When being "consistent" isn't enough

A simpler way to think about your marketing strategy and goals

This is for you if your revenue has plateaued and you don’t know where tf to start to fix it.

The last 18 months have been hitting business owners hard. The explosive growth from the pandemic has leveled off, leaving us with revenue that isn’t growing or worse, has declined.

I’m here to let you know, it’s not just you. Business is cyclical. People are generally spending less regardless of all the reels, sales, ads, or effort.

You feel like you're doing everything, but the results just aren't reflecting that. You know how Fat Joe said “Yesterday’s price is not today’s price”? Well, yesterday’s funnel is not today’s funnel.

The math ain’t mathing, because the formula has changed. We used to get away with a quick Instagram live, some FB ads and a few stories and emails to get a cash injection. Now? You need strategy.

The soft sales life of the past is dead. The business BBLs are gone. You gotta get in the marketing gym and put in that work now.

I need you to accept that showing up more on social media, launching new products for novelty’s sake, or spending more on advertising is not the solution to your revenue issue. You are going to run yourself into the ground trying to “do” more and quickly become fed up when you aren’t seeing the results you want.

Instead, it's crucial to identify where your sales funnel is leaking and pinpoint the underlying gap.

How to Analyze Your Funnel Leak

This is the first thing I do when creating 12-month marketing strategies for my VIP Day clients. It might seem like a lot at first, but trust, it becomes second nature over time.

Step 1: Calculate Your Conversion Rate and AOV

Begin by analyzing your data from the last 6-12 months. Determine your average conversion rate, which represents the percentage of website visitors who become paying customers. Additionally, calculate your average order value, which indicates the average amount customers spend per transaction.

Step 2: Develop Realistic, Data-Backed Goals

Now this is where we get down to business. I see too many arbitrary (aka unrealistic) revenue goals being set based on lifestyle desires and vibes, not math. Your goals and strategy need to be built around measurable KPIs you can work towards and execute against. Here’s how.

What do you want you monthly revenue to be? (keep it real with yourself here) Then, based on your average conversion rate and AOV, calculate the number of visitors and orders you need to reach that target.

To calculate the number of visitors and orders needed to reach a target revenue, you can use the following formula:

Number of Orders = Target Revenue / Average Order Value (AOV)

Once you've determined the number of orders needed, you can estimate the number of visitors required based on your conversion rate (the percentage of visitors likely to make a purchase):

Number of Visitors = Number of Orders / Conversion Rate

Let’s see it in real life:

Let's say your target revenue is $20,000, and your average order value (AOV) is $200 and have a conversion rate of 2% (0.02 as a decimal).

1. Calculate the Number of Orders:

   Number of Orders = $20,000 / $200 = 100 orders

2. Calculate the Number of Visitors:

   Number of Visitors = 100 orders / 0.02 = 5,000 visitors

So, to reach your target revenue of $20,000 with an AOV of $200 and a 2% conversion rate, you would need 100 orders, which would require at least 5,000 visitors to your website.

Step 3: Identifying Gaps and Leaks

Now that you have a clear understanding of what it takes to reach your revenue goals, it's important to identify areas where your sales funnel may be leaking.

Are you driving enough visits to your site? Traffic leak.

Is your conversion rate low? Messaging/market fit leak.

Are people adding to cart but not completing checkout? Abandon Cart leak.

Are you getting a ton of traffic from ads, but people aren’t adding to cart? Lead quality leak.

You catch my drift.

You need to meticulously assess each step of your customer journey, from awareness to conversion, and identify potential bottlenecks or areas where leads drop off. This could be due to unclear value proposition, a complicated checkout process, your marketing messages not resonating, or a ton of other reasons that are super specific to your business and no amount of reels or posting consistency can fix.

Step 4: Focus on Scaling Strategies

Scaling your business doesn’t equate to scaling your efforts. In 2016, the math was simple. The more you posted or spent on ads, the more money you would make. That’s not longer the case. Going from 1 to 3 posts a day might not be the solution you think it is. Launching a podcast isn’t the solution to your failing automated webinar. Offering more discounts won’t multiply your revenue or help you acquire new customers in bulk.

You typically need to go back to the basics and focus on increasing one of the 3 main levers: conversion rate, traffic, or AOV. Increasing traffic and AOV are the easier options, but it's vital to assess the feasibility and impact of each for your specific business. Experiment with different tactics, such as optimizing your website for conversions, tweaking your messaging, running targeted advertising campaigns, offering upsells or cross-sells, or improving customer experience.

How This Approach Impacts Your Leadership

How easy does it become to hold your team accountable when they know they needed to drive 20K visitors to the website but only sent 10K? And how simple does knowing where you need to take action become when you’re halfway through the month, but not on track with orders? “We want to have a $28,000 month.” Ok boo, but how are we going to do that?

Goals and projections allow you to lead better because you can develop KPIs and tracking metrics to measure performance against. Now your team meetings are less about pointless updates around tasks and projects and more about moving the needle.

Side note: Is it just me or is there a wave of entrepreneurs wanting to throw their businesses away? (Only to end up launching something new 6 weeks later?) I think the stress around revenue, managing a team, and the requirement for founders to also be personal brands is one of the root causes for this burnout, but that’s a post for another day. Let me know if you want me to dive into it.

I say all that to say…

You’re doing great sweetie! You are probably a first-generation entrepreneur figuring it out. Revenue plateaus are frustrating and make you doubt yourself and your team. But it’s not you, it’s business. By adopting a strategic approach and following the process above, you can start to identify the leaks in your sales funnel and take the necessary steps to plug them.

You got this!