The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success

NOTABLE! How FORMULAS and EXPERIMENTS have helped me grow my business!

Remove ads while supporting the Unscripted philosophy...become an INSIDER.

TreyAllDay

Whatever it takes
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Feb 9, 2016
549
1,620
485
29
Edmonton, AB
An interesting share for those of you interesting SASS - however this applies to all businesses. As some of you may know, I have had relatively good success selling my software in person. It's how I grew from $0 to $565,000 in sales. Where I am finding my footing now is automating online sales of my intranet software.

I am starting to understand how formulas and experimentation has helped me grow my business, and how it will help you too.

Want to know the secret about most business decisions from someone who spent millions and millions on ads in a corporation?


Nobody REALLY knows what works and what doesn't. We just get better at making educated guesses.

When I was 22, I took over national marketing for a large business. I was completely unqualified but I didn't care. I knew that any business decision was just about having a theory, trying it, understanding the data, and making decisions. The most SUCCESSFUL businesses in the world are usually the ones who experiment on small scales, collect the data, understand it, and then build growth models.

How This Works In Practice
When I first started my business I had zero sales online and I thought "well maybe my product sucks?". Do I need to create a new site? Do I need more visitors? What's working and what's not? I AM SO CONFUSED.

But then I distanced myself and thought - let's create the formula.

My Formula Is Roughly:

( ( ( Visitors X Funnel To Sign Up Page ) X Sign Up Rate) X ( Free-To-Paid-Rate ) ) X Paid Subscription Rate = Sales

This all seems super obvious - but just writing it down and putting it in excel helps you on so many levels. Here's mine explained:

1) Throughout a given period "X" number of users come to my site. This is one variable I can control and experiment with.
2) Only a certain percent will ever even get to the "Sign Up" page. I have reasonable control over this.
3) Of those who even look at your signup form, oddly some get intimidated and leave. I can reasonably control this.
4) Of those who join free trials, X percent convert to paid.
5) Those who move to paid will pay $x. I certainly have control over this and experimenting with price levels.

Now, I'm not looking at a mess of problems - I'm looking at variables I can control. Here it is with the numbers plugged in.


( ( ( 12,500 visitors X 6% Get to signup page ) X 34% signup rate ) X ( 5% To Paid ) ) X $1550/year = $19,762/year
29388

A good example of small changes to variables meaning BIG changes to revenue

In the previous period I was converting 10% on sign up page. The question: WHY are such a small amount of people not filling out our sign up form? I learned something new - for every extra field you have in your sign up, your conversion rate drops. I was able to go from 7 sign up fields to 3 and go from 10% to 34%. From the same 12,500 visitors I go from earning $5,812.50 to earning $19,762.50.

Can you imagine that?
We had an extra field for people to confirm their password, choose usernames, add in their first and last name, company type. By dropping this information that really wasn't needed I was able to grow my sales.

29389

29276

An INVERSE example - we want to increase our free to paid users which is at 5%. I have a theory that if we can learn the customer's industry we can pre-load content to their portal when they first sign in and make it seem more relevant. HOWEVER it MAY decrease my sign up variable by asking for additional information. Am I willing to increase my free-to-paid variable if it decreases my sign up rate? Here's an example of how that could play out - pay attention to finish signup and covert to paid.

29392

Worth the risk of messing around with signup? Not sure but I can at least make an educated guess.

In fact, I even experimented with my price/year variable. I began advertising prices in USD instead of CAD. Allowing my $99/month to be $129/month CAD. Nobody cared and just saw $99 as $99. I saw a 30% increase in revenue JUST from this.
29391


The Disclaimer
Yes, I am overly simplifying things for the purpose of demonstrating. Your variables will fluctuate especially as you grow. But this gives you an idea of HOW understanding your formula is the stepping stone for great decisions.
 

Don't like ads? Remove them while supporting the forum. Subscribe.

Attachments

Last edited:

MJ DeMarco

Administrator
Staff member
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 23, 2007
30,024
107,231
3,751
Fountain Hills, AZ
Awesome post, marked NOTABLE to start.

Reminds me a bit of the Scientific Method thread, very similar as we are scientists who test variables.

In my new book, I carry out the scientist theme throughout.

 

Process

Silver Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Jul 19, 2017
237
506
249
Solving Pain
An interesting share for those of you interesting SASS - however this applies to all businesses. As some of you may know, I have had relatively good success selling my software in person. It's how I grew from $0 to $565,000 in sales. Where I am finding my footing now is automating online sales of my intranet software.

