Most people when they think of creating a business builders online, they think of creating a product, selling the product, and hope to make enough capital to finance their next product idea.
This kind of thinking is short-term, and doesn’t lend itself well to a long-term business venture.
When you stop and think about a longer-term business builders model, whether online, off-line, or a mix of the two, you really need to think about the bigger picture.
What’s really needed is a method to capture leads, convert those leads into smalltime customers, and gradually build them towards customers that spend more with you in terms of three factors: frequency, monetary value, and recency.
The Marketing Funnel Explained
The marketing funnel is not a complicated process. It’s a tool, or a process, to separate your prospects and customers into different buckets.
For example we want to know the difference between our leads, customers that spend less than $10 a year with us, customers that spend more than $10,000 a year with us on a regular basis, and everything in between.
This allows us to concentrate our efforts on the smallest group of customers that spend the most amount of money with us. In other words, we’re trying to maximize our return on investment.
In a moment we’re going to take a closer look at the marketing funnel in detail to see how it works, plus what you probably are familiar with as the “80/20 rule.”
Because that’s going to drive our return on investment returns of those customers and spend the most of my money with us, those customers that spend the least, and the freebie seekers and tire-kickers.
The Real Business-builder’s Way Of Obtaining Maximum Profits
A typical business model might focus on three areas for each transaction: Recency, frequency, and monetary value.
For example, let’s take a typical fast food joint and use it as an example. There are primarily three ways to grow a business.
1. You can acquire more customers, which is which most businesses try to do.
2. You can get them to spend more with you per each transaction (monetary value).
3. And you can get them to buy from you more often (frequency).
There are other ways, dealing with investments and such, but for the sake of this discussion, will keep it simple and referred to growing your business as building a strong customer base.
And much more…