Customer Value Optimization Explained by a Business Development Coach

Customer Value Optimization is such a Powerful Principle for Business, I want to make sure that I can Talk about it as much as Possible, and Explained the true power and potential this concept really has.  As complicated as this concept is, They should be teaching this Powerful Principle of Business  in college universities if they aren’t already.

customer value optimization

What is so fascinating about this principle is that it leverages a lot of the most powerful sales and business strategies that I have ever seen in business.  It literally wraps all of them into one blueprint or plan, and then it incorporates the natural psychology of human nature when building trust in a relationship.

With creativity, some research, and some work, you can apply this concept to any type of business.  Period.

To give you an Idea about how powerful this concept is, I’ll tell you a story about when I was Younger.  I use to look to find a business that had consumable products, because I loved the cash flow that a business like that produced.  You do your work up front, and then on the back end, it is very easy to make more money in time, because you typically will have repeat business and also even referrals off of other customers.

This keeps advertising and marketing cost at a minimum, because a typical new customer will continue to buy, therefore increasing the value of each customer, and if they stay, they typically will give you referrals if you build the trust, and add value to that customers life.

Customer value optimization explained

The problem I have seen some companies, business owners and entrepreneurs make  2 main mistakes when marketing and selling.

They don’t start the relationship from a position of giving more in value than they take in payment. They either don’t know HOW or Why they should be doing this.

There is more competition out there today, there is more ‘noise’ in the marketplace.  Customers have become more knowledgeable than ever, more demanding, and they don’t trust companies that they don’t know.

On the other side of the business table, the second problem is business owners are also becoming more cautious about running ads and campaigns because sometimes sales conversions are so low, and the cost of running advertising is so high, that the business owner doesn’t know what to do, or how to design a marketing plan and scale their business.

Inexperienced entrepreneurs think that spamming people in Instant Messages and Emails and telling everyone about their offer (before people even know who they are) is the way to grow their business.

The third area of problems is that Marketing companies do a really bad job of educating the business owners and entrepreneurs when they do work for them.  Most marketing agencies and firms have quota to meet, they are pushing their sales team to run promotions and get those sales.

I understand this.  They are in business to make money, but here’s the thing…

Some of these companies do a great job of having online training and support, some of which is free, but in the sales process, they Lose Track of the “Over All Goals” for the Business Owner.  They do this because they Have No Idea of a Business’ Goals because they Don’t usually Ask.

business goals

They don’t Track results, and if they do track the results, it is used with vague tracking systems and key performance indicators are all over the place.

So, if you can get a over all picture of the challenges and problems that exist in the market right now, Customer Value Optimization Helps with all 3 areas,  and with all three groups. 

A true Win-Win-Win scenario.

Customer Value Optimization Explained

I am a certified partner with Digital Marketer, and I learned different versions of this while working and designing other marketing plans, but this CVO chart that Digital Marketer has is so simple and so clean, I wanted to share it with you here.
I set this link to open in a new tab, so you could get a really good view of it.

Now, I want you to Take a Look at this Chart, and Notice that there are about 7 steps in the chart.

  1. Determine Your Product’s Market potential
  2. Choose your Traffic Sources
  3. Offering a Lead Magnet, which is a zero cost, high value item
  4. Offering a Trip Wire offer, which is usually a $1-$150 dollar item.
  5. Offering your Core Offer, Your Flagship product or service
  6. Offer a Profit Maximizer
  7. Create The Return Path for Customer.

Now, this is the the basic blueprint for building your customer value optimization plan.  What typically happens is a business owner will say they want to get some of this work done, but they don’t have the complete blueprint done, so they are losing money.

Or you have a marketing company that does some of this work, but some of the steps are not complete, and you lose money.

Or you try to sell your core offer first, before you offer a lead magnet that introduces you and explains the benefits of using your company, and you don’t offer a very low cost item next, before you offer the core offer.

Ryan Deiss compares this to going out on a first date and then talking about when the wedding is and what you will name your kids on that first date.  It’s Creepy and weird.  It’s the same concept, but people are doing it everyday in their businesses also.

This is the reason why I am so passionate about this Customer Value Optimization Explained post because so many people are doing this wrong.  They are missing key steps, because they simply don’t know how CVO or Conversion funnels Works.

I can’t get into the details of each step and how they work in this short post today.  The main point of this article is to raise your awareness about what Customer Value Optimization is, and I want to now discuss why your business needs it, Why your clients need it, and how beneficial it is to you and your company’s future.

The Growth Potential Formula

Ryan Deiss Explains this in a course he teaches that we will offer you at the end of this article,

Leads + Conversions + Margin + Frequency = Growth Potential

Now if you look at this formula, I would like to personal give Ryan Deiss Credit for this formula of Growth Potential.  I would Also like to Point out that it takes no consideration of Leadership and Systems for growing a business.  At Innovative Marketer, we feel that it is crucial to have the 3 components of the Innovative Marketing Trinity to full reach your growth potential.

customer value optimization explained

For the sake of keeping this topic on subject, Let’s Assume you already have your leadership and systems in place.

If you increase your number of leads, or number of sales you convert, or in amount of Profit Margin or the Number of Times you sell a Client, Then you will in fact increase your growth Potential.

The CVO principle helps you increase all of the factors that help increase your Growth Potential.

Another point I would like to point out, that Russell Brunson Mentions in a lot of his training.  The goal for any funnel is to try and break even on the front end of the funnel.  That would be the Trip Wire offer in the CVO Funnel.  When you can accomplish this, this is how you Optimize the Lifetime Value of a customer.  Because you would then sell them the core offer and the profit maximizer and then you would create a return path and sell to that client again.

This is the Goal of any Funnel, or Conversion Funnel.  To create a self liquidating offer that essentially pays for your to market at a break even cost.  Then once you acquire that client, you sell them the core offer, profit maximize and repeat sales.

Ultimately, the cost of getting new clients are what most business owners are afraid of, and the first point I want to make with this customer value optimization explained post.

That is what holds them back on a belief that marketing is expensive.  They make the mistake of trying to sale their core offer first, they don’t sell any profit maximizers or they don’t focus on repeat business or referrals.

This is a VERY IMPORTANT point of the Customer Value Optimization principle. 

This is why you need one in your business.

If what I have been talking about has interested you, You can download a Free Checklist here that covers a good bit of the CVO process. Click Here

If you take this opportunity, you  will also have a Chance to Sign up for Ryan Deiss’ Conversion funnel Mastery course, where he will go into more depth of the customer value optimization funnel and how you can incorporate it in your business.

This course is hosted by me, as a Certified DM Partner, and I also include a lot of checklists for building out this funnel.

You will want to take this class if you don’t have a good understanding about Conversion Funnels.

Once again, Thank you for your interest in this foundation principle, and make sure you comment below if you have any questions!

If you are interested in having a free strategy call, book an appointment here.

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