Every successful business owner knows that the steady flow of fresh quality leads is the bloodline of the business. If you are currently in a situation that your business does not have enough leads coming in, that could mean that one of the following elements is not present or not developed strongly enough:
- No lead magnet – In order to attract clients to a business, there need to be an effective “bait” in place. Like in fishing, to attract a good fish we need good bait. The same works in online marketing to attract our premium ideal client we need a good lead magnet that will allow us to build a database. We often work with businesses that do not have any “lead magnet”, “free gift” or the lead magnets are not good enough, meaning lead magnet that does not convert well enough. Good conversation is relative as it depends on the industry but a rough ballpark number for a decent lead magnet is having 20% conversion, that means for 100 people who click on your lead magnet you should have 20 leads. currently might not have an effective bait or no bait at all.
- No paid advertising – one of the common challenges that contribute to the lack of leads and continuous struggling is that business owners are comfortable wasting precious hours trying to generate leads using free advertising by posting on social media. Surprisingly, they are ok spending 10-15 hours per week creating content, distributing it, and as a result getting only between 2-5 leads per week, instead of setting up the paid ads campaign and receiving 5-10 leads per day. The same time can be used on higher-value activities like following up, closing or serving customers. Don't get me wrong, posting on social media can make a difference if you have a big relevant database, clear message and it is not treated as a primary strategy. Unfortunately that's not the case for most business owners.
- Not defined ideal client – avatar – another big mistake we see entrepreneurs often make is that they start advertising without having a clearly defined ideal client i.e. avatar. Their marketing strategy is often based around answering this low-quality question “how do I get more clients” instead of taking time to clearly define the ideal client and aligning all marketing effort to attract the ideal client. This simple hack has a potential to change your entire business around.
- No clear message – you might have created a lead magnet, set up paid advertising, you might have also defined the ideal client, but still “crickets” or very few but expensive leads. What could be the reason? It could be because your message might not be clear enough for your ideal customer.
Reason #2: Not Enough Conversions
We know that clicks are important, leads are important but what is even more imporant are clients. There are businesses that have leads coming in but they struggle to convert them. If you currently have leads but not enough clients, it could be for one of several reasons.
- No or not enough follow up – very few business owners know that only 2% of sales occur at first touch. There are some fascinating statistics on this:
- 44% of salespeople give up after the very first “no”.
- 22% give up after two “nos”.
- 14% give up after three “nos”.
- 12% give up after four “nos”.
- 92% of salespeople stop after four “no's”, and only
- 8% cent of salespeople ask for the order a fifth time.
- No retargeting – in the past business owners had to manually follow up with leads. These days technology gives us unlimited options to follow up in automated ways. What is very important is to make sure that the customer follow up journey is designed in a way that is relevant. Meaning we should set up a campaign that shows an ad related to the specific step in the sales process (e.g. invite to comple the purchase someone who added an item to a cart and left). Good retargeting will strongly increase conversions.
- Not clearly defined sales strategy – this challenge is common in either starting businesses or businesses that are so focused on delivering their own professional service or a product (e.g. dentist, lawyers, accountants) that as a result they often miss recognizing that for a business to be able to survive and thrive it has to have a clearly defined marketing and sales strategy. Until a business owner acknowledges that sales and marketing pay the bills for the rest of the activities and department and sets up clearly defined processes it will have a massive impact on conversions.
Reason #3: Not Enough or No Tracking
Not knowing the key strategic numbers that drive your business will eventually lead to making consistent poor decisions and as a result losing precious resources, time as well as cash. Some of the must track number include:
- Number of leads (daily, weekly, monthly)
- CPL – Cost per lead
- AVC – Average value of a customer
- CAC – Cost of acquiring a customer
- ROAS – Return on ads spent
- Life time value of a customer
- No CEO Dashboard – strong conversion ratios always come hand in hand with detailed and meaningful tracking of the key important events in the customer journey. Healthy business should have a tracking dashboard that allows the business owner to make decisions like a CEO. I will expand on the point below.
- No Debrief Rhythm – when we study big growing companies, they have regular meetings to capture, identify key numbers and use these numbers to make better business decisions.
- Weekly key numbers review
- Monthly debrief of the key initiatives and critical numbers
- Quarterly review of they priorities and the key critical numbers
- Annual strategic review
Reason #4: No Positioning
Most business owners undervalue and undersell their own services and products as they either do not realize or utilise the fact that they stand on the mountain of value. Meaning the business most likely has some strong assets in place that could be used to increase branding and positioning but they are not.
Business owners frequently fail to take time to reflect after each season to debrief and pick up assets that could serve as powerful positioning tools and strengthen marketing. That would lead to increased profitability and brand positioning. Here are two main reasons that affect positioning:
- No Assets – designing a good marketing strategy starts with looking at existing assets. Positioning assets include
- “before and after” (images or videos)
- testimonies (images or videos)
- case studies
- origin story of the owner
- success clients stories
- transformation stories (employees, clients etc)
- certificates etc
- No brand power – just a commodity – now more than ever consumers prefer to buy from well-recognized brands rather than “no-name” companies. If a business owners do not take time to develop the power of the brand, it remains as a commodity and the marketing strategy is often reduced to lowering the price, this leads to the race to the bottom where there is little or no profit margin-left.
Reason #5: No System
Design of a good healthy business starts with designing a strong foundation.
- Healthy piping system – an important aspect of a strong foundation is a proper piping financial system that redirects cash to the different bucket (e.g. tax, operation, marketing, short term spending, long term spending etc). The distribution system should force entrepreneurs to take part of the money off the table and redistribute instead of rolling them to the next deal and potentially risking it all. How does it relate to marketing? We often work with businesses that do not have money for marketing. They have all the necessary elements in place to deliver a service but they do not have anyone to deliver it to.
- Funnel – a funnel is a sequence of pages that lead a customer towards a desired outcome i.e. (purchase, downloading a report, upselling etc)
- 3 types of funnel
- Assention
- Lead Magnet
- Webinar
- 3 types of funnel
- Not Automating Enough – one of the challenges for a business owner to produce value to the customer is actually to do many activities manually instead of investing in a software or an outsourcer. When we advise businesses we first look at software as they once set up they do not need to be supervised, motivated. Activities to automate include:
- Low value activities
- Repetitive tasks
Reason #6: No Cashflow
Maintaining a healthy reserve of cash flow in business gives options and flexibility. Lack of it can lead a business into major troubles or even be forced into bankruptcy. Here are a few reasons why entrepreneurs struggle to generate cashflow.
- Not focusing on MMA – these days “new productivity tools” are coming out every few days. We have access to the latest technologies, infrastructures that offer us increasing output, helping our businesses, however, in reality, for many entrepreneurs the opposite is true. Instead of working on activities that have a potential of bringing money to the business (MMA – Money Making Activities), business owners spend time watching videos, learning new tools, wasting time on social media and engaging in low-value activities or no value activities.
- No DMO – another big mistake affecting cashflow is not having a clearly defined Daily Method of Operation (DMO). As a result, it leads to engaging with low-value activities or not executing a strategy consistently to bring results. ****
- Not knowing AVC – Not knowing how much a customer is worth for your business puts breaks on your marketing that could lead to scaling up or even worse could lead you to believe you have a profitable business but you are simply bleeding and you should stop running this campaign before it's too late. AVC stands for Average Value of a Customer and is calculated by: Total Revenue / Number of Customers = Average Value of a Customer
