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8 Key Business Growth Metrics To Track

To grow your business, you need to know your numbers! 

At times it’s easy to focus on vanity metrics. These are those numbers that look impressive and appealing, but don’t directly contribute to the revenue, profit, growth and efficiency of your business.

In this short list I will share with you 8 key metrics to focus on and I’ll compare them to similar metrics that are less important.

1. Profit vs Revenue

Revenue is the more appealing figure to quote when discussing the financial performance of your business. The truth is that there are companies that generate massive amounts of revenue, but they fail to make a profit. 

  • Profit = Revenue - Expenses
  • Profit Margin % = Total Profit / Total Revenue

Focus on measuring and increasing the total profit and profit margin percentage to grow your business.

You can do this by increasing revenue while keeping expenses constant or decreasing expenses while keeping revenue constant, or both.

2. Paying Customers vs Likes or Followers

The most quoted vanity metric in online marketing is likes, followers and fans. These figures paint a picture of how well your brand is performing online, but they don’t directly generate income. Paying customers, on the other hand, generate the revenue and profit. 

Focus on sales to increase your amount of paying customers, as well as your customer retention rate. Increasing these will increase your revenue and profit, and ultimately help you grow your business.

3. Engaged Subscribers vs Subscribers

When it comes to email marketing, having a smaller engaged list of subscribers is more valuable than having a massive list of disengaged (or cold) subscribers. More engaged subscribers will open your emails, click your links and buy your products and services. 

Keep track of and improve your engagement metrics (email open rates and click-through rates), and regularly purge your list by removing cold subscribers.

4. Opt Ins/Leads vs Traffic

Traffic is the lifeblood of online marketing success. We all need traffic to our web properties in order to get our message in front of our target audience, however what’s more interesting is the opt in rate. In other words, the total number and percentage of users that opt into your list (sign up for a free lead magnet or add themselves to your notification list) and become a lead. 

Focus on providing valuable content to increase your opt in rate. Your main goal is increasing the number of leads that join your email list and enter your marketing funnel.

5. Champion Customers vs Ordinary Customers

As mentioned above, it’s crucial to focus on the total number of paying customers your business serves. You can however take this one step further and focus on those extraordinary customers that:

1. Rave about and recommend your business to family and friends — i.e. Brand Ambassadors
2. Make up a large portion of your revenue — i.e. High Value Customers
3. Send you high value referrals — i.e. Affiliate Partners or Strategic Partners

Figure out how you can convert more ordinary customers into champion customers and make sure to communicate your appreciation to your existing champion customers.

6. Recurring Purchases vs Once-Off Purchases

While focusing on attracting new customers, don’t neglect and underestimate the potential value of your existing customers. Instead of focusing on once-off deals, shift your attention to creating more value that you can sell as a recurring purchase or an additional purchase. 

On average it costs less to sell more to an existing customer than to acquire a new customer. And recurring purchases, like subscriptions, increase your monthly recurring revenue (MRR), which is more predictable and lead to more business growth. 

Consider offering your customers a subscription or membership or a monthly, quarterly or annual payment plan in exchange for an ongoing product or service package that adds value.

7. Engagement vs Views

When it comes to online content the most appealing metric is usually subscribers and views. What’s more interesting is looking at user engagement. How many viewers or readers are taking the next step and engaging with your content — for example leaving a comment or asking a question?

Encourage engagement and interaction to gather feedback from your audience. This will help you better understand your audiences' challenges, so you can refine your products and services to better meet their needs and market to them using the language that resonates with them.

8. Testimonials vs Compliments

It’s easy for friends, family members and even customers to compliment your business. What’s far more interesting is focusing on individual customer success stories, case studies and testimonials.  

Source and document customer testimonials, case studies and success stories and use them as part of your marketing material.

Document how a specific customer has benefited from using your service and/or product and how your business has helped them experience a transformation. Written testimonials are great, but video testimonials can be even more effective. 

Bonus Metric: Customer Lifetime Value

Customer Lifetime Value (CLV, CLTV, LCV or LTV) is a prediction of the net profit attributed to the entire future relationship with a customer. 

CLV = (Ave. Monthly Revenue per Customer * Gross Margin per Customer) ÷ Monthly Churn Rate
For example: ($100 average monthly spend * 25% margin) ÷ 5% monthly customer churn = $500 CLV

Calculating your estimated CLV will help decide how much you can afford to spend on acquiring a new customer. 

For example: If your CLV is $500, then you can spend up to $499 to acquire a new customer, while still making $1 in profit. If your CLV is $5000, then you can spend a lot more to acquire a new customer.

