service to people who refer you a customer. Even small incentives can have an enormous impact because referred prospects are typically pre-sold and less price sensitive. That means you’ll close more sales (and at higher prices) to referred prospects versus prospects generated by other marketing channels.
I hope by thinking through these 21 questions you now have a handful of action items to improve your marketing systems.
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