The Leverage Equation Page 11

  Using Financial Mentor as an example, all of my courses backend each other. (https://financialmentor.com/educational-products/courses) Each is a targeted solution to a specific problem when one is pursuing financial independence, and all of the courses together provide a complete solution. The way it works in practice is that the customer enters the course series based on the problem immediately in front of them, and as soon as they solve that one problem, they are then confronted by the next naturally occurring problem in the wealth building process. The courses are arranged in the order that the problems naturally occur when one is in pursuit of financial freedom, so that one solution leads to the next, then the next, and so on until the goal is achieved.

  Similarly, all of my books serve the same target market – people interested in financial independence. The entire product line serves a single market so that one sale on either platform can get leveraged into many sales across platforms.

  For example, let’s assume my Expectancy Wealth Planning course attracts 1000 customers and 100 affiliates. When I publish the next course in the series, that means I already have 1000 likely buyers, plus 100 affiliates to offer the course to for instant sales.

  Not only that; the effect is multiplicative since every person who becomes interested in my teachings through the Expectancy Investing course is also a likely candidate for the Expectancy Wealth Planning course, as well as every other course and book in my product line. Each product backends every other product, thus increasing the lifetime value of every satisfied client.

  The same thing happens at Amazon as a distributor of my books. A cursory look at the “also bought” list for any of my books shows that people who buy one of my books tend to buy the rest of them. Each book holds a different marketing position by topic within Amazon (investing, retirement planning, financial coaching, variable annuities, leverage, risk management, etc.), which creates multiple ways for my target market to find my business when shopping on Amazon, and if they have a great reading experience, they then buy the other books. That’s why the best way to expand my book business is to cross-sell by writing more books on different (but related) topics teaching how to achieve financial freedom.

  Another way to increase the value of each customer is to repackage and repurpose existing products. For example, if you give a live seminar and record the presentation, you can sell it later as a DVD set. Or you can develop a live training, and then flesh it out later into a book or self-paced course. Or possibly you can take sections of a complete course and repackage them as books. In fact, the book you’re reading right now is a stand-alone sampling of the three-lesson series fully explaining leverage, and it is excerpted from the entire Expectancy Wealth Planning course. If you’re getting great value from this book, you’ll get even more value from the comprehensive course it’s excerpted from.

  People prefer different modes of learning. Some like live events; others prefer books; and others want audio or video. Some people will consume everything in all formats! When you repurpose your products into multiple learning formats, it leverages your existing marketing efforts so you can sell more stuff to the same customers.

  Also, when you train employees to always be on the lookout for an appropriate upsell or cross-sell for your related products, it increases the lifetime value of your customers. That’s why the best servers ask if you’d like to have a drink or appetizer before your meal and also offer dessert before bringing the check. They’ll also suggest great side dishes or add-ons to your meal. It improves your overall experience because you’re well served, and it increases the profit margin of the business. These are high margin upsells for existing restaurant customers that significantly raise the average value of each client to the business.

  Create Continuity Sales Programs

  The final strategy for increasing the lifetime value of your customers is continuity sales. The idea is simple: sell the customer on a repeat purchase program so they buy from you every month (rather than just one time), thus increasing the value of that sale. For example, don’t just sell a single bottle of water. Instead, sell a weekly bottled water delivery service so that multiple bottles are sold every week.

  In summary, when you fully satisfy your customers’ needs through a complete product line, it gives them the opportunity to buy more from you, resulting in a higher lifetime value for each customer. It’s one of the smartest ways to grow your business because it leverages the value of every dollar you spend on marketing to increase total sales.

  GOAL #2: FIND NEW CUSTOMERS

  There’s a limit to how much of your stuff each customer needs. That’s why finding new customers is the second goal of marketing leverage. And one of the most effective tools for reaching new customers is technology.

  Technology is so deeply intertwined in all communications today – whether it’s the phone, internet, email, or social media – that it’s nearly impossible to talk about communications leverage in marketing without including technology leverage.

  Technology for Nurturing Your Sales Funnel

  Never in the history of business have more powerful marketing tools been available for so little cost, and this is because of technology. For example, a website provides the unique ability to track and segment both traffic and subscribers according to interest, and the cost to identify and reach out to specific target markets has never been cheaper. It’s a marketer’s goldmine of information:

  Use content marketing on the internet to attract people with interests that align with your product or service by delivering valuable information that builds trust and authority for your brand.

  Electronic mail systems can deliver valuable information to prospects at minimal cost so you can nurture new relationships into front-of-mind awareness for your brand or service.

