Welcome to the “Profit Lever” series from ConversionFly. In this series I am going to walk you through the 8 Profit Levers inside of every one of your marketing funnels and campaigns.
These Profit Levers directly give you the ability to control the profitability of your marketing as you’ll see…
By the end of each of the articles in this series you’re going to understand exactly what the Profit Lever means, how to know what your Profit Lever is telling you and what to do to manipulate that lever to increase the profitability of any of your marketing funnels or campaigns.
Let’s get right into this together…
The first Profit Lever we’ll be examining together is part of a set of keys we will refer to as your “Core Funnel Metrics”.
Every time a prospect finds you online, whether through a Facebook ad or a new blog post you publish, they come to your site…
And what happens next? Do they opt-in? Do they buy or not buy? What is their conversion story?
Ultimately are they taking the journey you want them to take? From consuming the content you want them to consume to finally opening up their wallet or purse and becoming your next new customer.
All of your prospect’s conversion stories begin at the same place. Your prospect is strolling up and down the Internet Street. Maybe doing a little work, chatting with friends, window shopping and maybe forwarding funny videos of cats…
Then suddenly, you serve them a banner ad… an email blast… something that puts your “shop” front and center.
It’s time for your prospect to make a big decision..
Will they walk through your front-door and come inside your world?
This front-door factor is what we know as Optin Rate and it’s the first of your Core Funnel Metrics.
Now let me clarify one thing. When I am talking about Optin Rate I am not talking about a piece of content or blog post that just so happens to also have a little sidebar ad where they can opt-in to your newsletter or a free widget.
What we are going to consider here is the traditional marketing funnel or campaign where the first place you bring your prospect is to an optin page where they need to enter their email address to take the next step in the conversion story.
You calculate your “optin rate %” as follows:
This is pretty basic stuff you probably already know. So let’s turn our focus to talking about the power of Optin Rate as your first profit lever…
I’m going to share a bit of my personal journey with you to make my point, and by the end, you may be looking at your own business a bit differently…
You see, before I was an online marketer, I worked in a traditional brick and mortar business. It was a service based educational business for a Fortune 500 company.
As the Director of the business, my job was to drive business. And well that was a pretty difficult thing to do. Let me explain why…
The levers in this business were very difficult to pull, and they didn’t move the needle very much when you did pull on them.
If I wanted to get more students in a particular class I would have to spend money on some local direct mail pieces and then sit and wait.
When we did generate new students and sales, there were then a load of added expenses of servicing these students like room rental fees, materials and live teachers.
So if I drove an additional 20% of prospects to the top part of my funnel, only a fraction of a fraction of that would drip down to bottom line profits.
There was a very WEAK correlation between what I could do at the top of the funnel and the result it would generate at the end.
Enter the wild, wild world of online marketing.
When you’re selling online, especially when you sell information, a SAS or services with minimal fulfillment fees, you are working with big rich margins.
Also, when your marketing funnel or campaign is built the right way, there is an extremely strong correlation between what you do at the top of your marketing funnel or campaign and your net profitability.
Take this example, you are spending $1.00 per click to send a prospect to the start of your campaign or funnel. And right now your optin rate is 20%. You are paying $5.00 per lead. And you know every lead is worth $5.50 to you. That’s a 110% return on your initial investment. Great!
Now let’s say through diligent testing and optimization you are able to boost your optin rate to 25%. A nice bump, but certainly not unachievable.
Now let’s see how this impacts your bottom line…
You will now pay $4.00 to generate a lead. And all things equal, you still are generating $5.50 per lead. What’s your return on investment now?
+137.5%
That’s insane! You’re going from a return of +110% to +137.5%, that’s actually TRIPLE your return in terms of margin! Just by tweaking the performance at the front door by a few percentage points.
The first time I had this realization and saw the unique access to profit levers you have as an online marketer, I was hooked! And I have been online for 10 years since!
Now if you’re paying attention, this leads to the next question, well how do I get better at getting people to come in my front door? How do I boost my optin rate?
Great question, I will tell you… in part 2 of the “Front Door Factor”.
