CHAPTER TEN: GETTING STARTED

So, what’s the high-level process of getting started? In simplest terms, the process looks like this: assess, plan, build, drive, optimize, and grow. You begin with an assessment, which involves something I like to call “basic business math,” and then you conduct a bottleneck analysis. Let’s take a look at these two.

ASSESS YOURSELF

When assessing your company, you want to get a sense of your current situation. What is happening with your current marketing, sales, and service teams? Are they aligned, working together as one team? Are they on the same page, and do they get what they need from one another? How effective are the people and programs within these teams? If they aren’t in alignment, you need to bring them in alignment before you do anything else. That’s your place to start.

Whatever platform these teams are using, make sure the data is aligned. Do you have a way to align all of that data, both in terms of people and in terms of technology? You don’t have to overhaul everything tomorrow, but you at least need to understand the current state of affairs with your platform.

Ultimately, you are aligning marketing, sales, and service to create maximum flow in your digital utopia system. That is how you create maximum flow in your digital ecosystem. Assess where you currently stand, so you know what remains to be done. What’s working, what’s not working, and where are the execution gaps?

BASIC BUSINESS MATH

Once you have an understanding of the current state of your marketing, sales, and service teams, it’s time to do basic business math. The purpose of this step is to answer the following questions: What does it cost to acquire a customer in your business, and what is an acceptable cost?

Sadly, most businesses can’t answer these questions, which means the funding they set aside for marketing and sales isn’t based on a real acquisition number. However, this information is critical to ensure you engage in activities that will eventually provide positive ROI. You can follow along in your Digital Utopia Blueprint as I walk you through the process.

KEY TERMS

Cost of Customer Acquisition (COCA): The total average cost of creating one new customer.

Gross Margin (GM): The average percentage of money you make per customer after subtracting the cost of producing a good or service.

Lifetime Value (LTV): The total revenue (Lifetime Revenue) you can reasonably expect to make from a customer multiplied by the average Gross Margin Percentage.

Though you shouldn’t expect overnight results from your first digital brand experience, you still want to start with eventual profitability in mind. If you don’t have a target number, you will be flying in the dark. That target number is called cost of customer acquisition (COCA), and it refers to the total cost of your marketing and sales efforts to gain a customer. If you know that number, you can derive budgets for your digital brand experience and related campaigns with a reasonable expectation of profitability.

How do you determine your COCA? First, for a given digital brand experience, determine what your buyer persona is worth in terms of lifetime revenue. I don’t recommend using total lifetime revenue, because the payback will take too long, even if the numbers make sense on paper. Instead, use a two- or three-year revenue number.

Once you have that number, multiply it by your gross margin percentage for that customer. This is the average percentage of money you make per customer after subtracting the cost of producing a good or service. Your customers might have a wide range of spending, so use a “garden variety” customer. That way you get a number that is middle of the road. Take your gross margin percentage and multiply it by your lifetime/two- to three-year revenue number. That will give you your lifetime value (LTV), the total profit you can reasonably expect to make from a customer. Once you have that number, determine what percentage of that lifetime value you’re willing to carve out for acquisition.

Some companies settle on 5 percent, others prefer 10 percent, and some go as high as 20 percent or more. I would say 5 percent is the absolute low end, but 10 percent is best, if you can afford it. Twenty percent may work for companies that are aggressively going after market share, but the 5 to 10 percent range is ideal for most.

Once you’ve decided on the percentage of gross margin that you’re willing to carve out, multiply that percentage by the lifetime value number. That’s how you arrive at your COCA number, which gives you the threshold you’re willing to spend to acquire a customer. Finally, multiply that number by the number of customers you want to acquire.

Suppose your goal is to acquire a hundred customers. Take your COCA number and multiply it by a hundred, and the result is your digital brand experience budget. Now you can make budget decisions that are designed for profitability.

Of course, marketing and sales budgets should also include non-acquisition activities, such as building long-term authority online or creating general brand
awareness. However, the smaller the company, the more you need to budget for activities that directly contribute to acquisition activities. With an actual number, you can make informed decisions about this.

