5 Steps To The Most Profit Your Business Has Ever Seen

The key principles of an unstoppable business.

To help you understand the process I’m explaining here – the one that you will hopefully use in your business to make you more money and make you smile – there are few fundamentals I need to explain to you first.

There are a few business principles and quirks of psychology on which this whole idea is based.

You have probably thought about how some companies experience a steady growth and huge flow of customers while others just try to make a living.

What if there was a proven formula you could follow to grow your business?

100 new customers: No problem.

$10,000 in new sales: Yup!

100,000 visitors to your website: Absolutely.

Contrary to what you might think there is a plug-and-play system for reaching these goals.

Repeatable and scalable system.

Most likely, this is how your current business structure looks like right now:

What if I told you I can teach you how to build a rockstar business model – in 10 minutes or so (that’s how long it takes to read this page)?

By “rockstar business” I mean one that keeps new customers flocking in by the thousands and existing ones compulsively coming back for more. Want a handy 5-step process you can start applying into your business within days?

This is how a system looks like when deployed into an average business:

“Give me a break, Max!” you’re probably thinking to yourself. But what if I told you that’s how AirBNB makes $900 million per year, Amazon kept Wall Street analysts bewildered for two decades, how Groupon became the fastest-growing web company ever, how hotels grind millions of dollars with fancy room upgrades alone, and yes – how dozens of other companies I have worked with – at least doubled their businesses.

It’s not about buying TV ads, Yellow Pages, magazine folds and billboards on the roadside anymore.

Marketing has evolved into a system responsible for everything from buying targeted website traffic, crafting relevant irresistible offers, to designing sales funnels, to automating follow-up emails that works mostly on autopilot allowing you to focus 100% on delivering your product or service.

The process I’m teaching you today is the product of decades of trial and error by legions of marketers. Known by many names, including funnel optimization or conversion optimization, it got most of its fame and fortune after digital marketing guru Ryan Deiss standardized it as Customer Value Optimization.

Nicknames and technicalities aside, the basic philosophy is unitary, straightforward and suitable to any industry and business model:

“Never sell stuff to cold prospects. Instead, progressively turn anonymous visitors into loyal, repeat customers by offering value in increasing increments.”

 

Sell benefits and outcomes not your product or service.

Here’s one simple truth that you’ll hear any half-decent marketer preach, but few business owners actually apply: people don’t buy products and services.

What they do, instead, is pay for a problem to go away, a necessity to be satisfied, or one aspect of life to improve noticeably. In one word, people buy outcomes: the change from a less desirable “before” state to a more pleasant “after” state.

Marketing is all about the gap between these two states. That gap is called value, and a highly respected definition of the entire profession is all about that magic word…

What this means in the real world is that an unstoppable business – one with a great offer, business model, and marketing – delivers and communicates the value in the before-after gap. This is true for any industry, and it works for both small business and corporate clients.

For example:

• A couple wants a beautiful evening together, so they go to a fancy restaurant (they don’t go to buy food, instead they want an experience);
• A fitness enthusiast wants to, well, be fit – and brag about it on social media. That’s why he or she gets training equipment, jogging apps, or training courses (more on this example later);
• A Fortune 500 corp’s HR manager wants productive and motivated employees, but also to be recognized as a top-notch professional. So he pays $3,000/month for an internal communications app that also tracks results.

In the sections that follow, you’ll learn a unique system to grow your business the smart way, by spoon-feeding value one larger chunk at a time, and strengthening the relationship with your customer along the way.

And speaking of relationships…

From transactions to relationships.

The 1990s have given us the Tamagochi, Michael Jordan ditching the NBA to try baseball, and the Hubble Space Telescope.

But another revolutionary event took place back then: marketers finally getting that consumers don’t want transactions, but what they want is relationships. (For enthusiasts a.k.a. nerds, here’s the influential paper that illuminated the world to this major “paradigm shift”).

A transaction takes place between two parties in a marketplace. It happens when a traveler pays for the highway toll, or when trading agents buy and sell white sugar futures in milliseconds.