  Electronic mail systems can also monitor and rank subscriber interest according to what they view on your website, so you only market to people likely to buy.

  A scheduling system can connect your email system to automate your entire sales funnel.

  Leveraging technology in marketing has three important benefits:

  Low marginal cost for each touch point. Technology is generally priced as a fixed expense, allowing you to cost-effectively increase the frequency and breadth of communication.

  Building brand loyalty and trust by giving value through courses, videos, and other educational resources that solve your target customer’s problems. Technology is what allows you to communicate all that value cost effectively.

  Immediate data proving effectiveness. In the old days of snail-mail, marketers would pay large upfront costs to design, print, and mail a campaign. Or they’d incur large media advertising costs. Then they’d have to wait weeks to monitor the results and find out if their marketing idea was effective. Today, you can test a headline in Google or test-email an offer to part of your list for just pennies and know within minutes how effective it was.

  The value of generating immediate response data can’t be overstated. You no longer have to risk thousands up front and wait weeks to gauge success or failure. Instead, you can test an offer for almost no cost and know the conversion rate within minutes.

  You can also tweak the offer based on your test results, and then send it to another sample portion of your list. This shortens the marketing learning curve through rapid iteration, which streamlines the efficiency of all marketing with minimal waste.

  HOW MARKETING AND NETWORKING WORK

  HAND-IN-HAND

  Another group of leveraged marketing tactics you can use to reach new customers interconnects with network leverage.

  The four most common forms of network leverage applied to marketing are:

  Media and publicity

  Bulk sales

  Joint ventures

  Referral systems

  When you land a spot on TV or receive newspaper coverage, you leverage the publication’s subscriber base. You produce content once and your message reaches thousands. Another advantage
of media marketing is that the message enters the prospect’s mind through an unlocked back door. It’s perceived as unbiased information reporting vetted by a trusted third party…instead of self-promotion copy. Examples of leveraging media include:

  Publishing a case study to a specific industry showing how you excelled at helping one of their own. This allows others in that industry who want the same help to seek you out. You promote the story by telling industry publications what you did, provide data to support your claims, and then deliver on the interviews.

  Be a guest on relevant podcasts for interviews. It positions you as the trusted expert because you’re the invited guest of a host who has an existing trust relationship with the listeners. Interviews are usually 30 to 60 minutes long and can be delivered in audio or video format over the internet. The intimate format and implied authority as an expert guest builds extraordinary relationship with the audience as you discuss topics relevant to your subject matter expertise.

  Promoting the awards your business receives. For example, Financial Mentor has received numerous awards, including “Best Retirement Planning Site,” “Best Designed Website,” and “People’s Choice,” and the news of these awards has in turn been picked up by major media outlets and republished. These awards are valuable because they’re a third-party endorsement of your business, adding credibility while also reaching new clients.

  Each media strategy alone is powerful, but combining several of these marketing leverage techniques can dramatically increase the authority and trustworthiness of your business.

  Another marketing strategy that includes network leverage is to bulk sell to strategic partners. For example, Microsoft was built from Bill Gates negotiating a single bulk licensing agreement with IBM that sold millions of copies of software, making Microsoft the industry standard for computer operating systems worldwide. Millions of sales all stemmed from just one sale by leveraging IBM’s sales network.

  A slight twist on the same theme is joint ventures, where you offer your product to someone else’s customers on a split revenue agreement. The affiliate leverages your product by profiting from something he didn’t create, and you leverage the affiliate’s customer base and opt-in list so you can sell inside a trusted network you otherwise couldn’t access.

  You can also leverage other people’s networks when you hire commission-only sales people. It’s essentially risk-free sales to your business because you only pay for the results the salesperson produces from marketing to his network.

  IN SUMMARY

  There are two objectives you’re trying to achieve with marketing leverage. You want to:

  Increase the lifetime value of every customer

  Reach more people to grow your customer base.

  The acceleration of communications leverage through improvements in technology has changed how modern marketers achieve these two goals by lowering the cost to share information so you can affordably increase both reach and frequency in your marketing.

  However, the same technology that’s leveraged to increase marketing communications has simultaneously brought information overwhelm to your target market. People are distracted, harried, and have less bandwidth than ever to pay attention to your message.

  This makes it harder than ever to break through the information clutter so you can connect with your target market and grow your business.

  Stated another way, you must use communications leverage tools in your marketing to compete effectively, but you have to be really smart about how you apply these tools so you deliver value and serve people rather than just adding to all the noise already out there.

