In my early days as a business owner I read The Art of War by Sun Tzu. It was a life-changing book, and taught me many things about how to take the long-view as a business owner.
One of the things I learned was the difference between strategy & tactics.
Strategy comes from the Greek word, strategos, which means a general — person who leads or directs an army and decides what the soldiers will do.
In business, strategic planning is the big picture thinking that a leader does to win the overall campaign against competition, market dips, or economic strife (=pandemic much?).
In military terms, tactics are the actions you take while engaging with the enemy in order to win a battle.
But let's put this in business terms.
See the picture above?
"We're going digital," is a strategic plan.
Facebook and YouTube are tactics.
You could think of strategic planning as the WHAT, WHEN and WHY, and tactical as the HOW.
This week on The Six Figure Biz Show I'm sharing with you the 6 steps you should be taking this year to create a strategic plan to sell your offer, so you can then chop that down into bite size tactics every week or every day of the year.
So, as always, let’s pull this problem apart.
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One of the secrets to business success is pricing your services correctly. Get it right, and your business will flourish without a lot of added stress or strain on you, the business owner.
But when done incorrectly, your price becomes an anchor that holds you stuck to the ocean floor.
In episode 69 I talked with pricing expert Kate Dixon about the right way to package up an offer so sexy it practically sells itself.
This really is square zero of your sales strategy, so if you haven't already I suggest tuning in to that episode and reading the examples on the show notes page BEFORE you tackle what I'm going to share next.
Most business owners have a talent or product that could serve many types of people. And your biggest fear in niching down or dialing into your ideal avatar is that you will miss opportunities or fail to make the sort of impact you wish to make in the world.
But I'm here to say: marketing doesn't work like that!
Sure, if you NEVER targeted anyone else with your efforts, you would of course prevent some people from reaching out to you, simply because they can see in the messaging, language, artwork, etc., that you aren't for them.
But leaning into speaking to just ONE niche or target market makes your message very very powerful.
I've taught these 6 steps at workshops all across the US, and one of my favorite demonstrations of this principle is to walk into the room without any fanfare when everyone is talking...and say "hello".
A few people - normally the ones closest to the stage, will turn and give me their attention.
But then I say louder, "All the ladies in the room put your hands up! Come on girls - show the men what you came for!" and I put some girl-empowerment vibe in my voice...
...that one always gets the ladies' attention ;-)
Why?
Because my message speaks to them in their hearts. They know I understand them. I've been there. I've felt the glass ceiling and I've broken through it...and I'm here to show you how.
So your first strategic step for selling your offer has to be: dialing into ONE target audience for this time period.
Most of my clients are small business owners making between $5- and $7-figures a year. At that size, they don't have a dedicated in-house marketing department, so we focus on ONE target audience and put automation in place as well as out-sourcing as much as possible to a virtual assistant before adding a new one.
Decide who would be the best fit for your services and who would be the easiest audience for you to get in front of.
Maybe they are already on your email list!
Or perhaps you have a local group where you can meet people, a Facebook group where they hang out, etc.
Finding "your people" is the first strategic step for selling your offer this year.
If you want to sell you need to learn the lingo of your target audience.
I don't mean "speak English" or proper grammar, I mean you need to go native and sound like the little voice in their head who understands their deepest darkest fears.
For instance, I worked with brides in the industry for ten years before I started my wedding planning business.
My ideal avatar was Betty Bride.
And sure, sometimes she had moments of bridezilla, but most of the time she was just a little girl who had dreamed of this moment her whole life, and was struggling to balance a career, society's expectations, the interference of every female member of her family, and her loving but wedding-clueless man.
Yes, I knew Betty Bride inside out and backwards.
That made it VERY easy to sell to her.
I knew the lingo of the wedding industry, but I also (more importantly) knew the fears inside her head, and stresses that weighed on her shoulders, and the dreams in her heart.
I could answer her questions before she asked them.
I was quieting her fears before she voiced them.
That is what it takes to write good sales copy for a website, ad, social media post. That's what it takes to sell so smoothly and easily that she just feels like we're having a normal conversation.
Not some pushy, sleazy, awkward "sales presentation".
