To increase your revenue by 33% per customer, you just need a 10% improvement in each of these 3 business levers:
- lead generation
- conversion rate
This marketing flow applies to most businesses. Let’s demonstrate how this work with easy math.
Let’s say, the “before” column shows what your business numbers look like right now, and the “after” column is what happens when you make a 10% improvement in each of these areas.
|1,000 leads||10% increase ➡️||1,100 leads|
|10% CVR (10 customers)||10% increase ➡️||11% (121 customers)|
|$100 price||10% increase ➡️||$110|
|Revenue: $10,000||33% increase ➡️||$13,310 revenue|
For example, if you are getting 1,000 people visiting your website in a month, and if 10% of them purchase your $100 product or service, you make $10,000.
If you add 10% more to your 1,000 website visitors, you get 1,100 visitors. You can achieve this by publishing better content more frequently or doing partnerships to get people to visit your website more.
If you improve your current conversion rate by 10%, it becomes 11%. If 11% of 1,100 website visitors buy your product, you get 121 customers. You can achieve this by improving the sales copy on your website, or improving your consultative selling.
If you add 10% to your $100 product, it would be $110. Maybe your price was a bit low, to begin with, so you just need to raise it. Maybe you can make your product or service offering more appealing.
When you have a 10% improvement on each of these 3 levers, you get a 33% increase in your bottom line!
To put it another way, improve your lead generation, sales, and product.
Of course, you can switch those numbers around and decide for yourself which lever you want to improve by how much.
That’s how you can make an educated guess and know how much money you can expect to make in your next launch or sales cycle.