Conversion Funnel Mastery by DigitalMarketer is a course about creating an optimized funnel. Most businesses have some sort of funnel for generating leads, nurturing them, and eventually, converting them into customers. This course deals with that but also focuses on optimizing every single touch point of the customer journey—the steps that your leads typically take from being complete strangers to becoming evangelists for your brand.
The ultimate goal of this optimization is to:
- Reduce the acquisition cost of each lead by getting more leads, which is done through crafting really good lead magnet.
- Increase the immediate average customer value. This is done through what the instructor—Ryan Deiss—calls Profit Maximizers.
- Increase the average lifetime value through a Return Path—strategies for constant communication and follow-up with your customer.
I really liked the strategic thinking behind all of this. While some of the concepts are not anything new, they certainly were organized into a brilliant, systematic process. Furthermore, these guys actually own real businesses that they actually own—they run companies (both online and offline) in B2B and B2C markets selling everything from cosmetics to camping equipment to industrial water filters—they’re not just marketers.
The following notes from Conversion Funnel Mastery by DigitalMarketer are meant to be concise, reminding me of high-level concepts and not trying to recreate the whole course. This summary is basically a bunch of notes and lessons paraphrased or quoted directly from the course and does not contain my own thoughts.
• While most businesses have some sort of a funnel—some sort of a methodology or mechanism for getting leads and converting them, most of them don’t have an optimized funnel.
• Your ultimate goal should be to craft a conversion funnel that lowers the cost of acquisition, while simultaneously increasing immediate and lifetime customer value. This is what a well-executed conversion funnel allows you to do.
• The way you can build an optimized conversion funnel is by using the CVO growth plan:
- The first step is to determine product-market fit (i.e., is what you’re selling something that someone actually wants to buy?); you want to make sure that what you’re offering to your market is exactly what they want, and that you’re articulating it in such a way.
- The second step is to increase the number of leads you’re getting through a specific and optimized lead magnet and landing page.
- The third step is to get as many customers as possible by offering your leads a tripwire—you lower the barrier to entry.
- The fourth step is to maximize your profit and margin with a profit maximizer.
- The fifth and final step is to increase the frequency of returns and purchases through a killer return path—get them to come back and come back more often.
What Is CVO?
• Just because you know your product or service is great… just because you know your prospects really need it… that doesn’t mean they know they need it… nor does it mean they want it from you if they do. (At least not yet.) This is the primary hurdle that marketers and business owners must overcome. And the CVO Growth Plan works because it follows the structure and sequence of normal, healthy human relationships. People follow a sequence where they go from complete strangers into sharing their lives with each other in the most intimate ways.
• Business is just another type of human relationships. However, most marketers propose marriage on a first date; the moment someone shows up on their home page, they try to sell you immediately.
On the other hand, some marketers have grossly over-compensated for the salesman factor, they’re constantly selling from their heels. This is where a lot of content and social media marketers are doing, they think to themselves: “Don’t sell. Just give and give and give, eventually, they’ll buy!” If you don’t ask, nothing will ever happen.
• Scientists have figured out that there are 12 stages of human intimacy; in business, there are five stages that make the structure of business relationships:
- Lead Magnet (What’s your number?)
- Tripwire (Want to get coffee?)
- Core Offer (Can I take you to dinner?)
- Profit Maximizer (Will you marry me?)
- Return Path (Flowers, date nights, etc. which never really stop.)
• Optimizing every single one of the five stages or phases of the conversion funnel is how you optimize customer value.
The Formula For Growth
• Here’s the formula for business growth:
Leads × Customers × Margin × Frequency of purchase = Growth Potential
• You want to increase your growth potential by working on doubling all four elements, which will give you a growth potential of actually 16:
2L × 2C × 2M × 2F = 16GP
You want to get twice as many leads, which you can achieve through the optimization of a lead magnet.
You also want to get twice as many customers, and there are two ways you can do that:
- Step 1: Clearly articulate what is the value that you bring. Marketing at the end of the day is simply the articulation of value to your customers in such a way that they say “Yeah, I want it, I need it, and I believe what you’re saying.”
- Step 2: Deploy a tripwire.
You also want to tackle margin. This is how you’ll actually be able to spend more to acquire new business because you’ll be able to put some of the profit back into the growth of your company—this might lead to investor and bankers, who realize that your business is making a lot of money, to give you additional capital to invest.
