We all want to make a million dollars, do you know how to do that? Did you ever do the math? Most people haven’t. Do you know what you’re looking for as far as numbers? Most people fail here too. But don’t worry you’re among friends.
I’ve always been an analytical type (maybe a bit too much). But is seems to work most of the time, in fact, I still need to find a time when it didn’t work. The reason this system works so well is that I always overshoot my requirements. Allow me to explain.
Constructing the sales plan
When you look at an iceberg all you see is the part that floats, not the 90% of it that is still under water. It the same with an attack plan (also known as a business plan). You need to know what your goal is and work back from there, Taking the worst case scenario into account.
Let’s say you want to make $100,000 in 12 months, how do you do it? First, you need to divide it by the price of your products, services, subscribers etc. Let’s make it easy, a unit is sold for $100. But that’s not your profit. If your business is healthy you make around $33 for each sale. That means you need to sell 3,000 units to reach your goal. Divided by 12 months that’s 250 units per month.
Doesn’t sound so scary now, does it? We’re not done yet. We still need to talk about your leads (prospective clients). Your leads will always be divided into 4 groups. Groups A, B, C, and D. Group A represents 3%, group B 7%, C roughly 30% and D the remaining 60%. Your leads will always contain all four groups. That’s why you will hear salesmen say that there are unseasonable leads.
So whenever you get 100 leads take all four groups into account. Three of them are going to be the easiest close. Seven of them should require a bit more work, thirty of them will be the hardest sale you have ever encountered. And sixty will never close, even if you promise them the world.
So your sales goal should be 3% to about 14%, anything over 14% means two things. You have a spectacular marketing team and outstanding sales. Anything under 3% means you have a big problem. It could be that you didn’t research your market correctly, or that you haven’t explained the benefits. Either way, you have to fix it quickly. Most businesses will hit a goal of 7% to 10%.
Remember we want to overshoot our goals. So we will be taking 5% as our closing metric. That means that if we need 250 customers a month, and they are only 5% of the total leads we get. We need 20 times that amount to reach her goal, that means 5000 leads a month.
Constructing the advertising plan
Now that we know how many leads we need it’s time to find sources to generate them. There are literally more sources than you can ever test out. The key here is quantifying your conversion rate. Your conversion rate refers to the number of sales you generate from 100 leads. Remember we’re aiming for 5%.
So your goal is, to make sure you’re still able to make a profit. Whatever lead generator you use remember that you’re buying a product. As far as the lead generator is concerned their job is done. But you’re job is just starting. If the price you pay for leads is too high you will not make profits on your sales. You might even lose money.
What you have to do is calculate your conversion rate into the mix. We said that you’re selling 5 items out of every 100 leads. And that those five total you $500. you need to make sure that you’re paying no more than $100 for those 100 leads. It might seem a little cheap for the affiliate (if that’s what you’re going for), but that doesn’t matter. If you’re not going to make a profit there is no point in selling anything.
Find alternative methods of generating your own leads. Do whatever you have to, but under no circumstances will you pay more than you earn.
Lead generators can be: Google ad words, Newspapers, A mailing list and the list goes on. The only way to find out what works best for you is by trying things out and monitoring the results. You may also want to check out my article on qualifying leads to learn more about how to get the most out of you incoming traffic.
Write everything down, don’t miss a thing. Remember what you don’t track you don’t manage. And what you don’t manage you can’t improve.
I hope you found this post helpful, if so like it and share it with your friends. And while you’re at it, check out my ebook ‘level up your business’ a guide to starting your own business the right way.