Discover and implement effective sales funnel tactics used by other businesses

In a previous blog post, I listed 99 ways to optimize your sales funnel and grow your business. One of the tips I gave was to “Look at businesses you’ve bought from who share a similar business model. Map out their business plan to see how it compares to yours.

Here’s how to do that:

STEP 1: KNOW YOUR BUSINESS MODEL
First, you need to know what kind of business model you have. If you already know your business model, you can skip this step. However, it might be useful to do it anyway. Although there are different ways to define a business model, here’s a few ways that you can narrow down the search:

  • Do you sell products and or services?
  • Do you sell something you, yourself, provide or are you a broker/agent/affiliate?
  • Do you sell a one-time purchase (i.e. an ebook) or an on-going purchase (i.e. a subscription)?
  • Do you sell primarily to consumers or businesses?
  • What problems does your product/service solve or what needs does your product/service fulfill?
  • What does your target market look like? What does it NOT look like? (i.e. who do you sell to versus who don’t you sell to?)

STEP 2: FIND OTHER COMPANIES THAT YOU’VE BOUGHT FROM
Now that you have some notes about your business model, think about other companies you’ve bought from in the past that are similar. You’ve defined a sort-of “mosaic” and you probably won’t find a company that is exactly the same. Try to find a company that fits parts of this model. In fact, try to find a few companies like this.

And, I’m advising that these be companies you’ve bought from, simply because you’ll have gained a great view into their sales funnel – you’ll have seen every step of their sales funnel from the “inside” of their sales funnel!

STEP 3: COMPARE SALES FUNNELS AND TAKE NOTES
Now, compare their sales funnel with yours and take notes. Use the Sales Funnel Worksheet to track how you entered their sales funnel as an Audience member, how you moved through the Lead and Prospect stage, and finally how you became a Customer. And, if you became one of their Evangelists, track that, too. In particular, take note of:

  • How you entered their sales funnel as an Audience member.
  • What they said or did that convinced you to listen to them as a Lead.
  • What sales techniques and marketing collateral they used to sell you as a Prospect.
  • What objections you had and how they overcame those objections.
  • How long it took you to go through each stage.
  • What actions (“triggers”) you performed to move from one stage to the next.
  • How you responded to the product/service when it was delivered. (Was it quick? Did you sense the value you hoped would be present?)

STEP 4: MODIFY YOUR SALES FUNNEL
Draw inspiration from the successful ideas that worked on you – the techniques that moved you through their sales funnel from their Audience stage to their Customer stage – and apply them to your own sales funnel.

If your sales funnel is completely different, consider setting up and testing a sales funnel that is very similar to theirs to test against your existing sales funnel.

Or, start smaller by integrating some of the more successful tactics on a regular basis.

STEP 5: REPEAT
This is one of those exercises where it doesn’t hurt to do it again from time to time. Depending on how often you buy, consider doing this at least once a quarter or even as often as once a month. You’ll progressively improve your sales funnel!

3 kinds of entrepreneurs: Which one are you?

Throughout history, humankind has followed the same cycle again and again: Explorers discover a place, settlers follow, and builders develop that location. People live there for a long time. The the place becomes built up, even to the point of becoming in-grown. Land becomes a premium. Organization and structure reign (and can even oppress). Then, new horizons are spotted and the cycle repeats.

This was the case when humans journeyed out of the cradle of civilization. It was the case as people spread across the continents and the oceans. And it’s the case today as we reach for the stars.

The same thing happens in business with three kinds of entrepreneurs: The explorers create innovative new opportunities, the settlers follow, and then builders arrive later and develop.

  • The first wave of entrepreneurs are the explorers who are trying completely new things. They’re creating new spaces. They’re discovering. Think: Ebay, Paypal, Yahoo, Google, Twitter, Facebook… and don’t miss the important lesson that there are other search engines and other social media that were there first but didn’t make this list. And I’m only using a marketing example here, but this explorer/settler/builder model is true in every industry.
  • The people we call “early adopters” are actually setters — the second wave of entrepreneurs who see the opportunity explored and know that more people are coming. Think: People who cashed in early on Ebay or sold Google AdWords services. Or, think of Chris Brogan’s position in Twitter or Mari Smith’s position in Facebook. (And again, don’t miss the important lesson that there are other entrepreneurs who tried to settle and didn’t.
  • The final wave of entrepreneurs are the builders. They may not do really innovative things but they create systems and structures and franchises so that many others can inhabit these spaces.

What kind of entrepreneur are you? Knowing this changes everything and prompts a number of question: How does it impact the work you do? Where should you invest your time and money? Who should you partner with? How does it influence how you define “success”?

