The Profit Formula for Infusionsoft Users
Business can be overwhelming and down right tough. This is especially true in the beginning of any venture, or before the venture hits critical mass.
There are so many things that seem really important, constantly nagging us for attention and time, both of which are in low availability and high demand!
Frameworks are simplifications of complicated concepts. They can be easily dismissed but when used properly can really help a time, effort and cash strapped entrepreneur to focus their efforts on things that make a real difference.
The formula in the photo came from a special report written by Frank Kern several years ago. This formula, which can be used as a framework, breaks down the essential business activities required to generate profits.
I'm going to give you a heads up right now, I'm not going to be covering each element of the formula in depth enough to have it be life changing in this post, but I will give you enough meat that you can gain a starting point to get on the path to profits.
Positioning: this concept alone is one of the most underrated parts of the formula that it blows my mind. Getting positioning even halfway right will generate more profit for you than you can believe at this point, and yet it's the most often neglected part of the formula.
In fact, if I had to weight each of the 3 parts, this would be worth 2-5 times as much as promotion and 10-20 times as much as process.
Now, don't let that emphasis lead you to believe that with some positioning you can get away with little promotion and no process and still create profits. The fact is you can create some profit without process, but it will be more work and less consistent than you should want.
Positioning is how the market you serve sees you.
It is a very relative concept. Relative to the market you serve. You can be positioned very well in the minds and hearts of your market and be virtually unknown by your neighbors, family and friends.
How you are perceived by the market you serve can have little to do with your actual expertise. By this I mean to say that I've met many bright and capable folks who are not seen in that way by their markets. I've also met literal morons who are carried about on platforms of adoration. This can give you peace and hope or drive you bonkers.
On the hope side is the understanding that positioning is created by piggy backing on cultural trends and human nature.
We can't possibly know in an instant who is credible and who is not. Or who is really good at what they do and who is clueless. Yet we make these judgements all the time. And what we make these judgements on is rarely factual. Don't believe me, look at who end up being the best known gurus in any area. Is it those who have the most expertise or skill? Rarely.
I'm going to frustrate you now. I'm not going to reveal anymore about positioning, but I'm going to close this section with this: With some thought and effort, you can create your positioning in such a way that you become the obvious choice to your market. There are plenty of clues around you.
Promotion: By promotion I mean advertising, joint ventures, marketing assets put into the market you serve. This could be Facebook ads. It could be an email to your list. It could be a social media post or a blog post pushed out to the market. It could be direct mail sent to a purchased list, or a list of prospects captured in other stages of promotion. It could be a speech you give to a group of people who are in your market.
But the heart that drives promotion is a compelling offer. An offer that is almost too irresistible for your market to ignore. Again, this all important offer formulation is often left to chance or lazily thrown together.
But if some minimal thought is put into crafting a compelling offer (from the perspective of your market, not yours), and it is coupled with half way decent promotion, it's almost criminal.
Criminal because the advantage you have over your competition is so great that it can almost feel like stealing.
See, most of your competition won't think about positioning and they won't even bother to trouble their brain with creating a compelling offer. No, they will instead do the deep dive into the lowest price end of the pool.
But understand, it's what most of your competition will do. Especially if you create a compelling offer and position yourself half way decently. See, when you do those two things you suck all the oxygen out of the marketplace.
Everyone will be drawn to you. And what happens when you take your competition's oxygen? They, just like anyone who is suffocating, will get desperate for air.
Because the competition bar is so low in most markets, they will do what desperate companies do, start trying to compete on price.
But that creates an interesting situation. How long can you do what you do if you are not getting paid enough to do it happily? The answer is not long. Pretty soon if you are trying to compete on price, you cut corners, you don't make investments into your product or service like you should, and before you know it, that thing you used to call a business is a dump.
You don't like working there and you really resent your customers.
That's what happens to your competition when you suck all the oxygen out of the market with positioning and promotion.
Now add one more very critical element to this equation and you almost can't help but be successful.
Process: This element of the equation, at least in the marketing automation world, gets WAY TOO MUCH EMPHASIS.