I am starting to understand how formulas and experimentation has helped me grow my business, and how it will help you too.

Want to know the secret about most business decisions from someone who spent millions and millions on ads in a corporation:


Nobody REALLY knows what works and what doesn't. We just get better at making educated guesses.

When I was 22, I took over national marketing for a large business. I was completely unqualified but I didn't care. I knew that any business decision was just about having a theory, trying it, understanding the data, and making decisions. The most SUCCESSFUL businesses in the world are usually the ones who experiment on small scales, collect the data, understand it, and then build growth models.

How This Works In Practice
When I first started my business I had zero sales online and I thought "well maybe my product sucks?". Do I need to create a new site? Do I need more visitors? What's working and what's not? I AM SO CONFUSED.

But then I distanced myself and thought - let's create the formula.

My Formula Is Roughly:

( ( ( Visitors X Funnel To Sign Up Page ) X Sign Up Rate) X ( Free-To-Paid-Rate ) ) X Paid Subscription Rate = Sales

This all seems super obvious - but just writing it down and putting it in excel helps you on so many levels. Here's mine explained:

1) Throughout a given period "X" number of users come to my site. This is one variable I can control and experiment with.
2) Only a certain percent will ever even get to the "Sign Up" page. I have reasonable control over this.
3) Of those who even look at your signup form, oddly some get intimidated and leave. I can reasonably control this.
4) Of those who join free trials, X percent convert to paid.
5) Those who move to paid will pay $x. I certainly have control over this and experimenting with price levels.

Now, I'm not look at a mess of problems - I'm looking at variables I can control. Here it is with the numbers plugged in.


( ( ( 12,500 visitors X 6% Get to signup page ) X 34% signup rate ) X ( 5% To Paid ) ) X $1550/year = $19,762/year
View attachment 29275

A good example of small changes to variables meaning BIG changes to revenue

In the previous period I was converting 10% on sign up page. The question: WHY are such a small amount of people not filling out our sign up form? I learned something new - for every extra field you have in your sign up, your conversion rate drops. I was able to go from 7 sign up fields to 3 and go from 10% to 34%. From the same 12,500 visitors I go from earning $5,812.50 to earning $19,762.50.

Can you imagine that?
We had an extra field for people to confirm their password, choose usernames, add in their first and last name, company type. By dropping this information that really wasn't needed I was able to grow my sales.
View attachment 29276

View attachment 29272

An INVERSE example - we want to increase our free to paid users which is at 5%. I have a theory that if we can learn the customer's industry we can pre-load content to their portal when they first sign in and make it seem more relevant. HOWEVER it MAY decrease my sign up variable by asking for additional information. Am I willing to increase my free-to-paid variable if it decreases my sign up rate? Here's an example of how that could play out - pay attention to finish signup and covert to paid.

View attachment 29274

Worth the risk of messing around with signup? Not sure but I can at least make an educated guess.

In fact, I even experimented with my price/year variable. I began advertising prices in USD instead of CAD. Allowing my $99/month to be $129/month CAD. Nobody cared and just saw $99 as $99. I saw a 30% increase in revenue JUST from this.
View attachment 29273


The Disclaimer
Yes, I am overly simplifying things for the purpose of demonstrating. Your variables will fluctuate especially as you grow. But this gives you an idea of HOW understanding your formula is the stepping stone for great decisions.
Great post and congrats on your results.
 

Aragorn

Still working in obscurity
FASTLANE INSIDER
I've Read UNSCRIPTED
Jul 1, 2018
25
37
29
Europe
Fantastic post, TreyAllDay.

I will sit down and create my own formula. Thanks for the inspiration!
 

MJ DeMarco

Administrator
Staff member
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 23, 2007
30,024
107,231
3,751
Fountain Hills, AZ
BUMP. Quite surprising that this post didn't get more traction.

Variable manipulation on variables you can control is a cornerstone of the Fastlane philosophy, something I talked about in The Millionaire Fastlane.
 

ApparentHorizon

Platinum Contributor
Speedway Pass
Apr 1, 2016
873
2,530
653
Greenville, SC
In fact, I even experimented with my price/year variable. I began advertising prices in USD instead of CAD. Allowing my $99/month to be $129/month CAD. Nobody cared and just saw $99 as $99. I saw a 30% increase in revenue JUST from this.
29391
Can you clarify? The $99 was best?