HOW THIS LOOKS IN PRACTICE

Suppose the ACME Corporation has a goal to win 100 more customers (based on their buyer persona) per year, and they determine that each customer is worth $100,000 to them, with a gross profit margin of 40 percent. They would put $100,000 in the lifetime revenue box, 40 percent in the gross profit margin box, and the resulting LTV would be $40,000. If the company is willing to invest 10 percent of their LTV, then their maximum COCA will be $4,000 (10 percent of $40,000).

Very quickly, the company has been able to determine they can afford to spend $4,000 per customer, so if they want 100 new customers, then their budget for the year on this particular effort should be $400,000 (or $4,000 times one hundred customers). They also know that if they spend $400,000 to get one hundred customers, it will be profitable for them.

Too often, companies like ACME just start spending. They know they want one hundred new customers, but they fail to do basic business math, so they don’t know how much they should spend to acquire them. I strongly encourage you to sit down right now with your executive team and work out your basic business math, so you can make informed decisions when designing your digital brand experiences. That way you know up front that you’re going to be profitable.

BOTTLENECK ANALYSIS

Now that you have some concrete spending numbers, you must be strategic in deploying them. You probably won’t be able to tackle the entire spectrum of your marketing, sales, and service all at once, so you need to determine which areas need more attention than others.

Your conversion rate is the number of customers that you move through your relationship levels. In a perfect world, you would have 100 percent elevation at each level, but you’re likely going to have a much lower rate. Let’s say you are currently at 10 percent, but your objective is to be at 20 percent. Doubling your investment at every level in order to make up the difference would be very ineffi-
cient and expensive. After all, you don’t know if you’re doing better at some relationship levels than others. You might be doing a great job of turning visitors into leads, but a comparatively worse job of turning leads into opportunities.

A bottleneck analysis will show you the levels at which your flow is restricted. To conduct a bottleneck analysis, look at the number of customers you are elevating per month at each level and compare it to your overall objective. Let’s put some real numbers on this. For the sake of ease, we’ll limit ourselves to the four relationship levels that represent the biggest and most common milestones:
visitor, lead, opportunity, customer.

Let’s suppose your goal is to create 100 new customers per month, but when you look at the numbers, you’ve only elevated 50. Somehow, you need to double your results from 50 to 100. Upon analysis, you learn that you’re getting 80,000 visits per month to your website. You might be tempted to think, “Well, we just need to double it to 160,000 visits per month, and that will double our number of new customers from 50 to 100.”

However, you need to do a bottleneck analysis to figure out what’s happening at each relationship level. Start from the top and work your way down. Let’s say you look at your customer level and find you had 200 opportunities during the month to translate opportunities into customers through follow up, content, and offers, but you only elevated 50. That’s a 25 percent elevation rate. While this rate can be better, it’s not terrible.

Next you look at how many chances you had to elevate leads into opportunities through follow up, content, and offers. Maybe you find that you have 800 leads in your database, and 200 elevated into opportunities. That’s a 25 percent elevation rate, which is quite good. You’re doing a great job of following up and showing value to contacts that have elevated to the lead relationship level.

Now take a look at those 800 leads and compare them to your 80,000 website visits. That’s an elevation rate of one percent, so your bottleneck analysis looks like this:

• Opportunity to Customer: 25 percent
• Lead to Opportunity: 25 percent
• Visitor to Lead: 1 percent

At this point, it should be obvious where you need to concentrate most of your increased investment in order to reach your goal of 100 customers per month. What can you improve for visitors to convince more of them to become leads?

You don’t need more visitors. You’re getting plenty of them. You just need to do a better job of elevating them into leads in your database. That’s your bottleneck. Now, instead of trying to double your investment at every relationship level, you can focus your efforts and prioritize the things that will open up the bottleneck. What buyer persona can you serve through a high-quality Lead Magnet on your website that will elevate visitors into leads in your database?

Instead of taking this focused approach, what companies often do in this situation is deploy $200,000 haphazardly across all sorts of initiatives. They’ll spend more on emails, Facebook, and Google ads, and they’ll do more blogging. Most of the money being spent outside of the bottleneck is wasted, because it’s not addressing the problem.

