The thought of doubling your AdWords profits probably sounds daunting, or even unrealistic. What if I told you it’s possible to more than double your profits with mere 20% improvements in your sales funnel? 20% improvement sounds reasonable enough, right? How can you possibly double profits with only 20% improvements?

Well, there is a catch here. You actually need to make 20% improvements on four different areas in your sales funnel. Again, we’re talking about fairly small changes, and by the end of this article I promise you’ll have both the tools and the confidence to make this happen.

If you can improve these four areas by just 20% then you’ll more than double your profits:

  1. Response Rate (i.e. Click Through Rate for Search ads)
  2. Conversion Rate (i.e. # of sales divided by # of clicks)
  3. Average Transaction Value (i.e. dollar amount per sale)
  4. Average 90 Day Value (i.e. dollar amount of future sales within a 90 day period)

Let’s use an example Google AdWords campaign to see how this works.  In the table below, I listed some realistic AdWords numbers. When you’re done reading this I recommend you create your own table and list the real values from your own AdWords campaign. That way you’ll see exactly what you need to do to double your profits.

As you can see in the last row of the table above, by improving the four metrics by just 20%, we increased the profit from $2,500 to $5,400! Also note that the cost per click remained the same in my example. If you’re familiar with AdWords, then you know you’ll typically reduce your cost per click as you improve your ad click through rate. So in practice you can expect to see an even larger profit improvement.

Let’s take a closer look at each metric to see how we could make these 20% improvements:

1. Response Rate or Click Through Rate

The first step to improve your advertising response rates is to match the message in your ad to your market.  In other words, your ad must connect with what your prospect is already thinking about.  Or, as legendary marketer, Robert Collier, says, “Always enter the conversation already taking place in the customer’s mind.”

Also, make sure your ad is benefit focused rather than feature focused. Answer the following questions to give you more ad ideas:

  • What are the results your product or service will deliver?
  • What emotions will your customer feel after using your product or service?

Finally, many ads can be improved by 20% simply by adding a stronger and clearer call to action.

2. Conversion Rate

Your sales conversion rates are a factor of your offer, your website copy, and your in-person or phone sales scripts. By far the most important of those 3 factors is your offer. An irresistible offer can improve your conversion rates by 20% despite weak website copy and/or weak sales scripts.  So focus on your offer first.

You’ll know if you have an irresistible offer if your prospect thinks, “I would be a fool if I don’t take advantage of this.”  And you should be a little nervous because great offers shift most of the risk on your business to deliver great results.  Typically this is done with some form of a guarantee.

3. Average Transaction Value

What’s the easiest way to increase your transaction value by 20%? Raise your prices by 20%. Now before you shrug that option aside, take a minute to carefully assess your prices.  Are you a premium provider offering discount prices?  If that’s the case, then seriously consider raising your prices. Offering a great price in your market can often be mistaken for lower quality by your customers. Through years of trial and error, we’ve all been trained to believe higher prices equal higher value. So make sure you’re not shooting yourself in the foot with low prices.

If raising prices is out of the question, then maybe you can offer additional, complimentary products or services. Or can you offer a deluxe or premium package that provides a faster and/or easier solution at a higher price? Both options could boost your transaction value up over the 20% threshold.

4. Average 90 Day Value

In my experience, most businesses do not even measure their 90 day customer value. This is also referred to as lifetime value or backend sales. For some businesses, this is the difference between thousands in profits vs. thousands in losses when advertising. To increase your 90 day customer value, think about everything your customer needs. Then consider whether you can add the additional products or services or whether you can partner with another company.

For example, if you’re a real estate agent your clients most likely need a moving company. They may also want an interior design firm and a kitchen renovation specialist. So you could form partnerships with high quality businesses, refer your clients, and earn referral fees. Or if referral fees are not appropriate, then reciprocal referral partners can also be very lucrative.

By now you should have several ideas for how you can improve each of these four areas by at least 20%.  Even if you only improve by a very modest 10%, then you will increase profits by 50%!