In Summary

1. Track your revenue and profit and maximise your profit margin.
2. Focus on sales to increase paying customers.
3. Track and increase your email engagement, as engaged customers are customers that purchase.
4. Track and increase your opt ins to get more leads into your marketing funnel.
5. Convert more ordinary customers into loyal champion customers and brand ambassadors.
6. If possible, increase recurring revenue by offering a subscription or payment plan.
7. Increase your user engagement to learn more about your audience.
8. Capture testimonials, success stories and case studies and use them in your marketing material.
9. Track and increase customer lifetime value.

I hope you found this list useful. If you have any feedback or questions, feel free to leave a comment below or contact me via our contact page.

10 Proven Online Business Models with Real World Examples

In this post I'll explain the 10 proven business models that will let you create and grow a successful online business that generates online income. 

One of the most common mistakes new entrepreneurs make is they jump into a business idea and start executing without understanding and clearly defining their business model. 

Make sure to understand the different business models and focus on the one that best aligns with your skillset, experience, goals and aspirations. 

Let me know if you have any questions in the comments below.

1. Selling digital services — freelancing or creating an agency

This option entails providing digital services to a client in exchange for a set project fee, an hourly rate or a recurring monthly retainer.

Example: MashMetrics is an agency that offers Web Analytics services — mashmetrics.com

Becoming a freelance digital service provider has the lowest barriers to entry with the highest short term earning potential. If you have marketable skills that others are willing to hire you for, then you can in a short space of time find a handful of projects or clients and generate an online income. 

The rate that you will be able to charge depends on your ability, your experience and your past success stories. What can you offer a potential client, what can you help them achieve or achieve on their behalf and what success stories do you have under your belt that will convince clients that you are the right service provider to work with.

Example: UpWork is a market place that matches freelancers with rewarding projects — UpWork.com

Any area of expertise that can be delivered digitally and worked on remotely can be sold as a digital service. These can include, but are not limited to:

  • Web Development
  • Copywriting
  • Graphic Design
  • Video Editing
  • Social Media Management
  • Paid Media Management
  • Search Engine Optimization (SEO)
  • Customer Support
  • Conversion Optimization
  • Lead Generation
  • etc.

It’s fairly easy to start freelancing, but as a freelancer your income is capped by the total number of hours you can work per month or by the number of clients that you can service at any given moment. Also keep in mind that your income potential and potential for being hired is directly proportionate with your skill level, your experience and how competitive the market is for what you are offering. 

If your goal is to earn more and take on more clients than you can handle yourself, then you will need to start hiring contractors and/or employees to build a team. By expanding your freelance business will grow into an agency. Building a digital agency comes with it’s own set of challenges and opportunities, and can be very lucrative in the long run if done correctly.

You can find many freelancers on UpWork and Fiverr. And here is a list of top 100 agencies.

2. Selling digital consulting, coaching or training services

This option entails providing strategic advice and support to an individual or a company via online video calls or sessions.

Example: Willo Sana offers coaching services — WilloLovesYou.com

If you have the knowledge and experience in a given area and you are willing to share your expertise and guidance with your clients, then this is a viable option. With this model you are not doing the work on behalf of your client, but you are merely accompanying and guiding them along their journey. 

As a coach or consultant you can offer one-on-one, group or team sessions. If needed and when possible you can offer in person sessions, but sessions can also be conducted online via platforms like Skype or Zoom.

Here are some examples of coaches and consultants based on their expertise:

  • Life Coaching
  • Business Coaching
  • Career Coaching
  • Fitness Coaching
  • Musical Instrument or Voice Coaching
  • Psychotherapy
  • Corporate Consulting
  • Financial Consulting
  • Legal Consulting
  • Language Teachers or Tutors

Here are 3 examples of life and business coaches: Willo Loves You, Charlie King Coaching, & Million Dollar Coach. And here is an example of an online language tutoring platform: iTalki

3. Selling physical products online — eCommerce

This model entails creating your own physical product and/or selling someone else's product in exchange for a margin or a sales commission. 

Creating a new product from scratch is generally speaking no minor undertaking. You’ll need to start with an idea, come with the design, manufacture a prototype, conduct extensive product testing, and market the product well enough to generate sales. Even though manufacturing has become a lot more accessible, it still has major risks and requires a fair amount of start up capital. 

Having said that it also depends on your specific product. Creating and selling custom designed and hand made face masks or swim wear is less complicated compared to designing, manufacturing and selling electric skateboards or a DIY hydroponics system. 

