When Automation is the Answer

Show Notes

The biggest mistake in automating is automating the wrong thing.
Once business owners start using automation, they often automate too many things, including the wrong thing. They then don’t get the results they hoped for and become disenfranchised with the whole concept.
Ryan has a formula for evaluating if you should automate something in your business:
- Ask yourself, “Is the time this is going to save me going to cost too much?” In other words, if you have things you are doing in your business you could automate and are time consuming, then saving your time is worth using automation. Free up your time so you can invest that time into your business instead.
- Look at your business and decide what is controlling the flow of profit. Every business has a system that money flows through. You want to identify that system. “What in that process is controlling the flow of profit?”
Only one thing can be controlling the flow of profit. Focus on seeing if marketing automation will facilitate in removing that restriction in the flow of profit and once it has, then you have applied automation to the right place in your business.
Don’t automate everything. You need to focus on one thing at a time and that should be what your business is telling you needs to be fixed.
You are the craftsman of your business. If you can understand when automation is the answer to solving a problem in your business, you will avoid the biggest mistake most people make in marketing automation.

Transcription of Episode

[00:00:00] If you only had one guess, what would you say to this question: what is the biggest mistake people make in marketing automation? Marketing automation is exciting. There are so many possibilities, but it also creates some problems. It's the same problem entrepreneurs have in general, and that is the problem of saying no.

The biggest mistake, according to me, in automating, is automating the wrong thing. That's the thing to look out for the most.

Whenever people start getting exposed to marketing automation, or automation in general, they want to start automating everything. And frequently, they automate the wrong thing, they don't get the results they helped for, and then they become disenfranchised with the whole concept.

I've seen this happen way too many times, people that buy into the concept and then don't get the results and then blame the software or the [00:01:00] concept. Unfortunately, that's not how it works. You need to have a formula for evaluating if you should automate something.

I want to share with you my simple formula. It's a simple formula. You can copy this down and memorize it quite easily. You don't have to memorize it word-for-word, the concept will do. The formula goes like this: the first thing I do when I'm looking at something to automate is I ask myself, is the time that this is going to save me costing me too much?

Okay, so let's go back and evaluate that statement. Basically, if I have things that I'm doing in my business that I could automate, and if I did automate these things, I wouldn't be spending my time doing them, and those things are costing me much more than what my time is worth, then that's something I want to consider automating right off the bat.

This is the first level of automation. Frequently, there's a lot of easy things that are being done that are time consuming [00:02:00] that we can switch over to automation and as soon as we do it's going to save us time and that time is critical.

When we start getting into the automation game, what we're trying to do is we're trying to buy time you will allow us to work on our business instead of in the business. Working on the business instead of in the business is the difference between those who really grow a business and those who are always struggling.

If you're always struggling, if you have to work every day to make sure that you make money today, tomorrow, and the next week, or even the next month, then you're working in the business. If what you're doing is influencing how you'll make money 6 months, 12 months, 18 months down the road, then you're working on the business. That doesn't mean you don't get results immediately, but you should also be having your focus be on 6, 12, or even 18 months down the road when you're making decisions when you're working on your business.

To get there, we need to free up some time. That's why the first level of my formula is, are there things that could be automated they're costing you too much time? And if there [00:03:00] are, then go ahead and hit those things first because we need to free up some time so that you can start thinking a little bit deeper on your business. Time is the most valuable asset you have, so let's get a little bit of that first. That's level one.

Once you've hit those basic things, and if there's anything in your business that can be hit at that level, it'll be two or three. Hit those two or three, free up an hour or so of your time if you can, and then we're gonna start using that hour to reinvest into freeing up more and more time by creating more profit, and that's the second part of the formula.

If you're saving time that you're wasting currently, that's worth automating. But the other place, and this is the place where it gets more exciting, is in the places that will increase profit margin.

There's a little formula to go through for increasing profit margin, and that is, looking at your business and identifying what is controlling the flow of profit. In order to identify what's controlling the flow of profit, you have to kind of identify, what's the system that money flows through in your business? And believe me, every business has a system. It may be convoluted, but there's [00:04:00] always a system that money flows through in the business.

If money's flowing really well, it's probably a pretty simple system because that's how money likes to flow, it likes to flow through a simple system. It doesn't mean it's not sophisticated, but it's simple. There's just a few steps and it flows through those steps very easily. Money loves to flow. It doesn't love to sit. It loves to flow.

