Small Business Smarts for Challenging Times: Know Your Funnels - Part Two

So - in Part One of this series, we covered how important it is to track how many people engage with and participate in any of the free lead generation activities you offer. Whether it’s a free PDF worksheet that someone can download if they give you their email address, a free hour-long training you offer or a free intro call, you need to know how many people are participating in all the free things you’re giving them.

If you completed the easy funnel worksheet I shared, you by now have a good sense of which of your free efforts are most popular and which ones are duds. You might even know which topics seem to resonate most with your audience. By completing that simple spreadsheet, you definitely have a very clear sense of what is working for you and what isn’t, what you should be doing more of and what you should stop doing altogether. And that’s great news - you already know where to focus more of your time.

But your free things - all of your lead generation activities - aren’t just there for kicks, are they? You’ve created all of these free activities to give people a sense of what services you offer, how you see the world, how they might also see the world if they work with you and so on. In short: every free activity should be driving revenue.

So how do you know what free things are driving the most revenue for your business?

You have to start with revenue. How much money is each product or service generating for you each year?

This doesn’t need to be scary or overwhelming. It’s a simple spreadsheet as well. If you are an e-commerce company with a lot of SKUs, this will take a bit more time - but you can also start by breaking it down into product categories vs SKUs. For service businesses, get as granular as you can. List every single service you offer and how much revenue you generated last year for each one.

I’m going to continue with our Client Amazing example from Part One. It’s a service business with a set amount of offerings - a new one added from time to time - so we mapped out revenue for 2019:

Note that right now we’re not focused on profitability or margins or your P&L or net vs gross revenue. We’re simply wanting to understand how much top line revenue each of your products or services bring in.

As you can see, there are some offerings that require a lot of customers to bring in meaningful revenue and there are other offerings that bring in the bulk of the revenue with far less clients.

In ideal world - you have a mix of both. As you’d imagine, Offering 4 that brought in the bulk of the revenue with so few customers is a higher ticket item as is Offering 6. You’ll also note that Offering 7 clearly needs a lot of people to generate $13k. That should be looked at. Is it necessary? How much effort is put into getting that $13k and should that effort go into another Offering that delivers more revenue for less effort? Offering 8 should clearly be looked at as well. Same with Offering 5 and even Offering 2.

If you completed your Free Activity worksheet from Part One - where you listed out every free activity and how many people participated - you can probably start to understand where I’m heading with all of this now that you’re about to map out your revenue by offering and you’re starting to see exactly how many people have contributed to your revenue streams. In Part Three, we’re going to link them together - your free activities to your revenue activities so you can REALLY get a sense of exactly how much you are expending for what revenue. In these truly uncertain times, it’s vital for you to get a handle on where you should be focusing your time exclusively and what offerings, services and marketing techniques are not serving you.

So! If you haven’t already, finish up your Free Activity Worksheet from Part One and complete this new Revenue By Product/Offering Worksheet. You can keep them in the same Google doc. Fill both of these out and let me know what you see. I promise you will already see areas that are really working for you and areas where you need to stop giving energy to right away.

Later this week. we’ll link your free marketing activities to your revenue and then you’ll have all the pieces you need to be very nimble with your business right now and focus only on those efforts that will bring in the most revenue for you with effort that is equal to the financial reward.

Let me know what you see!