SO WHAT’S NEXT?
If you’re an explorer, you need to be searching for the parts of the map that say “here be dragons.” Consider where are the frontiers are — overall and in your industry — and push them.

If you’re a settler, you need to be thinking about the frontiers, too, but you also need to keep your eye on the explorers. You need to think about how you can get in early.

If you’re a builder, you need to watch the headlines and see what’s coming up on the public’s radar. Get in as early as you can and create franchisable systems.

The innovation gap between small businesses and big businesses

In a Harvard Business Review blog post, Ron Ashkenas asked the question “Can a Big Company Innovate Like a Start-up?”.

At the time the post was written (a month ago), Google’s Eric Schmidt was stepping down as CEO and Google’s co-founder Larry Page was taking the role instead. Based on the official statements that followed, it became clear that Google was trying to get back to a place of nimble innovation that it once occupied.

On the HBR blog, Ashkenas wondered if it was possible for large companies to achieve the fast, bleeding-edge innovation that start-ups are more commonly known for. And he correctly points out that employees of big businesses probably don’t innovate as often because they have a different set of risk/reward measurements.

WHY SMALL BUSINESSES INNOVATE MORE SUCCESSFULLY THAN BIG BUSINESSES
I see this all the time in the companies of my own clients: The small business entrepreneurs and start-ups are passionate about the business and totally bought-in to the opportunities that exist through innovation. On the other hand, the big business employees are more focused on success in their own specific functions, and in job security, and the CEOs of these companies are often insulated from the innovative side of the business.

As companies grow, they become risk-averse, partly because their employees are no longer bought in to the company in the same way that the early start-up employees were. I’ve been part of start-ups and we were willing to work around-the-clock for next-to-nothing to see the company succeed. There was something thrilling about being part of that creation process. I’ve also been part of big, entrenched companies, and that just doesn’t exist.

Big companies also become risk-averse because their brand has much more equity, and a wound from negative press can cut deeply. Compare that to the start-up that has a brand but very little brand equity. They can make mistakes and they know they’ll get over those bumps.

In the HBR blog post, Ashkenas offers three pieces of advice for big businesses that want to innovate like small businesses: He says they should (1) Set up a venture group, (2) Carve off skunk-works, and (3) Hold innovation contests. (You can read the blog post here: Can a Big Company Innovate Like a Start-up?.)

ADDITIONAL OPPORTUNITIES FOR BIG BUSINESS TO INNOVATE LIKE A SMALL BUSINESS
I think those are great ideas but I also think that big businesses can do so much more: It starts with revising the corporate culture so that all employees are motivated to see the company as a whole succeed but are also willing to accept risk to a greater degree. To make this cultural change, HR’s hiring processes and payroll metrics will need to change. In other words, don’t hire “lifers” who want a salary; hire aggressive entrepreneurs who would prefer to shine while also enjoying a greater degree of control over their remuneration. (I’ve seen this work very successfully in a multi-billion dollar organization).

Another opportunity where big businesses can change is in decision-making. In many of my big-business clients’ hierarchies, decisions rest at the managerial level and the worker-bees end up focusing on job security because they don’t have the authority to take action on innovation opportunities. Grass-roots innovation (the best kind of innovation!) can take place when people have the authority to act quickly.

Which leads me to my next idea: Big businesses need to define innovation appropriately: We tend to think of innovation at the product/service level. However, innovation opportunities exist everywhere. If a front-line staffer discovers a faster way to do their job, they can save the company a small amount of money. But if that innovation is shared among other front-line staff, the company can enjoy larger savings. And that’s just one example. Businesses can innovate in their processes, in their sales funnel, in their technology, and so much more. People will naturally innovate to find ways to make their jobs better; a large organization just needs to pay attention to what its staff is already doing.

Lastly, employees in big businesses are scared of innovating because it could risk their job security. (“What happens if the manager walks by and sees me doing my job this way? It accomplishes the same thing faster but it’s not how I’ve been told to do my job… AND my manager doesn’t have the patience or foresight to allow me to explain why I’m doing it this way”). What businesses need to do is create a framework for evaluating innovation successes and failures in order to empower employees to make changes without fear of reprisal (within reason, of course).

Big businesses can be innovative, and I think they can be as innovative as small businesses. Unfortunately, it requires such a massive cultural shift, I suspect it is next to impossible to achieve.

How to price a product or service

As entrepreneurs start up their businesses, they quickly learn one of the most challenging aspects of business ownership: How to price a product or service so that it is attractive to customers but still profitable for the business.

Pricing is like a tug-of-war: All customers want to pay as little as possible for a product or service; all businesses want to charge as much as possible for a product or service. Somewhere in the middle is the right answer — a price that is attractive and fair to the customer and a price that is profitable and fair to the business.