If you do manage to design, manufacture, distribute and sell a new or improved physical product profitably, then you are in a position to build a bigger brand and product portfolio. You’ll also have a competitive edge over your competition, assuming the product you sell is unique and cannot easily be copied. 

Here are three great examples of products that are being successfully sold online: The Roost StandSwitch Pod,  and Minaal.

Example: The Roost Laptop Stand — therooststand.com

Besides creating a brand new product, another option would be to sell an existing product either via your own online store or via a larger online retailer like Amazon, using their FBA (Fulfilled by Amazon) program. If you do not hold your own stock and you outsource the fulfilment of your orders, then this model is referred to as drop shipping.

Here are examples of the top 500 Shopify stores: and here are some of the top Etsy stores.

4. Selling digital products

This option entails creating, marketing and selling a digital product online. Digital products can include books, audio books, games, online courses, templates, sheet music, musical recordings, recipes, building plans, checklists, or software to name a few.

The benefit of selling digital products is that distribution has become a lot easier to scale and once the initial production is complete, you can sell unlimited copies of your product. 

Once you’ve coded a game, written a book, recorded a song or finished filming and editing the lessons of your online course, you package the product once and can keep selling copies of it for years to come. By keeping overhead and recurring costs low, it’s possible to generate high margins when selling digital products.

Example: Data Driven U sells online courses, as well as a monthly or annual membership — datadrivenu.com

One major downside of the digital product business model is that digital products can easily be copied and pirated, but don’t let that hold you back.

One other thing to keep in mind is that creating the digital product is only part of the challenge. A major part is finding product market fit (i.e. creating a product that people want and are willing to purchase) and getting your product in front of the right audience.

The right audience can either be an audience that you have built up over time or you can rent the attention of an audience by running ads.

Here are some examples of websites selling digital products:

5. Affiliate Marketing

This model entails promoting someone else's product or service in exchange for a % commission for each sale that you generate.

Instead of spending their marketing budget on running ads and promotions, some companies offer an affiliate program where they will let anybody willing to promote their product sign up as an affiliate. After being accepted into the program, the affiliate will get their own unique affiliate link which they use when linking to the product online. 

Any sales that are generated via that affiliate link will then get credited to the affiliate’s account and the company will pay the affiliate the agreed upon commission on the agreed upon payment schedule. The commission is paid out by the company selling the product at no additional expense to the customer making the purchase.

Affiliate marketing has a low barrier to entry, but generating enough traffic and sales to earn significant commissions takes time and effort and is something that most affiliates never achieve.

Most affiliate commissions are once off commissions, but some companies do offer recurring commissions for the lifetime of a customer that the affiliate referred. Recurring commissions are great for affiliates, as they will continue getting paid every month as long as the customer remains a customer.

Affiliate income can be a great stream of passive income, but it’s important to understand that you won’t generate any sales without putting in the work that is needed to build an audience and generate the traffic to the specific offer that you are trying to sell.

Example: Amazon Associates Program — affiliate-program.amazon.com

There are many different ways of driving traffic to your affiliate links. Many YouTubers add affiliate links to the description of their videos recommending their preferred gear. Other affiliate marketers will add their affiliate links to review videos and blog posts. Travel bloggers might recommend specific listings on a booking site by linking out via their affiliate links. 

Here are some real world examples of well known affiliate programs:

And here are examples of some real world affiliate marketers:

Example: Smart Passive Income — smartpassiveincome.com

6. Advertising & Sponsorships / Influencer Marketing

This model entails building an audience and then selling their attention to advertisers. 

The most most common examples of this model would be YouTubers, authority or news site owners, Social Media Influences (Instagram, TikTok, etc.), and podcast hosts.

A YouTuber will regularly publish videos to build grow their audience on the platform. As they increase their subscriber count, their views, and their engagement, so their channel will become more valuable in terms of displaying ads. In order to monetize their account (i.e. activate ads on their account) a YouTube account needs at least 1000 subscribers and have at least 4,000 hours of watch time within the past 12 months.

An authority or news site owner will create a website that focused on a very specific niche and contains valuable content about that niche. They will create content that ranks in search results and will therefore attract readers (i.e. traffic). They can then sign up with an ad network (for example Google AdSense) to place ads on the pages and blog posts on their site. Ad networks will either pay out CPM (cost per thousand impressions) or CPP (cost per click). In order to generate significant ad revenue a website will need a significant amount of traffic. Some authority sites will also charge advertisers for a sponsored post on their website.

