The Dirty Little Secret of Online Sales Funnels with Kim Snider

Welcome to Bacon Wrapped Business with Brad Costanzo. Sizzling hot business advice guaranteed to make you fat profits. Now here's your host, Brad Costanzo. Alright, welcome back to the show. This is Brad and today's episode is going to feature a guest host named Kim Snyder. I'll explain who Kim is and what a guest host is and what that might mean for you in just a moment. I also want to tell you about some cool things that I've been doing and episodes that are coming up. So number one, I want to invite you over to a free Facebook group that I started along with my client, former guest on the show, Jesse Itzler. Jesse's the co owner at the Atlanta Hawks basketball team. He's the founder of Marquis jets and pioneer behind Zico Coconut Water and married to Sarah Blakely, the founder of Spanx. He's an amazing, amazing serial entrepreneur, father, husband and guy all around. And he is spearheading this fitlanthropy movement, which is Mary's Fitness in philanthropy. And we're working together to really blow this up in a big way. I cannot encourage you enough to come over and join us@wedohardstuff.com it is a free Facebook group and you can follow along with some of the exciting stuff we're doing. Also on some upcoming episodes, I'm going to talk about bots, messenger bots. If you have not looked up, looked up bots or heard about them, they are one of the biggest trends in marketing and they're also kind of controversial because a lot of marketers, there's some risk that they or we are going to screw it up for everybody else. But we're going to explore this in depth in a couple future episodes. I also recently interviewed one of the Managing partners of DigitalMarketer.com One of the smartest men in the room is Roland Frazier. That's going to be coming up here soon. Soon. It's in post production right now. But I encourage you to stick around because it's one of my favorite interviews ever. And today I want to get back to the fact that we are doing a guest host episode. So let me explain what a guest host is. You know, normally I either just do these solo podcasts here or I invite a guest to be interviewed. I recently decided for many reasons to try something new called guest hosting. Now if you're familiar at all with blogging, et cetera, you familiar with the concept of a guest blog post. So that is simply where you have somebody write an article and they post it on your site. Well, Kim and I started talking and I like what she had to say, but at the time I was just so busy and I said this would be an amazing opportunity for her to try this out, which is for her to deliver her own episode, a monologue, if you would, with content. It had to be really great content, something that my listeners like you are used to hearing. And she had a great concept called the Dirty Little Secret of Online Sales Funnels. And when she presented it to me, I thought it was, it was great. So she recorded about a 20 minute audio and chock full of some great content. I've already listened to it, I've taken notes and she makes some amazing points that you're going to want to listen closely to, including, you know, what this dirty little secret is and how to fix it, how most micropreneurs, people who can't afford big agencies, how they're doomed if they don't understand what happens to 80% of the best marketers out there in post marketing campaigns. She'll also explain where the biggest impact on revenue and profit really is, but why most people are looking at the wrong end of their sales funnel as well as how to spot profit leaks in said sales funnel. So if you don't know what a sales or marketing funnel is, then you'll definitely want to listen to this because she's also going to explain the traditional funnel and then how she kind of reworked it. She's also the. I guess I am talking about what she's going to talk about. I haven't really explained who she is. So Kim has. She's a founder of Reverseyourfunnel.com. you can go check it out. She's the author of how to be the family CFO and she started 14 ventures ranging from restaurants to a training video site for polo players. She's made and lost millions and she does talk about that in her book how to Be the Family's CFO Once More. She is the founder of Reverse youe Funnel and that is why I invited her to be a guest host today. So what you're going to hear is Kim talking directly to you now. Now, before I switch over to the recording of Kim, I want to invite you, if you have any topics that you would personally like to get on the show and be a guest host as well. We can do the same thing. Send me an email to askbradaconrappedbusiness.com and tell me a little bit about who you are, your message, what you have to share and why you think that my listeners who are so accustomed to receiving cutting edge business growth and marketing advice may benefit from what you have to say. Now, I am picky. I don't let anybody just come on here and post just for the publicity of it. But if you have something that you think will catch my attention, just send that email to askbradakenratbusiness.com and maybe we can work something out. Okay, without any further ado, let's get over to Kim.