So, you've got identify, what is the system that money flows through in your business. To give you some ideas, if that concept is still too vague, it's, how do we get people to know that we exist? Once they know we exist, how do we get them to raise their hand and say they're interested? Once they raise their hands and say they're interested, how do we get them to commit to actually spending money with us? Once they've spent money with us or committed to spending money with us, how do we collect it? How do we fulfill on the promises we made in marketing and sales, or in other words, in the process of getting people aware of our company and that it exists? And then how does that money then go into our bank account after it hits expenses? That's the flow of profit in your business or flow of money in your business.

So you got to look at that [00:05:00] process and say, what in that process is controlling the flow of profit? Do I have obscene expenses that are not justified and don't really match the amount of money we're collecting? Am I not getting enough leads to even be able to get to the point of converting somebody into a customer? Am I getting tons of leads, but I'm not converting people to customers? At any of these different points, am I not collecting the money? All those different points can be controlling the flow of profits.

We want identify which of those is controlling the flow of profit. And believe me, it can only be one thing.

If you want to think of this in other terms, imagine a hose and you're pushing water through that hose out of the spigot and you want to control the flow of that water. What would you do? That's right, you would pinch the hose off. You would fold the hose over on itself and now you start to control the flow of water and you'd be reducing it.

If you pinch the flow of water in one place, and then you do it in another, which of those is controlling the flow of water in that system or in that hose? And the answer is, it's the very first pinch. [00:06:00] The second pinch may be doing the same thing that the first one is doing, but it's not controlling the flow currently. It's the very first pinch in that hose that's controlling the flow. There can only be one pinch that's controlling flow.

Now, if one of those pinches in your hose is only pinched like halfway and then further down the hose, closer to where the water comes out, there's another pinch that's all the way, then which one is controlling the flow? Is it the halfway or is it the complete pinch that's controlling the flow? It's the complete pinch that's controlling the flow, and no matter how much that halfway is controlling the flow, it's not controlling as much as the complete pinch.

Only one of these any point in time can be the thing controlling the flow of profit, so figure out what that one thing is, then only address that one thing until it's no longer controlling the flow of profit.

Going back to our hose analogy, if I take that complete pinch that I start to un-pinch it until it's 3/4 of the way open, and I still have this half pinched portion of my hose, then now the [00:07:00] control of the flow of water is at the half pinch, no longer the 3/4 because the 3/4 is now open more than half. Now I move all my attention to the half pinched portion of the hose until it was greater than the three quarters and then that would be going back to the three quarters until it was fully open and then I have restored complete flow of profit or water to that hose.

So, same thing in your business. Only one thing can be controlling the flow of profit. Focus in on seeing if marketing automation is going to facilitate removing that restriction in the flow of profit and once it has, then you've applied automation to the right place in your business.

Now go back and find out what else is controlling the flow of profit and see if marketing automation or automation has a place in facilitating breaking that constriction as well. And now you're on the path to actually increasing profit margin. If automation plays a role in that, then fantastic, let it play its role, but only in that place.

Don't automate everything. If anyone [00:08:00] ever comes to you offering to automate your entire business, run. Don't walk, run, because they don't understand how to apply automation to your business. There can only be one thing that they should be focusing on a time. It has to be based on what your business is saying.

You've got to figure out, what is your business talking about? What is your business saying is controlling the flow of profit and focus in on that. Nothing else. Only that until it's fixed. Then you can move on to something else.

If you do this with your automation, you're going to have mega success because you're going to see results, and those results are going to have profit attached to them, and that profit is going to be able to compel you to go on in this process until your business continues to grow to the point that you want it to grow too.

Again, for some businesses, the thing that is controlling profit has nothing to do and will not be solved by automation. You must be aware of this point because if you don't, you're going to try and put the automation bandaid on every problem and that's not always the solution.

For example, you may have poor positioning. You may have poor [00:09:00] messaging. You might have poor communication channels that you're using. You may have bad business math. You may have a poor business model. And in all of these things, if you apply marketing automation to them, will only speed up the downfall of the business.

Remember, it's not the tool, it's the craftsman that makes the difference, and you are the craftsman of your business. Understand how profit flows through your business. Understand when automation is the answer to solving that problem and apply it appropriately and you'll be avoiding the biggest mistake folks make in marketing automation. This is Ryan Chapman with Fix Your Funnel. Keep moving forward.