Of course, the more money you have to spend, the easier it is to address multiple areas and speed things up, but only if you fully address the bottleneck first. You shouldn’t deploy into other areas until you’re putting enough effort into fixing the bottleneck. Even if you have a healthy budget, you have to deploy the dollars wisely. We no longer live in a world where big corporations are content to throw money around regardless of the metrics, because everything now affects the entire continuum of marketing, sales, and service.

No matter the budget, everyone has to perform to a number. If you’re the head of marketing and you want to help your company create better relationships in the
marketplace, you have to deploy those dollars in the most effective way possible, and the bottleneck analysis gives you a way to uncover where to prioritize your time.

DIGITAL BRAND EXPERIENCE PLANNING

Armed with the results of your basic business math and bottleneck analysis, you’re now ready for digital brand experience planning. You can now prioritize your buyer personas based on the investment you know you have. Even if you have the resources to tackle all of your buyer personas at the same time, I recommend starting with one, so you can get it right. Start with a very narrow
focus about whom exactly you’re attempting to engage in the marketplace.

Once you’ve done that, you can begin researching ways to uncover where your buyer persona is on an emotional level. What’s important to them? What buzzwords do they use? What struggles are they dealing with? What is the one focused pain point you’re going to solve for them through this process better than anyone else?

When you have your buyer persona defined, you can flip to the other side of your Digital Utopia Blueprint and begin designing your digital brand experience. Remember, your ecosystem is about the alignment of marketing, sales, and
service across all of your digital brand experiences. With this process we’ve just discussed, you’re going to have multiple digital brand experiences, one for each
buyer persona and pain point. By prioritizing a single buyer persona and pain point, you are simply finding the best place to start. Now, you can architect your first digital brand experience.

The easiest place to start is with the Lead Magnet. Come up with an amazing tool or resource around the pain point that the buyer persona can use, and you will make the rest of your digital brand experience architecture much easier to construct.

Your Lead Magnet has to be something that truly begins to address the pain point—not just an e-book. While e-books are great for Deep Dive Content in order to gauge behavior, your Lead Magnet has to be good enough that someone will be willing to request it from your website, through chat, or by some other form of direct communication. It must not only have high perceived value but high actual value.

The best Lead Magnets are tools and resources such as calculators, software, templates, and training—all fully functional things that can be implemented. Get this right, and everything else will be easier. It could make or break your entire digital brand experience.

For example, at our company, we have a buyer persona named President Pete, who is the president of a $10 million B2B technology firm. He has tried to step on the gas with his marketing efforts, but he’s frustrated that he can’t fund a full marketing department. On top of that, everything is so confusing that he doesn’t know where to begin. His approach is focused on tactics and he’s scattered.

Our Digital Utopia Methodology is meant to help President Pete get strategic by providing a blueprint that he can use to get started. The blueprint is the tool in our Lead Magnet box, and with our tool in place, the Cornerstone Content writes itself. Simply explain or teach what the Lead Magnet does, then offer the Lead Magnet as something that makes what you’re teaching that much easier.

For the Deep Dive Content, take the pain point solution one step further by providing your customer with deeper insights on the pain point you’re helping them solve. An easy way to fulfill this is to provide a video on how to use the Lead Magnet or a video that showcases a person or company using the Lead Magnet to solve their problem. It’s important that your Deep Dive Content shows compelling proof of the solution, product, or approach you’re educating the buyer about. Create compelling proof and your Foot-in-the-Door Offer will become a slam dunk!

Next, develop your Foot-in-the-Door Offer. You probably already have some way to initially engage people with your brand, so this offer shouldn’t be that difficult to create. Be consistent with your customer’s context at this point—they have engaged with your brand around a specific pain point and, as such, your offer to help shouldn’t simply be, “Hey, want a quote?” Provide an offer to help
that feels like a natural, logical next step.

If you’ve done it right up to this point, becoming a customer should be the obvious next step, which means it’s time to sell the offer that solves their pain point once and for all.

