Customer Value Maximization – 6 Practical Steps To Creating A Wildly Successful Information Business

Being in business is all about profitability.

How much profits you make day in and day out.

You can talk about having core values, your mission and vision of what you’d like to achieve with your product or service, but at the end of the day it all comes down to this:

While core values, mission, and vision are all important, it is not as important as cash flow… at least for people who’re just starting their business and have not gained traction yet.

Without profits and cash flow, you can kiss your business (along with your vision and mission) goodbye.

We all want to make sales.

However… simply asking for the sale directly won’t cut it. You might make 1 or 2 sale here and there, but the results are too poor to show for.

This is even more true if the product you’re selling is informational in nature (i.e. teaching people how to do or achieve something).

You certainly can’t just say “buy my ebook” and expect people to jump over your offer.

Nobody wants to buy your ebook or course. Who are you?

Unless you’re already a well-known expert in your field, you’re not going to sell even a single copy.

Instead, we should be using a more systematic approach to selling our products by using a marketing strategy called  Customer Value Maximization (CVM).

CVM is also widely known as a sales funnel, but if we call it that… then we’d all be thinking in terms of sales, sales and sales… when we should be providing maximum value for our customers and solving their problems first. When we’re able to do that, sales will naturally and inevitably follow.

According to marketing expert Jay Abraham, there are only 3 ways to grow a business:

1. Increase the number of new customers
2. Increase the average transaction value (buy more at checkout)
3. Increase the frequency of transactions (buy more often)

CVM uses the above 3 ways to maximize sales.

Customer Value Maximization (CVM) is a strategy to get more leads, more customers, and ultimately… Click To Tweet

CVM has a big opening at the top and a small opening at the bottom. You can think of CVM as a machine.

When you pour visitors (people) into the top, money comes out at the bottom… IF you have an effective system in place for converting visitors into customers.

It is also worth mentioning that people don’t buy products. People buy the outcome of what your product can do for them. They buy the end result.

People don’t buy products, they buy the end result of what your product can do for them. Click To Tweet

Someone who wants to lose weight buy your weight loss pills not because of the pills. They buy because of the promised end result — a slim body.

Before we begin on what each of the 6 stages mean, it’s important to take note that your audience have multiple problems they want to solve. Each of your product (stage) should aim to solve at least one but not all of their problems. No one product should solve all problems because in doing so, you’ll have a difficult time selling your other products/solutions.

Freemium

Freemium comes from the combination of 2 words — “Free” and “Premium”.

According to Wikipedia:

Freemium is a pricing strategy by which a product or service (typically a digital offering or application such as software, media, games or web services) is provided free of charge, but money (premium) is charged for proprietary features, functionality, or virtual goods.

The idea is that you offer something valuable (premium) for free to first-time visitors who haven’t heard of you before.

This is necessary to build trust, which in turn is needed to make sales.

By offering it for free, you lower people’s resistance since they don’t need to fork out any money.

They just need to provide their contact info (typically in the form of their email) in order to get the Freemium.

Freemiums are used every day in real lives too. Let me give you an example.

Go to Baskin Robbins and the sales counter will enthusiastically greet you: “Hello which flavor would you like to try?”

To which you then point to one of the ice cream flavors and exclaimed “This one please!”

What happens after you’ve tried the sample?

Yep, you simply can’t resist it anymore.

The sales counter has already whet your appetite. Your saliva is already gushing out of your mouth!

We all know what happens next as you open your wallet.

You might not have realized it, but this is Freemium Marketing in action.

Here’s another application in the digital world.

On our Zaxaa site, we give away a free report titled “38 Questions Smart Marketers Ask Themselves To 10x Their Profits”

As the name suggests, the report asks you 38 business questions that has the potential to multiply your profits.

But in order to get it, people have to give us their email first. We’re going to use their email in the later stages of CVM (which you’ll see below).

Freemium is also known as a Lead Magnet, and in this post — I show you how to create an irresistible Freemium / Lead Magnet.

Once you have your Freemium created, you then create a lead capture page to give it away.

Slide

Once someone has given you their email, they have unconsciously lowered their resistance.

The next step is to IMMEDIATELY make a LOW COST, CLOSELY RELATED offer to them.

Why immediately?

Because one of the persuasion principles as discussed in Robert Cialdini’s book “Influence – The Psychology of Persuasion” is called “commitment and consistency”.