A relationship happens among humans. It’s when you get your morning coffee from the neighborhood bar or go to your hairdresser of choice.

In between, of course, there’s every 21^st-century business that talks to you on social media, values your feedback, designs products that make your day and campaigns that scream the values you care about.

How does this apply to online marketing? Well, first off, you have quite an audience. Nearly 3.5 billion people online (as of writing), most of which will never be more than IP addresses to you. How do you create relationships with IP addresses? Here’s where our process comes in handy.

The idea I’m teaching you today is best visualized as a funnel.

It is wide at the top, where anonymous traffic pours from everywhere around the internet to your website. It’s narrow at the bottom, where it spits money from the increasingly narrow traffic that you’ve converted first into leads – ideally faces and names, or at the very least email addresses – and then to customers, through subsequent and increasingly involved transactions in which they open their hearts and wallets to your business and to the value that you have to offer.

If you’re good enough and fully understand this guide, you’ll be able to transform visitors into loyal repeat buyers, by delivering more value and additional offers in an indefinite sales cycle, completely on autopilot.

We’ll get to that in step 4. Let us start from the input to the funnel: traffic.

Traffic, a.k.a. anonymously browsing humans.

Many businesses complain that they’re struggling with sales because they don’t get enough traffic online or in the door. That is nonsense. There’s no such thing as a traffic problem, and for two reasons:

• Traffic is a commodity: it can be bought and sold;
• Sales (“money is made”) happen when you convert traffic into customers.

Let’s see what I mean by this.

Companies such as Google, Facebook, Instagram, Twitter or Pinterest are dying to sell you traffic by the kilogram. You pay X and you get Y clicks or Z impressions.

The problem is one of mindset, really: you don’t want to start with traffic; rather, you should deliver outcomes that delight and reinvest as much profit as you can in acquiring more customers.

How do you do that? Enter the second point: conversion. Traffic is by definition anonymous. You pay money or pull off PR stunts to get interested visitors to walk into your virtual premises. But the real deal is turning these random people into paying customers.

The least savvy businesses desperately try to buy as many visits as they can afford, and then market relentlessly to these cold prospects, who don’t know you and fundamentally don’t care about you.

What you want to do instead – and why you’re reading this article – is to be smart about how you approach your random surfers, progressively turning them into acquaintances and then, loyal customers. This is the essence of the model I’m teaching you today.

It’s more complicated than this, but the whole process kinda rests on one quirk in psychology that’s made the day of many a door-to-door salesperson for decades. It’s known as the foot-in-the-door technique.

The principle goes like this: if you convince someone to lend you a hand with a trivial request, they’ll be much more likely to help you with something much bigger in the future.

This happens because you’ve “broken the ice” and established a bond of sorts. Science nerds out there can take a look at one of the first studies from the 60s, and learn how the technique was found to be effective online almost as much as in person.

Good news! If you set up your business as I told you above, you’ll already be far better than most of your competitors, and you’ll be ready to take on the process to acquiring and retaining customers at the bottom of the funnel.

I summarize the key points and outline the 5-step process in the next section.

The Five-Step System.

To summarize the points here, business is all about delivering and communicating outcomes (the value and the benefits they receive from your offer). When you have that, you’re set to start making money for real, but you need to be smart about the “how.”

Given that you have access to billions of anonymous surfers, instead of trying to selling everyone everything, the key is to progressively select your customers from the noise, “decanting” them to the bottom of the funnel.

When understood and properly applies, the five-step system described below will help you make your business unstoppable.

