measure. If you put all 144 combinations on a spreadsheet, it would look like this: Figure 22-4 . If you pretend everything’s equal, all the ingredients in your sales funnel look like this. There are several problems with this: It’s too much data to reasonably keep track of, and perhaps the least obvious problem is that box Number 142 may turn an insanely high ROI this week (from ONE customer who bought ONE time) and box Number 43 gives you a big fat zero. You eliminate Number 143 but what you don’t know is that Number 142 was pure luck—it never happens again—and Number 143 would have performed nicely if you’d given it more time. The problem here is we drew this thing the wrong way. All the squares are the same size! What we ignored is 80/20—the fact that cause and effect are ALWAYS disproportionate. The grid gets drawn much differently if we understand that every dimension of your sales machine has a disproportionate
relationship between cause and effect. We had 12 keywords, right? Three or four of them are going to bring most of the traffic. In fact, if you’ve got 2,000 keywords, 95 percent of your traffic is probably going to come from fewer than 20 of them. Do you need to track the other 1980 keywords? Well, you’re sure not going to spend hours and hours setting up elaborate tracking for each one! We had four products—and one or two of them is going to produce most of the sales. We had three steps in the sales funnel; let’s say the opt-in is a prerequisite for all sales, so the other two steps are the ones that actually flip the buyers. So what do we have on our shortlist? • Three keywords • Two products • Two sales funnel steps • 3 x 2 x 2 = 12 Now we’re down to just 12 things to watch, not 144. Three keywords, two products, two steps. That’s manageable! Here’s the RIGHT way to draw the grid—the 80/20 Sales Matrix (see Figure 22-5 on page 176). The columns represent keywords. Three of them bring more than half the traffic. The rows represent combinations of products and sales steps. The top three combinations, like the keywords, also bring more than half the traffic. If you pay attention to only 1, 2, 13, and 14 in your matrix, you’re covering more than a third of your business with only four things to think about. If you pay attention to only 1, 2, 3, 4, 13, 14, 15, 16, 25, 26, 27, and 28, you’re covering more than half your business with only 12 things to think about. And if you focus your attention on making the big squares bigger—doubling them, let’s say—then you grow your business 50 percent with one-tenth the effort. Let’s say it takes you a week of work to double a square. Do you want to double square Number 1 or square Number 77? In
four weeks you can double some little squares, or double some big squares. It’s up to you. Figure 22-5 . This is what cause and effect really look like, for all the ways that you touch a customer in order to influence a sale.
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- Spring '16
- jane willliam
- Pareto distribution, power law, Pareto principle, Vilfredo Pareto, Perry Marshall