Formula Five Review Part 2 - Sales Stackers

My Formula Five review is getting so long that I have started having format problems with my blogging software, so instead of trimming the review, I decided to continue it on separate postings.

I don't know how long my review will get as I am writing it as I discover more about Formula Five.

For general introduction to Formula Five and Module 1 Margin Magnifier please see Formula Five Review and if you haven't download your free Paul Lemberg 73 minute Formula Five preview video, go do it now - it is excellent. You just have to sign up at Formula Five but you can download the transcript report.  

Formula Five Module 2 - Sales Stackers

First a list of the video modules in this section of Formula Five - I am sure that you appreciate this is a huge time commitment to review a product this size in what is expected to be an intensive launch period.

1. Introduction to core ideas
    
   
2. Core metrics
    
   
3. Upsells
    
   
4. Bundling
    
   
5. Cross-sells and back ends part 1
    
   
6. Cross-sells and back ends part 2
    
   
7. Larger transactions wrap-up
    
   
8. Selling more often
    
   
9. Increasing purchase frequency part 1
    
   
10. Increasing purchase frequency part 2
     
    
11. Subscriptions, memberships and continuity
     
    
12. Extending the life
     
    
13. Reactivation
     
    
14. Sales Stackers wrap-up

This Is The Module Where You Find The Hidden Treasure

These Sales Stacker modules of Formula Five are effectively the heart of my Hidden Profits coaching and I would be amazed if you could only increase your margins from your existing customers by 15% in this area.

It should be much, much more than that and best of all, because you sell a product or service with solid customer benefits in excess of the price, you are also helping your customers, either personally or in their business.

Formula Five Forum

I have also taken the opportunity to be one of the early posters in the Formula Five forum. It is looking good and my experience of previous StomperNet communities is that they are pretty active. In particular I want people to understand Jay Abraham's Strategy of Preeminence.

Core Metrics

The core metrics module is essential and covers similar ground to what I cover in my first pillar in the Eight Pillars of Business Prosperity coaching.

It's not exciting doing the number crunching - and even as an ex-accountant I can't claim that it is, but it is vital that before you start making major changes to your business, you get your key metrics in place so that you:

a) establish your baseline and know where you are at the beginning

b) you face up to reality - you can't manage the business on what you'd like it to be, just what it is.

c) you can set targets for improvement

d) you measure your progress as you test ideas.

e) it helps you to understand your business and to make better decisions.

This module in Formula Five is more extensive than I have seen elsewhere and includes concepts that I only introduce to particular clients when relevant.

Try not to be put off. All numbers and calculations get easier as you get used to the concept and the arithmetic.

Upsell

Very comprehensive module in Formula Five on this essential technique for increasing purchase values while making sure the customer gets the benefits and experience they really want.

I may quibble a bit on terminology but there are a host of ideas from Paul Lemberg.

The implementation steps are quickly covered but I would have liked to see more focus on how you take action. I'd have also liked to have seen the "why you do upsells" in terms of profit and not revenue to hammer home why it is such a big profit-making strategy.

But I am being picky here - with this Formula Five module you get 50 minutes of advice and examples to set your mind racing.

My advice - open your eyes and see which businesses make enhanced offers and then all the opportunities other businesses miss when it could make your purchase easier, better, more convenient and more successful. Then take what you have learnt and apply it in your business. 

Bundling

A special kind of upsell - easy to sell and even more importantly, easy for your customer to buy.

Think of a PC with the software you want pre-installed or a fixed price menu at a restaurant.

This module of Formula Five should fire your imagination and it gives you Paul Lemberg's "magic bundle question" which is one tip I didn't have before.

Just moving away from Formula Five for a moment, creating your own unique, highly differentiated bundle is a Dan Kennedy favourite marketing tip - he calls it creating a  widget - so do use your imagination when putting together bundles. The market will tell you if you have it right.

Cross-sells and Backend marketing

More essential concepts.

A cross-sell is introducing something extra to your customer while backend marketing refers to everything the customer buys after the first transaction.

Covered in two modules (although combined both are still much shorter than the upselling module) and then followed by a short wrap up for the ideas on how to build larger transaction values.