Step	Your prospect is…	What’s this?	You get:
1) Offer a Lead Magnet or “bait”	Anonymous traffic.	A small and specific chunk of value (case study, ebook, video) that you give for free in exchange for contact info	Contact details. Traffic becomes leads = people who have given you permission to be marketed to
2) Offer a Tripwire	Leads. Interested, but have never given you a penny.	A specific and small chunk of value for very little money. You don’t profit, but you acquire customers.	Leads become customers who have opened their wallet to you once (even if for a small sum).
3) Market the Core Offer	A customer who you have foot-in-the-door with.	Sell the thing you do for a living! You can stop here, but the best businesses deepen the funnel.	Customers who pay for the “real deal.” You make revenue here, but if you’re savvy, you’ll reinvest all profits into further customer acquisition.
4) Offer profit maximizers	A customer with quite a history with you.	“Upsell” noncore features and complementary offers that you make tons of money from.	Loyal, repeat customers and sizeable profits. This is where you really grow!
5) Deploy the Return Path	Any of the previous stages.	An process by which you follow prospects stuck in one stage of the funnel. Usually done with ad retargeting and targeted communication.	A better chance at leading prospects down the funnel; a chance to promote your brand.

And there’s it is: the quick picture of a winning digital marketing process. Read on for a detailed overview and tons of examples.

You have noticed how many times word “value” appears in the article? It is very important to understand what it really means. What you provide to your customers must be really beneficial to them and ideally be high on their Totem Pole.

When you are hungry and looking for a place to eat, do you notice appliance stores on your way? Probably not.

What about if you are doing a renovation at your house and see an ad that there is a sale on appliances in a local store or you see an online ad with a video that teaches you 5 mistakes people make when renovating their home. You click on that ad to find out more.

You are more likely to interact with these offers, because you see real value (benefit) in them.

Are your target customers looking to buy a house? They urgently need a mortgage. Are they selling a home? They might need a home staging company. Did they just move in? They might urgently be looking for a kitchen and bath renovation company. Are they getting married? What is high on their Totem Pole right now is getting a right photographer, venue, ceremony and honeymoon. That is what they are very likely to make purchase on.

Your mission is reach them exactly when they are looking for what you can help them with (your product or service), and to convert them from interested visitors into paying customers as soon as possible by using this five-step system.

1. The Lead Magnet or bait.

Let’s start filling up that funnel, shall we?

We do this by offering our traffic a freebie in exchange for contact information (usually, an email address). The freebie in question is a very specific chunk of value that solves a very specific problem, and the “very specific” part is crucial.

The lead magnet is where you start selling outcomes instead of products and services, and since the outcome is small, it must be specific enough to still have value.

Also aptly named as the “bait,” the lead magnet is usually a case study, report, guide or checklist – anything that has information valuable and useful enough to persuade a random surfer to entrust you with his or her email address.

In practice, lead magnets – also known as “baits” – are those little windows that pop up seemingly at random when you’re reading blogs or visiting websites.

These are called squeeze pages, and for the nerdiest of you folks, a squeeze page is a specific type of landing page that’s meant exclusively to gather contact information (whereas landing pages can be used for more purposes, such as selling stuff, or enticing sign-ups, donations etc.).

The goal of lead magnets is straightforward: converting anonymous traffic into leads, i.e. people who have given you permission to market them stuff.

Note that, while no money changes hands here, this is by all means a transaction: I help you by giving you free info you care about, and you help me by giving me a contact and a green light. Easy peasy (page squeezy – sorry, couldn’t resist…).

Here’s a good example of squeeze page:

The squeeze page here is simple and effective: it offers a clear benefit (a report how author shoots cheap videos) if only you provide your email address in exchange for free advice on how to shoot effective videos for cheap. By politely asking where to send you the video and ensuring your data will be kept confidential, it gives you further incentive to type in that precious email of yours.

And there you have it. The crucial first step is jumpstarting the funnel with an irresistible icebreaker offer that gets those emails pouring in. You reap two key benefits here:

• Contact info, which you’ll need in order to “flush” the lead further down the funnel (remember: traffic is now leads);
• You zero in on the target market, by making sure those who opted in are really interested in what you got on offer in the first place (for example, offering BBQ recipes to readers of a vegan blog would make makes little logical and commercial sense).

Again, make sure to address a VERY SPECIFIC problem with your lead magnet! Well-crafted and specific offers can attain over 60% conversion, which means 6 out of 10 people who see that little box will type their contact in there. Now we’re in business baby.

