Stuart Trier: Do you want to know how to attract customers to your business? If you want to scale up your business in 2018, you need to have the ability to predictably bring in leads into your business and convert those leads into paying customers. If you’re interested in using systems, automation and leverage to grow your business, go ahead and click that subscribe button, and the little bell beside it, so you’ll be notified when I post new videos.
You may be doing a number of things in your business today. You may be using word of mouth or referrals, and those are great, because those leads generally turn into clients. The problem with it is it’s not predictable, it’s not scalable, and you’re dependent on other people to mention you, which you can’t really control. You may be doing things like networking and BNI or Chamber of Commerce or other get togethers in your area, but again, those are limited because there’s only so much of it that you can do. Ultimately, you’re facing a problem of how to attract clients. We can look to other businesses and see what they’re doing. Businesses like McDonald’s, grocery stores. They’ve solved this problem, and they way they’ve done it is they’ve used loss leaders.
Loss leaders have been used in kind of offline businesses forever. When it came to online businesses, digital marketers coined the term trip wire offers, which essentially is just a loss leader. We need to look at how this applies in the offline world, and then how you can apply it to your business online. What McDonald’s does is, they advertise their Big Mac. That’s their loss leader. They only make about 10 or 15 cents selling you that Big Mac, and then they offer you the Coke and the fries and the apple pie and the ice cream sundae, and that’s where they make all of their profit. They know that if they make that compelling loss leader offer, a lot of people are going to come into the restaurant, and a percentage of those people are going to take them up on their core offer.
We want to be in a situation where you’re doing the same thing. Grocery stores do this with eggs. They sell you the eggs at a loss or just a slight margin, with the understanding that when you come into the store, you’re going to buy other groceries from them. I ran a tool business and did this. We called them door crashers. Ultimately it was the same thing. We put out a product at cost for wholesale. People came in and bought that, but we measured to make sure that a percentage of the people buying our door crashers were also buying other products and ultimately creating a basket of goods that created enough profit to make it worthwhile to have those door crashers to bring people in.
How does this apply to your business? I want to walk you through this. I’m going to hop onto my computer and walk you through an example so you can see how you can do this in your business and ultimately scale by bringing in as many leads as you need. All right, guys. Gather around my computer. Let’s jump through this. I want to walk you through understanding these key numbers in your business, because once you do, you’re going to see how easy it is for you to be able to scale up your business using other people’s money to kind of build your ideal prospects list and ultimately attract all of the customers that you want for your business.
I’m just going to quickly run through some assumptions because I have to make assumptions. You can obviously change this. I’m going to make this available at the end of the video so that you’ll be able to download it. I’m assuming that your core business, or your core offer is $1000/month, that your average client stays with you for eight months, that your average expense to deliver that service is 25% because you’re doing the work in your business, so your average profit is 75%, which means you make $750 profit per customer that you sell your core offer on a monthly basis. They stay with you for eight months, which means they generate $6,000 in profit over that eight month period of time. How many clients do you need in order to hit six figures or seven figures, if we want to grow your business by $100,000, or we want to grow your business by $1 million in 2018? What needs to happen? We need 17 core clients coming in. We need 17 new clients in your business in 2018 for you to create an extra $100,000 in free cash. 167 if you want to create an extra million dollars in your business.
This may seem like a daunting number, especially when you’re not sure how to attract customers into your business, but I’m going to walk you through this. Once you understand this, you’re going to see this is really how you should be thinking about your business and how to use that trip wire or loss leader to really afford to be able to grow your business.
Let’s assume we’re running Facebook ads. What we want to do is we want to pull together that loss leader that is going to appeal to our ideal client. For a loss leader or a trip wire in a digital environment, what we want to do is we want to make sure that the product that we’re offering or the service that we’re offering has a higher perceived value than what we’re charging. If we’re charging $100 for it, the client should view this or perceive the value of this at $300 or $400. That’s number one.
Number two, we want to offer a risk reversal. The whole purpose of doing this is to get people to audition with your service. If they’re not happy with it, you don’t even care if you give them back their money. Ultimately what you’re looking for are the people who are going to move to that next level. This is not about making money on the front end offer. This is one of the mistakes that a lot of marketers make. They try to make money selling the trip wire offer, and ultimately you don’t want that to be the purpose. You want as many of your ideal prospects to test out your service.