It basically means that it’s difficult to ask someone a huge favor. What you should do is ask for a small favor first, and then from there once the person has agreed to the small favor, you ask them for a bigger favor.

Because they’ve already said yes to your previous small favor, they want to look and stay consistent.

Hence when you ask for the bigger favor, there is a higher probability that they’re going to say yes compared to if you just shoot for the bigger favor directly without asking the small favor first.

Since the person has just said yes to our Freemium, asking them to buy our Slide immediately after they said yes is going to be an easier sale.

And to facilitate the sale even more, it’s low cost (low risk) and closely related to your Freemium. Hence the word “slide” — to create a slippery slide path from Freemium to Slide.

We’re going to make profits in the next stage. In this stage, all we’re concerned is just converting leads (they’ve given you their email in exchange for your Freemium — hence these people are leads) to customers, preferably at least at break even cost.

Meaning you spend $50 on ads to get back $50 in sales revenue.

Even if they only spend just $1… it’s still a good starting point. This way you’ll get to segment your audience and separate those who are willing to spend money from the tire kickers.

Once a person’s status changes from a lead to a customer, something magical happens, even if only for $1.

But you need to make sure the progression from Freemium to Slide is natural. This means they must be tightly connected.

In the Baskin Robbins example, the ice cream sample (Freemium) naturally leads to a full size ice cream (Slide).

In the 38 Questions example, the report naturally leads to my Zaxaa sales funnel platform.

Inside the report, I show them they can drastically increase their business if they know what questions to ask, and the way to get the answers to these questions is either by looking up their sales numbers using a plethora of different tracking tools (which is a pain)… or they can just simply use Zaxaa where all the sales metrics are already built inside the platform with only a few clicks away.

The tighter/more related between Freemium and Slide, the higher the conversion from lead to customer.

In the digital marketing world, Slide is widely known as a front-end product.

See this post for guidelines on how to create your paid digital products.

Essence

At this step, once people have taken up your Slide, you IMMEDIATELY (again) offer them another closely related offer — your Essence. This should be more expensive and deliver more value than your Slide.

For most business owners, the Essence is typically their “main offer”. Because they don’t know anything about the CVM strategy, what they typically do is sell their main offer straight off the bat to first-time visitors or people who haven’t know about them yet.

And you can pretty much guess they won’t be very successful in trying to sell their main offer — unless they’re selling well-known physical products (e.g. Apple and Samsung products, Ford cars, Fossil watches, Ray-Ban sunglasses, etc).

Suppose you’re interested in Forex trading. If I were to make you a straight pitch for my paid course on Forex trading, would you want to purchase if you don’t know who I am?

You don’t know what I do. You don’t know if I’m the real deal. You don’t know if I know what I’m talking about. What happens if I’m just another scammer?

Chances are, you won’t buy.

But if I were to switch around and instead use the Customer Value Maximization process… I’d have a much higher chance of successfully selling you my paid course.

In the digital marketing world, Essence is known as an upsell or OTO (one time offer).

Profit Booster

Again, IMMEDIATELY after the customer has said yes to your previous offer (Essence), you offer him another one of your closely related offer — which I like to call the Profit Booster.

Anything you add here is to boost your profits, hence the name Profit Booster.

You break even on your Slide.

You make money on your Essence.

You make more money on your Profit Booster.

Still using the Forex example, in this stage I could offer you to join my mastermind group/community where you can ask me and other active members questions.

Or I could also offer a more personalized environment where I offer you one-on-one coaching. You get direct personal access to me via email and/or phone and can ask any questions you want.

Of course I’d charge a higher fee for my one-on-one coaching than my mastermind community as it’s taking more of my personal time and involvement.

In this Forex example, the Profit Booster is definitely going to be more expensive than the Essence, but it doesn’t always have to be the case.

I could also offer other related products apart from mastermind or coaching that doesn’t eat away my personal time, and it could be cheaper than my Essence.

In the Baskin Robbins example, the Profit Booster could be offering drinks to customers. Though the cost of a drink is not much, when you add them up it can contribute to a sizeable portion of the overall revenue for the day, month and year.

Or Baskin Robbins could offer their Profit Booster in the form of asking if customers want to get cakes as well.

Amazon.com is a master at increasing their sales revenue with their “Frequently Bought Together” and “Customers Who Bought This Item Also Bought” tactic:

The point is: “Get your customers to buy more stuff”

Profit Booster is also known as an upsell or OTO (one time offer).

