At this point, we’ve acquired qualified leads with your Lead Magnet – woo hoo!
But, they are not new guests/customers yet – boo!
Even though your new lead has expressed their interest in your solutions through your Lead Magnet, a large percentage of them are likely still not ready to purchase your flagship product, high-end experience, or premium service... at least not yet.
If you understand and execute on this step, you will surely convert more visitors into customers than most of your competitors.
What exactly is a “Tripwire”?
The Tripwire is an entry-point offer designed to convert your new qualified leads into paying customers. It turns window shoppers into customers.
The most common way to make the Tripwire irresistible is by selling it at cost and, in some cases, at a loss to you – but, this isn’t the old auto dealership “bait and switch” loss leader concept.
The Tripwire is a REAL offer, it’s just that you aren’t trying to make a living from selling Tripwires. You are selling Tripwires with the sole purpose of acquiring buyers because there is nothing more valuable than a list of buyers.
There is nothing more valuable to your business than a list of people
who have bought from you already.
This step is not designed to maximize profits. Heck, it’s not even supposed to cover your bills. You’re probably thinking about skipping this step after that statement (C’mon you know I’m right!)
Don’t skip it!
When you understand the rest of the Customer Value Journey optimization process, you will understand how the Tripwire Offer is the single most powerful addition you can make to your conversion funnel — even though you may not make any direct profit from it.
The Tripwire is not a new idea.
The Tripwire is essentially a loss leader. Retail businesses have been using this pricing strategy for years to get people to make the first purchase and stimulate sales of more profitable goods or services. Think Black Friday doorbusters.
Let’s take a walk down memory lane for a dated but incredibly powerful example of a good Tripwire. If you’re old enough to remember it, you may have even signed up for it.
This offer from Columbia House is one of the best-known and most effective Tripwires ever created. Simply put, buyers paid a super small fee to get their first taste of a worthwhile product and then became long-term customers as they rolled into the monthly subscription service.
- Low-dollar amount — check!
- Valuable product — check!
Today, you can use this same approach to fuel the conversion funnel for your products and services, allowing you to convert more sales at a higher-margin.
Still feeling a bit skeptical?
Let’s take a look at a more relevant example.
Timeshare companies have been effectively using Tripwire offers for years...
In order to entice prospective buyers to visit their timeshares, they’ve offered discounted or free stays to hotspot destinations, as well as tickets to nearby attractions. Typical Tripwire offers might include:
- Three nights in an Orlando hotel and two tickets to Disney theme parks for $99
- A stay in a Las Vegas hotel and free gambling credit for $44 per night
- Three days and two nights in a luxury resort, plus two theme park tickets for $169
For eCommerce, a Tripwire is usually a deeply discounted item in your store. Some other relevant Tripwire ideas include:
- Selling kitchen design at a steep discount to encourage the purchase of the kitchen cabinets
- Selling a tour at a discount to incentivize the purchase of higher-margin add-ons such as meals, souvenirs, drinks, or photos.
- Offering a free consultation, demo or analysis for a B2B service or software
- A mini online course (yes, this can be used for a Tripwire idea too)
Why is offering a Tripwire worth my effort?
Remember the stats we shared earlier? Here's another sobering one...
Only 17% of consumers browse a website with an intent to purchase on their first visit, according to the 2018 Reimagining Commerce study by Episerver.
In fact, only half (50%) of shoppers immediately head for the product they want to purchase. You have to woo them, motivate them and hook them.
The strategy behind the Tripwire is simple: Convert the maximum number of Lead Magnet leads into paying customers, even at the expense of your profit margin, with the understanding that acquiring a paying customer will deliver profit through the next three steps:
Step 5 – Offer Your Core Product
Step 6 – Offer A Profit Maximizer
Step 7 – Establish A Return Path
When you offer a Tripwire your goal is to also achieve the following:
- Increasing rapport and trust with your Buyer Persona
- Getting a “micro-commitment,” which makes it easier to make a bigger purchase later (Note this can be a money or time commitment)
- Break even on your cost of customer acquisition
Before we leave this step, let’s take a closer look at customer acquisition costs…
How can I figure out my customer acquisition cost (CAC)?
It really is a simple equation:
- Calculate the total amount spent on acquiring more customers (marketing and sales expenses)
- Calculate the total number of new customers acquired in the period the money was spent.
- Divide total expenses by the number of new customers.
For example, if a company spent $2,000 on marketing in a year and acquired 100 customers in the same year, their CAC is $20.00.
With a well-executed conversion funnel, you can cover these costs with your Tripwire, so every purchase or upsell that comes afterwards becomes pure profit. Once you calculate your customer acquisition costs, you can build a Tripwire packed with enough value that you can sell it at a price high enough to cover your CAC.
Once you’ve turned your lead into a customer with a Tripwire, it’s time for the next step…