You want to make twice as much profit to the bottom line by improving your conversion funnel. You’ll work on adding some things in, slotting some offers that you maybe aren’t already making, or modifying some offers that you perhaps are already making to increase both, you’re immediate and your lifetime customer value.
If you can get (twice as many leads and twice as many customers spending twice as much money) to come back and buy twice as often, your growth potential goes up to 16.
Step 1. Determine Product-Market Fit
The Goal of Marketing
• The first step in the CVO process is to determine product-market fit. In other words, do they want what you’re offering?
In many cases, this doesn’t mean necessarily changing your primary product or service, it simply means articulating the offer in a way that speaks to their desired end result. Far too often, marketers get caught up talking about their products and services, their features and benefits, etc. You want to talk about them in the context of your market’s desired end result.
• You want to think about two things:
- Who is your prospect?
- What is your primary flagship product or service? This is the thing that you’re most proud of. If you have many of these, then choose one. The reason why you need to choose just one is that you need to build conversion funnels around one specific thing. You want different funnels for different products and services.
Your job no matter what it is you offer is to move people from a before state to an after state.
• You need to think about how your flagship product moves people from the before state to the after state. Good marketing and copywriting simply articulate the move from the before state to the after state. The way to do that is to stop talking about your products and services; start talking to your prospects and allow them to imagine what life will be like when they’re in the after state which. This requires you to figure out what is their after state and what is their before state.
Before and After Grid
• In order to determine the value your prospects get when they move from the before state to the after state, you need to figure what those states look like. You can do this through a Before and After Grid. This grid gives you categories to determine what their emotional and psychological states are:
• There are four primary ways you can articulate someone’s before state and after state—the four things your core offer must impact to demonstrate value to a customer:
- Have: What do they have before that they don’t have after? Or what don’t they have before that they now have after? This is where most ordinary marketers stop, and it’s where features lie.
- Feel: How does your product or service change the way that they feel?
- Average Day: How can you change their average day experience? Can you change the story that they tell themselves and others? Can you change their narrative?
- Status: Can you change their status (i.e. self-worth)? There’s a quote by Napoleon Bonaparte where he says “I have made the most wonderful discovery…men will fight long and hard, even die, for a bit of colored ribbon.” What he’s saying is that status matters a lot.
• Once you’ve identified your market’s ideal after, you should now craft your Statement of Value (SOV). Ideally, you want to craft one for each product or service you offer.
• Just being able to speak to your prospect’s desired end result in the form of a statement of value can, in and of itself, improve conversions and grow companies.
• A statement of value is pretty simple:
_____________ enables _____________ to experience _____________.
- The first blank should contain the name of your product or service. Alternatively, go broader by inserting your brand or product name.
- The second blank should describe your customer.
- The third blank should describe the customer’s desired after state.
Two Types of Doubt
• There are two types of doubt that your prospects might have:
- Prospect’s doubt about you or your brand: This is when you get into things like overcoming objections and having a frequently asked questions section on your site. Using testimonials and case studies and having trust seals, etc. are all about reducing a prospect’s doubt in you or your brand.
- Prospect’s doubt in themselves: This is actually the biggest hurdle that marketers have to overcome. The doubt has nothing to do with; you could have done everything right and it won’t matter.
• The way that you overcome both types is through lead magnets and tripwires. You need to slow-walk the relationship, be patient, and deliver value and little victories in advance.
Step 2. Optimize The Lead Magnet
What is a Lead Magnet?
• After we’ve made sure that thing you’re selling is actually something that someone wants to buy; however, just knowing that you have what someone wants isn’t enough, you have to ease into the relationship just like you have to do in normal human relationships, and this is exactly what offering a lead magnet allows you to do.
• The lead magnet is a small “chunk” of value that solves a SPECIFIC problem for a SPECIFIC market that is offered in exchange for an opt-in. A mistake that a lot of people make is thinking that because they’re offering something for free, then it doesn’t have to be that good; however, when someone gives you permission to follow-up with them, they’re giving you a chunk of their attention, therefore you need to deliver a chunk of value in exchange.
