SSK #18: Tripwires - your secret weapon to grow online (even if you're starting out)
Read time: 4 minutes.
Building an audience is a crucial element for growing a business online. Having a large following and numerous newsletter subscribers ensures that, regardless of your business activities, you will see results.
I recommend focusing on building a personal brand before concentrating on a business or product brand. Why? Because with a personal brand, your followers will stick with you regardless of your business idea. It becomes much easier to modify offers and change services when you have an audience to share them with. In contrast, when you focus on building a product brand and then decide to start a new one, you'll need to build a new brand from scratch.
There are two types of audiences:
- Rented: This includes followers on social media platforms. You don’t “own” these platforms, and companies like Facebook, Instagram, or LinkedIn can disable your account at any time, often without reason or recourse. Scary
- Owned: These are your newsletter subscribers. Once you have their email addresses and permission to email them, you can contact them as you please, with no restrictions on content or frequency.
The challenge with audience building is that it either takes time or money. When starting out, you may not have the money, so you have to invest time to grow your audience. This can be frustrating, as we all want to grow as quickly as possible.
So, what’s the solution?
What if there was a way to offset the cost of acquiring new subscribers?
The fastest methods to gain newsletter subscribers are running ads or promoting in other newsletters (which I highly recommend). My preferred strategy is to pay another creator or brand to promote my newsletter, as I find the lead quality is higher than from Facebook or Instagram ads.
However, ads and promotions require investment. How can we manage this?
Tripwire marketing is a strategy designed to increase customer acquisition and boost revenue by offsetting marketing costs. It involves converting leads into customers through a low-cost, high-value offer, and then, over time, upselling or cross-selling to higher-priced products or services.
Initial Low-Cost Offer (The Tripwire):
The tripwire is a low-priced offer designed to be irresistible to your target audience. It should provide substantial value while being priced low enough that purchasing it is a no-brainer for the consumer. This could be a discounted product, a trial subscription, or a small but valuable service. Some examples: a mini-course, an ebook, a low-cost consultation
Purpose of the Tripwire:
The main goal of the tripwire is not to generate a significant profit from the initial sale, but rather to convert leads into paying customers and offset the cost of acquiring the subscriber.
This psychological shift is important because a customer who has already purchased something is more likely to make additional purchases.
High-Quality Product or Service:
The tripwire product or service must be of high quality to build trust and satisfaction. This positive experience is crucial for leading the customer to consider more expensive purchases.
Upselling and Cross-Selling:
After a customer purchases the tripwire, the next step is to offer them more expensive products or services. This is where the real profitability comes in. The upsell should be related to the tripwire and provide additional value.
Tripwires to offset marketing cost:
Example Scenario: Online Course Creator
Objective: The course creator wants to build an email list to promote an online course. They use a digital guide as a tripwire to offset the cost of acquiring new email subscribers.
Step 1: Campaign Setup
- Email Lead Acquisition via Paid Ads:
- Cost per Lead (CPL) for Email Sign-ups: $3
- Goal: Acquire 1000 email leads
- Total Lead Acquisition Cost: 1000 leads x $3 = $3000
- Tripwire Product:
- Digital Guide titled "Beginner's Guide to Effective Online Learning"
- Price of Guide: $10
Step 2: Conversion to Tripwire
- Conversion Rate to Tripwire:
- 10% of email leads purchase the digital guide
- Number of Guides Sold: 10% of 1000 leads = 100 sales
- Revenue from Guide Sales:
- Total Revenue: 100 sales x $10 = $1000
Step 3: Upsell Product and Conversion
- Upsell Product:
- Comprehensive Online Course
- Price of Course: $200
- Conversion Rate to Upsell:
- 20% of digital guide buyers purchase the course
- Number of Courses Sold: 20% of 100 guide buyers = 20 sales
- Revenue from Course Upsells:
- Total Revenue: 20 sales x $200 = $4000
Step 4: Calculating Total Cost and Revenue
- Total Revenue (Guide + Upsell):
- Revenue from Guide Sales: $1000
- Revenue from Course Sales: $4000
- Total Revenue: $1000 + $4000 = $5000
- Net Cost to Build Email List:
- Total Lead Acquisition Cost: $3000
- Total Revenue: $5000
- Net Cost: $5000 - $3000 = $2000 (Profit)
NOTE: Play with the price of the tripwire. In quite a few instances we were able to completely balance out the cost of list building with just the tripwire sales. Everything we made from upsells was pure profit. Or there was no need to offer upsells at all, and we'd focus on selling the core offer only.
In this scenario, the tripwire (digital guide) and the subsequent upsell (online course) not only offset the initial cost of building the email list but also generate a profit. The initial investment in lead acquisition was $3000, but through the tripwire and upsell strategy, the total revenue amounted to $5000. This resulted in a net profit of $2000.
Remember, while rented audiences on social media are valuable, the real power lies in your owned audience - your newsletter subscribers. They are your direct line to engagement and long-term relationships.
Tripwires are your secret weapon. This ingenious marketing strategy not only offsets the costs of growing your coveted email list but also paves the way for profitable upselling opportunities.
p.s are we connected on LinkedIn or Twitter?
...and whenever you're ready, here are a few ways I can help you. If you're still trying to figure things out, I'd recommend starting with an affordable course:
1. The World Domination Strategy Game: a comprehensive tool for online entrepreneurs designed to simplify the process of creating a business strategy. A distillation of the best coaching exercises derived from working with over 800 online entrepreneurs. It provides clear, step-by-step instructions across 14 modules, supplemented with 20+ videos, exercises, files, and templates. The game can be used individually or with a team. The users are given access to additional resources like 40 pages of instructions, assignments, techniques, motivation.
2. The Marketing Agency Scaling Roadmap:Introducing: the 9 CRUCIAL categories and 27 power activities you need to focus on at each stage of growth: $5k-$25k/mo -> $25k-$50k/mo -> $50k-$100k+/mo. 5 Modules. 4 hours of ACTIONABLE content. Milk, honey, butterflies and rainbows and so much more...
3. LinkedIn Prospecting: In this training, I'm giving you the nuts and bolts of what it takes to make LinkedIn prospecting a success. I'm peeling back the curtain to show you exactly how I utilize it, while also sharing my personal insights and experiences from leveraging LinkedIn to secure leads and clients.
Build and scale your online business.
Join hundreds of successful online business owners. Every week you'll get 1 actionable tip to build and scale your online business. No weird hacks or gimmicks. I'm sharing actionable and practical knowledge and tips you can implement today to see the results.