CHAPTER 5 The System - I have to go back to 1997 to make this make sense. It looked like I was going to be at home for a while before heading to some kind of higher education, so I decided to take a 3 months introductory course in computers.
The first thing I learned that continues to show up for the next 25 years for me… What was it? It was input, CPU (central processing unit) and output; the three basic parts of a personal computer. Since then there have been multiple versions of that.
But what it did was allow me to understand at a fundamental level what value a computer brings to our lives from a system stand point. And I continue to believe in every aspect of life that the best part about humans is the ability to build systems that work even when we can’t.
A system is a set of parts or principles that work together to create a desired outcome. The outcome can actually be a part of the system or a recursive input into the system to create an even better outcome or output.
And Like I said, the first thing I learn about computers is its 3 basic parts namely input devices such as the keyboard, the CPU which contains the memory for storage and processes information coming through the input devices and lastly, the output devices such as the monitor to see visuals of the work being performed by the computer or to store information on external storage.
The external storage device that was popular back in 1997 was a floppy disk. While you can use it to store information digitally as an output from the CPU, it is often inserted back as input into the CPU for additional, better and improved output.
In this chapter, we are going to explore the concept of systems and how it applies at micro and macro levels when it comes to digital marketing.
But in the previous chapter, we talked about “The Connection” in so many dimensions. We talked about frame of reference. It’s a concept that we will revisit again because this whole thing is about the customer journey. And your ability to take them on an experience is a big determining factor in the level of success that you are able to create.
As I said in the last chapter, many businesses go back and forth between futuristic marketing and old school media that doesn’t work anymore such as newspapers and yellow books ads. Remember, this is about “The Persons”, the people and catering to your identified audience.
95% of businesses are already going to fail within their first five years. Feel free to attribute that terrible result to a lack of connection between “The Value” and “The Persons”. It just makes sense right?
We covered the idea of pre-framing the mind of your prospect so that the natural order of action is to create an order; buy your offer. Hopefully now, you understand that people need to “feel” like they know, like and trust you as part of the pre-framing. And getting people to convert to customers, clients, deals and partners start to feel almost effortless.
Very importantly, we covered a tool that helps us create a spider web of these agents and connections all over the world wide web. Do you recall the content management system? The CMS right? My favorite CMS, Wordpress, controls 40% of the CMS market share.
That is a good thing because of the ever evolving nature of everything digital. So like typical software, there are constant and seamless updates of bells and whistles to make your customers’ experiences super-cutting edge. In this era, you as a business owner or digital marketer cannot afford to operate on stale systems.
With that being said, let’s get into systems when it comes to digital marketing and digital based businesses. You guessed it right. It starts with an input.
In 2009, I got introduced to the world of multilevel marketing and direct sales. The truth is that it wasn’t just about finding customers. In fact, the majority of the income came from building a team. Being a self-motivated person that I’ve always been, I got to work right away, and I recruited my brother into my downline.
The idea behind the business model leverages people's immediate circle of influence to first… sell the business opportunity to and then second, sell them products if they are not interested in building the business.
My brother figured out quickly that the main input into the business model was people. The owners of these multilevel marketing businesses such as Amway, Herbalife, TransAmerica, Primerica etc. simply need people.
But there is a problem. Sure, we can probably go through the contacts of our smart phones and find 100 people. The issue is that we usually haven’t connected with these people in a long time. So even though they are people, they are not necessarily suitable inputs for the business model. Hence many of the reps get frustrated until they quit the business.
Also, we are talking about a business model that requires face-to-face sales skills. While a lot of the leaders and trainers in that industry continue to tell their teammates that sales is not involved, nothing could be further from the truth. The reality is that money is expected to exchange hands with an opportunity; a business opportunity or at least a product.
So even the second part of this business system is flawed with mostly non-capable business owners and processes that aren't updated for the digital era. No arguments. If it’s working for you, keep doing what you are doing because it works right?
