Sometimes my mind works best in reverse.
And I’m glad it does, because when you can start with an end result and reverse engineer your way to exceed income goals through a successful and profitable business model, it really makes your life as a TRIBE Builder online much easier.
When I apply this reverse thinking and engineering to online business and building TRIBES, I call it REVERSE MARKETING.
Whether you are building a tribe for business, spreading the word about a movement or creating positive change in the world, (or all, or other) REVERSE MARKETING works. If you are not interested in income goals, than you can utilize these methods to increase reach and exposure as well.
I realize that we’re not all math nerds and can’t all make our brains work backwards. THAT’S OK!
I give you permission to skim through the math outlined below, and skip to the part at the end where I tell you that I WILL HELP YOU FOR FREE and put a map together for your business so you can get all the benefits of Reverse Marketing without having to work through all of the math on your own.
Here is a STEP by STEP process on putting REVERSE MARKETING into action to escalate your TRIBE to the next level:
1. START WITH THE END RESULT.
What is your goal?
To help you visualize how this works, let’s put a fictitious scenario together.
Let’s use an income goal for our example. Income goal = $100,000 per year.
Break your end result into a daily goal.
Daily Income goal = $100,000 per year divided by 365 days in a year = $274 per day.
2. KNOW YOUR AVERAGE SALE.
What is the average price point of the product(s) that you are offering (or plan to offer) to your tribe?
Let’s use a lower-tiered information based product priced at $99.
3. KNOW YOUR DAILY SALES QUOTA.
How many products do you need to sell per day to reach your income goal?
Divide your daily income goal (STEP 1) by the average product price point (STEP 2).
$274 per day divided by $99 average sale = 2.77 products sold per day.
4. KNOW YOUR SUBSCRIBER TO SALE CONVERSION RATE.
How many new opt-in subscribers does it take to make one sale?
Take a look at how many sales you’ve made in the last 3 months, and how many opt-in subscribers it took to make those sales. For our example, let’s say we’ve made 100 sales in the last 3 months, and we’ve added 1500 new opt-in subscribers. Take the 100 sales and divide by the 1500 opt-in subscribers = .066 or 6.6% subscriber to sale conversion rate.
Divide your conversion rate # by 100. 100 divided by 6.6 = 15.2
This is the number of subscribers it takes to get 1 sale.
In our example scenario, we need 15.2 subscribers to get 1 sale.
5. KNOW YOUR VISITOR TO SUBSCRIBER CONVERSION RATE.
How many unique visitors does it take to get one subscriber?
Take a look at your clicky or google analytics and see how many unique visitors you’ve gotten over the last 3 months. Now look at your Aweber, Mailchimp or email list software provider and get your total subscribers gained during that same period.
For our example, let’s say we’ve gotten 3000 unique visitors in the last 3 months.
And we know we’ve added 120 new subscribers in the last 3 months.
120 new subscribers divided by 3000 unique visitors = 0.04 or 4%
Our visitor to subscriber conversion rate is 4%.
Take 100 and divide your visitor to subscriber conversion rate #. In this case 100 divided by 4 = 25.
This means that it takes 25 visitors to get 1 subscriber.
6. KNOW YOUR VISITORS TO SALE CONVERSION RATE.
How many unique visitors will it take to get 1 sale?
So now that we know 1 in 25 visitors becomes a subscriber and 1 in 15.2 subscribers become a sale, we can figure out how much traffic we need to get a sale.
Take 15.2 subscribers x 25 visitors (to get 1 subscriber) = 380 total visitors required to get 15.2 subscribers to get 1 sale.
7. KNOW YOUR GOLDEN TRAFFIC NUMBER.
How many daily unique visitors does it take to meet your income goal?
380 Unique Visitors (for 1 sale) x 2.77 sales (to meet our income goal of $274 per day) = 1053 unique visitors daily to reach our income goal.
*** Each visitor is worth approximately 28 cents. $297 worth of sales divided by 1053 visitors required to make those sales = $0.28
8. TWEAK AWAY
Now we know what options we have for tweaking in order to reach our goal:
- Increase traffic to 1053 unique visitors daily
- Increase our average product sale price (add more value, increase price)
- Improve our visitor to subscriber conversion rate
- Improve our subscriber to sale conversion rate
- Cross-sell other products (increase the value of every visitor/subscriber)
If this scenario were my own, I would do everything I could to get my unique visitor value as high as possible. How?
