Like a lot of people at this time of year, I take some time to reflect on the past 12 months and think about how I can serve my clients better.
While going through this exercise, one client came to mind that was a bitter-sweet experience, and illustrates an aspect of marketing we all need to remember if we don’t want to lose our shirts.
It’s not enough to get prospects in the door: there’s a second part of the equation that’s critical to marketing campaigns that create real growth for your business.
But before I get to that, let me tell you a story about this client.
Starting With A Bang
The client is a carpet cleaning company that wasn’t getting very good results from their Facebook ads. To make matters worse, the people who clicked on their ads didn’t convert into appointments when they landed on the website (sending traffic to their home page rather than a landing page was a huge part of the problem, but that’s a rabbit trail for a different post).
I took over this company’s Facebook ads in early 2016 and built lead gen funnels to capture contact info and drive appointments.
Before we started the campaigns, Facebook ads accounted for about 3-5 appointments a month.
Previous campaigns cost my client about $55 per sale, with a typical order size being in the $125-$150 range.
The campaign went nuts.
“We did what? Whoa.”
After launching the new ads and funnels we were able to get their cost per sale to under $15, bump the average order size to $220, and increase appointments from Facebook traffic to over 30 per month.
Did this make a difference?
You bet it did.
What A 62% Decrease In Cost Per Sale Can Do For A Business
Cost per sale dropped by 62%.
Average order size increased by 46%.
Appointments from Facebook traffic skyrocketed over 875%.
These campaigns didn’t just make my client more profitable, they allowed my client to grow.
- They were able to buy more trucks and hire additional staff.
- They built out a call center to handle the increased number of leads.
- They were able to increase their budget, buy more radio spots and a celebrity endorsement.
Everything was rocking, until…
Throwing A Wrench In The Gears
Six months into the campaigns, the manager I was working with followed his dream and opened his own business in the northeast.
The owner decided his internal team would handle the campaigns moving forward, so we parted ways and the internal staff took over.
You’re probably thinking this is the bitter part, but you’d be wrong. When all this went down, I was coaching the manager so he could take everything over anyway. At the time I needed to focus on other projects, so I was planning to move on–the owner’s decision just sped up the departure.
We parted friends.
Unfortunately, that’s when the wheels started coming off.
The Tragedy of Getting Most of It Right
What the owner didn’t realize is that the GM and I weren’t just running ads to a high-converting landing page–that’s only the part he could see.
It was the classic iceberg situation: 90% of the iceberg exists underwater unseen. The same was true of our lead gen campaigns.
The owner only saw the small visible piece of the campaigns–the front-end offer. We made the money on the backend.
The magic happened after the lead was captured.
Why It’s Critical to Emphasize the Right Thing
After I stopped working on the account, the owner’s main focus became getting new customers in the door with front-end offers.
There’s nothing wrong with that, but it’s not enough. (It’s also incredibly expensive. Follow this link for a deeper discussion of the cost of acquiring a customer, churn rates, retention, and what that means to your company’s profits.)
The key to dropping the cost per sale is what you do with the lead once you get it.
The Secret Sauce
Here’s the secret: I worked with the GM to ensure there was an outstanding follow-up sequence and backend offers.
It’s rare for companies to be profitable with just their front-end offers…
In fact, it’s a win if you can get your front end offer to break even.
As a smarter marketer than me once said,
The riches are in the backend.
If you can get a client with your front-end offer, and break even… you’re winning, my friend. Every dollar earned after that point is pure profit.
But you won’t get that next dollar unless you have a system in place to go get it.
For This Funnel, the Backend Looked Like This
- Online – Facebook ad traffic to squeeze page
- Online – Immediate upsell after initial offer (30% take rate)
- Offline – Phone call to confirm appointment, order, and see if any additional services might be needed (no pressure here, just informative)
- Online – After opt-in, follow up email sequence to remind clients of appointments
- Offline – Cleaning techs trained (and incentivized) to upsell and offer additional services onsite
- Online – Follow up email sequences with a mix of useful tips, engagement pieces, and offers sprinkled in
All of this added to a massive increase in profitability, recurring customers, and a reduced number of cancellations. This system is what fueled their growth.
Sadly, the owner focused on the front-end only, and the backend languished (as did profits).
I’m told their numbers have dropped to the levels they were at before I stepped in, which is a sad situation because it doesn’t have to be that way.
(For any of you who are wondering, I shared my steps, strategies, and roadmap with the owner, so he can follow this path if he chooses to.)
Nurture What You Have
This brings me to a rabbit trail I want to follow that’s about what it takes to grow your business. This ties in with all the backend talk, and is elegantly laid out by Jay Abraham in this video.
In case you can’t watch the video where you’re at, Jay lists three ways to grow a company:
- Increase the number of clients
- Increase the quantity or value of what they buy, or get something else of value from them (i.e., a referral)
- Increase the buying frequency
That’s the next step in nurturing your existing clients, and servicing them so these clients fuel sustained growth for your business.
Okay, rabbit trail over.
Here’s the Funnel Map I Used For the Cleaning Company
I already listed the lead gen plan in earlier bullet points, but here’s the funnel drawn out (for all you visual people).
After the cleaning, the client receives regular emails. The purpose of this email sequence is to build trust by offering useful tips, keeping the business top-of-mind for the client, and presenting offers to keep them buying (and referring). The content-to-offer ratio was about 7-to-1 (although every email included a call to action for anyone looking to book more cleanings).
In the End, It’s How You Follow Up
There’s nothing wrong with how aggressively my old client is going after new clients– every business has client churn, and adding new business is the only way to ensure net client gain– the key is what you do with these clients once they’re in the fold.
Acquisition + backend systems = positive growth
In the end that’s what separates profitable, growing companies from those that are struggling and anemic.
How do you manage clients once they move beyond your front-end offer?
