The Perfect Sales Funnel Process & How To Optimise it: CVO & CRO
To run a successful business with consistent sales and a regular revenue seems difficult… because it is!
However, if you are a marketer with knowledge on interactive sales funnels, Customer Value Optimisation (CVO) and Conversion Rate Optimisation (CRO), could be the game-changer to add to your success story.
These two processes work together like a magnet for your business. You will have more sales, higher qualified leads and more importantly recurring customers. Thus, turning your revenue from unintentional to predictable. It is key to increase your know-how when it comes to these processes so that your business strives.
I absolutely love this subject and practised (CRO) for many years. (CVO) is relatively new to me (a year or so) and wanted to discuss the relationship of CVO and CRO in-depth, so that you can better understand how to benefit from both of them. Furthermore, I will also throw in guidance, examples, actionable ideas & useful resources. This article should cover all your needs to get you started!
Before I dive in. I have to pay all due respect to Ryan Deiss, one of the most widely known and respected experts in Digital Marketing. A key concept for this post, Customer Value Optimisation or CVO, is awesome indeed. And he was the one I learnt this process from.
What is CVO?
Customer Value Optimisation is just not a marketing buzzword.
It is a process to increase the number of good potential customers (leads) and maximize the monetary value coming from each of them as they are attracted to you through the sales funnels. It is a great process to acquire good customers, and within time get the ideal ones buying from your business.
Its approach is pretty simple and straightforward, as it is based on three key factors:
Identification of your most valuable and ideal customers.
Design of your products/services/marketing strategies to attract more of those.
Evaluation of the funnels, so that you don’t attract the wrong leads.
Sounds simple? It might. However, consider that it takes some work and consistent effort. Which, in my experience, will be totally worth your while.
How does it Work?
CVO is a continuous process with a sequence of steps that are performed to achieve the ultimate goal of acquiring valuable customers.
You may use this as a step-by-step CVO guide, as I believe it is actionable straight away.
1. Determine your Product/Market Fit:
Customers are the most important people for your business, and you should certainly take the time to consider what people out there are the best fit for your products.
In other words: Product/Market fit assesses the ability of a market to sustain your business and the ability of your products and services to meet the needs of the potential customers in the market.
Why I say this is continuous, such study is a checkpoint for any business, as market changes over time with technologies and customer needs evolving rapidly. Therefore, before creating a product or service and hit the magic launch button, you must first determine whether or not you have a robust market fit.
To do so, following these steps will be useful:
Create at least 2-3 ideal customers, including their pains, aspirations, what type of content they consume. Make it relevant to your business.
Consider having one-on-one interviews (if possible) to get to know a sample of who you think are your ideal customers.
Get information and data from larger samples. A larger market analysis will certainly help!
You may have consistent interactions with your customer support team to find out about customers’ complaints and suggestions.
Welcome and reward the feedback from your customers, but always weigh it according to the value of the customer. Keep an eye where the feedback comes from, and consider how many people complain vs how many like things as they are.
You cannot please everyone, so just be honest and consistent with your product roadmap.
2. Choose a Traffic Source
Once you’ve chosen your niche, the next step is to select a channel to reach your potential audience to make them aware of your brand.
There are several sources to bring more traffic in your business, but you have to understand the appropriate and most profitable source to generate the one you are looking for when doing Customer Value Optimisation. Therefore:
Evaluate the value of each source by comparing it with the client it provides.
Usability analysis of various customers on different traffic sources such as Google, Instagram, Facebook, LinkedIn and any other advertisement platforms or inbound marketing.
3. Offer a Lead Magnet
A Lead Magnet is a value and attractive content that you can exchange to get a prospect’s email address. The most common leads are little ebooks, free guides or reports that are delivered in PDF format for free to attract users to your business. Its purpose is to nurture and find out the number of ideal customers that want your products/services later.
If you provide real value to the potential buyer, you will win them over. Look for an irresistible and appealing Lead Magnet which immediately grabs the attention of your buyer persona.
You should always offer free and high-quality lead magnets to create interest in your paid services or products and kickstart your customer relationship on a positive note.
Blinkist: This is a great example of offering a Lead Magnet.
Ok, not the typical lead magnet as to start my free trial, I have to give them my email (shoot me). However, because of the messaging, I was more than happy to do so in exchange for x amount of free articles.
I like the term trial. It subconsciously tells the user I'm not getting the full experience and/or it's for a limited time. Thus, I need to use it or lose it. More typical lead magnets come in the form of free guides, whitepapers without asking for a data point. You can use the action to retarget.
4. Offer a Tripwire
A lead magnet will help you build an email list of leads, but to convert those into paying customers will take a bit more. For that, you may want to offer a Tripwire.
A common example of a tripwire are free products with shipping charges like brands use to distribute their trial products as a giveaway by just paying shipping charges. Tripwire can be your offer of a high-quality product or service at a very low-cost. Often you may actually see a negative ROI with a tripwire, if you can get to a point where you break even at this step, then you have the process down.
These products are sometimes specifically designed to build a customer list mostly priced at $5 – $20 each. Thus, offer an exciting tripwire to grab more and more ideal customers in no time. The most important purpose of a tripwire is you change the relationship with a potential customer. If someone transacts (even a small amount) they have crossed the barrier of 'willing to do business with you'.
CXL: Takes the tripwire to the extreme. 7-day trial to access content from leading digital experts for $1. Done!
