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Growth Every Time
This is the show that I live life getting great growth nuggets either from our team, our employees, our vendors. Other speakers that I shared the stage with and other authors. In this case, my wife and I, Kerri, were asked to go to Hawaii to mentor a group of Global Mastermind students. They paid a handsome fee to go be mentored by five pretty amazing business owners. We flew in from all over the country. We had a great week. I got some feedback after my talk, unlike any feedback I’ve ever gotten. It was very directed questions asking me to repeat in pretty good detail, but slow enough that they could take notes because I was speaking really quick in this meeting. I had to get through the material. Every person had a different question about a different section. It was only ten slides. I said to myself, “I’ve never delivered a talk where I covered some growth techniques where the questions were spread evenly.” Normally if I have attended a twenty-slide presentation, for those of you that do PowerPoints, there’s the 20-20-20 rule, twenty-point font at the smallest, twenty slides at the longest and twenty minutes at the longest. I’m usually shorter than that. I write big and I usually have punchy bullets that people can remember. I’m only trying to make two or three points in any one presentation because the mind can only absorb and retain so much.
In this case, to my surprise, different people came up and asked detailed questions about every single one of the ten bullets. I’m going to break this into two podcasts. I’m going to cover the first five slides or first five bullets on this podcast. Then I’m going to go deep and talk about the next five. The title of this talk was, “What happened here?” and there was a graph that had three humps. If you could just imagine three camels, three humps and then they went up and down, up and down equally and it finished at a down. Then it just kept going up and up to the right almost off the chart. Each of the three humps reached $3 million and then they came crashing down to Earth to $0 and then up to $50 million. What this chart represents is the actual real-life gross revenues of the companies Kerri and I have ran. Between ‘92 and 2000, we had three different really strong product lines or businesses. We’ve got each one well-past $3 million and each one came back to Earth’s gravity to at least $500,000. Then we stacked what’s called an S-curve. We did it again to $3 million, then it crashed. Then $3 million, then it crashed. I’m a decade in as business owner. I have done pretty well in my twenties but I didn’t have anything sustaining. I didn’t have anything that was just continually and forever growing. It was always back to ground zero. It was driving me nuts.
A brand promise is more important than your product no matter how great you think your product is. Click To Tweet
All of a sudden something happened in which Kerri and I put our pedal down. It grew more than $3 million. Instead of coming back to Earth’s gravity, we sensed something and we stacked the S-curve or went into another product line while the other one was still healthy. We’ve stacked five in a row and our company does close to $50 million a year or more. We’re not going down anywhere to near Earth’s gravity ever again. We found the principles. What I did is I built a foundation. I want you to imagine like a mesh screen and the screen is really wide. Meaning each of the openings in the screen, it’s not small that a fly can’t go through. It’s really big. It’s two inches by two inches in each square. There are ten boxes. Just imagine ten boxes and you can put this test if you will or you can put these ten items over any business in any industry at any time.
When you compress these ten spots over any business, some are going to turn green and some are going to turn red. The ones that turn green, that area of the ten you’re doing well. The ones that turn red, you’re doing poorly and it’s going to probably cause you to fail. What we ended up putting together in that launch period where the big arrow points down and says, “What happened here?” It’s that bottom of the apex in which everything just took off up into the right. I want to explain what happened there. We came up with these ten boxes and we’ve been driving the company in these ten boxes since then. I’m going to cover the first five with you. If you have a piece of paper, just write one, two, three, four, five, going down the left side of your page.
Number one, you need a good idea. You need a good product, you need a good service, you just need a stinking good idea. You need an idea where you know that you know that you know this is going to go. You might not have the time, energy or money but you get the idea. Step two, you have to prove the product by selling it. You don’t prove the product by data analysis. You don’t prove the product by another company selling it, another company doing well with something similar. That’s not how you do it. You prove the product by selling it. You keep the money in escrow. You keep the money in a separate bank account. You don’t spend a penny of it. Once you go, “This is working. I can sell this,” you then move on to step three. It’s not build it right, not even close, not package it. It’s not hire employees. Step three is you develop a brand promise. Often the brand promise might be more important than the product. Your product could be very similar to something else out there. It’s the brand promise that separates.
Think about TOMS shoes. Nobody has ever made the claim, “TOMS shoes are great shoes,” yet TOMS is the fastest growing shoe company in world history. Bain Capital just paid $730 million for 35% of his company. It’s because at TOMS shoes, when you buy a pair of shoes, you get another pair for free. It doesn’t go to you though. That pair of shoes goes to some kid somewhere in the world that’s never worn shoes before. It stops disease and rot of his feet and it keeps them healthy. It’s buy one, give one. That’s his brand promise. It says, “Buy your shoes here and you’ll clothe the world. Buy one, give one.” That’s a brand promise. I can promise you the brand promise is more important to TOMS shoes than the shoes.