  EXERCISE: INCREASE YOUR CUSTOMER LIFETIME VALUE

  The goal of this exercise is for you to start thinking about ways you can increase the lifetime value of each customer in your business.

  This principle can be applied to nearly every type of business. For example, you might be tempted to think upsells and cross-sells don’t relate to your real estate rental business, but they absolutely do. Two obvious strategies are renting laundry equipment to your tenant or offering coin-operated vending. Your tenants need clean laundry. By providing them with equipment they pay for, you meet their need and increase their lifetime value to your real estate rental business.

  CPA’s historically traded time for money providing accounting and tax preparation services…until recent years. It was a natural upsell for that profession to offer investment and insurance products because they were already intimately familiar with the client’s financial numbers and had an established, trusted relationship with the client as a financial expert.

  The same principle is being applied when you open an investment brokerage account and then weeks later they start mailing you credit card offers attached to your account as an upsell.

  Regardless of your business, these principles can be applied to better serve your clients by profitably solving their problems. Below are several questions to help you find potential ideas:

  What new products and services could you create that would solve an important problem for your clients so that you could upsell or cross-sell?

  What products are offered by your competitors that would be perfect for your customers and that you’d be happy to promote for an affiliate commission?

  How could you convert a one-time sale into a continuity sale?

  What continuity programs are your customers already consuming that you could adapt to your business?

  5 – NETWORK AND RELATIONSHIP LEVERAGE

  Someday this will be true for all of us: Our network will equal our net worth.

  – Tim Sanders

  NETWORKS EXCHANGE VALUE, NOT MONEY

  Imagine you want to travel from Los Angeles to New York.

  You don’t need to own the highway or an airline. You don’t need to own a car, rent a car, pay for gas, or even buy an airline ticket.

  All you need to do is find someone who wants a car delivered from L.A. to New York or has shipping needs that require an airline ticket for the baggage that you could accompany on the plane. You could provide the delivery service and accomplish your travel goal at the same time without paying a dime.

  In other words, the only thing standing between you and the trip you desire is not money, cars, airline tickets, or gas. You don’t need any of those resources. You just need the network and relationships to connect your goal with someone else’s.

  Network and relationship leverage is about shifting your mindset from buying and renting resources to the purposeful cultivation of relationships that exchange value.

  That’s a key point so I’ll repeat it – network leverage is based on relationships that exchange value instead of money. It might be contacts, resources, strategies, experiences, referrals, support, or any other form of value that costs the giver nothing but makes a big difference for the receiver. Giving value is how both parties support each other.

  It’s an effective leverage tool because at the root of all business is a human relationship. No aspect of business exists outside of relationship, whether it’s customer, supplier, employee, partner, shareholder, contractor, or professional adviser relationships.

  All business is human relationship. When you know how to leverage those relationships ethically, you’ll create more business, faster, and with less of your own resources.

  YOUR MOST VALUABLE ASSET

  Your success is dramatically impacted by the people you know.

  Each addition to your network gives you more resources, experience, and support to draw from. Strong relationships can deliver talents, skills, contacts, and credibility you might otherwise not be able to access.

  People in your network can provide insights and share solutions based on their own experience.

  They can help you realize you’re not alone because they’ve faced professional challenges similar to your own.

  They can provide options for partnerships, new customers, and information useful to your business.

  They can
encourage and support you.

  They can hold you accountable to overcome challenges and make the most of professional opportunities.

  They can open doors that would otherwise be closed.

  For example, Financial Mentor is a financial education business built around content marketing on the internet. This is a rapidly developing new field akin to the Wild, Wild West where every operator is literally creating their own rules on the fly because the business develops and changes so rapidly.

  I operated as a lone wolf for years until the Financial Bloggers’ Conference was created by Philip Taylor. This conference connects 100’s of financial bloggers with varying levels of expertise and specialized niches in a community built around sharing best practices for what is working today. I attend every year, and I learn so much from my network of peers that I have to reformulate my business plans after every conference.

  The key point is: network leverage is much more than just a Rolodex of names and contact details. It’s a carefully chosen group of peers that you interact with, or want to begin interacting with, on a regular basis.

  The key is not just to build a large network, because size alone isn’t sufficient to deliver value. Instead, you want to carefully choose and nurture your network because several factors determine the value of that network:

  Size – The larger your network, the more valuable it becomes.

  Quality – Do they understand your needs? What resources can they access?

  Depth – Long-term relationships deepened over years have the greatest value.

  Recency – You must regularly contribute to the relationship or it will degrade over time.

  Relevancy – Is their expertise related to what you do?