You may charge more, CXL ensure you go from prospect to a paying customer. Overcoming a major barrier. The act of handing over the money immediately changes my relationship with the company. And yeah it might not be for me but $1. There was literally no hesitation.
Guess what, I then paid $1,000 for a mini degree course about 6 months later...well played guys.
Other examples may be, E-book or discounted offers
5. Offer your Core Product
After a lead magnet and a tripwire offer, the next step in a Customer Value Optimisation process would be to offer them your core product to increase your business revenue.
A Core Product is the most prominent product/service that your company is known for. It generally serves as an identity that people associate with your brand, and it must be offered to ideal customers. Offering your core product to cold prospects is extremely difficult. Don't get me wrong, people do, but it is unpredictable and unintentional.
After having two successful transactions with ideal buyers through lead magnet and tripwire, your potential customers will want something more valuable from you: here comes your core product to blow them away with your talent and its quality.
This will boost your revenue. In addition to that, your marketing strategy will be smoother and more effective than ever before.
But wait, there is more!
6. Offer a Profit Maximizer
A Profit Maximizer is an upsell with the primary goal of increasing the average transaction value of your customers for an immediate ROI.
Mediocre businesses are focused on a single offer, but not you. A smart strategist will always create funnels with multiple profitable and existing offers to maximize their profit value per customer.
7. Create the Return Path
The last stage of CVO is to create a Return Path for bringing your ideal customers back again and staying top of mind.
A Return-path may be an appealing offer at the time of exit, loyalty programs, content marketing on your customers’ most visited pages, and ad retargeting.
Return path serves for strategic and frequent communication with your ideal customers. It makes them more and more attached to you as time goes by.
As they are more and more satisfied with your products, they will become customers for a lifetime and advocates of your brand and services/products
Why is CVO important for your business?
Customer Value Optimisation (CVO) is also a useful strategic process for anyone who has ever attempted to sell something to someone. In any business, selling your products without a solid CVO can be more difficult as you’re trying to cold sell to a complete stranger.
Rather than investing your money into advertising blindly in the hopes to increase your business awareness in the market, understanding your customers with CVO is the recipe for success.
Dig deep in your ideal customer journey with CVO.
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Working in CRO for nearly 10 years, I couldn't help at first to see differences in process, but this was wrong. CRO & CVO complement each other no end. Whilst CVO is a fantastic digital sales funnel, CRO complements in optimising that funnel.
What is CRO?
Conversion Rate Optimisation (CRO) is a systematic process to increase the percentage of visitors to perform the desired action. For example, sign up to your lead magnet, tripwire and core product offering. Thus, making the existing website more effective. Rather than focus on attracting more people through advertising, CRO focusses on the visitors you already have.
Common Terms Associated with CRO: (I won't go into detail here).
A/B Testing: a common (and very useful) practice to verify conversion improvements. In this testing, two or more versions of the same site are shown to visitors, and then conversion rates are compared to check which one is more effective and has a higher conversion rate optimisation.
Multivariate Testing (MVT): this test is also a version of A/B testing, but intended to test multiple variables at a time.
Strategies & Tactics to Compliment CVO
If CVO is the sales funnel, Conversion Rate Optimisation is undoubtedly the process to improve the effectiveness of CVO. Here are a few key aspects to continually improve and test:
Call to Action (CTA): appealing and precise CTAs must be designed to engage your visitors about what to do next.
Value Proposition: is most likely the first element that a visitor will read. If you don't impress within 3 seconds, chances are you will lose the visitor. Top tip, ensure the page load time is below 3 seconds.
Here's what your value proposition needs:
Relevance - This confirms to the visitor that they have come to the right place. Ensure the proposition flows with your ad copy and meta description, which is also great for your quality score.
Value - Entice the visitor to continue their journey, by providing them with value. I.e. an offer.
Call to Action - Ensure the call to action stands out by creating a good contrast and tell the visitor what the next action is. (More on CTAs later).
Page Structure (Flow): Essentially this consists of 4 key areas (of course this may change depending on your objective).
Why the visitor should stay (yep, you know this one - if you don't then I haven't explained a value proposition that well).
Your benefits and product features.
Trust indicators (more on this later).
Call To Action, always end with an action point.
Trust indicators on a landing page are an excellent way to nudge the visitor to take the next action, whether that is calling you, filling a form or downloading a white paper etc.
Testimonials - from real customers, although celebrity endorsements are great and work. A visitor will want to relate to someone already using your service/product.
Case Studies - Demonstrating the impact you have made to other people is an excellent way of showcasing the impact and value you can provide.
Industry credentials - Do you have certifications and industry regulations? For example, a payments company may want to signpost card schemes such as Visa and MasterCard.
There are more tips to get you started here
Usability: a set of best and aesthetic practices to make your site more enjoyable and user-friendly. It also increases conversions by removing inconsistencies and friction on the site.
Conversion Research: this includes tools and processes to understand your customers’ perceptions and needs. After knowing your ideal customers better, it becomes easier to design the website accordingly.
You can get started for free using these tools:
Hotjar - For heatmaps; click, scroll, move. Video recordings and user feedback
Paid: If there was one product I'd recommend you pay for (and it's not that expensive) is Copytesting. Content is king, to get your messaging right is essential. Copytesting enables you to analyse what is or isn't working
A final thought on CVO and CRO:
After reading my Customer Value Optimization and Conversion Rate Optimisation you may still have questions, contact me and I will help you kickstart your CVO and CRO.