Direct and Indirect Revenue Generating Activities

Is what you’re doing making you money?

Is the work you are doing leading directly to revenue… or just keeping you busy?
Is the work you are doing leading directly to revenue… or just keeping you busy?

Revenue generating activities (RGAs) should be the first thing on every entrepreneur’s to-do list — every day. I know this. You know this. Articles shout this from the rooftops.

The numbers differ: You should spend 20% of your time marketing your business. A Constant Contact poll says the average small business spends up to 20 hours a week marketing their businesses. (In a 40 hour week, that’s a solid 50%, but I think “up to” is the operative phrase here.)

Then, of course, there is the balancing act of time vs. money. If you can’t put money into your marketing, you need to put in more time.

But it’s not about time spent and it’s not about money (though having a healthy marketing budget helps). It’s about doing the things that are effective in bringing business to you. While there are many marketing tasks and tactics that are foundational and supportive, what I define as Indirect Activities, it is more important to focus on those efforts that are going to result in money coming into the company coffers. And for the entrepreneur, these are sometimes the harder things to do because we don’t feel comfortable “being salesy.”*

Tough.

When you’re in business for yourself you learn very quickly that if you don’t make a sale, you don’t eat. I don’t know about you, but I like to eat on a regular basis. And to do that, you need to engage in revenue generating activities that lead directly to a sale.

Indirect vs. Direct Revenue Generating Activities

I have a simple method of distinguishing between the two types of activities: Indirect Revenue Generating Activities find prospects for you and Direct Revenue Generating Activities turn these prospects into clients.

Indirect activities are things like deciding what you’re going to offer, what language to use, who your best target market is. The tactics can include nurture email campaigns, top of mind social media posts, and at the low rung of the ladder, leaving your business card on restaurant bulletin boards. It’s joining the Chamber but not participating. Yes, you might get some business from it, but that business is incidental and definitely not a reliable income stream.

Direct revenue generating activity involves an offer being made to a qualified prospect. This can include things like selling from the stage, emailing a sales offer to your list of prospects, holding a webinar (with an offer at the end), sitting down and making a presentation (with offer) to a potential client. Do you see a pattern here?

Most of the time, there is a progression from indirect to direct activity.

For example, most blogging is an indirect activity. It’s a method of putting your content out into the world in the hopes of attracting clients. It’s a way for prospects to get to know you, what you do, and how you do it. But few people read a blog post and say, “AHA! I must hire this person right away.” (But please, if you’re thinking that right now, feel free to do so.)

A blog post that is basically a sales piece with a call to action at the end is more direct, but you are still depending on people finding your post.

Taking that blog post and putting it up on social media is one more step towards a direct activity, as is sending an email to your list linking the post. Using Google, Facebook, or LinkedIn ads to get that post in front of a targeted audience moves it solidly to a direct activity.

But a blog post without a call to action is a support activity. It is the equivalent of all those MLMs that tell newbies, “You don’t have to sell. Just share the information with your friends and family!” Yeah. No.

Here’s another example: I go on podcasts and talk about how little books can be used in marketing. Finding podcasts with the right target audience and contacting the host or producer is indirect RGA activity. Going on the podcast and telling people to click the link to get my free training on how to use little books in their businesses is a direct RGA. (Yes, of course I made that a clickable link.) I also make sure that I advertise the podcast to my market (my email list and social media) which not only puts my product in front of my people, but helps the podcaster get in front of my audience.

How Price Factors into Indirect/Direct RGA

The higher the price of your offer, the more likely it is that the activity you need to engage in is direct:

  • Sometimes through email
  • Sometimes over the phone or video chat
  • Sometimes in person

Think about the price of the things you order off Amazon. Anything under $100 is pretty much a no-brainer. You don’t need to interact personally with an author to buy her $20 book. You don’t need to meet George Foreman to buy his grill (though that would be cool).

