More revenue without more ad spend

Here is the question. At which step are you losing people who were already on their way to you?

Answer it and you almost always find more revenue than a budget increase would have brought, without spending another dollar. That is not an opinion. It is arithmetic, and I will show you the arithmetic.

Why the arithmetic is so brutally simple

Your path to the sale has steps. Somebody sees you. Gets in touch. Talks to you. Gets an offer. Buys. Buys again. Recommends you. At every step a part drops away.

What arrives at the end is not the sum of those steps. It is their product. And that is why an improvement at a single step acts on everything that comes after it.

Here is the arithmetic on an example. The numbers are invented so the calculation is visible. Yours are different.

A thousand people see you. Five percent get in touch, that is fifty. Forty percent of those come to a conversation, that is twenty. A quarter of those conversations ends in a sale, that is five customers.

Now you double the ad budget. Two thousand people see you, and you get ten customers. Revenue doubles, and so does the ad cost.

Now the other way. You don’t touch the budget and move a single step from forty to sixty percent, by answering inquiries the same day instead of the day after next. A thousand people become fifty inquiries, those become thirty conversations, and those become seven and a half customers.

Fifty percent more revenue, for zero additional advertising. And that improvement acts, from now on, on every further franc you ever put into advertising.

Why almost everyone raises the budget anyway

Because the step at the very top is the only one with a dashboard.

Your ad account shows you numbers every day. It shows reach, clicks, cost per click. Nobody shows you the step between inquiry and conversation, because it happens in your inbox and in your calendar, and nobody is counting there.

So you work on what you can see. That is not stupid. It is human. It just means that year after year the step with the most attention gets tightened, while nobody touches the three below it.

The three places I look at first

The time between inquiry and first reply

Whoever asks you today asks two other people today. The first one to answer runs the conversation. Everyone else gets a polite no. Or nothing at all.

What happens to a no

In most businesses, nothing happens to it. Somebody asked, then went quiet, and that was that. Those people have already shown interest and have already cost you something.

The best campaign that was never repeated

Almost every owner can tell me which campaign worked best in the last five years. Almost none of them can tell me when they last repeated it, because something new got built the following year.

What you can do in the next five minutes

Take a sheet of paper. Write your steps underneath each other. Ad, inquiry, conversation, offer, sale, repeat, referral.

Write a number from last month behind each one.

The first line where you cannot write a number is where I would start. Not because the leak is certainly there, but because a step nobody measures is a step nobody looks at.

Where you hold no light, no vegetables grow and money disappears.