• Great lead magnets:
- Make a SPECIFIC promise
- Give a SPECIFIC example (e.g. case studies)
- Offer a SPECIFIC shortcut
- Answer a SPECIFIC question
- Deliver a SPECIFIC discount
Finding the Hook
• You now need to dig in and find the hook—the big idea—that will really grab their attention. Ask yourself the following questions:
- If you have two minutes to impress someone, what would you say, show, or give them that would blow their mind? You need to be specific.
- What’s an interesting story or example you can show or tell that proves your product/service works like you say it works? Again, you need to give specific proof.
- What’s the “One Big Thing”… more than anything else… your prospects truly want to know? For example: How much is my property worth? When is she ready to be kissed? What’s the wholesale cost? Where’s the best fishing hole in Waco?
The Landing Page Checklist
• Ideally, your lead magnet should be offered on its own landing page most of the time. The landing page should have some of the following elements and conditions if you want to really maximize the conversion rate of that lead magnet:
- Market callout
- Clear and concise
- Easily understood
- Compelling headline
- CTA above the fold
- Contrasting button color
- Custom button text
- Social proof
- Limited navigation
- Uses visual cues
- Hero shot
- Limited form fields
- Source congruency
- Brand consistency
- Enable sharing
Step 3. Optimize The Tripwire Offer
What is a Tripwire?
• This is about getting more customers. There are two ways you can do that:
- Optimization of your core offer (step 1)
- Offering a tripwire (step 3)
• The tripwire is simply an irresistible, super-low-ticket offer that exists for one reason only… to convert prospects into buyers. In other words, tripwires change relationships. If people give you one dollar, they’re far more likely to buy from you again.
• A good tripwire allows the prospect to achieve a “little victory” that causes them to believe that they can achieve their ultimate desired end result.
• Another thing that tripwires do is that they show commitment, and this is ultimately what you want in all of your relationships. You want people to look at you and your brand and say: “Yes, this is the source, this is the company/authority that I look to for this particular need!”
Two Types of Commitment
• There are two ways that people show their commitment:
- Their wallet
- Their calendar (webinar, demo, appointment, etc.)
• The tripwire is not a coupon. Coupons are great for converting unconverted leads and going back to your customers to offer them a good deal (velvet rope). Coupons don’t make great tripwires because they’re quid pro quo—you give them a great deal if they give you money, and this is not a tripwire. Tripwires are value in advance.
• As you’re thinking through what’s the best tripwire for your particular offer, you need to know that there’s a good chance that the ideal tripwire already exists in your business. The best tripwires are “Splinter” offers.
• Think about your core flagship product/service. Whether it’s a software or digital course or web design, etc., you’ll discover that it’s actually made up of smaller products and services. Your tripwire should be splintered off your core. This is great because:
- You don’t have to create anything new.
- It leads seamlessly and subtly into the core offer.
• Splinter offers can help you overcome the customers’ doubt in themselves (the 2nd type of doubt) because even if you’ve overcome their doubt in you and your brand, you still have their doubt in themselves, which is the biggest hurdle of all. And this is why the best tripwires offer some sort of a little victory.
The Tripwire Checklist
• These are elements that make a great tripwire:
- Low barrier to entry/impulse buy: The price of your tripwire really depends on your market (e.g., corporate space, B2C, etc.). Keep it as low as you can stand it.
- Very easy to understand and explain.
- Seamlessly leads to the core sale: DigitalMarketer sells one execution plan for a very low price, then asks the people who purchased if they would like to have the rest of the plans.
- Useful but incomplete: The keyword here is useful. When DigitalMarketer sells one execution plan, it is useful. But, it’s not everything that people need to know about digital marketing.
- Has a high perceived value.
- Has a high actual value.
Step 5. Offer A Profit Maximizer
• The purpose of the profit maximizer is to increase overall revenues and average customer value, to make it possible to spend more to acquire even more customers, and to provide additional value to your customers.
• Once you have a buyer, you should ask them to buy something else. They’ve opted-in to the lead magnet, maybe got your tripwire, maybe they then took advantage of your core offer. Now, you should offer more things.
What is a Profit Maximizer?
• Profit maximizers can be up-sells (offering someone more of what they already bought, something in addition to what they already purchased that still leads to the same end result), cross-sells (offering them a related product or service, which may deviate a little bit from the original purchase, but it’s still relevant to the market), subscriptions (offering them access to a club, community, or association), or any other backend offer that increases immediate and lifetime customer value.