There’s a reason why Facebook ads have offers that are under $50 (and most are under $20). The advertisers are putting you into a sales funnel. The low-priced offer is the tripwire or qualifier: Will this person pull out their credit card and pay actual money for information on this topic? Ryan Deiss perfected this list building/qualifying technique with his $7 special reports. While the $7 helped to defray the cost of advertising, it’s true value was in sorting and qualifying prospects.

I have attended webinars where the value of the content has been so high and the price of the offer so low (because at this point, we should all know that a free webinar leads to a sales pitch, right?) that it’s a total no-brainer. For me, that price is in the $97 — $197 range. (You’ll notice that is where I price my mini-courses.) You might have a higher or lower no-brainer price. That doesn’t matter. What is important is that you know your target market’s no-brainer price.

You Have to Sell

Direct Revenue Generating Activities are just that — the action results in a sale. You (or someone on your team) have to actually close the sale. Again, if it’s a low-priced offer, a solid sales page will cause people to click to buy. When you are selling products and services in the $500 or $1,000 and up range, people are going to need to know more and trust more before they give you substantial amounts of money. The more well-known you are, the less they will need that reassurance and the more money they will pay before their caution flags start waving.

But most of us are not Tony Robbins or even Mel Robbins. People want to know who we are before they spend large sums of money with us and that is fair. Unless I talk to someone, all the blog posts and clever memes in the world are not going to create a steady stream of sales. They can create a steady stream of prospects, but I still need to actively do something.

So How Does This Work?

Let’s take the “free strategy session” model of marketing that is taught to so many coaches. The idea is that a free session will highlight what wonderful coaching skills you have and of course(!) people will want to hire you. Or maybe you are hoping that the law of reciprocity will kick in and by giving a free session, the prospect will feel obligated to hire you. (Hint: Even if they hire you, it will be for a minimal amount of time — just enough to get over any feeling of obligation.)

The free strategy session model can work and work well… if you structure it to include qualifying the prospect and making an offer. I’m not talking about bait and switch. If you’re offering a free strategy session, you damn well better deliver some valid content. But nothing says you can’t expand the session to include what you can do for that person in addition to the initial information they receive in the session. I can give someone a solid strategy to put in place that will move them forward AND if they work with me, I can create a comprehensive plan and help them implement it. The session can give the “what” to do; working with you gives them the how and support.

But you have to develop that structured framework in advance. You have to go into the conversation knowing that you will both help the person and lead them to a place where they will want to say yes to your offer. It takes practice and mindfulness and purpose. You don’t have to be slick or trick anyone. But you have to actually ask for the sale. People come to you for direction. Tell them how they can get started with you, then ask if they want to move forward. It can be that straightforward.

Which Are You Doing? Direct or Indirect?

You have to do some indirect activities in order to create prospects to sell to. You need to nurture people who are on your mailing list so they know you care about them and want to help them. You need to have a presence on social media or in your town’s business community or both, just to be visible. These things are fairly easy to do and for the most part, are not outside anyone’s comfort level. Or, more accurately, we do the things that are in our comfort zone and think we’re doing what we need to do.

We also know that people need to be exposed to an offer multiple times before they actually do something. That’s part of the nurturing process. But at some point you have to ask for the sale.

Make a list of the marketing tasks that you do each week. Then ask yourself if that activity actually leads to sitting down with someone and having a conversation. It is okay if the task doesn’t. But if all your tasks are indirect RGAs and only one or two are actively leading to sales conversations, you need to up your ratio of direct to indirect.

You also need to ask yourself if you’re avoiding asking for the sale. Sometimes we are afraid of “bugging our list” by making too many offers. Sometimes we’re afraid of rejection. But when the mortgage is due and Snidely Whiplash is twirling his mustache, you need to be able to step up and carry out those direct revenue generating activities that will keep the lights on.

* My friend Stephanie Wachman wrote Sell Without Being Salesy just for that reason. It’s a quick, very helpful read.

Barbara is a writer, speaker, and marketing consultant. She specializes in helping business authors leverage their books. Learn how: https://barbaragrassey.com/

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