Sell Like Crazy

Why is knowing unit economics so important?
Put simply, if you have a firm grip on your unit economics, you’ll know
exactly how much a customer is worth to your business over their lifetime.
In other words, no more guessing how much to spend on your marketing –
you’ll have precise control and confidence down to the cent.
Armed with this information, you can begin to aggressively market and
grow your business as you understand fundamentally how profitable your
customer acquisition strategy is, and you can scale it faster and more
efficiently than your competitors who don’t understand these metrics. They
might try Google Ads, look at the CPC (cost per click) and think, ‘Oh wow!
This Google stuff is really expensive’, and stop, when in reality it might
actually be highly profitable for their business if they knew they were
making ten times that cost from customers coming to their business through
that channel.
What should my cost per acquisition (CPA) be?
How do you figure out what your CPA is? And what makes a good CPA? In
other words, how much should you be spending to get a new client? The
answer, of course, is that it varies; it all comes down to your average
revenue per customer.
There are plenty of ways to determine your average revenue per customer,
but a good starting place is to take your total revenue over a period (year or
month) and divide this by the number of customers you had during the same
period.
For example, if your total profit for the year is $500,000 and you had 1,000

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customers, your average profit per customer is $500.
There are other formulas that take into account purchase frequency, lifetime
value, and average order size, but honestly, the formula above is the easiest
place to start.
Know how much you make from a customer, and you’ll know how much
you can spend to get one.
In the above example, you can spend up to $499 to acquire a customer and
you’ll still make a profit. Of course, you’d want to make more than $1
profit per customer. I’m just using this as an extreme example, but you get
where I’m coming from.
Armed with this number, take a good hard look at your current marketing
activity. It should be obvious which channels are creating profitable
customers and which channels are costing you more than they’re worth.
Now, if you find yourself saying, ‘Google Ads is too competitive’ or
‘Google Ads is too expensive’ or worse, ‘I tried Google Ads and it doesn’t
work for my business’, then this thinking is going to leave your business
stuck in limbo while your competitors continue to take your market share
and grab all the low-hanging fruit.
Google Ads is simply one part of the puzzle, and when you shift your
mindset, upgrade your learning curve, and use some of the tools I’m sharing
with you, it’s going to help your business skyrocket in growth and in
profits.
A business should never rely on one single source of traffic for new
business. Unfortunately, the following scenario is all too common:
A business starts advertising on an online channel, whether that be SEO,
Google Ads, or Facebook Ads. For this example, we’ll use Google Ads.
They start with a small budget of $1,000 per month. They start getting some
traffic, leads are coming in and they are converting those leads into sales.
Things are going great.

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They hire more people to deal with the influx of new leads and sales, and
even increase their ad spend to get even more business. The business owner
is really happy they’ve found an advertising channel that works to scale
their business.
Then suddenly, without warning, Google changes the landscape of their ad
platform.
On a Friday in February 2016, Google did exactly this. Google decided to
remove the sidebar ads on search results. After this day, businesses who
relied solely on Google Ads to get traffic, leads, and sales were hurt...
badly. Google literally wiped off 70% of its ad real estate, so competition
for the top spots on the remaining 30% soared. And with this increase in
competition CPCs (cost per click) skyrocketed.
If such a sudden shift occurs to their primary marketing channel, the
business may find itself with far less traffic coming to their website but with
many more staff to pay. So they have to let go of the employees that they
hired when the business was growing, as they no longer have a channel
that’s bringing in the same volume of traffic, leads, and sales.

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Many businesses made this mistake and suffered catastrophically in early
2016. But not all, and certainly none of the businesses I was helping to
grow at that time. Why? Simply because the most successful businesses
build multiple flows of traffic to maintain their flow of leads.
This is how you do it:
Start with one channel (SEO, Google Ads, Facebook Ads, Instagram Ads,
YouTube, LinkedIn, etc.). It depends on your budget as to which one you
should choose first. Once you establish an offer that converts profitably and
you’re making more than you’re spending, get clear on your cost per lead
(CPL) and cost per acquisition (CPA) of getting a new client on this
channel.
Assuming your goal is to scale your business, keep adding as many

