MBA1318 Guest Teacher: Mark Thompson- 8 Ways to Increase Your Customer Lifetime Value

Let me tell you about Intuit QuickBooks. When I was starting out my business, I remember sitting at my desk late at night not working on my business but cleaning up numbers, tracking and reconciling payments and wondering how this became my life. But once I automated the admin side of things of my finances, those nights had disappeared and I felt a whole lot better. Outdo it with intuit QuickBooks QuickBooks is the trusted end to end solution that businesses rely on for getting paid, managing finances, paying employees, finding new customers and more. QuickBooks provides a team of AI agents and trusted experts, so doing it yourself no longer means doing it alone. Their payment agent gets you paid faster, their customer agent finds leads, follows up and secures more sales, and the accounting agent automates and categorizes transactions. Get your critical business jobs done with QuickBooks on the Intuit platform. Ready to save on new tech? It's time for Dell Tech Day's annual sales event celebrating our customers with fantastic deals and benefits. Perks include Dell Rewards, free shipping, premium Support and more. PCs like the Dell 14 with Intel Core Ultra processors will help you do more faster and with a premium suite of monitors and accessories, you can upgrade your whole setup with amazing savings. Visit Dell.com deals. Heyo. Welcome to the $100 MBA Show. The sound of your business getting better every day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the $100 MBA, a couple of business training and community online and today's episode is a guest teacher episode. Today we have Mark Thompson and he'll be teaching eight ways to increase your customer lifetime value and how to make more money from each customer. Mark is the co founder of Pay Kickstart, a complete shopping cart and affiliate management software. Over the years Mark has generated over $20 million in sales with his products serving over a hundred thousand entrepreneurs. So he knows more than a bit about how to maximize revenue. That's that's why I'm so excited for his guest teacher lesson today. What are some ways you can package and offer your offerings to your customers to maximize revenue? Regardless if you're selling content, a course, software, consulting, coaching. He's got your back so let's get into it. Let's get down to business. Nicole I had the pleasure of meeting today's guest teacher Mark Thompson at a recent event we attended in Toronto, Canada. We're both part of a Software as a service community led by Dan Martell and when Nicole and I met him, we were like, we gotta get him on the show. He's got some great knowledge, some great information to share with our audience. Like today's lesson, how to increase customer lifetime value, how to make more money from each customer so you're not leaving money on the table. Too many of us cut ourselves short for a very long time. I was one of those people, I didn't want to oversell, but I was looking at the situation totally wrong. These people are interested in what you have to offer. They're buyers. And if you have something that can further help them, that can take things to the next level for them, why not sell it to them? Why not offer it to them? How are we going to do this? Well, this is where Mark comes in. He's going to show us eight ways to do it. I'm going to pass it on to him, but I'll be back to wrap up the episode and share my takeaways. But for now, take it away, Mark.

Hey guys, I'm Mark Thompson. Thank you for joining me today. Today I'll be teaching you my revenue accelerators 8 ways to instantly increase customer lifetime value and make more money from every customer that comes through the door. Alright, so let's dive into them. So the first revenue accelerator is adding upsells and downsells in your sales funnel. So what's an upsell or down sell? I like to define an upsell as an offer for either a higher end version of your product they just purchased or an offer to a complementary product to the one they just bought. A downsell is similar except it's an offer presented to the customer if they decided not to purchase the upsell. So you may be thinking, well, I don't have any products to offer or the ones that I do just don't really convert well. Well, based off of data from our top customers, they see approximately one half of their total revenue coming from upsells and downsells alone. With them, it creates an almost 2x in revenue instantly. So for a basic example, if your front end offer generates $50,000, there's potential for another $50,000 of additional revenue you could be generating just from having an upsell or multiple upsells in your sales funnel. Also, if you're running paid ads, this is how you can scale. If your cost to acquire a customer is roughly as your front end price, then every upsell or downsell purchase is pure profit. It's how top companies are able to scale many times losing money on their front end product because they have a sales funnel in place to make up for their ad costs. Now, to increase the conversion rate of a customer buying your upsells, they need to be highly complementary to what they just bought. Just as important as making your upsell complementary, you need to remove as much friction in the buying process as possible. And it's something that we use called One Click Upsells, which is our second revenue accelerator that we're going to discuss. One Click Upsells allow your customers to click a single button to purchase instead of having to pull their credit card out again and re enter their payment info. Since you've got the information from the initial order, you can reuse it automatically for the upsells once they click the upsell order button. I've personally seen One Click upsells double the conversion rate of our upsells when compared to the traditional upsell where the customer has to re enter their payment information, removing friction in the buying process. It'll help to make you more sales. It's as simple as that. If you're selling a physical product as your main offer, here's a few examples to think about. You could sell more of the same thing. We call this the product multiplier. Example would be if you just sold them a bottle of vitamins, then the perfect upsell would be to discount a bundle of three or more bottles. Rather than hoping they'll buy more from you after they run out of the initial bottle, give them the option to immediately purchase while they're still in the buying mindset. Sell them a digital course that teaches additional things related to the physical product they just purchased. An example would be if you' health supplements create a course teaching them a specific diet or exercise plan. If you sell digital goods, sell a complimentary membership. So an example would be your customer just bought an ebook from you. Now is the perfect time to offer