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The 11 Pillars of Highly Effective Business Scaling

How To Setup Your Business Before Ever Scaling Any of Your PPC Advertising Campaigns

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[Updated 3.11.2021]

In today’s business world, nothing seems more important than growth and scaling. When people think about scaling businesses, in most cases, the step advertisers take is to pump more money into advertising platforms.

growing a business implies ‘linear growth‘ and increasing revenue. Scaling is the ability to grow exponentially while being cost-effective and increasing profitability.

Imagine you’re scaling, and for the sake of the story, you’re “blessed” by the ad gods. All your ad campaigns produce out-of-the-ordinary results…

What will that look like?

When most businesses scale their advertising/marketing efforts, they realize that they are not ready yet. “Oh shit,” “I need more salespeople,” “I need more products,” “I need more warehouse staff,” “I need more… __fill in the blank__.”

In 2016, when I was hired by companies as an outsourced CMO. I got to see the ins and outs of many businesses in many industries and niches. Spending time with business leaders, marketing teams, and front-end staff has provided me with in-depth knowledge on how to help CEOs and entrepreneurs scale their businesses and brands.

Most business leaders want to scale up as soon as possible. Get more customers, more leads, more revenue — bigger bonuses.

Truth be told – each level of “scaling” requires a separate plan of attack to get to the next level. There are methods to scaling, which can only be limited by your own time and skillset. Preferably you want to set up the business so that its scalability is not hindered by you in any way and it can exponentially grow on its own.

Scaling a startup from $10,000 a month with a small team of 2 to $30,000 a month with 6.
Scaling a medium-sized company from $3,600,000 annual revenue to $10,000,000 annual revenue with international expansion, and more staff.

Each level has its requirements, methods, and potential choke points that you preferably want to be prepared for.

One of my favorite words is perspicacity. You need to be perspicacious. Being able to peer through the Matrix of your business and see the future.

Here are 2 examples:

Services:
You want a consistent stream of clients coming in. Just enough so you’re not stressed out about where the next client is coming from, but also not too many so you’re losing business. Before scaling your winning ad campaign to open the floodgates, you have to ask yourself:

Can I handle 5x – 10x – 30x the clients I’m currently working with?

Can I handle 10x – 20x the meetings, sessions, phone calls I’m currently taking?

If I get those numbers, do I still have enough time to spend on business operations + free time?

Products:
Brands that sell products, especially eCommerce brands can quickly run into big problems by scaling too fast. Ask yourself:

Can I handle 20x – 100x – 1000x the orders I’m currently taking?

Do I have the inventory? Can I handle all the orders effortlessly?

If I get 50x of the current orders, can I fulfill the orders in the promised time?

If I go out of stock, can I get our supplier to quickly refill the inventory?

Do I have enough people to handle customer support (emails, chats, phone calls)?

If the answer to the question that applies to your business is “no.” Then this article is for you.

[In Part I, You’re Going to Learn How We Help Our Clients Scale Predictably, and Profitably! By Focusing On The Fundamental Pillars.]

Now we get to the question… “so, how does a company scale?

The answer to that question is capital.

The way a business gets to scale fast and profitably is via increasing its capital. It would not be a surprise if I’d say that the popular vote goes towards borrowing cash from banks or getting significant investments.

However, there’s a third option. We call that option “sustainable scalability.” WTF is that you might say? Sustainable scalability is generating massive profits and wealth through advertising. With sustainable scalability, you’re not dependent on outside funding.

sustainable scalability is achieved by implementing the 11 pillars of business scaling. Your advertising is the driving factor – It’s responsible for bringing in exponential amounts of leads, customers, revenue, and profits. The excess can in return be siphoned back into your ad budget, and other wealth-generating strategies and repeated.

Type “scaling advertising” in Google, and each article covers “how to scale your Facebook ad campaigns.” That’s great and all, but scaling is more than just pumping cash into an ads platform. Plus, most businesses fail at it anyway.

before you scale the “micro.” You need to have the “macro” in place.

You only have so much room to handle new customers or clients before running into fulfillment or operations problems.

  • You cannot scale paid media if your products aren’t scalable.
  • You cannot scale paid media if your margins are super low.
  • You cannot scale paid media if your funnel is not built for scalability.
  • You can’t scale paid media if your business infrastructure is not built to handle scale.
  • You can’t scale paid media if you don’t have the staff.
  • You can’t scale paid media if it revolves around you fulfilling everything solo.

Additionally, if the business is predicated on you fulfilling its products and services, it is not scalable. You can only sleep 4 hours a night for so long before your brain shuts down.

Aka you will have no life. Amateur.

Even if this article is the best thing since sliced bread, things will go wrong anyway. Nobody is perfect, and you will be tested. However, It is better to be prepared rather than not. So, how do you scale your advertising campaigns without burning out or losing out on the backend?

The Foundations of Scaling

As you may know, our mission is to help our clients build legacy companies. Either build a sustainable, successful business to hand over to your children, or set up for a massive exit (selling the business). Because of that, our knowledge generally runs deeper than your average agency.

The foundational pillars of scaling are the systems that you build your business around.

You don’t want to build a business made out of twig, mud, and shit so that when the wind blows over — your business gets wiped out.

If you truly want to scale, you build a business like the Parthenon. You need to have pillars in place that keep the business running on its own. These pillars are the cornerstones on which you build a business that’s pro-active versus reactive.

Reactive:
The last thing you want is to sit back, hope, and let the market find you in obscurity. This is why I’m averse to putting all your eggs in the SEO basket.

Pro-active:
You’re driving the business forward. and it either goes after clients via outreach or you build systems that bring them in.

MICRO & MACRO

MICRO – During a growth-focused period, 80% of your time should be spent optimizing predictable growth. Growing your customer base, products/services, finances, lead generation, traffic, team & fulfillment. These are the day-to-day marketing, sales, and infrastructure systems.

