PPC's Biggest Success Factors


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Timothy Seward

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  • ** Timothy **Welcome!Introduction to Topic:We’ve seen some of our clients implement some of these tactics...others we see used by folks that are not our clients…please keep in mind that what you’re about to see are tactics that are part of a larger strategy that may or may not be right for your business.
  • Here’s the big picture…You Business: This is where the money is made. I’m going to jump ahead and give the punchline – PPC’s Biggest Success Factor is your business. That’s what this entire presentation is about – optimizing the value generated from your customers.So where do you get your customers? Here are some sources.[c] Walk-in Traffic[c] TV[c] Word of Mouth[c] Mail order catalogs[c] SEO or organic traffic from search engines[c] And last but not least: Pay per click Marketing – which is obviously our specialty here!PPC marketing where you pay for traffic on a per-click basis, usually through search engines. If you’re an online business, this is one of the most reliable methods of traffic generation.PPC Marketing can be a complicated endeavor. There are many factors involved in getting it right.[NEXT]
  • Let’s talk about the primary PPC Success Drivers:[c] PPC Campaign Optimization and about [c] Landing Page Optimization. Now we’re going to transition to the biggest Success driver:[c] Value OptimizationBy “Value Optimization”, we’re talking about organizing your sales funnel to get the highest “customer lifetime value”. We call it “value optimization” because the word “optimization” is key here. It is a continuous process. This isn’t just about making more money in general, it is about optimizing the value continuously – just like you’d optimize the landing page or your ppc ads.The value you provide your customers influences your landing page conversion rate and how much you can pay for PPC traffic.In the slide the arrows are pointing to the right – ‘cause that’s the chronological sequence your customers follow -- but the arrows of success point the opposite direction and flow from value optimization.Master PPC and Landing page optimization, yes – but realize that the biggest turning point for your business will be when you can get more value from your customers.The ones at the top have owned this responsibility. Frankly, this is why agencies such as ours exist. Not because PPC is too difficult for a layman to master, but because spending all your time on it distracts from your focus on the core of your business.
  • So what is value optimization?In short, it is offering your potential customers the:[c] Right Product with the[c] Right Offer at the[c] Right Price from the[c] Right CompanyAfter your prospect clicks a link to your site and after they read your landing page, the REAL question your prospects have in their mind is:[c] Do I want to buy this product from this company?In this presentation, “value” will refer to two things:The value received from customers (what a customer is worth to a company)The value you give to customers (what your product is worth to the customer)The rest of the time, we’ll be talking aboutsome specificways that companies can optimize for higher customer value. The strategies are intended to be ideas, not necessarily instructions or recommendations from ROI Revolution.We’ll be covering a wide range of ideas, some of which may apply to your business or your site, while others may not be as relevant. We’ll be using both real life examples and case studies, as well as some fictional scenarios to illustrate certain principles.
  • The next few slides will show ways that Mark, the business owner (the guy on the right above) can optimize the value so that each customer has a higher lifetime value.[c] Here we see the default value model. We have one product sold at a standard price point. Chris hands mark a dollar, Mark hands Chris a candy bar. After the transaction is complete, both parties go their separate ways.Many businesses use this model and sadly never progress beyond it.The goal is to increase the customer lifetime value. When each customer is worth more money, your business obviously makes more money. That’s good for Mark, because remember, -- even though you can’t tell it from his facial expression -- he really likes money.Not only that, but the more money customers are worth to Mark’s business, the more money he has available to invest in more forms of advertising, thereby increasing his customer base and profits.
  • The first way to optimize your Customer Value is also probably the simplest: Just change your prices. When most people think about price changes they think of lowering prices. Would this give you more value per customer? No, but you might get a higher volume of customers, which could give you higher conversion rates and make your advertising more profitable.But, if you're currently not getting enough value from your customers, then raising your prices can be a great idea. As long as your prices are not ridiculously high or unjustified by the quality of your product, then most reasonable prices increases will go unnoticed by your customers. Studies show that when you have a unique and high-quality product or service, many customers will remain loyal to your brand, regardless of a slight price increase. 
  • When product fulfillment costs are fixed, a small increase in price can raise your profit margins dramatically, and disproportionatelyExample - In a book called “The Art of Pricing” Rafi Mohammed page 43-44, explains that if Kroger (grocery store) were to raise their prices by only 1% (a $100.00 grocery bill becomes $101.00), then Kroger's net profit would almost triple![c]Example: Top 10 companies in the Fortune 500 - a 1% increase in price would result in an average of 11% increase in operational profits (assuming same volume sold and same fixed operational expenses)
  • ** Timothy **So we’ve seen that you can simply change your prices. Price changes can also be expressed creatively, as we’ll see in the next few slides…
  • If the competitive landscape won’t let you simply raise your prices, you can make your product worth more than the competitors’ products by adding more value to the product itself.Adding more value to your product should help it sell better and will also give you justification to raise your price above the competition due to the increased perceived value.There is a book by Tony Cram called “Smarter Pricing.” He gives a helpful value formula…He states that [c] value is [c] Perceived product benefits, plus[c] Perceived emotional associations, minus[c] Perceived priceSo if you want your products to be perceived as more valuable in the mind of your prospects, you can tweak any of the three elements on the left side of the equation.You can add more benefits to the product – real or perceived – or you can enhance the emotional association your product has in the mind of the consumer -- This is what advertising and copywriting seeks to accomplish.Or you can try to change the price as it is perceived by your prospects. This could involve an actual change in your price or simply a repositioning of your price. An example of this would be when a charity states that a $30 per month charge is “less than the price of a cup of coffee” when viewed on a daily basis.
