When people make a decision about spending money, they always do it first based on emotions, how does that make you feel? Spending $50,000 a year on dinner seminars feels like a lot, but what if that money generated a substantial amount of revenue for your business?
In this episode of Money Script Monday, Kevin goes over the importance of analyzing all aspects of your sales funnel and 3 easy steps to improve its efficiency.
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Hey, there. Thank for you watching today's Money Script Monday. My name is Kevin Nuber. Today, what I want to talk about is how to audit your sales funnel in five minutes.
The way I came up with this topic today was through a personal experience that I had with one of my top advisors.
What I do at the beginning of the year is, I like to go and do an office visit with some of my top people and go over their marketing and their goals for the year in order to plan for the upcoming year.
I did this same thing with one of my top guys. And prior to going to this meeting, he said, "Kevin, I got to tell you something. This year in 2018, I'm not going to spend a dime on dinner seminars where I'm feeding people free lunch and free dinners and they're not going to do anything with me.”
I said, "Listen. I understand how that feels, but when I come up there, what I want to do is I want to look through the facts and determine whether or not this is a good investment for you."
I think this illustrates a very important point.
You see, when people make a decision about spending money, they always do it first based on emotions, how does that make you feel?
Think about what it feels like spending $50,000 or $60,000 a year on a dinner seminar.
That's a lot of money. And it can be very easy to make the decision not to do that and just to keep that as profit.
But before you make that decision, you have to look at the facts and see if this is worth the investment that you're spending.
So, I went up there that day and the first thing that we did is we put together a sales funnel, and we tracked every single dollar that this person spent on dinner seminars and the money that came in from the dinner seminars.
The beautiful thing was that he tracks absolutely everything. Every dollar that goes out and comes into his company is tracked and allocated towards marketing expenses.
Marketing Expenses Funnel
And what we were able to see was that in 2017, that he had spent $63,000 on dinner seminars. $5,000 a month is lot of a money to spend on dinner seminars.
That's more than a mortgage payment probably for him. So, think about how that feels.
But the facts showed that just last year alone, that he made two times the amount of revenue off that investment.
So over $120,000 in revenue based on that investment. So the fact says that it's actually a good investment.
Now two times revenue is probably a little bit below average, but for him, him sales cycle is a little bit longer.
When we looked over time, we saw that his numbers were much better.
In 2016, he had made three times revenue. In 2015, it was five times revenue. And then 7 times revenue and 10 times revenue. In 2013, he spent $68,000 on dinner seminars, and he had made $680,000 in revenue.
The first question was, why is he making so much more money in the past, not in the future.
We immediately thought that perhaps the reason was because his dinner seminars were much better back in 2013 than they were today.
But because he tracks absolutely everything, we were easily able to figure out that the reason was because of the repeat business and the referrals that he gets from these preexisting clients.
So, although his particular sales funnel does not have a high return in the first year, it pays dividends over time and a multiple over time.
He was quickly able to see that dinner seminars are very, very, very important investment not only for 2018 but for the future of his business.
His response to me after looking through these numbers was, "Kevin, I'm going to keep doing this. But not only am I going to keep doing this, but I'm going to increase my budget to $100,000 a year."
I said, "Wait. Hold on a second. Before you increase it to $100,000 a year, what we need to do is we need to look through your sales funnel, and let's look for places where you can be more efficient and try to increase the amount of revenue that you're getting and try to get this two times the number up to something higher before we put more money into it."
So, with his dinner seminar funnel, we put together every single step from the very beginning to the very, very end in which he makes money.
Step 1: Mailer
For his steps, we had the mailer that goes out. Now with the mailer, we have a very predictable response.
Step 2: Registration
We know with a high degree of confidence that we can get a certain number of people to register for a dinner seminar.
Step 3: Attendance
We know that we're going to have a certain number of people actually show up for the dinner seminar. Each one of these steps, we have a conversion rate where clients drop off.
Step 4: Book Appointment
At the dinner seminar, you're going to have a certain number of people that book an appointment.
Step 5: Show Up for Appointment
You're going to have a certain number of people that show up for an appointment...not everybody shows up.
Step 6: Submit Case
You're going to have a certain number of people that submit a case.
Step 7: Paid Case
And since this is life insurance, in many situations not everybody qualifies, so not everybody pays for a case.
Step 8: Average Case Size
Then you have the average case size which we can always work on increasing.
Step 9: Money
And then lastly, we have the matter of money that you make on the funnel.
When I went to his dinner seminar that night, because that was part of what I wanted to see, we had a room full of 35 people. Every single seat was taken. That step worked.
He gave a very good presentation. And in the end, he had four people to book an appointment.
After the seminar, I asked what he felt about the event and the results that he got. And he told me, "Kevin, this is great. I got four appointments. That's more than I usually get from one of my dinner seminars."
Now for me, because I work with advisors that do this across the country, I know that four appointments is actually low and we should expect something at least double that from a dinner seminar with that many attendees.
So what we did over the coming weeks before his next seminar, is we worked on three or four things that we could do to improve just one step between attendance and book the appointment in order to maximize the efficiency of his funnel.
On his very next dinner seminar, he had 10 people book an appointment. And later that week, he had 12 people book an appointment.
With just those minor improvements, he doubled and tripled the amount of appointments that he got from his dinner seminar.
So you can see that just from improving this one step, we're able to now effectively double or triple the amount of revenue that we have coming in just from making this funnel more efficient.
Now, even if you have a very efficient sales funnel, the last thing that you can do is work on the average case size.
There's many things that we can do in order to increase average case size. So that is our final one.
And once you've done absolutely everything to make this efficient, this sales funnel as efficient as possible, then we can work on looking at other ways to increase the amount of revenue that you're getting out.
Sales Funnel Efficiency
In order to do any of this, I put together three quick steps that everybody needs to follow.
1. Know your numbers
The first thing is you have to know your numbers. I have another advisor I work with.
The beginning of the year, he said to me the exact same thing, "I am done spending this amount of money on dinner seminars."
And I asked him the same question. I said, "Well, how much money you're making off the dinner seminars?"
His response to me was, "I don't know."
If you don't know your numbers, how do you know if your sales funnel is a good investment or not?
What if you stopped making an investment on something that actually is critical to the future of your business?
So, the first step is you have to know your numbers. Every single number that's coming in, every single marketing you're doing, and you need to track your sales funnels.
2. Improve your numbers
Once you know your numbers, then you can analyze them and you can look for ways to improve your numbers.
Just like this one step where we doubled and tripled the amount of appointments that he booked, that's just one thing that you can do.
There's many different things that you can do to make it more efficient.
3. Put more money into your funnel
The third step is to put more money into your funnel. Notice that I put that third.
That's the last step because once you have a totally efficient funnel, the only way to increase it at that point is to scale up and increase the amount of money that you're putting into your funnel.
And it's only then that you want to do it. So imagine this. This advisor now has potentially without increasing his marketing expense, has four times revenue generator in the very first year.
Which makes it that much more effective over time. And if he does double his spending this year, think of how much more money he's going to make in that first year.
Thank you, everybody, for watching today's Money Script Monday video. If you have any questions, please feel free to contact us by phone at 1-888-LIFEPRO (543-3776). Thanks for watching.