MACRO – Scale-focused.
 20% of your time should be spent thinking about scaling. Preferably everything on the micro should be optimized for scale FIRST — before you double or 5X your advertising budget.

Before you start scaling, you need to implement the fundamental pillars.

THE 11 PILLARS to scaling with “PPC Advertising”:

  • Vision & Leadership. (Operations, Team & customer support)
  • Infrastructure (marketing, sales, logistics, fulfillment systems)
  • Scalable Offers (products or services)
  • KPI’s and knowing your numbers.
  • The Market.
  • Marketing (content, social, email.)
  • Funnel (TOFU, MOFU, BOFU)
  • Traffic (the lifeblood)
  • Product Suite expansion & Profit Margins
  • PPC Advertising (wide & deep).
  • Conversion Optimization.

Gaining Critical Mass.

There is going to be a tipping point in your business where you’re going to reach what we call “critical mass.” This is the point where you’re gaining compounded growth at scale. Meaning you’re going to be generating more traffic, leads, and sales from the work and investments you’ve made in the past.

Your SEO, Social, Advertising, referral strategy is seamlessly bringing you:
– More followers
– More Leads
– More customers or clients
– More referrals. 

That cycle is going to repeat itself over and over again. For example, if you’d ask every client or customer you ever had for 1-3 referrals, you’d double your business.

1. Vision & Leadership. (Operations, Team & Customer Support)

Businesses grow big on the shoulders of giants. Big thinkers who have a vision and build a team around themselves to spearhead that vision. If that is you great, if not – find someone to fulfill that role in your business. Fortune 500 companies do this all the time. They poach or hire the best A-players from their competition. The best in their fields.

As I explained before, you cannot scale if the business is dependent on you. Effectively duplicating yourself by hiring A-platers who relieve you from the tasks that are less impactful to do as the leader. This does not mean hiring randos…

Good hiring is a skillset on its own. Depending on where you are and what your skillset is (visionary, strategy, sales, marketing, finance) – you hire based on what the business needs first.

As soon as you’re able to make yourself redundant, Hire people that are more talented than you in their respected field.

If you’re a die-hard advertising specialist like me. At first, it is hard to give that role to someone else in the business. Learning to leverage A-players throughout your business who are better at their roles than you, is going to be a game-changer.

Tip: Record your day-to-day actions so you can create SoP’s (standard operating procedures).

With people come problems. Everyone has their own personality. Their own goals, dreams, aspirations, fears, etc. They can quit, leave, and even poach clients…

It is what it is, that is why the hiring process is key.

when gaining scale, your company is going to be at a point where a hierarchy has to be put in place. You’ll have to build teams, with each their own respected and skilled leaders.

At each level of that hierarchy, give individuals ownership of their productivity. This means you’re giving them full responsibility for their work. When people feel responsible, they’re more motivated to deliver great results. Let’s dive into that for a bit.

If you want to motivate people they must know and feel that they truly matter. Motivation goes far beyond just financial incentives. If you lead by example and go above and beyond for your employees, they’re more willing to reciprocate your output. People desire to go beyond their job descriptions if their efforts are met with gratefulness and appreciation for their work.

People have emotional drivers for significance, belonging, and contribution in life, but definitely in an organization as well. Since a third of our lives are spent working. Provide them with responsibility and combine that with strong financial incentives. and most are willing to go beyond their job descriptions. 

2. Infrastructure (marketing, sales, logistics, fulfillment systems)

When the big picture is established it is time to build indomitable infrastructure into the business. You’re going to implement systems and integrate them so everything runs like a well-oiled machine.

  • Marketing systems
  • Sales systems
  • Operation systems
  • Logistics & fulfillment systems.

You will need a system to generate traffic, a lead generation system, a lead nurturing system, and a conversion system and have them all seamlessly working together.

That marketing system needs to have a symbiotic relationship and tie into your sales system. For example, If you sell services, then you will need trained people to pick up the phone and call the leads who raised their hand.

eCommerce brands need their logistics sorted. Sourcing partners or suppliers to fill up your inventory, to get your products on time.

They need payment processes that deliver orders to their fulfillment system once an order is placed. An order picker will collect the products and package them for delivery.

3. Scalable Offers (products or services)

The third pillar is scalable offers, that’s because if you have the first two in place and you’re growing. Sometimes it just doesn’t make sense to scale because your product is not scalable and there are 3 reasons why you’re unable to do so.

  1. You need to have a market-validated product or service.
    Your offer needs to be proven to sell. If the niche is too tight you cannot scale.
  2. Profit Margin.
    If your profit margin is only 2% – 5% – 15% and depending on your industry, it’s going to be hard to produce desired CPAs and profit from scaling the business. You only have so much wiggle room in your PPC advertising. If your product costs $250 and you spend $230 to acquire a customer that leaves you with $20 bucks gross profit. Remove all other expenses and you’re left with a net profit of $10 per sale.

    It’s up to you if you’re willing to put yourself through that gauntlet. Look for ways to increase your profit margins, or look to increase your profits on the back-end.
  3. Scalable through people or automation (one to many)
    There are three ways to scale your products or services.
  • Hiring staff and training them to fulfill your service.
  • One to many.
  • DIY “Do It Yourself.”

The first way speaks for itself. Every time you perceive to outgrow your fulfillment staff, you bring new ones in. Think consulting, coaching, agency services, gym owners, barbers/hair salons.

Secondly, if your business model allows it, add one-to-many offers. Tony Robbins does this stunningly with his events such as Date with Destiny, Unleash The Power Within, and Business Mastery.

Tony is speaking to thousands of people from the stage. He gives the audience homework or challenges for which Tony has highly trained staff to guide people in smaller groups.