them access to a VIP membership site where you can provide a bit more advanced info during weekly or monthly trainings around that same topic. If you sell software, upsell them additional licenses or upsell them into getting the commercial license so they can use your software for their clients. If you feel that your main product could be broken down into a few different individual products, then I would recommend removing parts of your main offer and create an upsell offer based around those upgrades. For example, if you're selling a weight loss training package that includes workouts with video training as well as a diet plan, then perhaps you could break them up into two products and then offer one of the upsells instead of packaging them together. If you sell service based products like Coaching, you could sell them complimentary services. For example, if you're a marketing coach, you could sell them SEO, SEO services, paid advertising services, or copywriting services. Upsell and upgrade to an upcoming live event or sell them into a group mastermind with like minded individuals. You could also sell them templates for whatever service you offer. For example, if you're in the legal space, you could sell them boilerplate legal documents that you've written where they can copy and paste their company info and use them on their sites. Now the third revenue accelerator is order bumps. So what's an order bump? It's one of the best ways to increase the initial order value without reducing conversions on your main offer. An order bump is a feature where customers can add a second product to their order before they check out. It's really just another form of an upsell, but instead we're presenting a product that they can attach to their initial order. The customer is already on the checkout page, committed to buying, has entered their credit card details and are ready to click the buy button. Give them a subtle nudge to have an additional product or offer to their order with just one click. Order bumps can essentially be anything complementary to the initial offer. It's similar to upsells, except you don't have a full sales page to explain the offer, so you need to make sure you explain the benefits of your order bump with a short description. A great example of this would be if you're selling a physical book and as the order bump, offer them the digital version so that they can get immediate gratification and access to it while they're waiting for their physical good to be shipped. In fact, this is exactly what we did for our book packages. The main offer was a free physical package filled with three books, worksheets and mind maps. The initial order was 1495 to cover the shipping and handling, and after selling about 50 units, it was fairly obvious that customers also wanted the digital version. So we added a $7 order bump to the offer with about 60 seconds of additional work and after a couple days and 143 front end sales later, 88 customers also added the order bump. That's a 61% conversion on the order bump and that led to a 40% increase in total revenue. Now the fourth revenue accelerator you can add to your business is subscriptions. Once you get a single customer each time their subscription renews, you can get more revenue without having to resell them into buying another product. Yes, of course you want to offer additional products later in the customer life cycle, but by adding a subscription product to your portfolio, that's one less thing you need to sell them each month, yet one more consistent stream of revenue each month. I like to think of this as turning my customers into automatic customers. It costs five to six times as much to attract a new customer than it does to keep an existing one paying you month over month automatically. One way to convert your current customers is to give them a discount or incentive to join your subscription model rather than a one off payment. This allows you to predict your revenue and keep customers on a long term plan, thus increasing the customer value as you start to scale and look for additional expansion revenue. You can boost your revenue that surrounds your original subscription by adding something called elasticity to your billing. Give low end add on options that only slightly increase your customer's original subscription. A good example of this is Netflix. They have their base price for streaming, but if you want to receive a DVD in the mail, you can add it for just a couple dollars per month. To the customer it's only a couple bucks, but to Netflix it's millions in revenue. Some other ways to expand your subscription model are metered usage and overage costs added to the original subscription, similar to what you see cell phone service providers do when you go over your minutes or data. Now the fifth revenue accelerator you need to be adding is using email for your upselling and cross selling. Use email automation sequences to sell more of the same product or other complementary products, incentivizing them with coupons and free shipping. Email marketing is still one of the most effective ways to reach your customers. For example, even if people don't take the initial upsel in your sales funnel, you can tag the customer in your autoresponder accordingly. Tag them by products they bought. By doing this, you know which products they did not buy. Then set up an email automation sequence where you can sweeten the deal by offering an additional discount on the upgrade product or service. Provide them with a coupon to incentivize the upgrade. You can also use email to offer upsells as part of your shopping cart abandonment emails. If someone goes to the checkout page but never completes the purchase, you can send them a cart abandonment email with a special coupon or discount discount code or free shipping if they come back to complete the purchase. There's a lot of money left on the table when you simply ignore the power of email marketing and upsells and cross selling. The sixth revenue accelerator is retargeting existing customers Emailing is one way to retarget a past customer, but it shouldn't be the only way you're doing it. Retargeting is essentially showing an ad for a product that your customer has not purchased from you before, or showing them an ad for an additional sales funnel you want them to go through. It works amazingly well because they're already familiar with your brand and since it's on Facebook, they don't feel like it's being consistently sold to with emails. Plus it's super cheap since you're only targeting your customers. Typically your audience size won't be as large, nor will you be competing against all the other businesses. This in turn reduces your ad cost dramatically. Now, the seventh Revenue Accelerator is one of the biggest, most impactful accelerators to the long term growth of any online business and that is addressing churn. So many entrepreneurs believe