Thanks for the intro, Brad, and the opportunity to help you test this. What are we calling it? A guest podcast idea. And hey everyone. So let me be blunt. I want to talk to you about the dirty little secret of online marketing. If I walked in a room packed full of entrepreneurs and I asked them what they need to double their business next year, what do you think they'd say? What would you say? About 8 in 10 will answer, double my business. Lots more leads. And I used to think the same thing, which got me following all the conventional wisdom about online sales funnels. This idea that you start out by creating valuable content to warm up your new leads and then you retarget them to get them to opt into a lead magnet, and then you slowly work them down the funnel to a sale. Slowly being the key phrase there. But for micropreneurs at least, which I define as under a million in sales and anything from just you to. To a team of a couple employees and contractors for micropreneurs, there are problems galore with this approach. What works for the big guys doesn't really work for us. And the reason why is our unique size and constraints and the dirty little secret of online marketing. So let's start there. First, let's clearly define the traditional top down online marketing funnel so that we're all on the same page. I started. But let me just go back and make sure we understand. Step one is you create high value content. Step two, you run Facebook ads driving people to that content so the Facebook pixel can can record who visited that content. So that you can then tell Facebook to show another ad specifically to everyone who visited that page. This is called retargeting. So when you run that ad, you'll drive those people to some sort of a conversion event that could be a webinar or checklist, a tip sheet, swipe, file templates. It's what we call an irresistible lead magnet that indoctrinates your prospect, who you are, what you do, and why they should do business with you. And then in step four, you run another set of ads and now also email, since they gave you their email address in the last step for the lead magnet driving them to purchase your core offer. So that's kind of a simplified version, but that's the gist. Got it. Now, on the surface, this seems completely logical for several reasons. One, we ourselves are being marketed to this way all the time. And so social proof tells us that this must be right. Social proof is an incredibly powerful concept that says in the absence of certainty, a human being will look around, see what everyone else is doing, and do the same thing. And so we fall for it. And then we wonder why we can't make money at it. But in fact, for micropreneurs, there are two likely outcomes from this approach. One is you will never get this funnel fully built out, or two, you will spend months and months and thousands of dollars only to find that it didn't work. Now let's look at why it didn't work and why in fact, it can't work for us. I have a couple of quick sound clips for you. This first one is Greg Rinker, founder of Guthy Ranker. We've probably done about 225infomercials in the last 25 years. And again, this is not totally accurate, but it's indicative. I would say 200 of those have not succeeded, but 10 of them may have done 50 to 100 million in sales. Another 10 may have done 100 to 400 million in sales. And five of them have done and keep doing 200 million to 750 million in sales. The next is well known Internet marketer Eben Pagan.

Expect at least 80% of your advertising and marketing tests to fail, meaning that they don't bring in enough sales to justify continuing. Expect at least 80% of your marketing and advertising tests to fail. Why would I say something that sounds very discouraging like that? Because in marketing we're not trying to win a coin flip. We're drilling for oil.

And the last is from a recent Perpetual Traffic podcast. The guy speaking is Ralph Burns of Dominate Web Media.

But for early optimization, you got to remember that not everything that you put on Facebook is going to work. If you get 30% of your ads to work really well, you're in the hall of fame. It's like baseball.

