Turn your lunch & learns into high-conversion sales events that predictably drive new business.
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Your Risk Assessment Is The Fastest Way to Drive New Business, But Only if You Follow This Formula…
On one hand, risk assessments are a great way to start an engagement, or close a sale. On the other hand, they offer great value. Should you give all your value and insight away???
It’s a hard question that demands an answer!
The Point of Assessing Risk Is…
Several weeks ago I wrote an article defining the assessment (if you’ve not read it, I recommend going back to better understand the truth behind assessing risk and growing your business).
The bottom line is, Assessments are like health checkups. If the patient has URGENT issues, yet chooses to NOT take action, the doctor’s efforts are wasted. Even more, if most of that doctor’s patients never enter treatment (and are dying), he has failed.
If there are urgent issues, action is required.
And it’s your job to sell the customer on taking action – not for money, but for the livelihood of that customer’s business. With remediation in mind, your risk report is a marketing document. You goal is to sell your customer on doing something!
Amateurs Focus On Front-End Selling
When I hear, “We don’t give away the assessment”, I think to myself, “Amateur Thinking”. Front-end, is a funnelology term – It is the process of capturing a lead and ascending that lead up your value ladder.
The sales process starts with a lead magnet (some freemium offering) to attract qualified prospects (Think: Opt-in). You provide value and your buyer wants more. So they ascend over hurdles of indecision to the point of becoming a buyer.
Some prospects will drop out immediately, grabbing the free stuff and moving on (grab and dash). It’s okay…I’ll explain in a minute. Others will buy your initial offer, or perhaps engage with you in basic managed services (New Customers).
A select few will become hyper-buyers…your best customers. Hyper-buyers buy whatever you recommend because they see your value and trust you to advise them.
The front-end has to be easy (think, free or close to it). You might offer a white paper (which I seriously don’t recommend). Better choices include, special reports, quizzes, assessments, lunch & learns, etc.
Some front-end options convert quickly. Others, not so much. Signing up for your mailing list or free e-zine doesn’t make much sense these days. No one is choosing to get more spam email.
All great front-ends cost money. The idea is to spend your money with ROI in mind. The company that can spend more upfront (marketing), and still measure a strong return on the back end, wins.
Did you catch that? You’re not trying to minimize the front-end cost (or your marketing budget). You’re trying to maximize conversion and ascension. If your backend works, you can spend more upfront, beating your competition.
The assessment may be costly, but done right, it can have an extremely high ROI on the backend.
Qualified Prospects Only
Conversion (like getting people to a lunch & learn) is one thing, converting from free to fee is another. You don’t want to invite people for a free iPad…you’ll end up with a bunch of IT folks that want free gadgets (these are not buyers).
If you want qualified prospects, you won’t give your free assessment to just anyone. And that means you won’t advertise it on your webpage. Freemium means high-value and special, and should be guarded.
To qualify, you want to have a freemium offer, like an assessment, and have a clear avatar of your target prospect.
Let’s say its the SMB business owner with 25 to 250 users. Inviting that person to a lunch & learn is a qualifying step that gives you the opportunity to actually meet face to face. It’s costly, but if your conversion is high, you won’t care.
Then converting them (given the right message in your lunch & learn meeting) is easy…We’re converting over 90% right now with a security message designed to instill urgency. It leads to an assessment – we offer this analysis right there in the meeting. But our description is vague…on purpose. You see, we have one more step; it’s a phone call.
On our initial call we have the opportunity to ask them about their business and their role. If they turn out to be someone other than a qualified buyer, we make the assessment a simple over-the-phone questionnaire. If that person is a business owner, in charge of a possible qualified company, we move forward.
Our assessment engagement involves that decision maker all the way through to the deliverable. If our key contact (asset owner, I call them) drops out at any point in time, we stop the process.
Our conversions to business range from 60% to 80%, and our sales cycles averages a couple weeks to a couple of months. (But not 6 to 9 months). These contracts range from $1000 to $5000/month, with a 5 year expected lifetime value. So how much can I spend on customer acquisition (in this case a lunch & learn and assessment)? Do the math, it’s a big number.
Selling The Free One Isn’t Always Easy
But there’s still one more hurdle. Selling free assessments has it’s challenges. Free sometimes means no value. And getting that initial meeting may also prove to be a challenge.
The 60% to 80% close rate is attractive, so I know I want to sell the risk assessment. I am willing to give it away, because my ascension process works predictably well, and the ROI is there. I can afford it and the return is evident.