Instead of 1:1 services, you make it an (online) group program. Think personal trainers, Yoga instructors, business coaches.

Third and lastly, you could add DIY products to your suite of products and services. This can be in the form of ebooks, courses, training programs, recorded lectures.

4. Metrics – Knowing your numbers.

At the end of the day, it is all about profit. As entrepreneurs, business owners, and leaders we want to provide jobs and an awesome culture, but if there is no money to be made, that goes all out the window.

One of the first questions I ask potential clients is “what are your numbers?” And most of them have no clue.

How can you predictably grow and scale if you don’t know your numbers? You can’t!

The 4 core KPI categories.

  • Traffic,
  • Conversions,
  • Sales,
  • Profit.

The first KPI is the amount of traffic. Knowing the amount of traffic you are generating and from what effort and channel. Paid/Organic – Instagram, Tiktok, Facebook, Google. What is your CPM ‘Cost Per Mille? How much are you paying per thousand impressions, and what’s your CPC ‘Cost Per Click?’

200,000 impressions, 10,000 clicks from Facebook ads with an ad spend of $20,000.

  • CPM: $10.00
  • CPC: $2.00

The second primary KPI is conversions.

How many of those people are turning into leads and email subscribers? What is the conversion rate, and what is your CPL ‘Cost Per Lead?’ – how much you’ve spent acquiring that lead.

3,000 become a lead.

  • CR: 33%
  • CPL: $6.66

The third KPI is Sales.

What is the percentage of leads that becomes a customer? What is your CPA ‘Cost per Acquisition?’ – How much are you spending on advertising to get a sale? Then what is your ROAS ‘Return on ad spend?’

100 people purchase a $1,500 product.

  • CR: 3%
  • CPA: $200
  • Revenue: $150,000.
  • ROAS: 7.5x

This specific example only considers one core product. Most businesses have other products or services that they provide or ways to maximize the order value per customer.

What is your AOV ‘Average Order Value?’

  • AOV: ____

The Fourth KPI is Profit.

You now know your most important KPIs. Let’s convert those numbers into profit.

Gross revenue: $150,000

Profit Margin: 50% ($75,000)

Ad spent: $20,000

NET PROFIT: $55,000

Unless you’re ret***ed, you want your customers to come back and buy more frequently. The same product, other products, bundles, etc.

When you collect your DATA over the years you will learn your LTV ‘Lifetime Value per customer.’

What is the LTV ‘Lifetime Value’ of a customer/client?

Let’s say you have a $12.99 recurring support membership as an addon to the $1,500 initial purchase.

On average your customer stays a member for 7 months, that’s $90.93.

  • LTV: $1,590.93

When you want to dive deeper into statistics and metrics (investors/acquisitions love this). You need to know your VPL ‘Value Per Lead’ – how much is 1 lead worth to your company.

  • VPL: $50 ( $150,000/3000)

Why are we calculating all these numbers? My head hurts.

Because if you want to scale, you need to make informed decisions that are backed by data.

Based on the data you collect you can figure out how much you are willing to spend to acquire new customers.

I started this section out by helping you reveal the core KPIs. The next step is knowing your back-end numbers.

  • Salaries
  • Fees
  • Office/warehouse rent
  • Logistics
  • Expenses
  • Agency
  • Contractors
  • Fill in the blank.

5. The Market.

Since this article is about scaling, the market doesn’t come first. If it was about growth, then yes.

You already know your customer avatars, your product is validated and wanted, and you probably even have some custom audiences and LLA’s (lookalike audiences) based on your customers, leads, website visits, and social engagement.

A common problem that arises for companies that are going to scale is “targeting customers beyond their current sphere.”

You can target based on interests, demographics, and all. You can target based on similar characteristics via LLA’s but what if most of those audiences dry out?

The antidote to that problem is to expand in customer avatars or “breaking the niche.”

What type of avatar could benefit from your offers?

The answer is: You’re going to “create a new market.”

  • People who are about to enter the market. (not yet a customer avatar).
  • People with similar interests to your core audience.
  • People who are not “in the market” but benefit from your offer.

Juice example:

Me and one of my best friends are building a healthy premium juice business. Think ginger shots, turmeric shots, Himalayan pink salt lime shots, and more…

  • Core audience: Men who lift looking to regain their primal power through Keto-like diets.
  • Core Audience: fit girls and influencer chicks looking to showboat their healthy lifestyle.
  • Sub audience: Families who are seeking options for a healthier lifestyle.
  • Sub audience: Vegans & Organic.
  • Sub audience: weight loss.
  • Niche Breaker: business catering orders.

6. Marketing (Customer Journey)

A Customer Journey is the road potential customers and clients go through to become a customer. We are bridging the gap from “not knowing your brand to buying.” The way business owners and marketers achieve that goal is by leading them seamlessly through each stage of that journey with advertising and content marketing.

Businesses that don’t create content, use social, and email marketing effectively are leaving massive piles of cash on the table.

  • Relevant content attracts and converts 40% higher across the customer journey.
  • A sophisticated email marketing strategy generates on average a 40x return for every dollar invested and can bring in 15% – 30% of your annual revenue.
  • A rich social presence helps establish authority and increase brand awareness.

The goal of your marketing is to establish how you want to be perceived in the market and educate your customers to perceive your brand as the best possible option.

The Customer Journey.

  • Aware
  • Engage
  • Subscribe
  • Convert
  • Excite
  • Advocate
  • Ambassador (promote)

Stage 1: Aware.

Someone sees an ad, finds you on social or via referral. This is your cold traffic. They don’t know you at all. Your goal is to get them into your ecosystem, which is step 2.

Stage 2: Engage.

The person engages on social, reads an article, or watches a video.

From this stage, it is important to keep hooking them in. Engagement is PRICELESS today! When someone engages with your content, you can add them into custom advertising audiences to follow up with them.