So can you see the problem here? If you are a micro preneur without a big team or agency, this is what I call the dirty little secret of funnel marketing. It's that 80% of your ads will fail, 80% of your content will not be read. 80% of your emails won't be open and even less will get a click through. The fact is, 80% of all your marketing efforts will fail. So we know that. But given that, what are the odds that you're going to be able to spend an afternoon, throw together a blog post, a lead magnet, maybe an ad or two, a landing page on leadpages, and actually sell something? Well, Statistically, when you stack 80% failure on 80% failure on 80% failure rate, the chance of success becomes like 0,0036%. I forget the exact number, but it's something like that. Meaning, you know, effectively zero. But that's what almost all of us do, isn't it? And why do we do that? Because we are micropreneurs. I'm not talking about the people whose business is Internet marketing. I am talking about the rest of us who not only have to market our business, but also have to deliver whatever else it is that we sell. Like, you know, maybe you do waterproofing and foundation repair or coaching or massage or you're a lawyer, right? So that's all you have time to do, or the patience to do, or the budget to do. The fact is that the conventional online marketing funnel doesn't work for micropreneurs because number one, it takes too long to build out and it requires too much time and too much money to create and, and test all those 80% failures to find the 20% winners at each step in the funnel. So when we try to follow this big boy approach, what we end up with, truthfully, is half assed marketing. And I can say that because I've done it, I've been there. Through no fault of your own, you end up wasting a ton of time on social media posts. I. I was just at Social Media Marketing World in San Diego and again, one of the statistics was that only I think it was like 22% of tweets or Facebook page posts get even a single, like click or share. Most of them, nothing. Crickets. So you put out mostly crap content because you either hired someone to do it for you, or you just throw something up there because you have to get something up. Today. Your funnel is leaking like a sieve at every single step. Often we never even get it fully built out. And even if you do get it all built out, it took so long. Chances are everything's changed by the time you get it done. You spend all this time and money to get it all built out, only to find it doesn't work. Meaning it's marginally profitable or even losing money if you're measuring that at all. And by the way, just a point here, micro agencies, okay? Meaning someone that you pay, you know, a thousand or two thousand dollars a month to. To try to do this for you. Yeah. It's not. They have the exact same constraints. So unless, you know, unless they're content making a dollar an hour, they aren't able to do it either. So the, you know, $64,000 question is, what do you do? Well, let me tell you how I now do it once I got tired of beating my head against the wall. First, you do way less, but what you do, you do well. You do it right. You do one thing at a time. We don't load, balance one thing, finish it, move to the next thing. And the secret is in the sequence, the order you do it in, because of funnel math, it matters. So the big aha for me was when I realized that the biggest impact on revenue and profit is at the bottom of my funnel, where people actually pay me. And this is because funnels are multiplicative systems. So let me give you some simple numbers so you can see what I mean. This is easier in a presentation, but they're pretty simple. I'm pretty sure you can follow along. All right, let's just think of a very typical scenario. You use Facebook ads to drive traffic to your website at a dollar each for every thousand. So let me just back up, okay? A dollar each. So you're spending a thousand dollars. Thousand people come to your website. So for every thousand people who visit your website, just say, 20% of them opt in to your lead magnet, which is, you know, not huge, but not totally, you know, not undoable either. Right? So pretty typical. And let's imagine that you close 1% of those, so that works out to two people, or 0.2% of your total. Visitors buy from you. And we'll assume that when someone buys from you, that they have a lifetime value to you of $600. Okay? So that works out to $1200 of revenue and $200 of profit after your ad spend, or an ROI of 20%. Okay, makes sense so far. All right. Kind of keep those numbers in your head. Now, if you double the number of leads coming in the top, so now you get 2,000 people to visit your website. Well, now you make $400 profit on $2,400 in revenue, like, whoopee, right? But if instead you double the percentage of people who purchase from 1% to 2%, now you've made $1,400 profit on the same thousand leads nothing else changed. 