A social influencer will spend their time regularly publishing new content to grow their following on the most popular social media channels including Instagram and TikTok. As their subscriber count and view count grows, so they will have more and more attention to sell to advertisers and so the cost of placing ads on their accounts will increase. Social influencers can charge per sponsored post or can sign endorsement deals in which they feature and promote a brand on their channels.

A podcast host will grow their audience and subscribers by regularly publishing new podcast episodes. As soon as their channel is large enough they can sign start incorporating ads or promotions as part of their episodes. If you become popular enough you could even license your podcast to Spotify for a sweet $100m — yip, I’m looking at you Joe Rogan.

Example: Armchair Expert Podcast — armchairexpertpod.com

With any of these examples, keep it mind that it takes consistent effort and determination and it can take a considerable amount of time to grow a channel to a significant size to make advertising a viable option. 

Here is a list of top social media influencers by industry and here is a list of top YouTubers in 2020

Podcast Examples: The Joe Rogan ExperienceArmchair Expert & The Tropical MBA Podcast.

Authority/News Site Example: Mashable

7. Membership Sites, Events & Exclusive Communities

This model entails creating and selling access to a private membership and/or creating and selling tickets to in-person events, retreats and conferences.

Running a successful membership site can be a great source of recurring revenue, assuming that you can convince your members to keep paying their monthly membership. 

Membership sites generally provide exclusive access to premium resources and can also include an online or in-person community that gives members the opportunity to expand their network by meeting like-minded individuals.

Example: The Dynamite Circle — tropicalmba.com/join-the-dynamite-circle

Events can be run virtually or in-person and can provide the attendees with a specific experience which might include an educational element, like training, presentations or workshops. Formats can include conferences, retreats and masterminds. Creating a monthly, quarterly or annual event can help solidify the experience as a recurring one in the minds of attendees. And it also lets you pre-sell tickets for upcoming events.

The Dynamite Circle is an example of an online community membership site that brings together business owners and location independent entrepreneurs.

DCBKK is the exclusive annual conference that is hosted by the Dynamite Circle, which is only available to DC Members. 

And Lineage of Light is an example of online training and in-person educational retreats in an area of Ancient Wisdom Sciences, Core Cellular Healing & Ke Ala. 

8. Software as a Service (SaaS)

This model entails creating and selling access to a software application that provides  a valuable solution to a common and recurring problem. 

The SaaS model is great for regenerating recurring revenue, assuming you can build up a loyal user base and customers that keep paying the monthly or annual renewal fee.

Developing a new piece of software is a challenging under taking, as you will need a to create a solution that users are willing to pay for on a recurring basis. You also need to either build it yourself or hire developers. You will most likely also need to keep improving your product in order to keep users from switching to a competitor.  The development, marketing, maintenance and customer support will need to be financed and managed. 

Example: Dropbox Business — dropbox.com

There are higher barriers to entry when it comes to developing software, but if you can create a valuable solution that is delivered in an efficient and enjoyable user experience, then you can create a business that can be scaled almost indefinitely. And because it’s a digital product, your team can work remotely and digitally.

Here are some real-world example of successful SaaS products:

9. Brokerage — Online Market Places

This model entails bringing together buyers and seller to facilitate some form of transaction. This could involve facilitating the sale of an online business, a website or a service. 

Example: AppSumo — appsumo.com

Here are some real world example of online brokers and/or market places:

  • UpWork — A marketplace for freelancers selling their services and those looking to hire
  • Dynamite Jobs — A remote job board bringing together those hiring and those looking for work
  • AppSumo — Featuring and selling discounted online products and services from 3rd parties
  • Empire Flippers — Facilitating the sale of websites

10. Or of course, a combination of the above.

Last but not least it is common for a business to use a more than one of the above business models. For example a brand selling online courses or books, might also offer done for you services. Or a YouTuber might include affiliate links in their video descriptions, but also monetises their channel with advertising. 

Using more than one of the above models can work well, but trying to implement more than two or three will probably result in a dilution of your efforts. A strong recommendation would be to have a clear focus and stick with what works best for you. You can always expand at a later stage. 

Thanks for taking the time to read this post. If you have any questions feel free to leave a comment or contact me here

8 Tips For Growing Your Online Business

1. Start Today

While you’re reading this blog post (or watching YouTube videos) there are customers searching for the web for your specific product or service. If you have an idea that you’d like to launch or an existing business that you’d like to grow by marketing online, start today!

“The best time to plant a tree was 20 years ago. The second best time is now.” ― Chinese Proverb​

2. Avoid Distractions

The current pace of change that we are experiencing with the web and technology has never been seen before. There are unbelievable opportunities to make a difference and have an impact in the work you do.