Reengagement

Research has shown that a person needs to be exposed to the same offer multiple times before a sale takes place.

This means that people who have seen your offer for the first time are not going to buy.

The key, then, to make consistent sales day in and day out is to follow up with your leads and customers to build trusting and beneficial relationships so that they buy your offers.

Also, every person is unique and has different needs at different times.

Someone who doesn’t purchase your product (Slide, Essence, Profit Booster) right away doesn’t mean he won’t purchase in the future. It might be that the timing is not right for him or he has other more important issues to take care of.

By continuing to follow up with him, you create top-of-mind awareness should he need your product in the future.

Since you already have their contact info (email) in the Freemium stage, you can follow up with them via Automated Email Marketing — even when you’re not working, sleeping, or taking a vacation — all without your involvement and emails would still get delivered to their inbox.

All you need to do is write your emails and then load them into an email marketing autoresponder software, and let the software do the delivering of your emails to your leads and customers.

For example, let’s say you have 20 follow up sequential emails to be spread out to be sent on a period of 20 days, each one per day. You simply load these emails into the email marketing software, specifying which email is for day 1, which for day 2, which for day 3, etc.

When a lead or customer gets added to the sequence, they will get the emails as specified by you, according to the schedule as determined by you:

So everyone who gets added to the sequence will cycle through all of the emails, unless that person unsubscribes.

Please note that the “follow up” I’m referring to does not mean you become a pushy salesman who only do hard selling pitches and without offering any value to your leads and customers.

The follow up I’m referring is offering value upfront before you ask for the sale. If you do this, you won’t be regarded as just another pushy salesman who only want to sell all the time for personal gains.

On the contrary, they will thank you for emailing them.

Also note that this is NOT a get-rich-quick scheme. You must be able to craft emails that “win their hearts” because humans are emotional and we based our buying decisions based on emotions.

In addition, your product/offer must also be able to solve their real problems. You can’t just come out with a low quality, junk product.

It’s useless if you have the best offer in the world that can solve problems, but nobody knows about it.

Conversely… you can also have the best marketing system in the world, but if your product sucks and doesn’t solve real problems, what’s the point?

You may be able to trick a customer once into buying from you, but that’s it. They won’t buy your products anymore. Worse, they’ll even get to social media and bad-mouth you and your brand.

In addition to reengaging via email, you can also reengage via retargeting/remarketing, social media, and blog content.

Reserve

In this stage, you continue to follow up with your leads and customers as with the previous stage (Reengagement), only this time you offer them closely related products that you have not previously offered before.

As stated earlier, every person is unique and has different needs at different times. Since your Reserve solves different problems than your other products, someone who has not purchased your Slide, Essence or Profit Booster does not mean that he is not going to purchase your Reserve.

Your Reserve could include more than 1 product. Let’s say you have 5 products altogether. After taking out Slide, Essence, and Profit Booster… you still have 2 products left… both of which are your Reserve.

Offer these 2 products via follow up marketing (Reengagement) and your income and profits will increase further. Remember that you can’t use high-pressure sales tactics to sell, you must take on the mindset of a “problem solver” to be able to effectively sell your products.

What Next

Now that you understand the principles of Customer Value Maximization (CVM), the next step is to apply it your business.

With a good CVM in place, you will make sales consistently — day in and day out — even when you’re not actively working… because CVM is a system that has no emotions. It is a machine that works hard relentlessly 24/7 according to your command, every single day.

Of course in the beginning when building and fleshing out your CVM, you have no other options other than to work really hard.

There is no free lunch. To get results, you have to get going. There is no other way.

The good news is that you only have to work extra hard in the beginning when building out your CVM. Once your CVM is up and running, you only have to maintain and tweak it for improvements.

I certainly think this is a much better strategy than working 30 years at a corporate job.

With CVM, you can take vacations as you wish… or let’s say you don’t “feel” like working this week and would rather spend quality time with the family.

No problem. Your business will still run and make money without you.

For more guidelines on how to create your paid digital products, see this post.

How To Apply This To Your Business

Go and create your own CVM. It doesn’t have to be perfect. Nothing is perfect. It’s always a continuous process of tweaking and improving.

Make sure all the offers you make are closely related to one another.

For Beginners

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If you don’t know how to create your Freemium, these 4 steps show you how.

For Advanced Marketers

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Your Turn

Let me know what you think of the CVM strategy and how you’re going to apply it to your own business. I read every comment so leave yours below now…

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