4, $1,400 and a 140% ROI just by improving the purchase percentage. That is funnel math, and that is the seismic paradigm shift. The biggest impact on revenue, and more importantly, profit is at the bottom of the funnel, where people actually pay us really, really important. So one of my favorite opportunities at the bottom of the funnel is what I call leaky buckets. And leaky buckets are just their money, just hiding in plain sight. And as it turns out, for almost everybody, it's lots of money. And so the easiest way to understand leaky buckets is as didn'ts. Meaning at each stage of your funnel, you have people who didn't. They didn't buy, didn't refer, didn't opt in, didn't open your email, didn't even receive your email, didn't use your app after signing up for a free trial, didn't watch a video, didn't finish the video. Didn'ts are everywhere. And by definition, a funnel has far more didn'ts than dids. But where do we focus all of our time and attention? Again, through no fault of our own? Right, dids. The opportunity in leaky buckets is to turn more didn'ts into dids. Now, how do you do that? So in my reverse funnel workshop, what I do is I show my students that we can use hyper targeted messaging, yes, via ads, which is what everyone thinks of, but not just ads. We can also do the same with emails and site retargeting. Any messaging format or medium really, to create different paths and different messages for didn'ts and dids. And fortunately, there are lots of really great automation tools out there that help us systemize that process. So let's look at the impact of leaky buckets on our funnel math. Imagine that all we did was get some of the didn't opt ins to convert. So imagine now that instead of 20% who sign up for our lead magnet, we got 30% to opt in. Okay, now we've made $2,600 profit on those thousand leads, up from just 200 originally. So improving the purchase conversion rate on the one hand, by strengthening your offer, that's the 1% to now 2% purchase percentage and putting effort into the didn'ts. Okay, Work together in this symbiotic way to make you more money. And do you want to guess how many more leads you'd have to put in the top of the original funnel to get to $2,600 in profit? Guess it's 13,000 new leads to create that same $2,600 in profit. Given our original numbers. First time I realized this, I was absolutely stunned. But as Steve Jobs used to say, we're not done. There's also lifetime value, which I call the, you know, the third piece of the funnel, bottom of the funnel trifecta. Imagine now that you work on upselling or cross selling, you know, a percentage of your customers or raising your prices or, I mean, there's like, you know, just a myriad number of strategies and tactics that we can employ here to raise our lifetime value. So let's imagine now that we are able to raise the lifetime value from the original 600 to 800. Okay? So now, right, we've made $3,800 of profit, or 380% ROI, compared apples to apples to our original numbers of $200 in profit on the same thousand leads. Okay? And that is just. That's not what everyone else tells you to do. Even if they tell you to get your offer, you know, focus on your offer and make sure that that is converting and profitable. As soon as you do that, then they say, right, scale. And what I'm saying is, you know, wait, no, there's all these easier opportunities, which for us is important because we don't have a team and we don't have big budgets, okay? All we've done here is get an extra 1% to buy, 10% to opt in, and raised our lifetime value of a customer from 600 to $800. Is that sinking in every time. I talk about this all the time and it's. And I just still think I don't get, you know, I don't get it, why everybody doesn't, you know, it's just huge money, right, for us, life changing money. So once you've done these things, not only will you see immediate impact as the owner in your wallet without spending enormous amounts of time or money doing it relative to what everyone else is telling you to do. If then you go out, okay, and add more leads into the top of the funnel after having done only those three things, right now, doubling your number of leads to 2,000. Okay? Which is simple. Like all that is, is just a little bump in budget right now produces $10,800 in profit instead of $400. And that's the importance of a multiplicative system versus an additive one. That the secret is in the secret sequence. The easy for me to say, right? The order that you do things in when you are limited in what you can do matters a lot. So let me give you a couple of hopefully immediately actionable takeaways here. Number one, I didn't really talk about it much. I meant to, but if you haven't read the One Thing by Gary Keller, go get it now and read it. The One Thing. It's just a. It's a brilliant book, and it is easily one of the most influential books for me I have ever read. In fact, I like to say that the way I build businesses is it's the One Thing meets the lean startup and the One Thing. There's more to it than this, but there's a clarifying question in the One Thing, which is, what is the one thing I can do with right now which would make everything else easier or unnecessary? Okay? And so this idea of sequencing, you know, in order the aspects of your funnel that are going to have the biggest impact, from highest to lowest, that comes from the One Thing, okay? So the One Thing by Gary Keller, if you haven't read it, or even if you haven't read it in a while, go back and read it again. And then number two is if your funnel isn't working, then odds are very, very high that it's your offer. Okay? So that if your funnel isn't working is your one thing. Start there and do not do anything else until you get that sorted out, until you get your offer converting. I'm Kim Snyder of Reverse your Funnel, which is Reverseyourfunnel.com back to you, Brad.

All right, I'd like to thank Kim for an amazing episode, and I hope you enjoyed this. If you did, Please check out Reverseyourfunnel.com Check out her book, how to be the Family CEO on Amazon, and if you are the least bit interested once more in. In potentially being a guest host, send me an email to Ask Brad at baconrapbusiness. Com. And stay tuned for some really cool upcoming episodes with Roland Frazier and the Bot Revolution. All right, see y' all next time.