Moving forward this pace of change will keep accelerating. The web has become an incredibly noisy environment. New tools, apps and services are launched every day and there seems to be an endless amount of “experts” wanting to offer you magic bullet solutions to your problem.

Beware of the constant noise and the endless options. You most likely don’t need that new shiny web app or the 30-hour video course that will “Teach you everything you need to know to make 6 figures online”.

Cut out distractions, don’t waste your money on things you don’t need and stay laser focused on what you are creating.

“You will never reach your destination if you stop and throw stones at every dog that barks.” ― Winston S. Churchill

3. Define Your Desired Outcome

To reach your desired goals, it’s important to have a clear definition of what you are trying to achieve. What is your desired outcome? What does it look like? Why are you passionate about this idea or business? Take as much time as you need to clearly define your mission and your outcome. Avoid launching into the ‘doing phase’ if you are not sure what you are hoping to achieve.

“If you don’t know where you’re going, any road will get you there.” ― Lewis Carroll

4. Validate Your Value

So you’ve got something great to offer the market. Create a minimal viable product/service and make sure to test your offer before investing more time and money into expanding what you’ve already created.

The best way to test an offer is by getting direct feedback from existing or potential customers. And the ultimate validation of an offer is by generating sales. If your target audience is willing to pay for your solution, then it’s worth pursuing.

If you realise that your offer is not resonating with your audience, then review, rethink and rebuild.

“Try not to become a man of success. Rather become a man of value.” ― Albert Einstein

5. Create A Strategic Overview & Action Plan

After defining and clarifying your mission and desired outcome, expand those two items into a concise strategic overview and add an action plan.

A strategic overview will help you define and outline the finer details of your greater vision. Think of it as an architectural plan for your online home. This document should include defining the problem you’ll be solving, the value you’ll be adding, the audience you’ll be targeting, the offers that you’ll be making and how this all fits together online. How will you be marketing and delivering your product or service? Create a visualisation of your online marketing funnel.

Your action plan, on the other hand, will help you layout specific desired outcomes (projects) and what tasks (action items) need to be completed to reach those goals.

“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” ― Abraham Lincoln

6. Avoid Trying To Do It All Yourself

A common trap to fall into is trying to do everything yourself. As an entrepreneur, there is a lot to think about and manage. There are many moving parts to creating, managing and growing a business. Creating an online presence and marketing your business online is only one of the many challenges to overcome.

Consider hiring smart and reliable contractors and consultants to help you plan and create your desired outcome. Professional strategic support will help you scale yourself and your business. It’s ok to ask for help and work with strategic service providers. Trying to do everything yourself will result in overwhelm and burnout. Trust me, I’ve been there.

“If you want to go fast, go alone. If you want to go far, go together.” — African Proverb.

7. Invest In Systems & Support

The ability to invest depends on your available budget, your cashflow, your desired outcome and your priorities. If you’re creating a hobby blog, then you would not want to invest much. However, if you’re building and expanding your business, then I’d assume it’s a high priority and well worth investing in.

Making use of free and cheap solutions and services is great for when you’re bootstrapping and just getting started, but if you are serious about growing a sustainable business, then it’s crucial to invest in premium systems, services, and experienced support.

Areas worth investing in includes your website hosting, your content management system, your website architecture, any online tools and services you use to run your business – for example invoicing, payments, capturing leads, email marketing, landing pages, webinars, social media, content marketing, and analytics.

It can be extremely overwhelming to know what your business needs when. If needed, seek professional advice and guidance to make sure you don’t waste your money on things you don’t need.

“All the tools, techniques and technology in the world are nothing without the head, heart and hands to use them wisely, kindly and mindfully.” ― Rasheed Ogunlaru

8. Progress Over Perfection

One of the most frustrating hurdles to overcome is dealing with perfectionism – wanting everything to be perfect before we share it with the world. The truth is that behind perfectionism lies something else that needs to be addressed and dealt with. This could be some sort of limiting belief, insecurity or imposter syndrome.

Sometimes emotional work is needed to overcome these challenges. And once you’re ready to put yourself and your business out into the world, start with version 1.0 of your product or service. Create, refine and launch as soon as possible. Then get feedback from potential or existing customers and then work on version 1.1. Don’t try to make version 1.0 perfect, you’ll only end up wasting time and energy.

If you feel ready, you’ve launched too late.

“Perfectionism rarely begets perfection, or satisfaction - only disappointment.” ― Ryan Holiday

Are you in need of strategic support and help with implementation?

Learn more about our Strategic Support & Implementation packages, where together with my team I personally support you in building your business.

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