Today, what I want to talk to you about is how to drastically increase your client’s customers lifetime value.
The idea here is we have you, right?
You provide a service to the customer. We’ll actually call them the client so that we can kind of make sure we don’t get too confused. They provide a service to their customer.
What I want to help you do is increase how much this person spends. We’re going to increase what we call is that LTV also known as lifetime value.
Now, lifetime value can be actually cut up in a bunch of different ways. There are loads of different ways of measuring it. Everyone has a slightly different formula for how they measure it.
Most people will talk about how much has that customer spent with you in general over the entire period of their contract?
If you sell to them one thing a year and that thing is a hundred dollars, over 10 years they’ll have a lifetime value of a thousand dollars.
Lifetime value can be affected yearly monthly per transaction. There are a lot of different ways of increasing it. One of the measures of lifetime value is what we call transaction density.
Now, this sounds like a very like, kind of fancy, a typical bullshit marketing term. It is, but what we’re trying to look at here are four areas.
Basically, the amount that they spend per year but it could be per month if it’s a monthly subscription. We’re just part timeframe. In this particular instance, we’ll spend per year.
We want to increase the number of times they purchase.
If someone buys petrol, fuel gas, whatever you guys call it, once a week, how could we get them to buy Petrol twice?
That’s the number of times they purchase, but you might be thinking but isn’t that related to per time over a period of time?
This is why it can get a little confusing because I only buy from Netflix once a month and their model is going to be difficult for them to get me to buy twice a month.
The actual amount of times that they purchase from you and the number of times they buy per year, some businesses were able to go while they currently have a subscription with us, but can we get them to pay twice for that?
We also have per transaction. That is like how much they buy in one fell swoop. If they pay $10, can we get them to pay $12 or $20?
Those are kind of the core areas of per transaction.
This is basically the time between purchases. We want to reduce the number of times between purchases.
There are a few other things that we could look at. Things like per customer and things like this, but those are kind of the three core ones.
What I want to look at is how we can increase all of those.
There are a few ways we can do this.
My favorite way to do this is a really simple OOO funnel, sometimes called an ATM funnel.
By the way, I’m giving you this funnel if you want to get this exact template, plus all the follow-ups and plus all the email and plus all the page design and all that kind of stuff.
Here’s a really easy way to increase transaction.
Let’s say that your average customer spends a thousand dollars with you per year as a rough rule.
Justify an increase in price
If we can increase the price of the product so we can justify a $1,250 sale. That’s the first thing. Justify an increase in price.
If we could also increase per transaction that means adding on extra products that may be in total to 250 like maybe it’s 125 and 125.
If we could add another potential thousand dollars to that for another product, that’s some really easy ways to start increasing and to increase the times that they buy and the frequency that they bought.
Here’s how we do this.
There’s squeeze page where we basically want to give them something for free. It’s a lead magnet. A free training or guide on whatever. You could do this for literally anything.
Now, remember, you’re having to do this to attract this client. What does this customer want to see? What does their lead magnet need to look like?
Let’s say that you work with coaches who help reduce stress. The lead magnet could be something super simple, such as how to reduce stress every single workday in five minutes or less.
Write something nice and simple.
Let’s say that the thousand dollars they spend a year with you is some kind of stress-related coaching.
The first thing that we’re going to try and do is immediately make them a one-time offer, an OTO.
If this is free, we want to try and offer them maybe something already in the region of a hundred dollars. Something like that and we are giving them the option to buy here and now.
What we’re also going to do is we’re going to have another O, the order bump.
This is where we look at another product and this could be anything like doubling the price. It could be a quarter of the price. It could be double the value.
Let’s say we have an order bump, which is a single one-off product. Would we say, “Hey, if you like this free thing of how to do it in five minutes, I want to show you how to get complete control over your stress even if you have kids, a stressful job and you’re not sleeping well at the moment. I want to show you how to do that. It’s a three-day intensive program. It was a hundred dollars. I want to show you how to do that.”
The order bump then says, “If you would like the audio guide, which you can listen to on the train or while commuting that will help de-stressing as you move forward through the process, that is just an extra 99 bucks. We did sell this as a four day intensive for a thousand dollars and we want to give you the audio version for 99 bucks.”
We have already doubled the value of how much they’re going to buy. Then we’re going to say to them, “Look, if you liked that we actually have a $1,000 at home study course that will allow you to completely distress and allow others to de stress over a period of six weeks. You will ultimately yield new, having much higher sleep quality or whatever.”
The next one could also have an order bump. This is called one-click upsell.
This is when they go, “Yeah, I would like that.”
They click it once and it charges their card. We’re presuming that they’re going to spend at least 1,100. So when they come through, they click and it just charges their card, an extra a hundred, and we could even have an order bump on that.
Now, there are some funnels that will have a further one click upsell perhaps to some kind of subscription.
Nothing wrong with that. They can work if you have a great subscription product for 99 per month to get a free call or whatever.
A colleague of mine, guy called Matt does. Like super high ticket. It’s not 99 per month by any stretch of the imagination, but he does a morning call with you live. Gets you focused.
He works with like five or six clients. He has a super high ticket recurring revenue product. Something along those lines.
Here’s what’s important. Someone who says yes to the one-time offer and then sees the OCO and then drops out. What we want to do is follow up.
This is when we basically send them a sales campaign for the value of this product. This shouldn’t be a thousand dollars. Should it? We said we would increase the price to 1,250.
Now, the important thing to understand here is increasing this price means packaging up and not just saying we offer monthly coaching.
What we’re now doing is we’re doing a 30-day intensive where we will work with you one-on-one. It will take 15 minutes a day.
We will have a conversation with you. By the end, you will be able to combat stress like nobody’s business.
That’s how you increase your prices. Basically, by justifying the offer and by having a follow-up campaign.
For something like a thousand dollars, maybe five to seven emails follow-up series. Basically, trying to get them to get back to that.
The same with this as well. If they don’t buy this, we put them into a follow-up campaign.
If they do buy that’s a sales campaign. If they do buy from here, we can automatically put them into that sales campaign, anyway.
If they drop off, then obviously we want to continue selling them. This is technically called an Ascension or an upsell campaign is the specific word.
You have got eight different products that you could package up there and sell to someone.
You could say, “How about we double the value of your customers?”
Do the maths and work out what it is.
My average customer are spending a thousand pounds a year. How could we get that to 1200 to 1500 even doubling it to 2000, working out what that funnel is doing the math, and then starting these campaigns.
That’s not even true because you also have the squeeze campaign at the start to try and drive traffic. You’ve got nine products that you can sell.
By the way, you can get this for free. If you head over to gohighlevel.com/mike-killen where I’ve created all of this for you ready to go, that you could sell to customers.
I’ve labeled it. It’s all ready to go. You would just change depending on what it is that they’re buying.
You literally have something there that if you were able to turn around and say, I can double the lifetime value or even increase the lifetime value of your clients by 50%, that would be well worth them paying 15, 20, 25 grand for like two grand a month to set this up, run it and have people go through that process.