As a business owner, you have likely heard of the term “break-even point.” This refers to the point at which the revenue generated from sales equals the costs of acquiring those customers. But what about a “break-even funnel”? This concept takes the idea of the break-even point and applies it to the entire sales process. The result is a valuable tool for maximizing sales and minimizing costs.
What is a Break-Even Funnel?
A break-even funnel is a visual representation of the steps a customer goes through in order to make a purchase. It starts with the initial awareness of your services and moves through the stages of interest, consideration, and finally, the decision to buy. As customers move through the funnel, some will drop off while others will become customers. The goal of a break-even funnel is to maximize the number of customers who reach the end of the funnel and to minimize the cost of acquiring those customers.
Why is a Break-Even Funnel Important?
The break-even funnel is an important tool for businesses because it helps to ensure that the revenue generated from sales is greater than the cost of acquiring those leads. By understanding the cost of lead acquisition, firms can make informed decisions about where to allocate their resources and what steps to take to improve their sales process.
Paying for advertising can quickly add up. Especially in our business. We arent selling sun glasses. If someone gives us their information for a meeting, it still may take 6 months before their assets come in. That makes it really hard to do marketing. When you launch a new campaign and have to wait months to see if assets are coming in or not is too long. Especially when considering the investment in time and money to generate the leads.
This is why I built a “break-even” funnel.
Here is what I did:
In a nut shell, I created an irristible offer. The offer included a variety of infoproducts that didnt cost us anything as well as a portfolio review. We sold these online for $30-$50. Our lead cost was $30-50. So we can run ads, selling these offers, and breaking even immediatly. We didnt care to make money on this. We want their assets. The key was to justify why as an advisor we were selling this for so cheap. I was honest with people. I explained that as a finanicial advisor, we make money helping people live their dreams in retirement while we managed their income plan. I explained that we charge $30 to break even on material and ad cost. Using the honest approach helped people realize they were meeting with a legit advisor who was just trying to recoup his material cost.
By understanding the cost of customer acquisition and tracking the conversion rate at each stage of the sales process, firms can make informed decisions about where to allocate their resources and what steps to take to improve their sales process. Whether you are just starting out or are an established firm, creating a break-even funnel is a critical step towards ensuring long-term success.