Watched 50% of your video on Instagram? RETARGET.

Liked your Instagram page? RETARGET.

Commented on a Facebook post? RETARGET.

Viewed 95% of your Youtube video? RETARGET.

Spent 2 hours listening to your podcast? RETARGET.

Clicked on your AD but did not subscribe? RETARGET.

The goal is to segment out the highest percentage of people who engage with your content and get them to subscribe and enter your funnel so you can stay top of mind and relevant.

Stage 3: Subscribe.

The Lead opts in to receive gated content in exchange for information details.

This is the stage where you have access to their email address and have them saved in a custom audience so you can follow up with them via email and relevant ads whilst building a deeper relationship.

From stage 3 onward, they are likely to follow and engage on your socials like Instagram, Twitter, maybe listen to your podcast, read your blogs, and watch your videos — which the first two stages have access to as well.

Use” them to boost social proof and cheat the platform algorithms.

Stage 4: Convert.

The lead makes a small purchase or books a demo, strategy session.

This stage is about acquiring customers on the front-end or increasing the commitment level of that lead. Our initial goal is to identify, get and segment the buyers from the non-buyers while liquidating some of our ad costs.

We can do that with small offers priced at $9, $17, $29, or $49 — it is totally up to you.

Or we want them to book a free session, in which you WoW them with your expertise and make an offer to work with you or buy a high-priced product.

Stage 5: Excite.

The customer gets value from the initial transaction.

Stage 6: Ascend.

You present your “core offer” to your customer/prospect. Your customer is ready to buy more and buy more often.

Stage 7: Advocate.

Successful customer gives a testimonial/case study. If you create a community around your business — which we shall name “your Tribe,” your successful customers can be leveraged ( they can and absolutely will help) to warm up new leads to your brand. Building a tribe is a sure way to speed up the buying cycle.

Just like stage 3. If you have any form of community or online community – the opinions and engagement of your successful customers to new subscribers, weigh 100x more than the people who just opted in.

Stage 8: Ambassador.

Successful customer raves about your brand or product and refer their friends/community to your business.

AIDA.

Throughout all the stages it is imperative to inspire and engage your tribe frequently. Remember AIDA – Attention, Interest, Desire, Action.

Each piece of content you create should hook their attention, pique their interest/curiosity, spike an emotion(s), and end with a CTA “Call to Action.”

Utilize biases and storytelling.

The more of you or your brand they are exposed to in a short time frame, the faster the relationship bonding.

7. Funnel (TOFU, MOFU, BOFU)

A funnel is a series of web pages, email sequences, and retargeting ads all dynamically strung together to get people to take the next step that you want them to take. With each step, they are getting closer to becoming a customer. A funnel is the framework of your customer journey.

Your marketing activities should have specific goals and hook points dedicated to bringing people closer to the point of purchase with the least amount of friction. Throughout the funnel, we’re looking to convert people to the next step through a commitment of either time or money.

Time-based commitments: Opting in for a demo, webinar, free trial, coupon.

Money-based commitments: purchasing one of your offers.

(the ultimate test of trust is people handing over their creditcards.)

Before scaling your PPC advertising campaigns – your funnel should convert directly proportional to profitability. How profitable are you and how cost-effective is the ad campaign?

I’m not saying “be a cheap ass.” If your campaigns are generating great results, but your leads cost $0.20 more than you initially wanted them to be. Grow up.

If your funnel converts on 1:2, meaning for every $1.00 you put in, you’re getting $2.00 back with high profitability on the backend, you can scale it to the moon.

The process of converting non-buyers to buyers requires you to understand the concept of TOFU, MOFU, and BOFU.

  • TOFU: “Top of funnel”
  • MOFU: “Middle of funnel”
  • BOFU: “Bottom of funnel”

Your whole customer journey ecosystem falls into these three categories. Every marketing message revolves around conversing directly with the prospect, relevant to where they are in the customer journey.

Driving traffic and converting them into customers is a “simple” process of building marketing campaigns that will direct them through the funnel.

TOFU – Attract (Awareness & Attention.)

It all starts with a potential client getting aware of your brand. That can either be on social media, Spotify, Youtube, or via ol’ uncle Google.

From my perspective TOFU is “above the funnel.” At this stage, all the marketing and advertising campaigns you build are to get their attention.

You hook them in by piquing their curiosity enough so they want to exchange their information details for valuable gated content.

You show them the “what.” What is the potential transformation that’s possible?

Goal: Get attention and attract potential customers.

MOFU – Collect Leads & Nurture (DATA)

Now that someone entered your funnel we want to build and nurture a relationship. They know who you are because they’ve already engaged with your content. At this stage, we establish “like, trust,” and authority by educating them on how to solve a specific problem.

The biggest money is in the follow-up of the people who are in the MOFU stage. Remember, only 3% buy fast and 7% are thinking about it. The relationship you build with the people in your funnel is created by the value you provide them.

The core pillars of your MOFU content: “Creating Goodwill.”

  • More in-depth and should help them solve a problem, help them get something or understand something.
  • Features & benefit content. (What to do, why to do it, and how to do it.)
  • Should evoke desire, emotions, and sound rational by addressing skepticism.
    – Tell stories, share anecdotes, future pace by painting the larger picture.
  • Instills the belief that they can get results and that you can help them get those.
  • Establish you as the authority before they give you money.
  • Have a conversion mechanism aka “soft pitches” and “hard pitches.

People in the MOFU stage are aware of the problem, want a solution, and looking to make an educated buying decision. In the MOFU stage, you provide deeper and wider information and show them the steps and “how to.”

The game is about educating your potential customers to become aware, understand, and believe that you can solve their problems or fulfill their wants, and that you’re the best option.