In the last few years, many multi level marketers have transferred the same not-so-professional strategies to social media. All they do is pitch every one by “throwing everything at the wall and hoping that something sticks.”
Most other types of businesses make the same mistake; not identifying a suitable input necessary with well thought out processes and systems that can operate even when humans are not involved. So if the main person gets sick or encounters an emergency, operations will shut down immediately; just an over-glorified and undercompensated after 9-5 job.
If your marketing needs your attention constantly in order to continue filling the pipeline, it cannot be working competitively in these times. Back in the days, the only call-to-action on commercials was the phone number which meant someone had to pick up the phone on the other end. If they don’t pick up, you’ve lost money.
When that happens enough time, it can take your business out effectively becoming the 95% in 5 years failure stat member. Since then, marketing has evolved to not involve the need of humans to receive these messages.
Back in 1998, there were the famous 900 numbers all over television commercials. Not only did these numbers actually charge the callers a fee that shares royalties with the business on the other end, the phone was also picked up by automated answering machines.
So the more your marketing involves humans, the higher the cost of marketing will be because of the cost of human resources and time. Systems can still involve human time but the idea is to minimize that particular variable in your marketing therefore reducing or offsetting marketing cost dramatically.
The same way we have inputs, central processing units (CPU) and outputs as the three basic parts of a personal computer, your marketing operation must identify the inputs, processes and outputs. A business can no longer just be a business; it must be a business “system”. And that means, you are able to take a walk without a risk of the business shutting down.
There are multi-layers of systems in any given business and one of them is obviously the marketing system. To further break this down, I want to borrow some ideas for what I learned in Project Management Professional (PMP®). Surprise… surprise… They use similar concepts to break down projects.
Projects have multiple processes which are subsets of systems. Each process has its own inputs, tools and techniques (TT) and outputs. For short, you might encounter ITTO if you are into project management. The reality is that each campaign is like a project especially if it has an end date or predetermined and desired end results.
Back in the days, you might just worry about the input and the output as a business owner while the process in-between them is handled by a marketing agency. But in this digital era, any individual with a Facebook or Google account has access to millions of target audience.
In many ways, marketing agencies are still very useful. In fact, you can inquire more at www.myEmpirePRO.com.services about our marketing agency services. But the point is that the business owners are much more involved in the middle component of a marketing system; the processes, at least at a consulting and services level.
We will get into more detail of the different components of a marketing system and campaign throughout the rest of this book. My focus right now is just to highlight the importance of executing the marketing campaign of a business, product or service like a system.
What it does is that it removes guess-work and allows you to replicate more of what’s working and delete whatever is not working. You will be able to scale your business without and simultaneously eliminate human error in that process.
There are two metrics that we will elaborate on later namely; ACV and LCV. They stand for Average Customer Value and Lifetime Customer Value respectively. These are the KPI (Key Performance Indicators) that allow you to test offers in different types of ways.
Do you know the average or lifetime customer value of your business? If you do not know this number, you can’t scale the business because it’s directly an indication that you don’t even know your business.
It’s very simple. Over a period of time, divide your total revenue by the number of customers; the product is your average customer value. Lifetime is simply the same number over the lifetime of your business.
When you don’t have systems that systemically make offers in a particular sequence based on a customer journey into and through your offers, you can’t properly measure these numbers. And the last thing you want to try is to manually measure and calculate these important numbers. You will lose track.
Here are some examples of systems that allow you to measure your ACV and LCV so that you can know when and how much to invest in marketing campaigns.
Funded Proposal - Anytime you have an offer, product or service for the marketplace, think of it as a proposal. You are proposing a solution where the buyer has the agency to decide to buy or not.
An average business does not have a choice of entering a profitable zone until 5 years after launch. But what if you can create and position offers that will fund your marketing campaigns upfront?
I am not talking about your main offer or core product. When you implement a funded proposal in your business, all the sales of your core product becomes pure profit. There is a self-liquidating or tripwire offer that funds your marketing campaigns and most especially, customer list-building. Once you have these customers in your funnel, it’s easier to sell your main core product to them.
