This is the end, beautiful friend
This is the end, my only friend, the end
Of our elaborate plans, the end
~ The Doors
Business works backwards.
Whether setting a goal or creating a marketing plan, everything starts at the end.
Often I see clients start at the beginning when setting goals for a product launch or an automated system. Starting at the beginning appears as statements like “If only I could get X number of people to optin.” or “I want the cheapest clicks.” or “I need to reach as many people as I can.”
These statements signal that you haven’t started with the end in mind.
Instead, start with the answer and then find the formula (or formulas) that reveals the answer.
Here’s a simplistic example…
A good strong end goal is “I want to make $70,000 in gross profit.” Great! Let’s work backwards to see how we might achieve that. There are infinite scenarios, but let’s look at one possibility.
$70,000 gross profit = $100,00 gross sales at a 70% profit margin
$100,000 gross sales = 100 sales at $1,000 each
100 sales = 1,000 visits to a sales page at a 10% conversion rate
1,000 visits to a sales page = 5,000 people on an email list at a 20% click through rate
5,000 people on an email list = 10,000 visits to an optin page at a 50% conversion rate
10,000 visits to an optin page = 200,000 views of an ad at a 5% click rate
There you have it. Under this scenario, you’ll need 200,000 people to view your ad in order to make a $70,000 gross profit.
That means you can spend up to 35 cents per view or $350 per thousand and still break even. $70,000 / 200,000 = .35
Obviously, this is a very simplified example. In the real-world you’ll probably have a mix of warm traffic and cold traffic that will convert at different percentages. The longer you’ve been in business the better you’ll be at predicting each step of the process.
Every one of these numbers becomes a goal within the greater goal. If I start the campaign and find that my optin rate is only 20% then I know that I need to close a higher percentage or I need to lower my ad cost.
But the whole idea is I know at the optin stage that things aren’t working and I need to adjust.
Without a plan, I may get a 40% optin and think “Wow! That’s great.” But that 10% drop in optin means my gross profit now becomes $56,000 instead of $70,000. A 20% drop in GP.
If you already have an automated sales funnel, map out your process and metrics. Run some numbers to see which point in the process could have the greatest impact on your bottom line.
By increasing each step in the previous example by only ONE percentage point the bottom line gross profit increases to $98,960. That’s a 41% increase to the bottom line!