Are you like many business owners we meet who want to do everything all together, all at once?
If your “wish list” include updating the website, SEO, paid ads, social media, email marketing, landing pages, building fancy automated systems to scale your business and add a “naught or two” onto your revenue while you sleep and only work a 4-hour workweek, your ambitions may well be bigger than your budget.
Unless you can predictably generate an acceptable Return On Investment (ROI) to fund all this activity.
That’s why we always start with a reality check to see whether we can envisage and reverse engineer a pathway to generate a break-even on their marketing investment and how much additional sales our clients would need to multiply their revenue by 4X.
A key variable in calculating your Return On Investment is your offer.
And the key lesson that I have learned, is that even though a focused, systematic approach undeniably takes longer, it always produces better and more consistent results.
Running marketing tests, with a clearly defined test hypothesis, well-documented variables, and a spreadsheet to check the response you get from the market (before you change 1 variable at a time and “rinse and repeat”) ensures slow and steady progress.
Key variables to test in any marketing campaign
We created 5 different marketing packages to reflect the customer journey, to help prioritise and to know where to start when testing the key variables of Audience, Offer, and Copy.
Crowd, utilising Social Media to increase your Audience.
Capture, utilising a Free Offer to increase your List.
Conversion, utilising a Paid Offer and Sales Funnel/Process, to increase your Clients.
Cash Value, utilising an Offer ladder, to increase your Revenue.
Continuity, utilising Consistency and Continuity Strategies to increase your Client Retention.
In this article, the variable that I want to focus on how to structure your offer to best demonstrate the price/value/benefit that you deliver.
Your end game is to make it easy for people to engage with your offer and buy your product or services.
Our experience is that it’s a good idea to test your offer(s), and see if you can find a single person who is willing to put their hand in their pocket and give you the money, before you scale.
Because scaling an offer that does not convert is insanity.
So, what can you do to transform your offer from a barrier into an enabler to motivate and inspire your next client or customer to buy from you?
The best way to think of your offer, we have found, is as an offer ladder.
This means that you may start with a free offer, followed by an entry-level product, which for many markets will be less than £100, although this does vary by market, leading to your core product and profit maximiser.
We use the term “Cash Value” to reflect the steps up your offer ladder
We use the Statement of Value and the Pareto principle to structure the Offer.
The Statement of Value enables us to identify the transformation that our clients offer and set the price/value/benefit for that transformation.
The Pareto principle is more commonly known as the 80/20 rule, which is that 80% of your revenue comes from 20% of your clients.
80% of your clients come from 20% of your prospects, etc.
And Pareto can be applied to itself, so that 80% of 80% (64%) of your revenue comes from 20% of 20% (4%) of your clients, and so on.
Provided that you know what your client wants and the value you deliver you can create an offer ladder to satisfy the desire of the clients who want to buy more from you (a.k.a. the 4%).
By way of illustration…
Scenario 1 – The “old” mass-production model. You have 1 product or service which you sell to all of your customers at the same price/value/benefit point.
For example: You sell your clients an identical product or service at £125, and you have 16 clients paying the same amount for the same thing, that’s revenue of £2,000.
Scenario 2 – You create an offer ladder, with variations on what you offer at different price/benefit points, with lower and higher price/value/benefit points.
Mathematically, increasing your highest-price/benefit offer to £1,000, your client distribution may look like this…
£1,000 – 1 client
£500 – 2 clients
£250 – 4 clients
£125 – 8 cllients
£62.50 – 16 clients
£31.25 – 32 clients
That’s revenue of £6,000 (Or 3X the revenue in scenario 1).
Once you have defined your offer you need a step-by-step process to test it
Sounds simple in theory, I know.
Next, you need a way to systematically test your Price/Value/Benefit points to see that they work.
If you want to structure your offer to maximise your revenue, book a time to talk in my calendar below…