Good stuff and while I agree with Paul Lemberg that you should look for quick wins and take action, Paul wants you to move on to the extra modules of Formula Five.

My approach is different - I know that there are often huge gains available in back end marketing and I'd have concerns about anyone who rushes through Formula Five just looking for the 15% profit gain from each module and then never comes back.

If you do that, you are missing huge amounts of hidden profit in your business.

Selling more often & increasing purchase frequency

Remember Jay Abraham's three ways to grow - more customers, who spend more, more often so Formula Five now focuses on the more often element as you increase your lifetime customer value.

I can't argue with Paul's number one secret in this area.

In videos 9 and 10 Paul Lemberg takes you through multiple options for ways to increase the frequency of purchase to help inspire you, whatever your business.

It is just a case of finding the most appropriate and the easiest techniques to apply.

Jay Abraham has a concept which he calls the "moving parade" - people's needs and wants change as their circumstances change so you shouldn't make the mistake of thinking that just because a customer wasn't interested last year, they are still not interested.

And don't fall into the passive thinking trap that they will contact you. They have forgotten that you sell other things.

Formula Five sales stackers module 11 goes into subscriptions, memberships and continuity programs. These have become very popular in the Internet marketing world - probably thanks to StomperNet's success - and have received some criticism.

Remember I pointed you toward Jay Abraham's strategy of preeminence as the moral highground. Your objection is not bleed your customers dry but to find ways that you add so much value, and enhance their lives and experiences in so many different ways that you customers are delighted to keep buying more. And then you capture a fair share of the reward.

Extending The Life Of The Customer

When you calculated your customer lifetime profits value under Formula Five Sales Stacker module 2, you will have realised just how important retaining customers is to your financial health.

Think of your customers as a big bath of money, with new customers flowing in and old customers flowing out. If you want to fill the bath - and you do - then if you can stop old customers flowing out so fast, you don't need to work so hard to attract new customers.

Reactivation

This is another of my favourite money making strategies.

If you haven't been focused on your customers, then you may have a huge number who stopped buying because they didn't feel appreciated.

It is crazy but I have known businesses mess existing customers around because a new prospect asked them to jump that little bit higher and they were so keen to win the new battle, they lost sight of who was bringing the money in.

Formula Five gives you some quick tips on how to reactivate past customers.

It then ends with sales stackers video 14 which is a quick wrap up.

Paul Lemberg and Formula Five want you to grab a few pieces of low hanging fruit and move on to the third formula for success, Lead Landslide.

I suppose because this is my area, and I know how much money there often is to be found in these Sales Stacker ideas, I would want you to spend longer but I have had this dilemma in my coaching in the past.

Do you concentrate on one area and get big results or do you get quick wins and move to the next magic fix?

Other Formulas In Formula Five

You have just read Formula Five main module 2 on Sales Stackers.

Here are the links to the other Formula Five main modules

Formula 1 - Margin Magnifier

Formula 3 - Lead Landslide

Formula 4 - Conversion Control

Formula 5 - Turbo Thrusters

Other Formula Five Reviews - to help give you a more balanced view.

 

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Comments

[Jay Deiboldt]

Great overview, I like how you even put other peoples' videos in it too to show what they are saying as well.

F5 is definitely a really fast way to increase your profits in an online or offline business using small changes or 'baby steps' to see large jumps in your bottom line.

Nice post dude.

[Paul Simister]

Jay, thanks for the comment and it is always nice to get the first one on a new blog.

This part 2 of my Formula Five Review is very much still a work in progress as I work through the material.

I tend to be very open minded with my blogs and reviews. So foe example on the Arbitrage Conspiracy which was a very big recent Internet product launch, some people were strong advocates whilst others were very critical.

I just want to present the debate and let people chose whether it is right for them.

Formula Five is very much in my core competency area.

While I hope to learn some new ideas, I am more interested in what Paul Lemberg presents in Formula Five, how he communicates it, whether the ideas make sense and in the end whether I believe the product provides great value for money.

I must admit as I work my way through the Sales Stackers modules, it is looking very good.

If I have time I also plan to write a comparison of Formula Five with other business coaching and development methodologies so people can see how it is similar or different to what else is available.