Number four, you find an audience until and then an underline. You fill in the underline or the blank with the phrase, “You can relax in the numbers.” That means when we first came out started building websites in 2008 or 2009, I had to figure out, “How am I going to find an audience? How am I going to find people to trust me to build something that could eventually be part of our now billion eyeball portfolio across a thousand moneymaking websites? How am I going to find these people?” In the beginning I didn’t know what to do, so I called people. I sold a few people on the idea. Then I said, “This is too much work and too much rejection.” We started doing trade shows. Every time I put in at least $5,000 into a booth, I’d walk away with a new website partner. Somebody that trusted me with their money to build something that would make both of us money. That was good, but I wasn’t going to scale fast enough.
Then I started sponsoring events. That put me in front of a bigger audience. Then I started speaking at these events I was sponsoring. Then I wrote a book about my first 200 websites. Then I started speaking all over the world about that book and then I stumbled on to something amazing called direct mail and radio. When you do direct mail, you can send out 2,000 pieces of mail and invite people to a fancy steak restaurant saying, “If you come and listen to me talk for an hour, I’ll buy you a steak dinner and drink.” I go all over the country. I have 35, 40 people show up. Very seldom did I do a steak dinner, which only cost me a couple grand and not get a site partner to do a website in which we could share thousands of dollars a year in an ongoing revenue in perpetuity. The magic came when I started doing radio because our average ticket item at Income Store is very expensive. Our average item now is $260,000 per contract. Where do people or companies with $260,000 that after they just sold a piece of property or this or that, where do they hang out? It’s not always easy to find, but I know what they listen to. They listen to Sirius radio. They have to pay for Sirius radio. They pay so there are no commercials. They pay for exclusivity. They pay because they have the money.
Here’s the key. I finally found my audience. What I could do is I could relax in the numbers. I just had to keep increasing my radio budget until I was beating people off with a stick. Now we’ve been dialing it down and come March or April, we won’t ever have to do radio again. As a matter of fact, that’s a whole different story. The key is this, until I found the radio, I could never truly relax. My goal as I wrote in 2009 and stuck it on my wall was we’re going to find 1,000 website partners. Once we get to 1,000, I thought we’d probably be at a half a billion eyeballs will be at a billion. I knew right there I wanted to stop my portfolio to 1,000 and finetune that portfolio. That’s exactly what we’re doing now. You find your audience, you keep searching, you try Facebook Ads, you try Google pay-per-click. Keep trying until you find the one platform where you can just dial in the budget. That’s number four.
Number one, you have a great idea. Number two, you prove that product by selling it. Number three, develop a brand promise, which is probably more important than your product no matter how great you think your product is. How do you develop an incredible brand promise? How do you develop an awesome brand promise? There are three steps. Number one, the brand promise must clearly separate your product from the competition. It has to have a clear separation. Number two, it provides you, the founder of your company, the right to compete and more importantly, it provides easy sales. Take Income Store for example. Our brand promises if you trust us with your money, we’re going to go buy you a website already making money. Depending on the size that you fund, you’re going to get a 12% to 22% guaranteed return in perpetuity from that asset.
You prove the product by selling it. Click To Tweet
We’re going to buy you an asset, probably producing a 30% to 50% return. We’re going to cut it in half, you’re going to have a week and a half to manage it. Lo and behold, we can lock that down in a contract. If something happens, and 2% of the time something does happen, we might have to go out and buy you another website in case your original site starts to drop and we can’t control it. My brand promise says we’re so sure that our 140 employees can manage that asset we buy you. If we can’t and there are some times we can’t, we’ll just go buy you another. That’s my brand promise. It created a moat around our company that allows people to trust us with their money. Number three part of the brand promise, it forces word of mouth. Nobody can hear the brand promise of Income Store and not go, “That’s too good to be true. No way I can just give those guys money and they’re going to manage my website and have it keep making passive revenue and keep growing it. I’ll always get at least 16% the rest of my life and I can give it to my kids. No way, it’s too good to be true. It is true. Because it is true and everybody finds out to be true, it forces word of mouth.
The bottom line is number one, you’ve got to have a great idea. Number two, you’ve got to prove the product by selling it. Number three, you better come up with a killer brand promise. Number four, you find your audience. You keep trying platforms until you can relax in the numbers, you can literally sit back and relax. Number five, you then incentivize your audience until you no longer need to. You incentivize the audience because in the beginning, nobody’s willing to be your first customer. You have to give your services away in exchange for testimonial. You’re probably going to have to do that three to five times. Then you’ve got three to five testimonials and now you can incentivize your next client a little bit less and a little bit less. This goes back to 1956, Dial soap sent samples of Dial soaps in the mail. Then they sent coupons for 50% off and then 90 days later, coupons for 25% off and then 10% and then none. They incentivized until they no longer had to. Those are steps one through five. Join me on the next episode for six through ten. I hope this helps. Take care.