Look, your competitors ask for money first. We turn that around by helping our customers out first before we even ask for the money. This is how we generate goodwill and authority.

Leave them thinking “if the free stuff is so amazing, how awesome would their product or service be?”

Your content should be more focused on helping them from where they are and how to get the result. People are inherently lazy – so don’t be afraid to give your best content away for free.

Juice business example:

  • TOFU article: 5 Super Health Benefits of Ginger.
  • MOFU article: How to include Juices in your diet.
  • MOFU Guide: 11 easy-to-make Healthy Juice Recipes.
  • MOFU email link to article: Revealed! “Bloodwork was done after 30 days of Juicing.”
  • MOFU Email link to video: The Process: How our juices are made?
  • MOFU video: Where do our ingredients come from?
  • TOFU Podcast: Interview with Insta fit chick about life (whatever)

Reach your tribe via multiple outlets.

  • Email buckets.
  • Retargeting audiences.
  • Discord server.
  • Telegram.
  • Facebook group.
  • TOFU content (Podcasts, Youtube, Facebook, Instagram, etc)

Nurture your tribe frequently and stay omnipresent. You’re selling the feeling of certainty on an emotional and rational level.

Goal: continue to cultivate a relationship, establish rapport and authority, convert into a buyer

BOFU – Engage & Convert ($$$)

People in the BOFU stage are most aware. At this point, they are problem aware and you have demonstrated that you’re the trusted authority. They’ve raised their hand and are ravenous for a solution.

They believe that they can get results or your product is their best choice. We did that by educating them on the problems, showing them what they need to do to get what they want.

You’ve turned them into an informed buyer. The last thing you need to do is make the offer. The content you provide should focus on stories including the How, what, and why.

Goal: Convert them into a customer.

Your customer is the main character in your funnel. Your marketing lets your potential customers experience the hero’s journey.

Your customer journey:

  • Educates.
  • Tells stories.
  • Pre-frames.
  • Indoctrinates.
  • Has social proof & proof of concept.
  • Pre-qualifies buyers.

Optimizing your funnel for scale.

The biggest takeaway I can give you from this section is to always be relevant to where people are in your funnel – The most fascinating part of human nature is that even though our basic programming is the same, we all have different characteristics and personalities.

Some people buy faster than others – Give people the opportunity to speed through your funnel by making soft offers for your products or services throughout your messaging.

Some people buy 14-days, 30-days, 90-days, 2 years after entering your funnel, some people read one message that resonated so well, they immediately buy.

The more relevant content you give to your audience, the more they will like and trust you.

8. Traffic (the Lifeblood)

What is a business without customers? Just an expensive hobby right? The ways to bring in new customers are to either be discoverable or get in their face via marketing channels and advertising.

There are two traffic sources. Organic and Paid. Most people see traffic generation as an either-or choice. All in on paid or all in on organic and SEO.

With SEO, you’re working between a 6 to 9 month period during which you’re building up your website, creating content, doing outreach and link building, etc – and 6 to 9 months down the line you get to see the fruit of your labor. But you might be spending all that time to see your crops wither. Meaning you are spending 9 months building all that SEO up and sending traffic to an offer that does not even convert.

Meanwhile, with paid ads, you can drive instantaneous results. You learn what is working and what is not. You’re quickly validating your message, market, and offer at lightning speed. It costs a little bit of money, but at least you can grow based on data.

Tip: If you solely focus on organic the chance of getting wiped out by Google or other search platforms is very high. The flipside of the coin if you only advertise on Facebook… they can shut you down for no reason at all. Do not rely on one source of traffic. 

This is why step 1 is always to find a hungry market that is ravenous for your offer, first. Step 2 is to validate your marketing message and offer in that market to find your profit oasis.

Once you have verified your thesis, and you’ve found your profit oasis in that market, it’s time to dig your organic SEO well. Organic leads are not only more cost-effective than paid strategies, they convert faster and spend more.

The legendary Chet Holmes explains in his book ‘The Ultimate Sales Machine’ that only 3% of the people who you put your marketing messages in front of “buy now,” 7% are “open to buying,” 30% are thinking about it — 30% don’t think they are interested or it is not for them. Lastly, 30% of the people who see your message don’t give a flying FK and are not interested.

It’s not pre 2012 and advertising platform AI’s collect around 52000 data points per person. All that data gives you the ability to hyper-target your best customers, then build audiences based on your best customers.

Would it be crazy if I said that most advertisers focus only on the ‘3% Now buyer?’ Even today, with all the marketing automation and AI at our fingertips, that’s exactly what is still happening today.

If you’re skeptical, you might say “Mike is just throwing around random percentages, 76*% of statistics are made up.” Maybe you’re right.

I applaud you for applying critical thinking. (very rare nowadays!)

I could indeed be throwing around random numbers from a book that was published in a time when the internet was still in its breastfeeding stage.

However, all the data that I’ve had the privilege to study for about 10 years confirm Chet Holmes’ buyer’s pyramid. Not just the data that I get to see, agencies, businesses, and corporations across all industries report the same numbers.

My point is this.

Identify your best traffic sources and double down on those that bring in the highest return on investment. Once you have one validated traffic source, gradually expand to more sources, one by one with a multi-channel approach. Create more attention-hooks, sequences, and funnels for specific sections of your market.

For each audience, you can create multiple hook-points to reel them in. This methodology was once explained to me that you should approach the market as if you were selling a basket of fruit. They need to buy the fruit basket, that is the ‘solution’ your business offers. That solution is split up into multiple steps or checkpoints, those are the pieces of fruit. Now here’s the deal… some people like pineapples, but dislike strawberries. Others prefer mangoes over pineapples. Based on this methodology, it would not make ANY sense whatsoever to keep trying to sell the fruit basket by approaching people with pineapples, that don’t like them. 

