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What Is the Customer Value Optimization Process

What Is the Customer Value Optimization Process?

The Customer Value Optimization process is a 10,000-foot view of how marketing works when it's being done right. Let's dive in!

A 10,000 Foot View of How Marketing Works

Are you looking to build an unstoppable business? If so, you’ll want to learn about the Customer Value Optimization process.

What is it?

The Customer Value Optimization process is a 10,000-foot view of how marketing works when it’s being done right.

A system that repeatedly drives in new prospects converts them into paying customers and maximizes profits.

At its core, the Customer Value Optimization process creates a blueprint for all of your marketing. This blueprint will eventually become the core of your customer experience and customer experience.

Your customer experience will be much different if your marketing approach focuses on capturing customers, converting them into customers, and gaining the maximum profit out of them.

Your marketing will no longer be focused on nurturing the customer-you’ll be focused on converting the customer into a customer.

The Customer Value Optimization process is the methodology that makes this work. It works by creating a marketing blueprint that outlines all of the customer-driven steps needed to convert customers into customers.

It’s the same system that Starbucks and McDonalds use to attract customers into their businesses. It’s what Amazon users to dominate the eCommerce space.

Let’s dive in!

What is the Customer Value Optimization process?

At its core, the Customer Value Optimization process is about investing in high-quality quality customer experiences so you can build high-quality relationships with your customers. One quick way to think of it is that it’s about investing in an ecosystem of other companies with similar values. It’s about creating a unique value proposition with customers. It’s about maximizing the value of the company as a whole. It’s about building relationships that lead to loyalty and a smooth-sailing path to longevity. It’s about maintaining these relationships with customers and adapting them to change to deliver more value.

The System

Todays’ best marketers and entrepreneurs already know about and use the Customer Value Optimization System.

However, you won’t find this system taught in any business school.

Marketers use this system to determine what type of customers to target and optimize their customers’ value in the customer journey. It should be at the core of any great business, especially one that’s on a mission to become a social force.

This system is beautiful because it uses all aspects of the “Irrefutable law of Business Growth” by legendary marketer Jay Abraham.

The system states that, primarily, there are three main ways to grow a business:

  • Increase the number of customers
  • Increase the average transaction value per customer
  • Increase the number of transactions per customer

This system is called Customer Value Optimization.

Customer Value Optimization is a way of thinking about a marketing strategy, mission, and KPIs founded on data. It’s a tool that businesses use to make money and attract new customers.

The Steps to Customer Value Optimization

At its core, there are seven steps to Customer Value Optimization:

  1. Determine Product/Market Fit
  2. Choose a Traffic Source
  3. Offer a Lead Magnet
  4. Offer a Tripwire
  5. Offer a Core Product
  6. Offer a Profit Maximizer
  7. Create the Return Path

Step 1: Determine The Right Fit for your Product

The Customer Value Optimization process starts by understanding your customer.

Marketers like you and I get paid to get customers to move from a “Before” to “After” state.

In the “Before” state, the customer is unhappy or discontent somehow. They might be in pain, confused, or frustrated for some reason.

In the “After” state, everything is all better. They are out of pain, aren’t confused, and aren’t plagued by frustrations.

The critical takeaway is that people don’t buy products or services. They buy outcomes. They buy transformations. Customers are seeking to be in the “After” state.

Good marketing clearly shows the transformation from the “Before” to “After” state.

Businesses often fail because they aren’t good at articulating moving from the “Before” to “After” states.

As you can imagine, it’s critical to understand the desired outcome that your offer delivers. It’s vital to understand that for your businesses’ success.

Before you rush into the process of creating an offer, first ask yourself these five questions.

  • What does your prospect HAVE in the “Before” state? What does your prospect HAVE in the “After” state?
  • How does your prospect FEEL in the “Before” state? How does your prospect FEEL in the “After” state?
  • What is an AVERAGE DAY like for your prospect in the “Before” state? What is an AVERAGE DAY like for your prospect in the “After” state?
  • What is your prospect’s STATUS in the “Before” state? What is your prospect’s STATUS in the “After” state?
  • What is an EVIL that is plaguing the prospect in the “Before” state? How does your prospect conquer it and bring more GOOD to the world in the “After” state?

You can put your answers in a simple table with a grid that breaks things down.

Here’s an example using PushLeads. How do we help our customers get a positive transformation by using our services?

In this example, we’re going to use our “local business owner” buyer persona. These people are business owners of a service company, such as a plumber, carpet cleaner, or physical therapist.