Examples of great and not so great lead magnets:

An example from Saturday.com offering you 15% off the next order. They get your emails and can now send you promotional emails with new products and special offers.

Perfect example of a lead magnet. A wedding planning company compiled a wedding planning checklist based on their 20 years of experience in the field and let’s you get it for free in exchange for an email. They know you are in the market and looking how to plan your wedding. Once you sign up, they now can run a sequence of emails telling you how to properly plan your wedding and how they can help you do it as well.

Personal trainer offers a VERY specific guide to capture a very specific audience. Women looking to lose weight for a bikini. This personal trainer can now email those who opted in with guidance on how to lose weight and most likely, once the relationship is built, offer his or her expertise as consultation, diet planning or video course on losing weight.

Simple offer targeting new customers, get $50 off your next order in exchange for an email.

Very smart lead magnet. A jewelry store offers a free exam of your ring to get foot traffic in and then convert them into customers using techniques (tripwire, core offers) outlined below.

Example below is how your lead magnet should not look like. This particular example is too vague and does not have a specific enough offer, benefit or call to action to interest a visitor to share their email with you.

2. Offer a Tripwire.

Remember the foot-in-the-door? It’s time to get your leads to open up their wallet for the first time. You’re after a small, symbolic amount, to get your foot in the door for the real sale later on.

That’s the tripwire’s job: an irresistible, low-cost and relatively painless offer meant to turn leads into customers. Again, the transaction is small, so the value you offer here must also be highly specific, catering to a well-defined need.

Now, money-wise, tripwire offers are usually in the $1-50 range, although up to $500 is possible for high-value offerings (especially in business to business markets). It doesn’t matter much, as long as it’s something.

See, the difference between $1 and $500 is infinitely smaller than that between $0 and $1, again due to a quirk in psychology. Paying someone means opening up your trusting heart, taking the trouble of entering credit card info and being really interested in what they can provide you with.

A glorious example dear to marketers is Columbia House, the music mail-order service form the 1970s that owned the business much before iTunes and Spotify. Here’s their deal: get 13 records for a measly dollar. See them delivered to your door. Fall in love with the service. Buy tons of tunes at regular prices!

Common tripwires today are webinars, private advice by an experts, a physical product such as a book or bundle of books, but also consumer goods such as huge discounts at Amazon or the many deals featured on Groupon. In fact, Groupon became the fastest-growing web company ever because it did what nobody did before: enabling the small businesses to get tons of new customers that they’d never have gotten otherwise, even at the price of offering ridiculously cheap and often unprofitable deals.

Indeed, mind you: tripwires are not meant to be profitable. You’re supposed to sell at break-even or even at loss, for the sake of acquiring customers that will make you money further down the funnel.

Theoretically, you could make a few bucks if you have almost no delivery costs (for example, in limited access to subscription-based products or software trials with limited functionality), but that’s not the point. The primary goal is to acquire customers.

Besides acquisition, you get a bonus perk: market segmentation, or understanding who wants what. That’s why it’s often imperative to have more than one tripwire.

Imagine you’re a personal trainer. The core offer you are selling is a 6-month custom training program. Your customers want to lose weight, increase muscle definition or gain mass.

As a lead magnet, you offer some specific but common value: a video teaching a super-effective 5-minute exercise that burns fat and puts those muscles to work. Then, you propose three tripwires:

• A booklet with fat-burning smoothie recipes (weight loss);
• A detailed whole-body free weights workout lesson (definition);
• A two-week nutrition and exercise program to gain mass quickly (mass).

You offer the tripwires all together or in random sequence, and when a lead buys one of them, you know he or she is after that particular outcome. So you market the core offer (the 6-month program) separately to each segment, for example by redirecting them to one of three landing pages that highlight different benefits of training with you. (The idea for this great example comes from here, by the way).

Done! You’ve gotten new leads and customers, segmented your market while making a buck at the same time and opening up your customer’s hearts (and wallets) to future transactions that will actually make you money.