And it's not hard to understand why. Once you learn how marketing automation works, it's FUN to create an automated process. There is some instant gratification from creating a process, publishing it and seeing a contact work their way through it.
It gets really addicting when that contact ends up spending money with you!
But on its own process doesn't produce profit. This is the grand mystery that is lost on so many automation consultants.
Frankly, it's why I've avoided the automation consulting world. I know that in order to have process be profitable, you must do the hard work of thinking about and crafting an irresistible offer AND creating the positioning that will make everything else more effective.
Yet, if I get promotion and positioning right without process, I'm doomed to the diamond encrusted golden treadmill. The one that produces profits but that will also eat me alive if I stop running.
That treadmill is exhausting.
I can't tell you how many famous (because they are positioned well) and wealthy (because they promote well) folks I've met and deep in their eyes I hear a cry for help.
They've failed to put process in place. Process that gives them liberty to live.
You might have gotten the wrong impression about process. I kinda made it sound like it's automation. Automation is a part of process, but it is not process. Process in and of itself implies the presence of a team of people working together toward a common goal.
That being said, process is critical to a one person show as well. It is what opens up the opportunity to build a team. See, as a one person show you do so much on autopilot. You don't think about how you sell. You just do it. You don't think about how you fulfill the promises you make to customers, you just do it.
But process means that you inspect what you do and how you do it, so that you can begin to automate portions that are subject to the frailties of your human nature, and enhance the humanity of where you interface with other people.
As a one person show, you might get away without identifying process, but you'll never see real profits if you don't identify and leverage process with a team.
Profits: They seem elusive for some, but profits are waiting to be extracted. But before you can hope to see them consistently and in increasing amounts, you've got to get at least a level 1 mastery of the 3 P's of Profits.
When you're working this formula correctly, you should see profits increase on a regular basis. In part, this will be because you can ask for and happily be given higher than average prices. This doesn't mean you are ripping people off. It means that the value from the perspective of the customer will be higher as a result of the these three P's being combined by you in your business.
I wasn't going to do this, but since we're already here, let's talk this through.
Understand that unless you can perceive a difference in any product or service from another in a way that is meaningful to you, you see that thing as a commodity and will there for seek the lowest price...to an extent.
Let's consider water.
In the first world West, at least, water is fairly available. You can turn on a tap in one of several sinks in your home and get a glass of drinkable water.
That water is what you might call a commodity. A glass of it is less than a penny in even the most drought plagued city in America.
Yet, if you go to the grocery store you'll find a bottle of water selling for over $2. It's called Voss.
Voss charges and gets from a select audience 20,000% more than the cheapest option. How? Largely on the positioning element of our formula. Close inspection will reveal that promotion and process are part of this company.
If you go to water.com you'll find that Sparkletts charges much more than the penny per glass to deliver water to your doorstep.
Yes, the water is different in both cases from that coming out of your tap. But the fact that something as plain as water can have such drastically different values to different people clearly illustrates that what you charge is appropriate to the market that pays you for it.
In the case of Voss, for your $2+ you get a nice glass bottle that isn't leaching carcinogenic chemicals into your pure water from some especially pure source. While the glass bottle no doubt adds to the cost, their margin is significantly larger than the city, or even the plastic bottles below it on the shelf.
In the case of Sparkletts, they are being paid to conveniently bring you better tasting water than you can get from your tap. Water you could go to the store and lift into a cart and then lift into your car, then lift into your house. Sparkletts leans more on the process than the positioning. Their process of creating convenience increases the value and profit for them.
No one loses as a result of the effort that Voss and Sparketts put into promotion, positioning and process. In fact, everyone wins. These businesses are able to stay profitable and in business. That reliability gives confidence to their customers that they are going to continue to get what they expected and want.
If you find yourself struggling, take 20 minutes today to consider each of the 3 parts of this formula. Ask yourself how well you have done at positioning yourself to your market. Ask yourself how well you promote; how compelling is your primary offer? Ask yourself, how well am I leveraging process? Is there a predictable way to generate leads? Is there a predictable way to nurture those prospects to customers (sales)? Is there a reliable, predictable process for delivering on our promises to customers?