  • So far we’ve just talked about selling one item or a bundle of items at one price to your customers. There is a whole world of value available by selling additional products to your customers.These include:Up-sells, Down-sells, cross-sells (selling additional items to your customers), and Back-end sales (marketing to existing customers)An upsell usually refers to selling additional products in the same category as the original product – or in upgrading someone from one version of the product to a more expensive version of the same product.A cross-sell, on the other hand, is when you attempt to sell a customer a complementary product. So when Mark asks me if I want to buy a drink with the candy bar, he is cross-selling me.A down-sell is what you offer if someone rejects your upsell. At a fast food restaurant, if the standard drink size is medium, the clerk can upsell you by asking if “you want to supersize that.” If you reject the supersize, the downsell could be “So do you just want to go large?” A downsell accomplishes a great psychological advantage in that the business is seen to be making a concession in the sale negotiation. While Upsells, Cross-sells, and Down-sells are usually thought of as occurring at the same time as the initial sale – back-end sales are any sales you make to your existing customers – whether a few days, a weeks, or months after the original sale.Back-end sales drive up customer lifetime value tremendously. If you’re not selling additional products to your existing customers, you are leaving a lot of money on the table. Since the relationship is already there, these will be some of your easiest and most profitable sales.
  • Another way to optimize value is through versioning.Versioning is where you offer different versions of a product targeting different prospects – usually at different price points. The king size candy bar appeals to different people than the regular size candy bar (or a candy bar with a bite taken out of it as you see in the picture above). If you’re already in the candy bar business, it isn’t much more difficult to package a bigger bar – but by offering more value at a higher price, you’re appealing to more prospects and maximizing your profits.Tell story about keepsake box/jewelry box example
  • Making a sale can be hard work. Why not turn one sale into several sales? One of the most popular ways to do this is by selling your product on a continuity program or a recurring billing model. Some of the major benefits to recurring payment models include:“Sell Only Once”Each subsequent sale is automaticEasy and convenient for Both PartiesExamples of this include subscriptions, memberships, service plans, etc.If you sell a product for say $39.99, could you make more revenue by charging $5.99 per month? Well, if they stay on for more than 6 and half months, you’ve upped the value of every customer.TIMOTHY begins story of car wash, then followed by web “matching” service
  • Actions you take to add value to your product or service work to “decommoditize” it.The goal is to remove the temptation that your customers have to see your product as a commodity. A commodity is usually thought of as something like gold and oil, where the “product is the product” and the customer – they’re just trying to get the best price for it regardless of the company selling it. Many products – such as Electronics -- can easily fall into this category.You don’t want price to be the determining factor in the purchase decision.When you decommoditize by adding more perceived value to your product, you[c] Avoid Price Wars[c] you get More Loyal Customers[c] and your Product Stands Out Among CompetitionThe goal is to make your product so unique that your customers know that they can’t get it anywhere else.Anything you do to add value to your product so it stands out from the competition can be a way to decommoditize it.While the competition may be selling normal candy bars, you can be selling candy bars with a [c] built-in USB drive.
  • ** Timothy **At the beginning Italked about 3 main Success drivers PPC marketing: PPC Optimizations, Landing Page Optimization and Value Optimizations.[c] Or in other words, your ads [c] your website [c] and your offer.All 3 of these elements are important and have a role in each conversion. However, all 3 of these factors are not equal. Without question, your offer is the most important piece of the conversion puzzle.The offer is what people ultimately say “yes” or “no” to. The value of your product (whether real of perceived) is the deciding factor in whether or not they want to buy from you, far more than the design of the page or the precise wording of your ads.Ads help visitors find your product, and landing pages help them learn more about it. But the offer itself is what’s most important, and should be tested and optimized just like ads and landing pages.
