Sales is a numbers game. As a marketer, who failed high school math once, that does NOT make me happy. But it IS true.
Fortunately for me, and all the other college algebra drop outs out there, the math is pretty easy.
The more people you get into your funnel, the more sales you make.
But, it is slightly more complicated than that (but just a little). The more effort put into the front end (traffic, e-mail sign ups), will have a much greater effect on your profit than boosting your conversion rate overall. If you want to see how this all works mathematically check out my blog post
450 people visit your teleseminar squeeze page
150 sign up for your teleseminar
30 attend your teleseminar
6 end up purchasing your $100 product ($600 profit)
900 people visit your teleseminar squeeze page
300 sign up for your teleseminar
60 attend your teleseminar
12 end up purchasing your $100 product ($1200 profit)
Double the numbers in the beginning, can double your profits. But, it gets even better. The more people you have on your list, the more sales you’ll make every time (if you provide value and keep them opening your e-mails (link to open rate post).
So, time spent getting more traffic and building your list is well worth it.
You’ve decided to become a solo biz hacker! Congratulations. The next step is deciding which overall goals to measure. The temptation is to start measuring everything all at once. The problem is that is it very easy to get overwhelmed with all the measuring and give up on your hacking all together.
The trick is to find the goals that matter and to keep breaking them down until you get to the experiments that are going to give you the most traction in your business.
We’ve found that there are three main levers for making change in your business:
Everything that you do in your business can fall under one of these three main levers.
Traffic is simply how many people are aware of your offer. For a brick and mortar store – traffic is simply how many people are walking past. For online businesses, traffic is how many people are seeing your website, your offers, your social media posts. Traffic is also where most people think they should start. The problem is that traffic by itself doesn’t really help your business. You need to make sales. If you have a terrible offer (conversion) or you aren’t making a big enough profit on each sale (money), traffic isn’t going to help you overly much. So, traffic is the last of the three levers to work with when you hack your business.
Conversion is what percentage of your traffic actually opts in for your offer or buys your product. This is an important number because even very small increases in conversion can make huge differences in your revenue. Going from a 2% to a 4% conversion rate is actually a big deal. It means that your sales have doubled! Conversion goals are good for beginning solo biz hackers because they are easy experiments to set up and test. Does headline A get more conversions than headline B. Does video work better for my audience or text? The key here is to always be testing – but also to only test one variable at a time. Too many tests and you won’t be able to tell which result is working.
Money is about how much money you are actually making per customer at the end of the day. A lot of solo entrepreneurs get very hung up on pricing. “Is my product worth XX?” The truth is that your product is worth whatever the customer will pay and it often takes some experimentation (both up and down) to get to the sweet spot of the maximum number of buyers paying the maximum price.
The biggest mistake i see solopreneurs make is pricing based on perceived value rather than charging based on what makes sense for the business. How much do you need to make to pay your bills? How much do you think you can sell each month. The intersection between these two items is the price you should be charging. Pricing is a great place to start your solo biz hacking because if you are not making money with one customer – you will likely continue to lose more money as you sell more products.
The easiest way to come up with experiments to try in your business is to take each of the big three and create an outline of your goals for each one. Keep getting narrower until you find a “task-sized” goal to measure.
GOAL: I want to increase my revenue by 10% next year
Experiment: Increase price on signature product by 10% for 90 days.
Hypothesis: price increase will not affect sales and revenue will increase
How many goals to start?
Resist the temptation to measure dozens of goals at once. Pick two or three small things that you think will make the biggest difference. Run the experiments, make the changes, and watch your business grow.