Do you speak the lingo of your target audience? If not, you better hit the pavement and go speak to a dozen of them before you try to sell them anything!
I absolutely HATED math in school. It always seemed so pointless...who cares how many apples Johnny has?? I mean, seriously!
But if you're anything like me, you will fall in love with this formula:
It always enrages me - true rage - when I see a scammy, predatory marketing agency tell my client:
"How much is your offer? $5k? Okay, well my services are just $4,500 so it will pay for itself in one sale!"
Do they think we are idiots?
These companies are ignorant at best, truly evil at worst, because I don't know any business that has 100% profit margin on its high-ticket sales.
And for low ticket...? That kind of thinking will put you out of business really fast! So let's explore what I have coined Marketing Math - the simple arithmetic that will build you a highly-profitable business!
We start by calculating how much a single new customer or client is worth to your business in revenue.
First, take a look at the last six months of invoices, and average out each transaction. This will look a little different depending on your industry.
If you have a physical office, what is the average amount spent by a client per office visit?
If you are selling online services, what is the average cost of the packages you're selling? Or if you are charging per hour, how many hours does the average client use?
Let's call this number your Average Transaction Fee (ATF).
Next, take a look at your rate of customer/client retention. What percent of new clients come back for a second, third, fourth visit?
If you're selling online courses, what is the average number of upsells a typical client purchases from you?
We will call this number your Retention Rate (RR).
The formula is easy once you calculate these two numbers.
ATF x RR = Customer Lifetime Value (CLV)
How does this formula help?
It tells us right away how much we can afford to spend to attract a new client!
I recommend as a rule of thumb not spending more than 10% of your CLV on marketing, but it is important to know your own profit %.
For ever dollar you make, how much goes towards bills? The rest left over after bills & taxes is your profit!
If your business has a very high profit margin you might be able to spend more to attract a new client.
Let's call that number your Target Customer Acquisition Cost (Target CAC).
It is one of the most important financial numbers to know in your business. Now you know how much you should set aside in your business budget toward client-attraction.
Now we need to take a look at how many new clients you want and estimate how much work it will take to attract them.
A lot of business owners skip this step and end up underestimating the work involved - which makes them fall short of their goals.
Is there a limit to how many clients you can onboard at a time? If your business requires hands-on or manual processes, you likely have a production capacity. Figure out what that is before you go on to the next step.
If your business does not have a production capacity (for example, a group coaching program or online course can scale easily) then determine a goal for how many new clients or customers you want in the time period you are planning for.
Next, break that number down. Do you have enough sales people to sell it? Enough welcome kits to ship? Enough support staff to deliver it?
An important part of strategic planning is identifying where bottlenecks exist that could prevent your goal from being achieved, and working out solutions for them as part of your written plan.
Many entrepreneurs have a tendency to throw things at the wall and hope something sticks as their total end-all marketing strategy.
This seldom works, and is inefficient, expensive, and time-consuming.
Instead, keep careful records of your marketing efforts to determine what worked and what didn't - comparing your original budget with your final Customer Acquisition Cost (how much did you have to spend to attract the clients who bought from you previously?).
What worked before is often capable of working again! So don't throw the baby out with the bath water, but instead every quarter do an analysis of your marketing activities for the past three months and crunch the numbers.
What's working? Do more of it.
What's not? Cut the spending and reinvest it elsewhere.
Let's review:
You have an exact target audience now, know where they hang out, and exactly what to say to them that will make them perk their ears and listen up.
You know exactly how much you can afford to spend to attract a new client, and also a list of past successful actions to try again.
If that isn't enough - you also have a budget based on your production capacity so you can afford to hire help or run ads.
Doesn't that seem like a better strategy than the spaghetti-on-the-wall idea?
Now is the time to get tactical. Should you try Facebook or Instagram? Is it smarter to invest in Google Ads or email marketing?
These are the types of questions I solve every day for my clients, and I'd be happy to help you build a $1M business so you can dial back and work <20 hours a week.
I hope you found this episode helpful!
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Sarah Nicole Nadler is a business + balance coach. When she’s not serving her clients, she geeks out on board games, fantasy novels, and explores the great outdoors with her husband Ben. A digital nomad, she currently calls Tampa Bay, Florida home.
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