they need more traffic when in fact they just need to minimize their churn and it can have a dramatic impact on their business. There are a few forms of churn. The first is voluntary churn and it's when a customer asks to cancel their subscription. One of the best ways to combat this will be the eighth and final accelerator that we discuss and the second is involuntary churn meeting a customer's rebill payment has failed. Now around 30% of rebill transactions fail, typically because the payment method on file declines. But there's dozens of reasons for this. Implementing something called dunning management will help in minimize involuntary churn. This would include sending reminders to your customers when their payment has failed so they can go and update their billing method on file. Also it would include things like credit card expiration reminders so that a customer updates their billing even before the transaction fails. And finally, the 8th Revenue Accelerator, which is an extension of the last accelerator we just discussed, is to simply offer great customer service. It should go without saying that your customer service team should be understanding of your customers challenges and issues, but they should also be connecting with your customers. More specifically customers who cancel or refund to find out what their issues were. Is there something that needs to be updated in your product? Is there a flaw in a certain part of your business? How can you learn from your mistakes or shortcomings so future customers don't have this issue? Many times a new training video or product update can relieve many customers issues and help to combat canceled cancellations and refunds. Each of these accelerators have a snowball effect when it comes to not only generating more revenue, but maintaining the existing recurring customers you have in your business. So that's the lesson for today. If you want to continue learning more about how to increase cltv, generate more revenue, and more importantly, how you can automate each of the eight revenue accelerators we discussed today. Make sure you go to paykickstart.com 100mbashow thank you for joining me today. Now back to Omar. Okay, does this happen to anybody else? You sit down with a juicy QPC, some McNuggets and those golden fries from McDonald's. Then you take a long sip of your Sprite because you can still hear your mama saying don't fill up on that drink before you eat your food. But you're grown now, so you do what you want. Share and share alike with a 20.

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What a valuable, valuable lesson by Mark Thompson. Don't forget to check out Mark's gift to us to our listeners. He's going to show you how to automate all eight of these revenue accelerators you shared with us today. Just go to paykickstart.com 100-mbashow Again, that's paykickstart.com 100-MBashow loved all the information, loved the value, loved all the great tips by Mark. I'm going to highlight a few that I found extremely useful when I was actually growing our businesses. Number one, a lot of people don't like to upsell during the checkout process because they feel like hey, they're already a buyer. I don't want to push it too much. If the upsell is something that can help them further, it may suit their needs. You don't know what they need. For example, if you were selling an ebook and then you offered hey, a seven part video course that goes with it. People may prefer video over the book or want the video with the book. You don't know that. So instead of just offering the ebook, give them something because they may be a visual learner. People are not as resistant to upsells as we may think we're used to it with Amazon now they're the king of the one click upsell. I love the tip where he talks about breaking down your product. Why? Well, first of all, you're diluting the value of your product when you just bunch it up with a whole bunch of stuff and say this is all for one price. By breaking it down, you only give the customers what they need. They only pay for what they need, so it's actually a lot fairer. And then you can charge extra for the extra stuff for the other things they may need along with your initial offering. Going back to the content example, with the ebook, you can have several upsells or add ons depending on how much support they need with that topic. Your core offer could be the book, the add on, or the upsell could be the video course. But then you can also add some sort of community aspect, be part of a Slack group or be part of your group coaching. Again, they may be like, this is exactly what I'm looking for. You don't know unless you offer it. I remember when I was going through this when I was building my businesses. I realized I was resisting this for some time when I was working on this with our business and I realized I was making unfounded assumptions where I thought people would abandon the car or not buy if I gave them another offer or an upsell. And then until somebody asked me a very brilliant question, where is the data to prove your assumption? And I didn't have the data. It was just some gut feeling that was just founded on my own fear. You're not creating any kind of resistance by having these upsells. You're just adding more value to the buying process. One of my favorite sayings in sales is that people love to buy but don't like to be sold. An upsell is a very gentle way to make an offer. You're not pitching to them. They don't have to watch a video or anything like that. You're not forcing them to go through it or waste their time. They can easily decline and move on with the checkout. Well, there you have it. Awesome lesson by Mark Thompson. Thank you so much. Don't forget to check out his gift to us, how to automate those revenue accelerators over at paykickstart.com 100nbashow thank you so much for listening. Don't forget to hit subscribe on whatever you love to use to listen to podcasts, whether it's Citra Radio or Apple podcast or overcast or Spotify. We're on them all. Before I go, I want to leave you with this. Some of us are are struggling to make ends meet with our business. Some of us are having a hard time getting enough sales to make that next hire. If you just implement a few of these strategies today, you can see a bump in the next month or two in your revenue. Just got to pull the trigger and execute. Do what you got to do to implement these things, whether it's creating these upsells or offers or having implemented on your website. And that's where Mark Thompson can help out with that. So make sure you check out paykickstar.com 100mbashow that's it for me today guys. Thank you so much for listening and I'll check you in tomorrow's episode. I'll see you then. Take care.

Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning, and effective communication, and you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at Capella Eduardo.