With this information, you’re ready to build your digital brand experience. If you don’t have the funds, staff, or time to tackle everything at once, use your bottleneck analysis to prioritize your efforts. Build the most important content and offers, and bring the core of your digital brand experience to life. Leverage your website management tools to deploy your content and offers.

There are more marketing and sales tools available to you than I can possibly list here, so do your research to find the ones that are right for you.

If selecting the right tech or tools for your organization, goals, and objectives is overwhelming, we offer a free consultation session to help you narrow down your options at BuildingYourDigitalUtopia.com.

DRIVE AND OPTIMIZE

Now that you’ve built the core of your digital brand experience, it’s time to drive and optimize, which is the ongoing, cyclical phase in which you are constantly engaging and re-engaging to ensure maximum flow through your digital brand experience. You will want to refer back to your bottleneck analysis to prioritize activities.

For example, if your bottleneck analysis reveals that your biggest problem is turning visitors into leads, an appropriate activity would be retargeting, which refers to ads that remind visitors about all of your great offers and content. Once you start generating more leads, then you can add email nurturing to the mix.

Ultimately, prioritization should always align with your biggest bottleneck. Once you’re fully addressing that specific relationship level, you can deploy any money left over to the next bottleneck down the list, and so on. That’s how you define your drive activities.

Once you’re executing your drive activities, make sure to optimize regularly. Remember, the clarifying question in the Digital Utopia Methodology is always, “How do we elevate the relationship?” It’s another way of asking, “How do we improve our conversion rates?” If your conversion rate is low, you’re not providing enough value.

If you’re providing enough value, elevating the relationship will seem natural and logical to your customer. With optimization, look at where you’re not elevating relationships at an acceptable level (based on your history, trends, and benchmarks), and consider the value you are offering
to customers.

As we said earlier, optimization begins at the top: turning customers into fans. That’s the job of your entire organization, beginning with your executive team. Of course, the last relationship level that your marketing team will be able to directly affect is turning leads into opportunities, so that’s the top level for them. If they find that very few qualified contacts are taking advantage of a “Foot-in-the-Door Offer,” then they need to figure out how they can give more value to make those decisions feel natural and logical.

Always remember that marketing shouldn’t operate in a silo. Marketing, sales, and service should all be aligned, but since each team has specific responsibilities, there will be points at which you need to have a seamless hand-off of specific tasks.

Even multi-billion-dollar companies have to prioritize their efforts. You may be able to tackle multiple digital brand experiences or drive activities at once, but no one has an unlimited amount of funds or team members. Always look at how your entire digital ecosystem is flowing, so you can identify the digital brand experiences that need the most help. Deploy your attention, effort, teams, and money into your bottlenecks—drive and optimize those places first and foremost.

A HEALTHY DIGITAL ECOSYSTEM

The final step in this process is growth. Once your first digital brand experience is up and running, it will get to a point where it’s mostly in maintenance mode. That’s the beauty of the digital world. A digital brand experience in maintenance mode continues to produce results for you, even as you turn most of your attention elsewhere.

Now it’s time to deploy another digital brand experience and start the process all over again. Eventually, you will have multiple digital brand experiences in play. As long as your marketing, sales, and service teams are working in harmony together through this process, these digital brand experiences will work together to create a healthy digital ecosystem or, as I like to say, your digital utopia.

This is your digital growth system, and it’s the way successful companies maximize flow, generating momentum for long-term ROI that will continue to pay off.

THE END

Building Your Digital Utopia Blueprint Chapter Guide

• Introducing Building Your Digital
• CHAPTER 1: Put the Pain in the Past
• CHAPTER 2: Commit to Building Your Brand
• CHAPTER 3: Service Mindset
• CHAPTER 4: Hyper-Specificity
• CHAPTER 5: Slow Down to Speed Up
• CHAPTER 6: Top Down Optimization
• CHAPTER 7: Commitment and Consistency
• CHAPTER 8: The Digital Utopia Blueprint
• CHAPTER 9: Engaging Your Core
• CHAPTER 10: Getting Started
• BONUS MATERIAL: Get the Digital Utopia Blueprint FREE