• Up-sells are offering more of what people have already bought—something that compliments what’s been purchased. This is why when up-sells are done properly, people don’t get upset.
• The difference between a cross-sell and an upsell is that a cross-sell is a product or service that is not directly-relevant to the previous purchase but is relevant to the customer, and an upsell is a product or service that is directly-relevant to the previous purchase.
• It’s not recommended that you run cross-sells immediately after purchase. If someone came to you because they believe that you can move them from a before state to an after state, and you start telling them that they need this other after state, it can be frustrating. If you put a little time in between, they’re more likely to accept the offer. You also want to be subtle about it, just like Amazon.
• Slack adjusters can have a dramatic impact on the bottom line because they’re, typically, 10x-100x the core offer price—it’s your most expensive offer. A slack adjuster will only appeal to 2% of your market. This 2% actually wants to ascend, they want your most expensive product/service.
• Often times, a slack adjuster is sold as access or some type of “done for you” but not always. At Starbucks, you can buy a cup of coffee for $3-5, and you can also buy a $3000-5000 Espresso machine.
• In addition to being great for profit margin, slack adjusters are also great for brand elevation. When you offer something that is truly expensive, it makes people think that your brand is a premium/luxury brand.
Bundle and Kits
• If you’re in a business/market that is selling a lot of commodity items or you don’t have a solid brand yet, bundling and kitting is one of the ways you can de-commoditize a product/service.
• You can also try bundling physical and digital products, or create a kit that has both of them: The Walk Yourself Thin Kit, which has a pedometer, videos, a diet guide, and more.
• Think about the desired end result. What do they want? What are the other things that they need that you can bundle in and create a one-stop shop? This will elevate the perceived and the actual value, and it will offset low margins on some items.
• When it comes to recurring billing, the hardest thing is making the first sale. Try to think how you can make the sale once, and get paid over and over again.
• Recurring billing is extremely difficult to sell on the front because people, generally, don’t want to commit for a long time. Do not do it early in the relationship; let people go through your lead magnet, tripwire, and your core offer first. Do not try it as an initial offer—selling it to people who don’t yet know, like, and trust you. Sell it to your highest value people. Give them an opportunity to get fully engaged.
• With line extensions, you’ve got the products/services that you offer, but you also ask “What else do people want?” Think of toothpaste companies; besides offering toothpaste, they also have dental floss and mouthwash. Toothpaste companies realized that they’re not in the toothpaste business, they’re in the teeth health business. But, they could go even further by opening, for example, they’re own clinics because they already have well-known brands.
• If people know, like, and trust you, they’ll want you to be a one-stop shop. So ask yourself what other things you can offer them. When doing this, you might tell yourself that you’re not in such or such business, or you don’t offer that type of product/service. Do not let your current deliverables define your business; markets should define your business.
• Another thing to keep in mind is that it doesn’t have to be your product. You can wholesale it, you license it, you can promote it as an affiliate, etc. Figure out what your market wants. Become a solutions provider.
Speed and Automation
• The most effective type of maximizer is going to include some form of speed and automation. Whether it’s a cross-sell that offers speed and automation or a slack adjuster that offers speed and automation, etc. Speed and automation can be applied to any one of the profit maximizers.
• If you can help customers achieve their desired end result faster and with less work, they’ll throw their money at you and thank you along the way. The reason for this is simple: they’ve already bought into the end result. They already believe that you/your product or service/your brand will take them from their before state to their desired after state. Now, they just want to get there as quickly as possible, and preferably, with as little work as possible. Therefore, if you give them that opportunity—the speed and automation offer—you conversion rate will be unlike anything you’ve ever seen before.
Step 5. Architect A Return Path
• Most sales don’t occur in the first visit—you’ll often hear that it takes 7-12 contacts to close a sale, depending on who you’re talking to. Whether it’s 7, 8, 10, or 12, it doesn’t matter; everyone agrees that it’s more than one. And so, if you want to maximize your sales and grow your company, you need to increase the frequency at which you get people to come back.
• It’s not just about email—what most people think of when it comes to the return path. The return path is actually made up of four different types:
- Constant strategic communication: Always being there, being top-of-mind, and not letting them forget about you.
- Exit offers: What happens when they arrive at your website, and then they start to leave? You should make them an offer at that time.