Here are some great examples of tripwires:

In a no brainer deal. 12 issues for $12. $1 per issue.

Perfect tripwire targeting entrepreneur crowd. Three issues of Inc. magazine for just $1. Remember the goal here not to get rich selling your tripwires, but to make a visitor become a paying customer even with a small transaction.

Offers from restaurants for a happy hour. See they get visitors to come in and enjoy a VERY deal in hopes that the customer gets something else they make a big profit on. You come in for a free appetizer and then order a bottle of wine and a main dish. Or come in for $1 drinks, then order food and regular priced drinks after the happy hour is over.

Groupon is THE company to study tripwires from and possibly get ideas for yours. Groupon offers deals on products and services from local businesses. Same concept applies. Smart businesses only use groupon to drive in a huge flow of new customers using the tripwires they published on Groupon website, and then hard sell new customers on main offers and additional products/services.

3. Market your Core Offer.

The previous two steps are the “alpha and omega,” if anything because most businesses neglect them altogether, rushing to sell the core offer to cold prospects – i.e. customers who have zero prior experience with the company.

If you’ve come this far in the funnel, good news! You’re already started selling outcomes instead of products and services. You now enjoy:

• Customers who are very confident in buying from you, as you’ve already offered great (and specific!) value in two separate transactions;
• A clear idea of who your customers are and what they exactly want (thanks to segmentation);

You can now confidently sell your core offer, which is your flagship product or service, the thing you do like a boss and on which you probably built your business in the first place. This is where you finally make some serious money.

Now, some businesses will stop here, happy to be making a living – even marketing-savvy ones. This is fine in some cases, such as when you’re a startup or you have a very specialized service that’s hard to split into chunks or enlarge in scope (for example, a very simple consumer product.

However there is no such thing as nothing else to sell. Always use your imagination what else you can sell in addition to even a simple product. Find what would compliment your product and make it even better for an additional price.).

But the best-in-class marketers will push deeper into the funnel, at any cost. Shockingly, perhaps, they’ll reinvest all profits from core sales into further customer acquisition, jump-starting an unstoppable revenue machine.

Take a look at Amazon – the company that’s been puzzling Wall Street for two decades now. Founded in 1994, the giant online retailer has never been profitable in its entire history. Every profit they make, they reinvest into growing customer base and maintaining religious loyalty with killer prices and service. It’s a crazy model, but it works like a charm. The company’s visionary CEO Jeff Bezos best explained with a bold warning to competitors: “your margin is my opportunity.”

Amazon’s core offer is selling stuff online – and each new sale is an opportunity to sell more and reach more consumers. Instead of milking online sales, Amazon keeps core margins low and reinvests whatever’s left over into growing like there’s no tomorrow.

The lesson is simple, and works for any business in any industry: if you can spend more than your competitors to acquire a customer – you’ve won.

4. Offer a Profit Maximizer.

Savvy marketers don’t make a dime from the core offer, instead squeezing the funnel even further. The next step in the funnel are profit maximizers: offers that enhance or complement the core offer. If you can pull it off, the real magic starts here.

Profit maximizers are often called “upsells,” but there are in fact two types of profit maximizers:

• The upsell, a premium version of the same product, such as buying a 55″ TV instead of 45″, a car with maxed out options or a 32Gb iPhone (16Gb more than the base model), getting a protection plan on your MacBook;
• The cross sell, a different product that enhances the original product, such as buying premium sound system for your new TV,  or a case for the iPhone.

In the consumer’s mind, the profit maximizer triggers the “why not, while I’m already here” reaction. It’s a noncore, nonessential but sweet addition to an existing product that they already want to buy at this stage in the funnel. Because of the “why not” attitude and established relationship, you’re now entitled to charge more.

Let’s see some examples:

• Amazon shows suggestions under each product, “Customers Also Shopped for” (cross-sell maximizer) as well as related sponsored products. Both increase basket value (= more profit), and sponsorship revenue pours in thanks to the core offer; Amazon reported that cross sell is responsible for 35% of its sales – and that was way back in 2006 – just imagine what that is worth to them today!