If your market is not responding to the pineapple, serve them bananas. Don’t like bananas? Serve them strawberries, mangoes, kiwi, etcetera. The conclusion to the point I’m trying to make is this. As advertisers, we need to match our message (the fruit), to the market (people who are ill, lying in bed?), and to the offer (the basket of fruit.)

The reason we put traffic below the funnel in this article is that most advertisers don’t maximize their funnel, match their message, and offer to the correct market before scaling. They are just throwing 10X their advertising budget down the drain.

Before opening the traffic floodgates, the whole process should be pre-verified to produce results so that each step in the customer journey meets the prospect where they are, and enters the conversation that they were already having in their mind.

Before you start scaling your advertising you have to dissect the types of traffic relative to the advertising platform you’re taking advantage of.

Cold Traffic:

  • They’ve never heard of you before.
  • They are not problem or solution aware.

Goal: Get their attention and pixel them for relevant retargeting campaigns.

Warm Traffic:

  • People that know you – (like and trust).
  • They are problem aware and solution aware.

Goal: continue cultivating a relationship and converting them into buyers.

Hot traffic:

  • People who desperately seek a solution for their wants, needs, or problems.
  • People (in your list) that know you, who are solution aware and ready to buy (again).
  • In your “Buyers” list.

Goal: Convert into a buyer.

Not all traffic is created equal.

For example, Hot traffic on Facebook and Hot traffic on Google are not the same.

Hot traffic on Facebook – People who already know, like, and trust you or your brand, have the belief instilled that you can help them, and need a little nudge to buy. Throughout your marketing and funnel, they’ve raised their hand and said “I want that.”

Or they have searched for similar products, forgot about it, see your ad and decide to buy straight from your ad.

Hot Traffic on Google – People who have a big enough of frustration, pain, or desire that they want to have fixed or fulfilled. They know what they want. Those who are in the category of hot traffic can land on your product page, add to cart and complete their order.

No matter your type of business, play in on the frustrations and desires, and wants & needs of your customers by understanding the temperature of traffic.

9. Product Suite Expansion & Profit Margins

When you’re able to grasp this concept and apply it, you can experience exponential increases in growth.

In the early stages, you maybe have one or two core products that bring in the majority of the sales. As you continue to grow, look for these 4 steps to maximize the lifetime value of your customer.

  1. Increase the quality of your products.

Looking for ways to increase the quality of your product allows you to charge a more premium than your competitors or “WoW” your customers with a high-quality product for cheaper.

How can an increase in the quality of your products or services differentiate your brand from your competitors?

2. Find and test new products to add to your suite.

Over time you can find and test new products or services to add to your current suite of offers. Amazon is great at this. Whenever I go in to buy one book, I end up buying 4 lol.

  • Wider variety of products.
  • A “logical next step offer.” (Agency: “Conversion Optimization Package”)
  • Upsell and down-sells.
  • Addons & Cross-sells.
  • Continuity offer. (amazon prime, memberships, group offers.)

 

3. Increase the margins on your offers.

There are multiple ways to increase the margins on your products.

  • Eliminate staff (don’t be that *sshole that values a tiny incremental bump in revenue over your staff.)
  • Having enough people to handle all the orders without burning them out (saves on extra staff.)
  • Negotiate better price deals with your suppliers if you’re selling products.
  • Increase the price of your offers.

4. Increase the Average order value per customer.

Adding more validated products to your store that compliment your core offerings is going to increase the AOV. Look for products or services that people frequently buy. This can be every month, every quarter, a year, two years, etc.

My point is that if your products are of great quality and/or your brand really speaks to your customers — you could even get away with bad designs if the promise of the product works – thus increasing the LTV of your customer.

There is this company called Razer. They sell computer hardware to gamers. Think mice, mousepads, headsets, earbuds, laptops, desktops, and everything in between.  

  • I’m on my 3rd keyboard in 5 years. I promise I’m not hitting my desk with them, randomly some keys don’t work anymore, but they are super awesome 🙂
  • My 3rd mouse in 8 years. (shit quality, but I’m so used to the design in my palms, that I keep buying these.)
  • 3rd headset in 4 years (The headsets are great. I’ve worn the first one out till the bitter end. The second one I purchased was of shit quality. But I still went and bought the most premium headset from them anyways. (Best headset I’ve ever had.)
  • 2nd Bluetooth wireless earbuds in 2 years. This was before the Apple pods or whatever they are called. Anyway, the earbuds have an amazing sound quality and bass. HOWEVER, the wires were too short for my big ass head. And for some reason I STILL bought a second pair after the first one broke, knowing that I will get super f***ing annoyed by constantly pulling one out whilst turning my head left or right.

100% Organic Healthy Juices.

One of our core offers is a pure ginger shot. €3,50-, in a box of 5 each. the most logical next step for our customers to take is adding more variety of shots to their order.

A great way for us to be more of a service to our customers while increasing the AOV is to offer 3-types of ‘higher value’ detox boxes (the fit girls love this). With one of the offers being a clear decoy.

Lastly, a continuity offer where we deliver a full week’s worth of shots every month for €120/m.

The way we increase our margins is by picking the highest quality produce that we can find. Organic ginger, lemons, limes, turmeric roots, etc — negotiate a good price with our suppliers and position as the premium offer in the market.

10. PPC Advertising (Wide & Deep).

PPC advertising is buying underpriced attention on the interwebz and transmuting that into wealth. With crypto, you can increase your portfolio by 10%, 20%, each year. Sometimes a random nerd gets a gigantic 8000% return – but that’s highly unlikely.

With advertising, we can “buy customers” for $160 each, and know that each customer is worth $3997 to our business the first month. That’s a 2498% return on investment.

I am not only biased but I know for a fact that digital advertising is the grand equalizer to business scaling. Having all the other pillars in place gives you the ability to open the traffic floodgates, profitably.

