Let’s talk about leverage.
It’s an exciting concept. In marketing it means you can apply a little of something at one end and get a big something happening at the other.
Let’s say you’re running a Facebook ad and every week it converts 20 people into new customers. You make a little adjustment to the ad copy. Now instead of 20 people it brings in 80 people. That’s an increase of 400% with no extra spend.
Suppose you’re spending $500 a week on advertising and every person the ad converts spends $100, half of which is your profit.
This means that your first ad generated $2000 in sales (20 people x $100 per person.) Take away $1000 for the cost of your sales and $500 for the advertising and you’re left with a profit of $500. Not bad.
It means that every time you invest $500 in advertising you’re doubling your money.
Now let’s take a look at the second ad. This ad generates $8000 in sales (80 people x $100 per person.) Take away $4000 for your cost of sales and $500 for your advertising. That leaves a whopping $3500 profit! That’s a 700% increase!
Hang on a sec. You only increased your sales by 400% but your profits went up by 700%. How is this possible?
That’s the power of leveraging. You see the cost of your ad remains the same. In fact the cost of your ad is the same no matter what words you put in it. But the words you use can have a dramatic effect on your results. So the leverage you have in marketing and advertising is down to the words you put into your ads.
The more effective the words you put in, the better the results your get out. In the above examples you make an extra $3000 with the second ad that you would never make if you stuck with the first ad.
To put this into perspective let’s say you go to your bank tomorrow and borrow $3000 to expand your business. The bank is going to charge you some interest on that money aren’t they? And you’re going to have to repay it one day too. (Banks are unreasonable like that aren’t they?)
But you just got the equivalent of a $3000 loan by making a few small changes to your second ad–interest free. But the best part is…you never have to pay it back!
Now can you see how powerful advertising and marketing leverage can be? And that’s just from one little Facebook ad. But there are lots of areas you can apply this to in your business.
Think landing pages, emails, thank you pages, blogs, video scripts. Their success (or failure) all depend on the words you use. Better wording = bigger profits.
And I explain the simple way to find the right words to use in my new short course Persuasion Shortcuts. It’s a 2.5 hour ‘copy writing intensive’ for beginners.
You can watch it in a morning, apply what you learn in the afternoon and see bigger profits in a matter of days.