All right. Once you have that high value, you have the risk reversal, you have the messaging for your ideal client, now what you’re trying to figure out are these magic metrics. Let’s assume that we pay $1 per click so that every time we put an ad in front of an ideal prospect on Facebook, they click it, we give Facebook $1. In order to get 500 visitors to our landing page, we’re going to pay $500.
That’s the first number we need to understand. What does it cost to drive our ideal prospect to view our opt in?
Then we’re going to put an opt in there. That opt in is a lead magnet. It has to entice them. It has to be something that they really want. This is where you really want to step up and make sure that your lead magnet is super super powerful and remember, it’s an ethical bribe. It’s something that they have to be willing to give up their email address in exchange for. The more value you give them here, the easier your process becomes at scaling up your business. Too many people try to give as little away here as possible, and it really hurts the process. The higher the perceived value of your lead magnet, the better.
They opt in. Let’s assume from the 500 people that go there, that we pay $500 for, only one in five take your lead magnet. That is below average, and probably means that you should be tweaking the messaging on it, but I’m going to use conservative numbers here. You’ve spent $500 to get 100 email addresses from your ideal prospects. Then what I’m going to assume is, we’re going to put that loss leader in front of them. We’re going to try to sell them that loss leader or that trial offer or trip wire or done for you service, and only one out of ten are going to take it. 10% of the people that opt in and take your lead magnet are going to take your trip wire offer. I’m proposing we sell the trip wire for $100 in this example, and I’m suggesting that we’re going to spend $50 to deliver it, leaving us with the other $50 which we can put into ad spend.
This is how the math runs down. Total revenue is 10 trial offers for $100, means that we’ve earned $1,000 in revenue, and we’ve spent $500 to deliver it, because I’m not assuming you’re going to go and do this work. I’m assuming you’re either going to have an employee do it, you’re going to have an outsourcer do it, you’re going to have a VA do it, or you’re going to use another service that’s actually going to white label it for you. Then you’re going to have $500 left over. That $500 is going to go toward your ad spend. You actually make no money, but what I want you to realize here is two things have happened. Number one, you have 10 customers or clients that you’re now auditioning with, because you have 10 people that are taking your trial offer that you have the opportunity of pitching your core offer, and you have 100 people on your email list. Now you have two assets that you’ve created. For this example, I’m assuming that one out of these ten are going to take your core service.
This is really where the magic happens. If you’re able to create a system where you make no money on your trial, but you’re able to generate emails and you’re able to pay for your ad spend and pay for the delivery of your trial offer, effectively you’re able to scale as much traffic as you want for your ideal prospects and pay for as much ads as you need to bring them in in order to do this. Now what ends up happening is, if we want to hit that six figure business, we need to do this 17 times the level. All we’d need to do is take 500 and multiply it by 17. If we bring that much traffic to your site, right, and everything maintains the same, so 20% opt in, 10% of those take your trial offer, you’d end up with 17 clients. You would have spent money on Facebook. You would have collected it on the trial offers. You would have paid your outsourcer, your VA, to deliver that service. You would have auditioned that client, and you would have sold 17 core offers. That’s the aha. That’s really what you need to understand. That’s how businesses outside of the digital world work. That’s how McDonald’s works. That’s how grocery stores work. It’s really the way every business brings customers in. It’s how they attract customers and move them up.
Obviously once you build a brand name, you have positioning and authority, then you’re able to make core offers front end, but ultimately what’s happening here is you’re building two assets. You’re building a list that you’re able to market to for free, and you’re able to try out with these 10 clients. Once you move them down here, you’re in a situation where you have a core. This tells us how many times. If we wanted a seven figure business, we’d just have to do this enough where 80,000 people came to the page. Obviously this depends on the size of your market. Not every niche is going to have 80,000 prospects, but a lot of niches do, and ultimately that’s how you’d scale up the business.
Hopefully you found this really useful. If you did, smash that thumbs up button. I’d really appreciate it. If you have questions, drop them below. I’m happy to answer them here on the channel, engage with you here on the channel. If there’s anything that I can do for you, I’m happy to help you with this. If you want a copy of this, all you have to do is just comment below and you want a copy on this show, one of my team gets it to you. All right guys. I’ll see you in the next video.