Hopefully, you have the skills to orchestrate a sequence of offers that naturally ascends your customers through your sales funnel.
Sales Funnels - What is a sales funnel? Simply put, it’s the journey that you have designed for your customers to go from discovering your business to sales conversion. More often than none, one sale conversion is not enough to make your business profitable.
Like I said earlier, if your business falls within the range of an average business, you won’t be in profit for 5 years or never. By designing a sales funnel that ensures profit upfront and funding your marketing campaign as soon as possible, your business will legally print money.
If you are able to make $1.10 every time you spend a dollar in any given year, you are effectively printing money. How would you like it if you are able to spend $22,787.30 and generate a revenue of 49,059.80 all in less than 3 years. That’s a 60+% return on investment (ROi).
All of that happened and even more so during the covid pandemic. It dramatically recession-proofs your business. By the way, that’s a true story and you can replicate that result especially when you understand the power of upsell funnels.
Upsell Funnels - Have you ever been asked “would you want fries with that?” after buying something off McDonald’s basic entry menu? (It’s no longer called the dollar menu right? Thanks to inflation).
What about “would you like 2 apple pies for $1.99?” That is a real example of an upsell offer. With digital marketing, you can create and position offers after a first offer purchase (the tripwire offer) has been initiated.
In addition to that, you can offer a downsell to customers that says no to an offer if the reason for declining is likely cost. For example, you made an offer of $4,997 inside an upsell sales funnel, and your customer clicks “no thanks”.
As soon as they click on that, they can be redirected to an offer with a little less feature at the price of $2,497. Sometimes, you can also offer a payment plan. By doing this, you can secure a sale and additional revenue that would otherwise not have happened if you are presenting to total strangers.
Check out this web-based sales funnel and list-building system if you want a free trial of marketing automation with your digital marketing efforts. Keep in mind that we are talking about systems.
Inside of the system are processes such as email marketing, autoresponders, audience segmentation, customer engagement, audience growth, and more to boost your online sales.
Typically, digital marketers use multiple tools to execute all these different techniques. In fact, there are more than enough techniques and if you are not careful, that’s a negative thing. It can be hard to stay focused.
Once you get the ball rolling and you fully understand this as a system, one tool can execute everything. Sometimes, you might have different aspects of your business with their own sales processes. But ideally, it’s better to keep all your processes in one system especially if you are new to digital marketing.
The shiny ball syndrome is real and distractions are extremely costly. I know because I am speaking from experience. There are many different types of systems implementable for digital marketing. But the best ones for what should be obvious to you after the next chapter starts with list building; audience growth.
If you have to spend money for every unit of discovery, your business will likely go broke. The reason why all the best businesses you know today create smartphone apps to engage you and offer rewards is to build and engage their audience on a regular basis. The idea is to create and boost for more sales.
So in the next chapter, we are going to dive into list building. Have you ever heard the saying “the money is in ‘the list’?” I’ve heard some people try to dumb this down but they are also usually trying to sell something else. List building as the front end of your sales funnel system is undefeatable and we will be talking about it.
What is a system without at least an input? Useless right? The sales funnel as a system is a beautiful beast but without making sure that you are feeding the beast, it’s all pointless. In addition to that, we will be talking about quality vs quantity. We will also talk about all the different forms of list-building and how it has evolved right before my very own eyes since 2009.
There have been many moments over the years when I derailed from this ideology. Yes I agree. It’s still an ideology but yielding away from it has cost me millions in losses. Don’t make the same mistake.
There is a space from a mindset standpoint that it might seem like you can get quicker results starting your sales funnel system with asking for money from strangers. Remember people need to feel like they know, like and trust you.
Do you remember the KLT factor and brand equity? How much more when you are able to fund your marketing campaigns simultaneously on the front end?
And what if the output of your sales funnel system are customers who can’t wait to buy more from you? Then your output becomes a recursive input for your system making it faster to scale your business. They can also buy from partners though you.