Social media marketing is a great tool to get your brand in the face of potential customers. Though, in and of itself, it does not do much for your business unless you are driving more customers. Your digital strategy will not be effective unless you inspect its role in the customer value optimization(CVO) process. The CVO process grows your business by increasing your number of customers, average transaction value per customer, and number of transactions per customer. You must move your customer through the sales process. A customer can’t buy a product they don’t know exists. Then you want to educate them on your product, which builds trust and encourages them to buy more. Here is how your business can effectively use social media in the CVO funnel to grow your business:
Step 1: Introducing Customers to Your Product
Brand awareness is the first step in the customer value optimization process. Your customers can not purchase your product unless they know it exists. Get in front of your potential customers through multiple channels such as email marketing, social advertising, blogging, or SEO. Introduce your unique selling proposition to your customer. Why is your product distinct from the competition? What problem do you solve for customers that nobody else does?
Step 2: Lead Magnet
The lead magnet is a tempting bribe that gives value to a prospect to obtain their contact information, increasing your number of potential customers. This magnet can come from sources (social media ads, email campaigns, etc.) that take you to a landing page. (Read our post on Effective Landing Pages) The lead magnet is generally your first interaction with a prospect; make it count! It is essential that the value you offer your prospect delivers a specific outcome for them. Asking prospects to subscribe to your newsletter is not a good lead magnet. Effective offers include discounts, reports, guides, resource lists, cheat sheets, or free trials. The best lead magnets drive more prospects to your tripwire by building trust. Prospects do not trust your brand at this point, so you’ll need to give more value than you think at this point. Give more than you get.
Step 3: Tripwire
So far, you have not converted prospects to customers. You have only initiated awareness. Tripwires are irresistible, low-priced offer (price ranges vary by industry) that change your relationship from prospect to customer. That said, this is not where you are trying to make your money. The best way to make your tripwire effective is to sell it at cost, or even a loss, to you. Adding customers to your list of buyers is where the tripwire provides value. Think of a grocery store selling mild (which is kept at the back of the store) at a loss to entice customers to come in, and inevitably buy more products. Tripwires fill one single purpose: to change a prospect into a customer. We all know it is easier to then sell more to an existing customer. Examples of tried and true tripwires are physical products, physical books, webinars, deeply discounted services, and pieces of software. The strategy is to convert the largest number of lead magnets into actual customers knowing that they will give value in the next two steps.
Step 4: Core Offering
Since you have already had two successful transactions with the buyer, now is the time to offer your company's flagship products. The first two transaction experiences must be positive to get customers to this step. Your company's ability to spend more to acquire a customer than your competitor is how your company will start to dominate. Though you can attempt to make hefty profits on this step like most of your competitors, it is still not required. Another approach is to price your core offering at a smaller margin but upsell adjacent products and services with massive margins.
Step 5: Upsell
McDonald's does not make much money on the hamburger (its core product), it makes its money on upselling fries and soda. Most of your competitors will not have tripwires or profit maximizers, they survive on cold selling core products. The upsell needs to be a high-margin, profit maximizer for your business. Think about what you can bundle with your core offer or how to build in subscription or membership offers. Keep in mind that not everyone will purchase the upsell offer. This step will help your business grow by increasing the number of transactions per customer and the average transaction value per customer.
Delivering value to your customer at each step will keep them in your CVO funnel. Remember that the first three steps are not designed to drive profit in and of themselves. They build relationships with customers by offering irresistible offers. The ability to spend more on bringing in customers can make you a powerhouse in your industry. The last two steps are where you start to make money. Bringing customers from just knowing what your brand is to having a profitable relationship is the goal of the CVO funnel. These five steps will allow your business to grow by increasing your number of customers, average transaction value per customer and number of transactions per customer.