The big reason most businesses seek investors is to ruthlessly scale and grow their customer base as fast as possible. Their focus is not on profitability first, but on amassing customers.

This is why some companies are valued at the high 8, 9, and 10 figures but are not making any profit. The investors are keeping that business above water.

So… how do they ruthlessly grow that customer base? Advertising!

But it is not as simple as just throwing stacks of cash at Zucks or Larry. Most advertising campaigns waste 76% of their budgets.

That’s why before you attempt to scale your business to the next level, It’s ideal to have a funnel and winning ad campaigns in place that are already optimized and proven to convert seamlessly and profitably across the customer journey.

Fail fast and fail cost-effectively.

Just like anything else in life, for every action, there is an equal and opposite reaction. That’s Newton’s third law of motion. In advertising, we can call these feedback loops. Do A to get B. If I don’t get B then do C to get B.

The way this works is if an advertisement (A), doesn’t get the desired result we want it to have, for example, clicks to a landing page to drive opt-ins (B) – we have to go back to the drawing board and try again.

The quickest way to scale your ad campaigns is to have realistic expectations, continually A/B test, and optimize your campaigns. If you do that, you cannot fail. Failure means giving up.

If your ad is not clicked, change the ad.

Ad still not being clicked? Change the targeting.

If no one opts in on the landing page, tweak the page or lead magnet.

If no one is buying your product, change or adjust the offer.

If you’re able to follow ROI-driven principles with a scientists’ mindset and keep testing and improving – you’re going to create a campaign that if scaled, can significantly increase your profit.

This is why businesses hire ad agencies and consultants. They are in the trenches every single day executing this for clients.

Wide and deep 🙂

There are two ways to scale your Facebook ads, Google ads, etc. We call that wide and deep scaling. The official terminologies that the nerds and gurus use are horizontal scaling and vertical scaling.

In my opinion, wide and deep just has a more entertaining ring to it.

Wide scaling is scaling your campaign via targeting more interests and audiences. By implementing wide scaling you’re going to show your ads to more people.

Deep scaling is increasing your budget and spending more money on your campaign.

Each method has its pros and cons and it goes way deeper than just “increase the budget or target a wider variety of people…”

Wide scaling involves targeting LLA’s “Lookalike Audiences” or targeting more interests and keywords with initial smaller budgets per campaign. Spend an average of 10% of your budget to test new audiences.

When you’re scaling deep, you should not just pump double the ad budget into your campaign or ad sets. What that does is reset the Facebook Algorithmic learning curve, which means you’re going to spend MORE than you were previously spending on acquiring leads and sales.

When you’re deep scaling – duplicate the ad sets and start over with a bigger budget or duplicate and increase the ad budget by 20% every 2-3 days on the new AND existing ad sets or CBO “Campaign Budget Optimization.”

Outspending your competitors.

“The one who can spend the most to acquire a customer, wins” – Dan S. Kennedy

Based on that single premise we can interpret that the one who spends more than his competitors, has the ability to 1: reach more people, 2: Drive more leads and prospects, and 3: Get more customers and clients.

Even if you’re spending more on advertising than your competitor – It doesn’t directly correlate to winning.

If your competitor spends less but is more profitable than you, who is winning?

So, the conclusive statement to our thesis is:

“The one who can spend the most to acquire a customer profitably, wins”

Businesses that scale, thus being able to spend more on advertising to acquire customers profitably are generally overflooded with leads – not necessarily getting more customers.

The key is following up. That’s where the big money is.

The businesses that truly scale and double, triple, or ten times their revenue are the businesses that focus on nurturing a relationship and building value.

Following this methodology of business they can:

  • Command higher prices.
  • Spend more to acquire the right customer.
  • Build long-term relationships with their customers; increasing their Lifetime value.

How to outspend your competitor profitably.

Scaling your advertising without an optimized funnel and ad campaigns is possible (and most businesses go for this option because they don’t know any better). You’d probably still drive revenue, growth, and profit…

The difference between your sales conversion being at 3% or converting at 9% is a 300% increase in sales. Understanding this principle alone can propel a business from $2,000,000 to $10,000,000 in revenue.

  • You’re spending less to acquire customers = cost-efficient = higher profit.
  • You’re driving more customers from the same budget.

Advertising platforms reward advertisers for highly relevant ads. The more relevant your ad is to your market, the more likely they are going to click. Meaning that your ad won the auction – it got higher engagement so the algorithm is dropping the cost per click, and showing your ad to more people. The more people click, the more the platform makes in ad revenue even if they lower the price.

Example: If you and your competitor both spend $2 per click.

Competitor:

  • 1,000 impressions.
  • 1.5% CTR
  • 15 clicks at $2 each (1.5% CTR)
  • Lower relevance = increased CPC ($2.25)

You:

  • 1,000 impressions.
  • 3% CTR
  • 30 clicks at $2 each (3% CTR)
  • Higher relevance = decreased CPC ($1.50)

“Higher relevance (conversion) = show more, pay less.”

Incorporating everything you’ve learned so far — If your competitor can spend $50 to acquire a new customer, and you can spend $100. You can completely dominate them.

It gets even more fun.

Traffic Compounding Interest.

If you nail this traffic compounding interest strategy. You can outspend your competitors and exponentially scale your business based on this principle alone.

As I’ve previously explained. The big money is in the follow-up.

Here’s why…

Based on the Chet Holmes’ pyramid we know:

  • 3% are ready to buy now.
  • 7% are open to buying.
  • 30% are thinking about it.
  • 30% don’t think they are interested.
  • 30% are not interested/ bought somewhere else.

Everyone markets to the 3 percentile. While the big bucks are made from the other 97 percent of people who’ve raised their hands and became a lead.

