🎯 Work Smart Wednesday
👋 Hey there!
Here is your weekly dose of Work Smart Wednesday
In these emails I will share with you 3 things to help you work smarter in 3 minutes or less. That leaves you with 10,077 more minutes to conquer your goals this week
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1. 🪣 Don’t fill a leaky bucket
One of the things I see a lot of clients do is to pump lots of money into some kind of promotion that is not converting or leading to retention. Whether it is an ad campaign, a giveaway, or even their website, people often believe if they just reach more people then it will all work out.
There is some truth to this, if you reach more people then you probably will get more customers. At a basic level, new customers = number of people aware of your solution - (minus) number of people not yet interested in your solution. Entrepreneurs in the early stages often benefit hugely from things that are usually classed as ‘inefficiencies’, such as cold calling or doing email outreach. Simply making people aware you exist can go a long way.
However, you need to be aware of your sales process and your ‘customer/buyer journey’ so you can spot where the problems are. To see if the issue is the lack of people, or the level of interest, retention, or something else.
I like to use the metaphor of a bucket. The bucket is your business. Every time somebody becomes aware of your business, they are a droplet of water entering the bucket. Every time they ‘drop out’, choosing not to work with you yet, is them leaving via a hole in the bucket. Some holes are big, others are small, but people often start with a very leaky bucket.
Why fill up a leaky bucket?
It doesn’t make sense to spend time and money filling up a bucket that has lots of holes in it. We want the water to remain. We want to patch up those holes.
To spot the problems, you usually need to have some traffic coming through your sales process. You will need to spend some time and money at first. Having water in the bucket helps you see where the holes might be. BUT you should be willing to ‘turn off the tap’ of traffic and fix an issue.
If you have found a method that is delivering good traffic and has potential to scale, I argue that you should spend some time improving conversion and retention before really ramping it up.
Outline how it works so you can see what is happening. You should track conversion stats and your retention systems should be systematised.
Importantly, you must define what a conversion is for you - a qualified lead, a sale, a download of your lead magnet? Track your process and track your data. A simple spreadsheet is fine at first.
Different industries and different marketing methods have different conversion rates. You must compare like for like. On average, organic search has an average conversion rate of 16% (for leads), landing page opt ins have around 4%, while social media has been shown to have a low conversion rate of about 0.7%. Ecom websites worldwide currently average 2.86% (on sales), Google Ads have an average conversion rate of 3.75%.
Before you scale up your traffic, fix the holes in your bucket. Outline your process, make sure you have a process in place for things like collecting reviews and encourage referrals. Consider introducing a re-engagement or re-targeting campaigns so that leads who dropped out may still be captured, it can be something simple like a free pdf to capture emails and then occasionally sending the potential customer an email to remind them you exist.
Have a core process in place, even if basic, then scale up your traffic. You get more people through the system so you can see where the problems actually are. You will be able to dramatically improve your sales much more quickly this way.
An important caveat - leads aren’t “burnt” or “used up” when they have been reached once. Just because you call a prospect once and they say no doesn’t mean you can never call them again. You shouldn’t spam people, but you should reach out to people again in the future. Systematically.
On average it takes about 7 hours and 11 points of contact before a stranger feels safe enough to trust you with a purchase. While this varies, with some saying 7 times asking for a sale, few entrepreneurs reach out more than once. Keep going. It is easier to sell to somebody who you have contacted before, even if they rejected you, because they have at least heard of you. Having these re-engagement campaigns as part of your system is an important part of plugging the hole to make sure you don’t have a leaky bucket.
2. 🕳️ The sunk cost fallacy
This may appear as a counterpoint to the above at first, but I promise it isn’t. With many things in business, you should keep going. But there is a time to call it a day.
Projects or ideas can quickly become a financial black hole if you let them. It can be difficult to give up on something that you think should work, or that you are passionate about, or that you have spent lots of money on. Just because you have spent $500 on conference tickets doesn’t mean you should go. Just because you spent $8k or 20 hours on a new website it doesn’t mean you should use it. $150k on fitting out a new restaurant doesn’t mean the restaurant should ever open.
How do you know if you should continue or if you should stop? Data.
You need evidence that the thing will or won’t work. You probably already have that evidence, but maybe cannot see it.
My friend recently became interim CEO of an angel investment company. That company is in dire straits but the original board won’t let it go because it hasn’t yet delivered the ROI they expected, despite an objective strategic summary from my friend showing that the future is bleak. They have invested and find it hard to quit because they have put so much into the project.
What they have put in is “sunk”, it is done, used, finito, gone. It is irrelevant. The future is what matters. Past actions should not dictate future actions. Your future need not be dictated by your past. That company is bleeding money without any realistic future prospects. It is causing significant reputational damage to all involved. It is time to cut it loose.
It can often be hard to ‘zoom out’ and see the situation for what it really is, but you must seek out an objective opinion. An objective opinion can make you aware of evidence that you are otherwise blind to. There are lots of reasons why you may be blind to the evidence, from your emotional connection to misattributing or misunderstanding the importance of some evidence. Objective opinions will help you see things that are otherwise impossible to see.
Remember: there is an opportunity cost to continuing with anything. Have the courage to cut a problem project, regardless of what you have spent.
What has happened in the past pales in comparison to the future. People in pop-culture when time travelling often worry about how a tiny change in the past will impact the present, but rarely consider how a tiny change in the present can impact the future.
The past is done. Learn from it. Focus on the future.
3. 💡 Quote I'm pondering
"Winners quit fast, quit often, and quit without guilt” - Seth Godin
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