Here is a collection of some of my best advice on pricing.

HOW TO PRICE A PRODUCT OR SERVICE
Understand how prices and pricing works: One of the first things you’ll need to do is understand how pricing products and services actually works. It’s not a matter of randomly assigning a dollar value! There is an actual science to the creation of a product’s or service’s price. There are two key elements that go into any price, and there are three kinds of price-based businesses. Read more about it in my blog post Prices and pricing strategies: How to price your offerings more effectively. (Don’t miss the pricing tactics at the bottom of that post).

How to monetize digital content: If your business is selling digital content, it is critical to understand how content monetization works. The web has enabled new business models to be developed so that people can earn money in various ways, but not all of these business models require pricing services or products. There are 5 ways to monetize your content and only 2 of them require pricing. Read more about the 5 levels of online content monetization.

Competing with low-price providers: One problem in many industries is the problem of low-price providers who enter quickly and undercut your prices. It’s a problem for everyone because most of these low-price/low-cost providers will only compete for a short time before they run out of money and have to fold. But along the way, they may potentially do a lot of damage to your business. If you find yourself competing with low-priced providers, check out my blog post: Pricing your sales funnel: How to avoid competing with low-cost providers.

A competitive analysis tool to find the best price for your product or service: What entrepreneurs need most is a way that they can use to find the best price for a product a service. By doing some simple competitive research, business owners can find the best price for their products or services in comparison to their competitors’ offerings. I’ve developed a tool for entrepreneurs to find the best price for their offering. Read about it at How to easily discover the best price for your product or service.

A customer-based, needs-analysis tool to find the best price for all of the products or services in your sales funnel: I’ve also reated another tool to help you know how to price your products and services while you are developing your products, based on what your customers are wanting to buy. By mapping out your products and services against customer needs, you’ll easily see how to price your products and services in the context of your sales funnel — pricing “entry” products for brand new Customers and then pricing follow-up products or existing Customers. In my blog post, you’ll read how product development, pricing, and sales funnels all work together to create a very profitable business! Read more about it at Product development, pricing, and sales funnel strategy made easy.

How to be a lazy serial entrepreneur (part 2)

In yesterday’s blog post, How to be a lazy serial entrepreneur (part 1), I talked about a client of mine who has started or is starting 8 businesses that are taking a lot of his time and attention.

I used the following time-and-attention demand chart to demonstrate where my client’s trouble-spots were.

Near the end of the post, I mentioned that the goal of every business should be to move toward passive administration, marketing and deliverables. I don’t think many businesses can achieve completely passive levels in all three functions but it’s a good goal. And, if you like to start businesses or you initiate a lot of projects in a single business, this is a good way to force yourself to manage the amount of time and attention you give to each one. Ultimately, your goal should be to maximize your return while you minimize your effort.

So, how can you achieve increasingly passive efforts in your business? Here are some ideas:

Administration

  • Outsource your administration. (Not sure where to start? Go visit my friends at ContemporaryVA). Get them answering your phones and email, and pinging you with only the most important stuff.
  • Use software to automate your delegation. Zoho and GoogleDocs are both ideal for this. For example, create a spreadsheet with your staff’s names down the side and the tasks you want them to do across the top, and have them update a pre-defined percentage-complete as they do so. Zoho and Google let you invite your staff to view the file and make changes.
  • Use accounting software to keep your business’ books. IAC-EZ and Kashoo are my favorites.

Marketing

  • Delegate your marketing. Guru, Elance, and Odesk are my favorites… and Odesk has a collaboration/delegation desktop interface that seriously kicks ass.
  • Automate your marketing with marketing software. There are lots out there (too many for me to give a comprehensive list, and depending on what your needs are, the software will vary). Some examples: Automate your email marketing with ConstantContact; automate your keyword advertising with AdWords; automate your digital product sales with Clickbank, automate your social marketing with Hootsuite.

Deliverables

  • Delegate the delivery of your products by using a dropshipping company or a “middleman”. Or, if it’s a simple as running to the post office to attach stamps to a package, hire your kid to do it.
  • Delegate the delivery of your services by hiring and training associates or licensing your proprietary techniques. You can even delegate part of the delivery of your service by getting someone to do the initial work while you provide the value-added work.
  • Sell more digital products, such as ebooks, ecourses, toolkits, subscriptions, exclusive access to networks and information, and more.
  • Write a book.
  • Host a seminar.

Turning your administration, marketing, and deliverable functions into passive activities doesn’t mean you can sip martinis on a beach, but it is an intentional effort to reduce the amount of time and attention each one requires in order to operate successfully.