  • ** Timothy **[c] Dominating a PPC market all boils down to highest lifetime customer value. If you’ve ever wondered how a company can afford to be consistently at the top spots, its usually because they have the highest LCV. Advertisers with the highest LCV can sustain enormous amounts of traffic. If your customer value is lower LCV than your competitors’, you'll always be settling for only fractions of the available search volume. [c] Value optimization is about finding a way to be more profitable. If you're not profitable at that spot, do everything in your power to become profitable there. Instead of reducing your cost per click, pausing campaigns and lowering traffic levels, aim to increase your customer value instead. After all, your LCV dictates how much you can pay per click, and what position can be on the page.[c] Higher LCV increases your likelihood to find more traffic channels that convert profitably. [c] While VO certainly helps your PPC marketing, it can also affect every other traffic source you have, including organic search, direct traffic, referrals and even offline advertisements.
  • Tell the Story of one of Justin’s client to illustrate what mixing strategies (up sells, continuity, increased pricing & (bonus!) a free trial) meant to his bottom line.“The first upsell that was added increased revenues of 40%.  It’s a $2.95 trial of week 1 of an 8-week training course.  After a week the customer is charged $97 to continue the full course.  Upon raising the price of that high ticket upsell from $97 to $147, the take rate of that product remained the same and revenues then jumped to about a 55% increase. The 2ndupsell after that is a straight $73 package of 17 training videos, offering the customer another opportunity to purchase an upsell. Overall, the take rate is about 20% for at least one upsell, and adding these literally doubled his revenues with absolutely no change in adspend.  Now our client has raised his CPA target by 50%, allowing him to be much more competitive in his ultra-competitive space, and is breaking new sales records every month.”
  • Timothy: We’d like to share a free resource with you today, it’s called: ROI Revolution’s PPC Ad Writing Quick-Reference Guide.It packs years of expertise gained through trial and error ad writing into one easy-to-use and ultra-portable cheat sheet.So don’t start from square one when it comes to ad writing. Write like a professional, even if you aren’t one, using our ad writing cheat sheet. Smart advertisers write and re-write their paid search ads often. This can lead to a mental block if you don’t have an inspiration for rewriting each part of the ad. This guide provides a way to move forward with your ad writing with clear ideas and focus.Included on the guide are: Powerful words that are proven to generate clicks, Strategies to make your PPC ad stand out from your competitors, Example headlines you can use (in 25 characters or less), Abbreviation tricks, and much more!To get your free copy of the ad writing cheat sheet just stop by our booth today and either Mike or I would be glad to give you a laminated version for you keep by your computer.
  • PPC's Biggest Success Factors

    1. 1. PPC’s Biggest Success Factor (where the money is really made)<br />Presented by:<br />Timothy Seward<br />Founder/CEO<br />ROI Revolution<br />
    2. 2. The Big Picture<br />Overview<br />PPC Marketing<br />Your Business<br />SEO/Organic Traffic<br />Mail Order Catalog<br />Word of Mouth<br />TV Commercials<br />Walk-in Traffic<br />
    3. 3. 3 Main PPC Success Drivers<br />Overview<br />Landing Page Optimization<br />Value Optimization<br />PPC Campaign Optimization<br />
    4. 4. Value Optimization<br />Overview<br />Right Product<br />Right Offer<br />Right Price<br />Right Company<br />Question: Do I want to buy this product from this company?<br />
    5. 5. Default Value Model<br />Ways to Optimize Value<br />
    6. 6. Simple Price Changes<br />Ways to Optimize Value<br />
    7. 7. How Price Affects Bottom Line<br />Ways to Optimize Value<br />Price Increase<br />Profit Increase<br />+1%<br />+11%<br />=<br />
    8. 8. Creative Pricing<br />Ways to Optimize Value<br />
    9. 9. Providing More Value<br />Ways to Optimize Value<br />Emotional Association<br />Perceived Benefits<br />Perceived Price<br />Value<br />
    10. 10. Selling Additional Products<br />Ways to Optimize Value<br />
    11. 11. Example: Versioning <br />Ways to Optimize Value<br />
    12. 12. Continuity / Recurring Revenue<br />Ways to Optimize Value<br />
    13. 13. Decommoditize<br />Ways to Optimize Value<br />Avoid Price Wars<br />More Loyal Customers<br />Product Stands Out Among Competition<br />
    14. 14. Back to the Big Picture<br />Benefits of Value Optimization<br />Landing Page Optimization<br />Value Optimization<br />PPC Campaign Optimization<br />Website<br />Offer<br />Ads<br />
    15. 15. Value Optimization & PPC<br />Benefits of Value Optimization<br />Highest Lifetime Customer Value WINS<br />Higher Ad Positions<br />More Opportunities and New Advertising Channels<br />Affects All Traffic Channels<br />
    16. 16. Ways to Optimize Value<br />Example: Mixing Strategies<br />
    17. 17. Get ROI’s Ad Writing Cheat Sheet<br /><ul><li>Get ad writing tips and best-practices that we’ve developed from years of experience distilled into one powerful cheat-sheet.
    18. 18. Just stop by our booth to get your free copy of ROI’s Ad Writing Cheat Sheet</li></li></ul><li>Thanks!<br />