Your marketing should be segmented in buckets to create hyper-relevant content that provides value and establish a relationship with each stage of awareness. Then, you keep nurturing that relationship.

Just because they “don’t think they are interested” – does not mean they will NEVER BUY. The same counts for the people who are not interested.

If they are truly “not interested,” they can freely opt out of your marketing.

How many times in your life have you said “no” to something and then went on to go buy that thing 2 weeks later, one year later etcetera.

Basically every single human being on the planet.

This brings us to the point of needing to know our numbers and the VPL ‘value per lead.’

Imagine this…

You’re currently generating 300 leads a day. You spend $2 to acquire each lead. Based on knowing your numbers, you know that your leads are worth $2 between day 0 and day 12.

You’re breaking even on day 12.

We’ve adjusted our funnel. A lead is now worth $2.50 on day 12. You can now spend $2.50 per lead.

You might be thinking “what is the point in breaking even on advertising?” – But you’re essentially generating 300 leads per day, for free. All gratis.

In advertising, we call this “liquidating ad cost.” Making a small offer to new subscribers up-front. The 3 reasons to make smaller offers are 1. liquidate ad cost, 2. generate leads for pennies, for free, or even for a small profit; and 3. segment buyers/quick action takers.

Here’s how to liquidate your ad spend:

  • 6 sales per day at $100 each
  • 10 sales per day at $60 each
  • 20 sales per day at $30 each.
  • 35 sales per day at $17 each.

But here is the cool part of scaling your PPC advertising. Scaling ads is an exponential process.

At $2.50 per lead, you were getting 900 leads per day. $3 per lead, you may start getting 1500 leads per day.

Now imagine what could happen if you could spend $4 per lead? You may start to drive 2500 leads per day.

If your competitors can only spend $2 per lead, but you can spend $4, you’re not just going to get 100% more subscribers than them. You’ve not only doubled your value per lead – you’re exponentially driving 8.3x more leads.

With a highly curated customer journey and high converting funnel, you have the potential to increase your revenue by 1000%.

Even if your funnel isn’t highly converting on the back end. With 8.3 times more people going through it. you can still effectively double or triple your revenue.

If you can spend $1 on an ad and make a $1.50 profit back, you’ll never have to worry about money again.

11. Conversion Rate Optimization.

Conversion rate optimization is like digging up hidden gold. Small or large tests and tweaks here and there can mean the difference of increasing your sales by 30%, 50%, or sometimes even 2X to 10X your sales.

What conversion optimization truly means is turning “no’s” and “maybe’s” into more “yesses.”

Optimizing your funnels will result in maximizing the ROI you’re getting from your organic and paid traffic strategies.

Imagine this… You’ve ran an ad campaign for 30 days. The campaign had a 1.5% click-through rate from 1,000,000 impressions. That’s 15000 people who’ve clicked the ad. 30% of those who clicked, opted in for a lead magnet. That’s 4500 leads.

After going through the lead nurturing process – 2.5% made a decision to purchase. That’s 112 new customers.

Here is the power of conversion rate optimization.

After the initial 30 days, we’ve been A/B testing your ads and one of the ad variations with a slight adjustment to the copy is getting a 2.5% CTR.

[The numbers and percentages that I’ve used are around the average in most industries – look it up.]

Based on the previous numbers.

  • 25,000 clicks (2.5%)
  • 7500 leads (30%)
  • 187 new customers. (2.5%)

Let’s play with another completely possible metric change.

You’ve been establishing authority – throwing in your personality and building a tribe around your brand.

We add some contingencies in the lead nurturing process, change email copy, threw in some retargeting ads that drive people to content videos that are relatable to where they are in the customer journey. We’ve boosted your sales conversion to 5%.

  • 1,000,000 impressions.
  • 25,000 clicks. (2.5% CTR)
  • 7500 leads. (30%)
  • 375 new customers. (5%)

Following this process will give you the ability to double the number of sales from that same ad campaign and funnel by optimizing specific steps. But here is the kicker. You’re gonna spend less to acquire leads and customers the higher percentage of your funnel converts. Leaving you with higher back-end profits and more ad budget to spend.

Follow this same process with your SEO strategy.

Darkside Scaling

If you’re an entrepreneur or CEO that already leads a company that’s experienced exponential growth, has high EBITDA, and piles of liquid cash lying around, and you truly seek absolute hegemony and dominate your market. Darkside scaling is about using tactics and strategies to bully your competitors out of the market. It’s on the spectrum of the dark-triad, but I made a decision to put it in the article anyway.

You can seize market share in multiple ways:

  • Rolling up companies and unifying them under one banner.
  • Buying out your competitors. You want access to their customer base and increase market share in that way (ethically.)
  • Bullying your competitor via legal. Make it as hard as possible for them to operate. Make them waste time and money and lose morale. (I’d highly suggest NOT to do this.)
  • Creating a business syndicate. You team up with other businesses that don’t sell the same product or service as you but you overlap in customer base. Creating a “Many vs one” situation. You create a symbiotic relationship with your partners where you feed each others’ customers, leaving your competitor to hang dry.
  • Outspend your competitor. Who is willing to spend more to acquire a customer profitably, wins.

A few companies may come to mind but allow me to just spoil the clue:

  • Meta (Facebook),
  • Amazon,
  • Apple,
  • Google.

Governments that use these same tactics:

  • USA
  • UK
  • China
  • Russia
  • The Netherlands
  • Germany
  • UAE
  • SAUDI’S

Conclusion.

To scale your business with paid advertising is a matter of setting up the right infrastructure, a (high) converting marketing machine, and consistently flooding that machine with high-quality, ready-to-buy prospects. Remember, Before you decide to scale… start advertising with a smaller budget to test, optimize and validate your processes. When you strike the ‘Hidden Gold,’ a high converting ad campaign and funnel — it’s time to start scaling up.

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