The Great Ideazine
     December 03, 2009Volume 8   Number 32   Issue 247     
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Been doing a lot more reading and video watching lately. Got more good stuff, that I'm sharing in today's article.

The New Leverage Formula

by Jim Green

This is a brief synopsis of a paper and video by Shawn Casey and Jim Fleck. I will try to attribute any exact quotes by setting them in quotes. Quotes for quotes. Cool eh?

Their system in a nutshell:

    Step 1. Get Leads.

    Step 2. Turn Leads into Cash

    Step 3. Repeat

Or to put it another way, “Leads go in. Cash comes out. Repeat.” Concise. Simple. Like so many other great formulas, the trick is in the execution. Your chore is to find ways, that are congruent with your ethics and morals, to create the simplest path to maximize the cash per lead. Anything more than that is an unneeded complexity and will negatively impact your bottom line.

Comparing it to an assembly line, it was clear that if the parts were executed in the proper sequence, a complete, saleable product was produced. Done incorrectly or out of order, and no saleable product was produced. So with your business. Simple steps, done correctly will produce cash.

Information products are the most profitable items you can sell. If you are not getting a high profit margin, then you are overly complicating your business or doing something drastically wrong. Plain and Simple.

Because you are dealing with information products, your costs are basically, hosting, bandwidth, an autoresponder, and some web storage, but these costs are minuscule compared to income.

You will however, need to spend money on lead acquisition. This can be done in a variety of ways - SEO, article marketing, and other free, except for your time, methods, or you could pay either directly in the case of Pay Per Click (PPC) and lead purchase, or indirectly by joint ventures or paying affiliates a commission on sales. Leads are an investment that you must make if you are going to grow your business at more than a snail’s pace.

According to the authors, it takes money to make money. If you cannot afford to invest in leads, either because you have no money, or you have a poor business model, then you are stuck with doing free things and growing very slowly. You may have to stay with your J.O.B. until you can save up a nest egg so that you can jump start your business.

You also need to develop a business model that has more than one source of income. You cannot make money selling one ebook, one video or one tutorial without adding backend products to extract additional income from your qualified leads.

There is no long-term money to be made by selling stand alone products or joint ventures (JV). The big money comes not from the first sale, but rather from the second, third, fourth and fifth sales to the same prospect.

To reframe it, you are not looking for a one-night-stand with your leads, but rather a long-term relationship.

Your first goal with your leads is to get their email addresses so that you can continue to build your relationship with them. That way you can continue to market to them over the long term at almost no cost to you. Even if they never buy one of your products, there is a good chance that they will buy something you recommend and get a commission on. But you must keep building that relationship.

The amount you can earn from each lead determines how much you can afford to pay for the lead. If you buy a lead for $1, make an initial sale of $.50 or a $1 and then let them to go, you will go broke. If however you pay $2 for a lead and extract $3 to $5 from that lead, over the lifetime of your relationship, you will make good money.

Your role is two-fold. First you must acquire high quality leads from reliable sources. Second you must create and maintain a profitable relationship with these leads. You must consistently create the maximum cash per lead. Of course, you must be constantly acquiring new leads and creating new ways to get cash out of your leads.

When you acquire a lead, your first step should be to make them an offer, and if they buy, continue with upsells until they cease to buy. Your aim here is twofold. You want to recover your investment in the lead as fast as possible so that you can recycle the money and buy more leads, and you want to get them into your system so that you can continue to market to them.

You need to have an autoresponder that goes through a series of email offers to them. Then send them email blasts. You must constantly follow up to make money from those leads.

So now the question is, “How much can you actually afford to pay for a lead?” Until you know this, you cannot effectively buy leads. You need to be able generate enough cash to pay the going price, or more, for high quality leads. Once you can do that, your efforts can be focussed on buying as many leads as possible. Make sure that you have multiple leads sources because any one source could dry up or become prohibitively expensive - Google Slap.

Do not expect any traffic source to continue to provide the same volume of quality leads forever. You need to be constantly adding new lead sources. If you rely solely on JV, it will restrict your ability to grow. Your business is dependent on the actions of someone else. Their inaction could put you out of business in an instant. You must diversify your lead sources.

Social media is valuable, but extremely restrictive. You can do very little to increase the number or quality of your leads. Social media leads are neither controllable nor predictable. You should do social media, but do not expect immediate profits. The same arguments apply to Search Engine Optimization (SEO).

“Teleseminars, Webinars and Seminars as lead generation tools all work fine, but obviously offer a limited volume of leads.”

You need to develop sources that you can control, such as “Cost Per Action (CPA), Direct Mail, Radio, Television, PPC” and other methods of purchasing leads. If your conversion rate does not allow you to pay the cost of lead acquisition and leave you a profit, you need to find ways to either improve your conversion rate, or to generate more cash per lead.

To generate cash, the proven formula is to offer several low cost products as an introduction, then move on to higher and higher priced products like home study course, monthly continuity, affiliate products, teleseminars and webinars, product launches, telemarketing, etc. Learn how to leverage the power in your list.

You can grow your business.

“The Gateway Principle

  • Drive Suspects to a Squeeze Page using off-line Classifieds

  • Postcards - direct mail - rent lists of mail order buyers

  • Space buy space ads in newspapers

  • Radio and TV - Home Shopping, Short Form Commercials (30 second to 2 minutes), Uncommercial - Often cheaper than buying traffic on-line”

You can start small for most lead sources, even TV. Expect to lose money on your initial sales to leads generated from TV, but if you have a good back end sales system an overall profit is readily attainable. Because of the huge volume of leads, a small net profit per lead can generate a large amount of income.

Jim and Shawn have included a 2010 Profit Planner in their ebook. Basically, it has you list all of the potential lead sources, and then “write down the number of leads you acquired from each source” in 2009. Then, “for 2010, write down your goals for the number of leads you intend to acquire from each source.”

Then they have you write down your income for 2009 from the various cash sources, and then “for 2010, write down your goals for the amount of cash you intend to acquire from each source.”

Once that is done, you should be able to see the areas that you need to concentrate on, whether it be lead generation or the sale of high dollar products. Remember, you are not limited by simple percentage increases. You can and should double or triple your efforts and revenue in some areas.

Plan carefully, then act rapidly.

Final Notes
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