Running a business can be frustrating. Arguably one of the biggest frustrations is not making sales. This is made even worse by “window shoppers” – people who interact with your social media, your ad content, your website, or sales page but never buy.
The frustration at seeing people NOT purchase your products or services when you’ve poured your blood sweat and tears into making them causes many people to quit being a business owner. In fact, the Small Business Administration estimates around 595,000 businesses close every single year.
So as a business owner, how can you overcome the frustration that can be a huge factor that causes so many business owners to give up?
I’ve discovered that developing a strong business mindset really all comes down to understanding the 80/20 rule. The 80/20 rule states that 80% of your income will come from 20% of your clients. However, when you look a little closer at the actual numbers, it gets a little clearer as to what is going on, and why so many business owners give up.
Let’s imagine you have 500 social media followers. The 80/20 rule states that only 20% would truly be interested in your product. The rest are just following you because of other reasons. Perhaps they’re a friend, they like a post you made once, or they added you to sell you something of theirs.
So now you only have 100 people who are truly interested in what you have to offer.
Out of those 100 people, we have to apply the 80/20 rule again in order to identify people who would actually consider spending money to purchase your products or service. 80 of these people love what you do, but don’t like the idea of spending money to get it. They’re hoping for freebies, gifts, or maybe just to fantasize about getting it one day though they would never actually spend their money to get it.
This leaves us with only 20 potential customers.
Once again, however, the 80/20 rule comes into play. Of the 20 people only 4 will actually purchase your products or services… but… the 80/20 rule isn’t finished.
You see these initial buyers are only going to spend a TINY amount of money on the smallest offering available, which is usually less than $100.
If you want to sell something at a higher price point than that, we’d need the 80/20 rule again, but with only 4 people left, we can’t pull 20% (the smallest we can do is 25%). So from this audience, there are currently no more sales to make, until a new campaign is created, a new product is released, or we wait for a long enough time for someone to be ready to buy again.
Now while some companies enjoy a higher than 20% conversion rate, there are many business owners who have a lower than 20% conversion rate. The reason business owners get frustrated is that the 496 people following them that don’t purchase out of every 500 cause them to feel that their product isn’t desired.
Sometimes these other non-buyers “give advice” to improve the product or more commonly about the pricing and how it should be cheaper. All this does is reduce the profits in your company and don’t actually get them to buy. They just like the idea of the product being cheaper.
There are a lot of these voices and they both become tiring to deal with while drowning out the happy buyers.
This is why at the S.M.A.R.T. Blueprint we have a simple method to handle them all.
We focus on dividing up our audience into 3 distinct phases based on where a customer is in their journey with us.
We call these phases Education, Indoctrination, and Conversation.
During Education, we don’t sell anything. This is where we’re most likely to have the 496 out of 500 who just want free stuff or who don’t care about what we have to offer. They can choose to interact with us or not; however, they never see a pitch to our paid products. This way they’re less likely to offer “helpful” advice about us lowering our prices or changing the way we do business as they’re only offered things for free.
This way we base our business decisions on the people who matter most to us – namely our paying clients.
Then anyone who takes us up on an offer of our free products moves into the Indoctrination phase. During this phase, we indoctrinate someone into our processes and systems. We uncover what they get if they work with us, share our prices, and invite them to talk to us to tell us what they most hope to achieve with our program and what they need help with.
(By the way, if you’re at a point where you want to chat to us to learn more about what we do, here’s a handy link you can click on to schedule a call with our team: CLICKING HERE)
Once someone talks to us, they’ve effectively moved to the Conversation phase. This is where we talk, assess their needs, and see what we can do to help them.
Sometimes we offer them more free resources that are more than enough to help them get to where they want to be and sometimes they make the choice to have more hands-on help. At this point based on the 80/20 rule, we find many business owners are ready to hire us to help them grow their company, increase their profits, and in general make running their business easier and more enjoyable.
By being mindful of which 80/20 we’re dealing with at different parts of the customer journey, we limit wasted energy on people who would never actually become customers. This reduces the frustration you might feel and helps you focus on the success of your customers and the growth of our company.
If you would like to talk to us about implementing the S.M.A.R.T. Blueprint into your company, then you can apply to join the program by CLICKING HERE.