An INVERSE example - we want to increase our free to paid users which is at 5%. I have a theory that if we can learn the customer's industry we can pre-load content to their portal when they first sign in and make it seem more relevant. HOWEVER it MAY decrease my sign up variable by asking for additional information. Am I willing to increase my free-to-paid variable if it decreases my sign up rate? Here's an example of how that could play out - pay attention to finish signup and covert to paid.
How about a multi-step form? Capture the first set of data, name and email.

Ajax that into your db for follow up, then dynamically reveal the rest of the fields?

(edit: forgot to mention, you need to check your local laws for this. Especially GDPR guys, and Google ads guidelines.)

I have a client who added 2 new fields to his FREE consultation form. Conversions tanked by 90%! It went from simple name and phone fields to, making the visitor think about the date and time they want the consultation.

So we're revisiting.

The hypothesis:

Use the simplicity of quick lead form, bundled with the effects of longer sales process, to increase profit.
  1. Only show the basic contact info. Name/phone. They don't have to think about this one. Don't reveal any other field, but allow them to submit the info.
  2. Use a multi-step form.
  3. Add in as many additional but relevant questions as possible. Date/time, where did you find us, background questions, etc. This will have multiple effects
    1. We'll have their info to remarket if needed
    2. We'll get more info about the industry. Take that info and tailor the page to their responses.
    3. The more info and effort they put in, the more they'll feel like this is tailored to them, and the higher their trust in the company will be.
    4. If they don't finish the form, they'll have an open loop and keep us in the back of their mind. People like finishing lists.
BUMP. Quite surprising that this post didn't get more traction.

Variable manipulation on variables you can control is a cornerstone of the Fastlane philosophy, something I talked about in The Millionaire Fastlane.
How about a post of the day that stickies at the very top of the forum on the main page? Don't need one every day, just a spot for these kinds of threads.
 
OP
OP
TreyAllDay

TreyAllDay

Whatever it takes
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Feb 9, 2016
549
1,620
485
29
Edmonton, AB
Can you clarify? The $99 was best?
We naturally advertised prices in CAD (Canadian dollars) but found a workaround to advertise in USD. $99USD is $129 CAD (a 30% increase) and it oddly didn't bother anyone.

How about a multi-step form? Capture the first set of data, name and email.
These work good as well - when someone fills out 2 fields and hits "next" they usually are more likely to finish because they've started, but if it's an obvious multi-step it can still make conversions go down. Haven't experimented with it much I'd be curious to see what the data says

I have a client who added 2 new fields to his FREE consultation form. Conversions tanked by 90%! It went from simple name and phone fields to, making the visitor think about the date and time they want the consultation.
This is the stuff that blows my mind!
 

Sophie_Leonard

New Contributor
Dec 26, 2019
13
13
15
UK
Great Post TreyAllDay!
Seems interesting and useful.
Definitely looking forward to applying it for my business.
Thanks for sharing.
Regards & Best wishes to you!
 

Mr. Roboto

Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Mar 13, 2019
10
20
17
This is really great! I was wondering why my competitors make certain decisions. After reading it, everything starts to make sense...

A/B testing might be worth looking into while testing a hypothesis.
 

Don't like ads? Remove them while supporting the forum. Subscribe.

Create an account or login to comment

You must be a member in order to leave a comment

Create account

Create an account on our community. It's easy!

Log in

Already have an account? Log in here.

Sponsored Offers

  • Sticky
MARKETPLACE Lex DeVille's - Advanced Freelance Udemy Courses!
APRIL IS LETHAL AND HERE'S YOUR COURSE PROMOS! Get any of my Udemy courses on sale at Udemy's...
  • Sticky
MARKETPLACE You Are One Call Away From Living Your Dream Life - LightHouse’s Accountability Program ⚡
Here is where you eliminate uncertainty from the future! I wanted to post this image as I...
  • Sticky
MARKETPLACE KAK’s “Kill Bigger” Incubation Program- With DAILY personal attention.
Hey Guys! I wanted to give a quick update on what this program has become. In its infancy, we...


Don't like ads? Remove them while supporting the forum. Subscribe to become an INSIDER.

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Top Bottom
AdBlock Detected - Please Disable

Yes, ads can be annoying. But please...

...to support the Unscripted/Fastlane mission (and to respect the immense amount of time needed to manage this forum) please DISABLE your ad-block. Thank you.

I've Disabled AdBlock