To make your business successful, you need to shift from back end product creation into lead generation techniques. The next step is, I want to understand, once a client comes into my business, on average, how much do they spend?
I can then figure out, ok, if I get five hundred clients that I tip into the top of my funnel and then I say, of five hundred clients, let’s say five of them spend on average $500. So that’s $2,500 in total and then you divide $2,500 by five hundred and then you figure out how much is a client worth to me? Now I know that’s $5 a lead, I know my back end profit system, now what do I do? I find as many clients as I can get worth less than $5. That needs to be where you spend your time focusing on lead generation systems, not building back end product, once you know your business and your profit model inside out.
You need to know the lifetime value of your client and then you need to acquire as many leads as you can for less than that value. Not only that, once they get there, I just said, ok, that might be $500 over a three month period but then there is the lifetime value of a client as well, which might actually increase the value from $5 up to significantly more.
If you look at someone like Eben Pagan and his Double Your Dating work, he figured out this material to an amazing detail and knew his dollar value. So what he started to do, is whereas most people were offering a fifty-fifty affiliate commission on whatever this front end lead product was, if this was free, if it was a free product, he started to pay people for every lead that got in as a free product. This was a giveaway and he contacted people and said, if you email these lead generation techniques to your list, it’s a giveaway and I’ll pay you $3 or $2 for every lead that signs up.
That’s a little bit counter intuitive. You sit there and unless you knew your numbers, that is a way to go broke really quickly. If the numbers weren’t right, you might be paying more than the lifetime value. Once you know what that value is, that makes this game a whole lot easier. That’s business systems 2.0.
I’ll discuss something that I’m using in one of my info marketing niches and explain a flowchart from that business perspective.
In one of the lead generation and lists I have, I’m giving away an audio copy of my Million Dollar Idea book and come in through this free book. The book is available on Amazon for $20 and you can get the audio version free. They come in, a few things happen at the front of this funnel. They get to the thank you page, then there are some referral things, if they give away or pass on the link where other people can get these lead generation techniques for free as well, they get additional bonuses to encourage some viral activity with the opt in.