- Your friend shows you her kick-arse Instagram strategy.
- A webinar about sales funnels demonstrates exactly how powerful those things can be when done right.
- You read a case study about a business owner who writes one piece of content each week and repurposes it over eight different social media properties.
All these things ‘work’. They all produce great results.
But here’s the thing no one is telling you:
Just because something works, that doesn’t mean you’re obliged to do it.
Trust me when I tell you I know how hard this is to put into practice. I hang around with some very clever online business people. The stuff they come up for their own businesses is insanely effective and they’re always very generous in sharing those strategies with me. The thing is, if I were to try and implement every amazing thing that was shared with me, I’d start drowning in overwhelm very quickly.
So how do you decide where to focus your efforts? Well I’ve found this profit formula (first brought to my attention by James Schramko) is a great place to start.
Here’s the formula:
Prospects x conversions = Customers
Customers x $ amount x frequency x % margin = Profit
Here’s the powerful thing about this formula: you only need to increase one of those numbers to increase your bottom line (profit).
So you can focus on doing just one of the following:
- Create a better lead magnet for your website (which will increase prospects)
- Fine tune your sales process (increases conversions)
- Putting up your prices (increases the $ amount)
- Offer complimentary products/services or a monthly recurring service (increases frequency)
- Reduce your costs (which increases the % margin)
Suddenly, it becomes a lot easier to choose which of the hundreds of amazing ‘these really work’ strategies out there you should implement first. Even better, once you’ve implemented that one thing and it’s humming along nicely for you, you can move on to the next. The compound effect of doing this will yield far greater results (both financially and mental health-wise) than trying to implement six new strategies at once and doing none of them well.
Also, when you implement six strategies at once, how do you measure the effectiveness of the individual strategies? The answer is, you can’t. And as you know from here, it’s hard to attract what you can’t track.