- Automated follow-up
Constant Communication Explained
• If you aren’t communicating with your list at least once a week—using a weekly newsletter sent as a broadcast to your entire list, for example—then you obviously hate money. People worry that if they email their list and follow up with them, they’ll unsubscribe. You should realize that if you’re not talking to them, then it doesn’t matter if they unsubscribe because you’ve functionally, by not communicating with them, have already unsubscribed them.
• Again, follow-up is not just email. You should be talking to your customers. There are tools like CallFire that will allow you to text and do outbound calls to your customers in order to welcome or thank them.
There is also faxing. Even though this is outdated, many companies in the B2B industry use it. A lot of companies aren’t sending faxes anymore, which is a great reason to send someone fax. Companies like eFax make this very simple even if you don’t have a fax machine.
And most importantly, you should be attending all of your industry gatherings—you should have a presence there. If your brand, whether you’re in B2B or B2C, is going to be seen as a leader in the industry, then you need to be there.
Exit Offers Explained
• What happens when someone visits your website, and then they go to leave? When exit offers are done improperly can be very spammy, pushy, and obnoxious. But, if you do it in a way and using the right technology, exit offers can be tremendously effective at getting the folks who are about to leave to reconsider. You should always have different offers that you make to your list and different ways of positioning the offer they’ve seen. Basically, you shouldn’t give up on them just because they said no the first time.
Full Funnel Retargeting
• It’s important to create specific audiences based on the content that people visit on your website in order to retarget them with a specific offer such as a lead magnet—something that’s enticing and really specific to what they already read on your website. However, this is where most people stop—they use traffic to get people to the top of the funnel, but they don’t use retargeting to move them from one step to the next in the funnel.
• You need to use retargeting to get people to move to other steps or phases in your funnel. You’re going to run ads to people who had a particular offer but didn’t make it to the next offer. You can set up audiences based on that logic—people who visited an offer (e.g., lead magnet landing page) but didn’t hit the next offer (e.g. tripwire sales page).
Automated Email Follow-up Explained
• The fourth type of return path and the one that will most likely have the biggest impact on your company’s growth is automated email follow-up.
• There are five phases that make up the email follow-up machine:
Part 1. Indoctrination
• The goal of indoctrination is to turn strangers into friends. And a typical indoctrination series is three emails over the course of three days.
• In this series, you want to do a few things:
- You want to ask them to whitelist you so that you get better deliverability and engagement.
- You want to show them your best stuff. Think about the indoctrination series as a first date—you want to do everything you can to give a great first impression.
- You want to bounce them around; tell them to check out a blog post you wrote, watch a video on Youtube, visit a website that you’re featured in, follow you on Twitter, etc. because if you can get a brand new subscriber to move, it increases intimacy.
- Get a little personal. You want to be more than just a nameless, faceless corporation. Everyone else is sending emails from the company, they’re signing emails that say management or customer support. Since you’re talking to people, you want to make sure that they know you’re a person, too. Do things like sharing a photo of you and your team and using real names in your emails.
Part 2. Engagement
• The role of part two, which is engagement, is to follow up with them and talk to them about the thing that they said they were interested in. In other words, this part is lead magnet-centric, whereas the first part—indoctrination—is brand-centric.
• The topics of your lead magnets, which should be very specific, determine what you’ll be talking about in your engagement series.
Part 3. Ascension
• If the engagement series works and does get someone to buy, the next step is to get that person to ascend from an ordinary buyer into a multi-buyer. The concept of buying, again and again, is called the value loop.
Part 4. Segmentation
• Engagement and ascension are where all the money is made because you’re asking people to buy. But, the segmentation is where all the magic happens because it’s where you ask you’re subscribers what they want. If someone raises their hand and says that he or she is interested in a particular topic, then you should talk to them more about that which is what you do in the engagement series.
Part 5. Re-engagement
• People come into indoctrination. After indoctrination, they’re engaged. After engagement, they have an opportunity to ascend. If one of the previous phases doesn’t work, they go into the segmentation bucket where you keep testing things that might interest them.
• Re-engagement is for people who stop engaging with your emails—they stopped opening or clicking your emails for 60 days. It’s about waking up dying leads. And the goal of the re-engagement series is to get them back into an engagement series.