• Believe it or not, McDonald’s makes ridiculously low margins on hamburgers (the core offer): most profits come from fries and drinks (upsell);

• Companies selling courses or books upsell to one-on-one mentorship (e.g. private skype sessions or in-person coaching) or related affiliate programs (e.g. they sell third-party’s designs and make commission from each sale);
• Hotels regularly upsell room upgrades and amenities by phone, online or at the front deck; Ever heard “Get an oceanview suite for just $99 more!” or “Get all you can eat breakfast included for just $9!”. They are upselling you to increase their profit for the transaction, offering you something you might have not think about before + its different when you look at the hotel room costing ocean view room costing $400 and here they are offering it to you for just $99 more but you probably already are buying a room for $299. $99 upgrade seems like an easier decision than how $400 room upfront.

• Many consumer and industrial products vendors upsell training and additional service, or cross-sell aftermarket upgrades.

The profit maximizer goes into profit overkill mode because it increases the average transaction value per customer – a customer that you’ve already worked hard and smart to acquire.

How many profit maximizers can you have? Potentially infinite, although it may be wise to limit the number to those that you can market and maintain profitably (remember: each is a related, but basically separate offering).

5. Deploy the Return Path.

And there you have it. A fully functional funnel that starts with faceless traffic and ends with money pouring from well-selected, loyal and satisfied customers. There’s one last step, though: keeping your prospects engaged throughout all the stages.

This continual process is known as the Return Path, and the idea is simple: if they fail to follow your funnel, track them and try steering them back in. There are two things you can do:

• Use communication specific to each stage to persuade “nonconverts” into taking the action you want them to take;
• Use ad retargeting to track prospects who are stuck into one stage and remind them of the juicy offer you have ready for them.

Let’s see how this works in the specific.

You’ve already set up several traffic sources and strategies to lead anonymous surfers to wherever your lead magnet’s waiting for them. If they fail to take the bait, there’s not much you can do (remember: they’re still anonymous at this point), but retargeting comes in handy.

Did it ever happen to you to search for e.g. sneakers on some e-commerce website without buying anything, only to be haunted by the same pair of sneakers all around your Gmail, Facebook, Instagram and random blog pages? That’s retargeting. It allows you to display ads anywhere online to people who visited your website.

Retargeting can work miracles. Think about it: if people have come to your website in the first place, they did have at least some interest, therefore following up on them is probably more effective (and cheaper) than marketing to new random strangers.

Let’s see the tripwire, the stage at which you already have a toe (if not a foot), in the door, and a contact detail. You can send awesomely crafted tripwire reminder emails (a discount also doesn’t hurt), or unrelated content meant to introduce your prospects to your brand. Give it some time (and add some retargeting for extra juiciness) and you may convert a stubborn prospect once he or she gets to know you better.

Now, once the customer’s already paid big bucks for your core offer, you can get very creative with your communications. The relationship is strong now, and you’ll be crafting content, sending offers, engaging on organic social media, or even so some outbound sales calling to promote repeat purchase and upsell like there’s no tomorrow. Retargeting is also useful here, since your prospects trust and know you and are much more eager to click on your ads than they were earlier on.

This process can, theoretically, go on forever, in a virtuous cycle of engagement and customer delight.

How are you planning to grow your business without a sales funnel?

Don’t forget to download the Sales Funnels Worksheet to help you with creating the exact same sales funnel for your business.

P.S. I get excited anytime I write or talk about this stuff and yeah, you’ve guessed it: I’m often one of those buzzword-spitting partygoers of yours. If I’ve made you at least a fraction this excited, or awakened the marketing nerd in you, my day is made.

By the way, there are posts like this that I write every week so don’t forget to sign up to newsletter and join our beautiful business community. I also create sales funnels for businesses just like yours using exact same system outlined in this blog post, so if yours could use a slingshot to the 22^nd century, let’s get started.