We know that, from experience, these people are frustrated in the “Before” state because they aren’t getting enough leads from Google and other search engines. Our SEO process solves this by increasing their local SEO Visibility. As this process proceeds, the client gets more leads and is happy in the “After” state.

The local business owner ends up going:

  • From HAVING no SEO plan in action…to having a well-oiled SEO machine that grows their local visibility.
  • From FEELING frustrated, ignorant, and scared of losing their business….to feeling confident, in control, and happy.
  • From having an AVERAGE DAY in which they receive few leads in Google…to an average day in which they receive 2 to 5 qualified leads.
  • From a STATUS of being behind the times…to a status of having their business more respected by an increase of local visibility.
  • From the EVIL of being a victim of old-school marketing techniques to the GOOD of helping people with the products and services.

Do you want to be an average marketer or a great marketer?

Average marketers only focus on what customers HAVE if they purchase their product or service. 

Great marketers speak to transformations in the customer’s everyday life. They go beyond benefits and features and talk about how the customer will FEEL, how their AVERAGE DAY will change, how they will solve an EVIL in the world, and how their STATUS will elevate.

You can use a 10-question “Before and After” grid to craft powerful marketing messages that will be effective. 

How much do you charge for your services? 

If you want to charge more then, you’ll have to make some changes in your business that increase your VALUE.

Value is the distance before the “Before” and “After state. When creating new products or services, make sure that you have clear “Before” and “After” states. You’ll need to do this for each of your customer personas. 

Once you’ve done this, next, you’ll need a choose a traffic source. 

Step 2: Choose a Traffic Source

Now that you’ve found a found Product/Market fit, the next step is to reach your market and get them to visit your site. You can do this by using paid traffic.

Paid traffic is super valuable because it’s so easy to implement.

Google, Facebook, Pinterest, Twitter, and LinkedIn are huge storehouses containing nearly unlimited traffic! They would love for you to spend money with them!

How do you generate traffic profitably? This is a question that many people ask themselves and one that can be answered with two things.

First, you need to know how to measure the worth of traffic. Then, you need to know you can extract a maximum immediate value from that traffic.

Ask yourself this question.

“What if I received $50 in profit for every time you had a visitor come to your website?”

Yes, of course, you would!

The more you understand why the Customer Value Optimization system works, you might even consider paying more than $50 in profit for every visitor.

CVO is powerful because it allows you to earn more profit per visitor…which means you can spend more money per visitor.

The goal of traffic generation is not to generate an immediate profit but to drive prospects into the CVO Funnel.

Unless you set up a system that gets a maximum profit from your traffic, you’ll continue to be frustrated.

The best thing to do first is to focus on a single, steady traffic source until you’ve completely mastered it. Then, you can add a second, third, and fourth traffic source once that’s done.

These additional traffic sources could be Facebook Ads, email marketing, display ads, content marketing, SEO, organic social media, and so on.

The profits will start rolling in the more you use the CVO system.

Next, let’s talk about lead magnets.

Step 3: Offer a Lead Magnet

A lead magnet is something a prospect can’t say no to. It’s an irresistible bribe that gives a specific chunk of value in exchange for contact information. So, give your prospects the offer they can’t refuse with Lead Magnet.

This is a business transaction. It’s often the very first transaction you’ll have with a prospect.

For your Lead Magnet to be effective, it needs to provide tremendous value.

Lead Magnets are typically found on a landing page, a page set up to convert cold traffic into leads and customers.

The job of a Lead Magnet is to generate leads that you can continue to follow up with down the road.

Some Lead Magnets are better than others. While some will convert at a 5% or 10% rate, the best Lead Magnet Landing pages will convert 50% of cold traffic into leads.

How does one get a 50% conversion rate?

By being specific and straightforward. By creating something that gives value, is laser-focused, and has a clear Call to Action.

And also, be sure that your Lead Magnet solves a particular issue for a specific persona.

If you do this, you can create more high-quality leads!

Step 4: Offer a Tripwire

You now have a Lead Magnet, which helps to grow your email subscribers’ list.

However, your lead magnet is only generating prospects at this stage of the game, not customers. 

The next step is to create something that will turn those leads into customers. To do that, you’ll need to create a Tripwire. 

A Tripwire is an unbelievable offer that converts your prospects into buyers. Tripwires are typically very low-priced offers, usually between $1 and $20.

The goal of your Tripwire is to change the relationship from prospect to customer. A conversion, even for $1, is magical.

The most important key is to make your Tripwire Offer irresistible. 