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channels as possible, stacking one on top of the other:
SEO
Google Ads
Facebook Ads
YouTube Ads
Retargeting
Keep at each channel until you gain momentum and receive a minimum of
50% ROI. Then roll these additional profits into experimenting on a new
channel. Use this channel as a benchmark for your CPL and CPA when
comparing the success of your new channels.
You might start with SEO, and after six months, once you start getting an

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acceptable ROI, roll these profits into Facebook Ads. Bolster these two
channels and ensure they are running profitably before you start scaling
(increasing) ad spend and think about adding a third channel.
Ideally, you should have at least three channels firing along profitably,
which will enable you to allocate some of your profit to other channels. If
something changes in one, like the case above where Google dramatically
changed its advertising landscape and CPCs skyrocketed, your business
won’t be as negatively affected because you can shift your ad budget for
Google Ads into another channel and shelter yourself from such changes
while you figure out how to get Google Ads back up to its original volume.
However, keep in mind that while many businesses (including marketing
agencies) often think they just need more traffic, in reality what you need is
an offer that converts traffic profitably.
For a business, having the ability to turn advertising into a profit is the
single greatest skill to ensure you won’t ever go hungry.
As a real-life example take Raphael Bender, whose ad campaign for
Breathe Education started with one traffic channel that doubled his
business. Adding more channels helped him scale his business from
$200,000 to $2 million, and now we’re taking him global. Once he had an
offer that converted complete strangers into high-value clients, he grew
from using Google Ads to SEO to Facebook Ads and so on, step by step,
stacking on more traffic channels.
Because we developed a proven funnel, where we knew that for every $1 in
traffic we put in it, it spat out $5, $8, and $10, we no longer had a traffic
problem. That’s the power of getting this system right.
As I mentioned in the introduction, most people don’t have a traffic
problem, they have an offer problem. Traffic is out there. More traffic than
you know what to do with. And accessing it is the key to aggressively
marketing and growing your business, rather than just hoping for the best.

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But there are different types of traffic. You need to make your offer
extremely enticing if you want them to click. Understanding where they are
in the buying cycle – and what channel is best to reach them – is critical if
you want to tailor a message to fit.
Make sure your message matches the temperature of your audience!
In Phase 1, I introduced The Larger Market Formula and the fact there are
three different types of prospects you can attract into your business.

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Three Types Of Traffic
The first type, at the tip of the pyramid, is in buy mode. These guys are on
Google, actively searching. They know they have a problem. They’re
looking for a solution in the products and services you provide. These
prospects are generally best to reach through Google Ads or SEO, and they
have a very high purchase intent. They could also be on your email list or
following you on Facebook
The second group of prospects are in the awareness stage. They’re not
actively searching but they are aware they have a problem and they’re open
to buying. Perhaps they know they need a new car, but they’re not scoping
car yards on the weekends just yet. Or it might be someone who knows they

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need to lose weight but they’re not yet in hunt mode looking for a personal
trainer or a new diet program. These guys aren’t searching, however they’re
certainly open to the prospect of buying. They’re aware they have a
problem, unlike the third type – the cold prospects.
A cold prospect isn’t searching and doesn’t even know they have a problem
or a need. But they are still a good candidate for the products or services
you sell. This represents the largest segment of your market, and of any
market out there. They’re the 60% of prospects sitting at the base of The
Larger Market Formula pyramid.
So, let’s say you offer a free consultation that’s packed with value. How
could it go wrong? Well, maybe your prospects are cold and not ready for
that level of commitment just yet. Maybe it feels threatening to them.
Maybe they don’t want to speak to a salesperson.
If your message is not speaking to the temperature of your audience, it’s
never going to work. If your customers are cold, then offer a more cold-
suitable call to action (CTA) such as a quiz, free guide, or competition. If
your customers are piping hot, don’t beat around the bush – take them
straight to the shopping cart.
Think of it this way: If you went to a restaurant and ordered a medium-rare
steak only to be served a steak so well done it might as well be a hockey
puck, let’s be real: you’d be sending that steak back.
On a steak, the temperature has to be right before serving. And the same
thing is true for ads, offers, and landing pages. If you want to convert your
visitors, you have to match the temperature of your audience.
Let’s look at it this way.