Have you been so focused on creating more revenue, that it’s decreasing profit?
As an online business with an expertise-based offer suite, you don’t have a ton of overhead.
In the first couple of years it’s just down to the cost of softwares, your devices, continued education / coaches, and contractors for pop-up support.
Some of those costs are fixed (software) and some are variable (deciding to join a group program that you didn’t bank on earlier in the year).
But ultimately, with a budget that accounts for those pop-up expenses & investments, you’re pretty set for the year.
So where does the dip into profit come from?
If you, the CEO of the company, is the one performing every task or deliverable, that project will cost more.
Our top priority, before adding on more revenue-generating tactics, is to lean out your tasks + lean out the amount of stuff & steps in your offers.
Without that you may find yourself spending $7k to make $9k > realizing the $2k in your bank account isn’t going to cut it > and going into a reactionary mode selling three 90 day 1:1 clients that you did NOT have the time to support… but now you’re going to figure it out.
>> Not sure if your offers are overloaded… OR if the offers are great but your audience isn’t the right fit… OR if your audience is great, but your messaging isn’t landing… You may have a business blindspot (don’t worry, that’s normal, most of us do!)
Discover your blindspot with this quick + intuitive quiz: What’s Your Business Blindspot?
Click Here to Take the FREE Quiz!
5 Ways to Increase Your Cash WITHOUT Needing More Traffic
1. Increase the Average Order Value
The average order value (AOV) is the average amount your audience pays at checkout. If we increase the average amount from $497 to $547 by adding a self-study upsell at the point of purchase, that can increase your profit by 10% on average, per sale.
That 10% increase after one month or one year can be anywhere from an additional $500 to $5,000 depending on how much traffic you want to drive to that product.
2. Adding a Secret Menu to Your Back End
I have two “coined terms” I need to introduce you to first –
Secret Menu: Just like ordering a drink that’s not on the front-facing menu at Starbucks, the front end of your business should be lean and specific to support your leads in making an easy initial investment.
The back end of your business can contain a secret menu of additional items only available to current customers.
Upsell Waterfall: Unlike an upsell at checkout that banks on “shopping momentum”, an upsell waterfall is a series of additional purchases presented to your new customer over the following 2-6 weeks.
The timeline is unique to each business + each offer, but our goal is to present an opportunity to add more support or supplies to their experience based off of their current need.
This strategy banks on “result momentum” and promotes a success-first relationship with your new customer before focusing on adding more to cart. Hello cascading sales that feel as good as they perform.
So your back end consists of a (secret menu) that you present BOTH at checkout (to increase AOV) and over time to bolster their results (upsell waterfall).
3. Increasing Retention (no membership required)
The most frequent use of the term “retention” refers to a subscription model where there’s a recurring monthly charge – and while memberships can be hugely successful – I’m instead talking about retaining your current clients by selling the next offer in your offer suite that supports their growth journey.
When your client initially found you & invested, that offer or service served a specific need / goal of theirs at that time. Now? Their needs/goals have changed and they’re ready for the next front end offer.
By creating a suite of different offers on the front end of your business you’ll increase the lifetime value of your clients now, and later.
4. Flexible Payment Plans with a Back Up Squad of Automated Support
The basic breakdown: A pay in full price is the main price of the offer or service, and a payment plan is a monthly pay-as-you-go option with a small increase to the overall price (paid monthly) due to the associated risk + additional processing fees.
Typically a payment plan does NOT exceed the amount of time of the contract.
Meaning, if you have a three month group program the payment plan is three months (sometimes four months if a client makes an early payment on month “zero”, or pays a deposit to secure their spot).
But with the recession on the rise, many consumers are concerned about high monthly fees. And that fear keeps them from making an investment. Which leads to you wondering what you did wrong in your entire sales campaign… when really the answer was simple- it wasn’t flexible enough for the current economical landscape.
Now I’m not suggesting you create a six month payment plan for a three month program. No one enjoys making a payment for something they’re no longer a part of. But in certain cases, you may need to extend your payment plan by one or two months to be supportive of your audience’s right-now needs.
However, with that flexibility comes additional risk of failed payments. Consider two things first:
If you hate “payment chasing”, definitely give that blog a read.
Hear me on this: You’ve already made the sale! Don’t let it go out of awkwardness. Someone said yes to working with you + decided they wanted that problem solved. You’re simply following up to help them get back on track and make an adjustment to their plan if needed. Fight for your people and their results.
5. Early Pay Off Plans
Speaking of those payment plans, our final “back up squad” member is an early pay off plan. For example: Within Live Launch Academy (LLA) we help online entrepreneurs launch a digital offer or service in order to hit an infusion of cash & clients.
On average most new students launch within three months of purchasing LLA. When initially enrolling in the offer they may have chosen a six month payment plan. Now, three months in + with additional cash in the bank for their launch, we reach out to see if an early pay off plan would work best –> with the associated payment plan increase waived.
Pay in full cost of LLA: $1,997
Payment plan cost of LLA: $373 x 6 ($2,238 total – 12% increase)
Instead, we reach out and see if they’d prefer to pay off the remaining “pay in full balance”
Pay in full price of $1,997 (minus) the already paid amount of $1,119 = $878 remaining total
TL;DR this goes something like: “Hi! Would you like to pay off the remaining balance of $878 or continue paying monthly for a total of $1,119 in three more monthly installments…?”
Everyone loves to get rid of a monthly expense, to save a buck, and to have the flexibility + support to get started easily followed by a great opportunity once success is experienced!
This is also an awesome way to decrease churn & failed payments to ensure the money owed to you is paid. It won’t be perfect, but it will absolutely increase the money collected from the expected!
Now, imagine if your combined all of these cash in the bank options:
The only other thing to do? Increase the price of your main offers (those on the front end) – when the time is right to do so.
When’s the right time? 1. If the market shifts and you’re charging well below your market-comps 2. When the demand for your offer is greater than your bandwidth = increase prices + hire support.
>> Want more profitable online biz value? Discover your blindspot with this quick + intuitive quiz: What’s Your Business Blindspot?
Click Here to Take the FREE Quiz
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