Focus on 2, 3, 4, and 5 above. By focusing on those items, the amount of traffic required to make our income goal significantly decrease, and the value of each visitor and subscriber will significantly increase.
For example, if we could double our average product sale price to $198 (TWEAK 2), double our visitor to subscriber conversion rate to 8% (TWEAK 3), and double our subscriber to sale conversion rate to 13.2% (TWEAK 4), all of a sudden the amount of traffic required to meet our income goal drops to 131 visitors per day! Almost 10x less traffic required. Here’s the reverse marketing math on that in case you were wondering:
1.38 sales required daily to meet our original income goal of $274 per day (higher priced product)
1 in 7.58 subscribers becomes a sale (13.2% subscribers to sales conversion rate)
1 in 12.5 visitors becomes a subscriber (8% visitors to subscribers conversion rate)
94.75 visitors = 1 sale (less visitors required to make a sale)
94.75 visitors x 1.38 sales = 131 visitors per day required
Keep in mind, what I outlined above is only scratching the surface of utilizing REVERSE MARKETING in an Information Product business model online. I didn’t even mention partnerships, paid traffic models, webinars, launch strategies, etc.
Let’s step out of our example scenario, and step into your TRIBES. I’d love to help map out this REVERSE MARKETING approach for your TRIBE. We can talk, income, reach, list building,or whatever your current goals are.
If you have interest in walking through this model at absolutely no cost, please send me an email at jason@tribe.ly or leave a comment below. I’d like to feature some of you in an upcoming product, so you’ll not only get a free REVERSE MARKETING map and conversation with me, but you’ll have a chance at some free exposure when the product goes live to the public.
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I love the details of this. It is basically, starting with a big measurable goal then it is broken down into specific measurable outcomes.
Next, would be identifying the best methods to get traffic to the site.
I love planning (and Microsoft excel for that matter) so this post resonated with me.
Straightforward and to the point.
Izzy recently posted..Japanese Culture, Mind Readers, and New Skill Development
Yes, Izzy, great idea! I will work on traffic stuff for a future post. Glad this resonated with you.
Excellent post Jason.
It’s simple and to the point, which makes it even more relevant as we tend to forget or overlook this when we’re so engrossed trying to establish or grow our own businesses.
The conversions above make sense but what if you haven’t sold any or as many products? What if you are just starting out? Would we have to assume our initial subscriber to sale conversion and other rates, and tweak as we go?
Thanking you in advance for the advise!
Great question! Simply put, just start. Step 1 applies before you get started. Step 2 you can figure out based on competitors in your niche — find competitors and make a spreadsheet of their products and price point. As you think about what type of product you want to create and what value you are going to offer, and compare against your competitors, you’ll be able to pick a spot in the range for your price point. Once you have Step 1 and 2, you can still figure out Step 3.
The conversion rates are where experience or a friend with experience is a must. Join a mastermind group with some folks that are ahead of you in experience, so you can get some advice on conversion rates you might be able to expect. Or reach out to a competitor that could be a potential partner for you down the road, and get to know them. If you find the right one, and aren’t pushy about it, you might be able to get some good insight into what they are seeing for conversion rates on their site(s).
The mastermind groups are something I’m going to be working on offering here on TRIBE.LY soon. I think its a critical piece in the puzzle for people getting started.
Thanks for the reply Jason.
I’ve thought about reaching out to competitors before but have always stopped short…more out of being scared to ask than anything else.
Are you still offering the reverse marketing walkthrough?
Definitely. Send me an email to jason@tribe.ly with the following info:
1. Income Goal
2. Describe your desired TRIBE – niche, how you will serve the world
3. Who are the top businesses in that space?
4. What type of product(s) do you want to offer? Book, eBook, Video Training Course, Membership Site, Live Events, etc. (choosing more then 1 is fine)
5. What keywords do you think people will find you under when they search google?
I love this! What a great way to go about sales goals! Nice job.