However, the assessment can’t be the first step in my sales process (or funnel).
Most of my clients sell assessments by using something upfront to attract clients. eBooks, followed by webinars, with an offer to assess, can work. Live lunch & learns, using a hard copy letter invitation work extremely well. And any excuse to get a meeting (such as referrals, product or quotation requests, etc.) can be turned into an assessment.
In my book, The House & the Cloud, I explain how to transition just about any meeting into an assessment (chapter 13), and then later in the book (Pg. 194 – 200) I explain how to move through the assessment in a way that engages asset owners, and leads to a sale.
The most important thing in this whole process is to track your conversion metrics. Make sure you are at least breaking even. Once you break even, start tweaking your funnel to modify and grow your ascension process.
As you perfect your conversion metrics you will be creating a long term, predictable profit machine.
©2017, David Stelzl
How Long Has Your Company Been This Size?
Can You Multiply It?
In 1995, I joined a couple of guys to build a new commercial focused reseller. Our vision was big. We were funded by an 8 million dollar CAD-CAM reseller, but we expected to exceed this by 10X…
So How Do You 10X Your Business?
First, it takes a lot of work ON your business, vs. being bogged down in the daily grind. There’s a tipping point, or fly wheel, or whatever you want to call it, depending on whose book you read. Three things that accelerated our growth are important, because they still apply.
RETENTION and MARKET FOCUS…even in the mid 90s we knew we needed recurring revenue and long term clients. Getting a client takes time, but keeping one is far easier. (Check out Shaun Buck’s Book on newsletter marketing for more ideas on client retention – It’s free if you use this link).
Customer experience is a hot topic right now in every business. But the key to our success was problem solving. We weren’t going after the firewall sale, or even the storage sale. We were there to solve problems. When you solve a problem, people take notice, and retention goes up.
The first step might be surprising. It’s going after the right kind of customers. I call this people group. Even today I can point to profitable deals that didn’t create long term business, simply because the client was too far outside my target people group. It’s fine to sell something to someone outside your core market. But don’t spend time marketing to that group. Let them come to you. Take down the business and assume they’ll be moving on. Whatever you do, don’t rebrand your company overnight to find more like that.
The same was true in our 1995 start up. We sold 10s of millions of dollars to one single customer in one single year. But the chances of landing more like it were nearly zero. Not everyone agreed with me on that, but over the 5 years (before the company was sold,) those who tried never succeeded. It was a wasted effort. On the other hand, those in our target market were by far our most profitable clients.
MAXIMUM LIFE TIME VALUE…next is understanding the lifetime value of a customer. A few weeks ago I entered an ice cream store with my family. Now we have 9 people in our family, so when we buy ice cream at a boutique, it’s a large ticket sale. But in the course of ordering, the owner yelled at my 8 year old son. My son was tired, not feeling well, and accidentally wandered behind the counter looking for a restroom.
Not believing my ears, I confronted the store owner – at first politely. But he remained stubborn, so we all walked out. What did that cost him? He might be thinking, $30. But no, it’s far more. We travel by that store on trips pretty often. The lifetime value (LTV) far exceeds that $30. Customer experience is essential if you want to increase LTV. What about your business. How long do clients stay on your managed services? What if you increase that average by just one year? What happens to your profit?
When a new client comes on, you need a real problem to solve, and an experience they won’t forget. You need long term retention.
GROWTH AND UPSELL…Finally, the 80/20 rule says that 20 percent of your customers are worth 80% of your revenue. So what can you add for those premium customers, to give them a premium service?
A one off sale does not lead to growth. So start thinking, what can we add to provide higher level services, with recurring revenue, which ultimately increase LTV?
Let’s say you have a base MSP offering of $X per workstation – let’s say you have 100 of these. 20 percent of these customers are going to pay enough to make up 80%, so give them something more expensive to buy. But don’t stop. The 20 customers are paying a multiple of what the other 80 are paying – and of course getting something far more valuable. But 20 percent of that 20, or 4 of them, will pay enough to make up 80% of the profit coming from the 20. In other words, you can offer a higher level service to the 4, worth a multiple of what those 20 pay. But wait, there’s one more step – that last 20% is one person, willing to pay for one more level of service. So go ahead and create one.
If you do the math now, you’ll see that this 100 person group is now worth far more than they were with the original MSP offering. As your business grows, the group grows, and new levels get created, growing your business. It took us 5 years to hit the 10X mark. Of course this takes people, time, and vision…but there’s no better time to start than right now.
© 2016, David Stelzl