Examples of Tripwire Offers include:

  • Columbia House offering 13 tapes for $1.
  • Everstryke Lighter is offering a buy one, get one free lighter with every purchase.
  • A Dental office offering a $199 white whitening special. 
  • A gym doing a 30 days for $20 offer.
  • Godaddy is offering a $4.99 .com domain for the first year.

The strategy behind the Tripwire is all about converting the maximum number of lead magnets into paying customers. This is quite often done at the expense of your profit margin because acquiring a customer through the next Three steps (core offer, profit maximizer, return path) will drive even more profits. 

Next, we’ll look at these three more steps in close detail.


Step 5: Offer a Core Product

The next step in the customer value optimization process is to sell these customers a higher-priced product.

This is called your Core Offer. Your Core Offer is usually your flagship product or service.

Many businesses make the mistake of attempting to sell their Core Product to cold prospects. You’ll rarely be able to convince customers to pay your Core Price because it’s quite often too expensive.

This is why following the CVO process works better at turning cold prospects into warm prospects and then customers.

Along as your Lead Magnet and Tripwire Offer provides immense value, your customers will be highly interested in purchasing your Core Offer.

With the Core Offer, you could be profitable without taking on additional risk. If you follow through with the CVO process, you could take all the sales you make from your Core Offer and reinvest them.

When you have a system that allows you to spend more on acquiring a customer than your competitors, you become unstoppable. With this strategy, you’ll be able to generate more profit and reach new customers in the long run.

Most companies are trying to make a living by selling their Core Offer.

And sure, you can continue to sell your Core Offer and make a living as well.

However, it’s also possible not to even make a dime from your Core Offer.

Jeff Bezos says that your “competitor’s margin is an opportunity.” It is your opportunity to, for example, spend more on traffic acquisition, conversion rate optimization, or increase the value of your offers.

Did you know that many successful businesses make not money from their Core Offers?

Nope. They make money at the final two stages: Profit Maximizers and Return Path.

Get ready to have your mind blown!

Step 6: Offer a Profit Maximizer

The second of Jay Abraham’s business growth methods is to increase the average transaction value per customer. The Profit Maximizer does this by offering a wide variety of profitable and high-margin products that will maximize your revenue.

Tripwire Offers and Profit Maximizers are the two things most businesses don’t have. This means they’re not maximizing their profits because they’re just selling to cold prospects.

You’re missing out if you don’t have a Tripwire Offer and Profit Maximizer. They will help you sell more of your Core Offer because people love discounts and incentives.

Did you know that Mcdonald’s doesn’t make any money off selling their hamburgers? The hamburger is the core offer, but it’s the French fry and soda that made McDonald’s what it is today. The French fry and soda Profit Maximizers are what really grew the business.

There are many different types of Profit Maximizers.

Whenever Best Buy offers warranties, installation, and Geek Squad support, they are Profit Maximizers.

Amazon will show you products that they think you’ll want to buy, based on the items you have in your cart. This is an offer called Cross-Sell Profit Maximizer, which helps increase the average value of your basket.

One of the most popular offers Amazon has to date is their Bundle Profit Maximizer. This offer includes the Frequently Bought Together one, which provides a personalized list of products commonly bought together.

These offers are called Profit Maximizers because these sales generate revenue that will be much more profitable than your Tripwire and Core Offers.

Think it this way: the single and most significant expense that most companies have is the cost of getting a new customer. That’s the job of the Tripwire Offer. Everything that happens after the Tripwire offer increases the customer’s immediate and lifetime value.

So, spend some time thinking about what you could be offering as an add-on, upsell, cross-sell, or bundle.

And now, here’s one final way that you can grow your business.

Step 7: Create the Return Path

The last way to grow your business is to get more out of every customer you have. You can do that by increasing the number of transactions per customer.

This is called the Return Path.

The Return Path’s goal is to provide the strategic communication needed to make your buyers and prospects come back for more.

Once you have collected a contact’s information through the Lead Magnet, you can continue marketing to them online.

You can tailor your marketing in the form of new Lead Magnets, Core Offers, and Profit Maximizers.

The Return Path is a marketing tactic that encourages the customer to return to your product or service more often. This could be in the form of an exit offer, loyalty program, email marketing, ad retargeting, content marketing, and other forms.

Going Forward

That’s it! This Customer Value Optimization system is giant corporations are using the grow their businesses.

Now, you can too!

If you apply the principles I’ve just explained to your business, it will help you grow and scale.

Have fun!

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