Roland Frasier
Roland currently is a principal in Idea Incubator which owns both DigitalMarketer.com and NativeCommerce.com and works in marketing businesses as a principal with Ryan Deiss, Perry Belcher, Frank Kern and many other digital marketing thought leaders. Roland has a real passion for business and putting deals together and is always on the lookout for businesses to buy, reposition and sell.
There’s a 4-step formula to growing a business. This formula is what has scaled the Traffic and Conversion Summit from 180 attendees to over 1,000, with guest speakers like Kevin O’Leary and Gary Vaynerchuk. This formula can be applied to businesses in varying industries and is the strategy the founders of the Traffic and Conversion Summit have used to build multiple multimillion-dollar businesses.
Their businesses in medical billing, real estate, and the cosmetic industry have scaled up to $100 million in revenue by focusing on this 4-step formula.
This is their secret.
The first step to 10x a digital business is to leverage with these 3 strategies:
Strategy 1: Replicate your success.
How do you replicate what you’re doing to serve more people?
The Traffic and Conversion Summit couldn’t replicate their San Diego event every month without losing the value of an annual event. What they could, however, do was take that event and replicate it in other countries, expanding the mastermind internationally.
Everything from the original summit was repeated, such as:
The Traffic and Conversion Summit has now held a successful event in Australia, has an upcoming event in Brazil, and is expanding to other countries. Thanks to replication, this multimillion-dollar annual event just doubled in size and profits.
Strategy 2: Attain as many checks on the “Quick Wins” checklist as you can.
The Quick Wins checklist highlights the leverage each business has, but doesn’t see. For example, the Traffic and Conversion Summit sells t-shirts. Originally they bought each t-shirt for $11. As the Summit grew and orders increased, they were able to negotiate the price per shirt to $7. Then, they start to manufacture in-house. They purchased the equipment to make their own t-shirts and the price of each shirt drastically dropped to $3.
Other Quick Wins to increase profitability are:
Strategy 3: Acquire more customers.
If you look at the product you sell, chances are you’re selling a product that somebody sold you. For example: one of the T&C summit founders is a bath bomb company, which they acquired as a developed company.
Instead of solely selling bath bombs to customers looking to enjoy a nice bubble bath, they started to sell the ingredients too. The ingredients are sold in a much larger quantity than a few bath bombs per transaction.
Transactions just increased from $7.95 to $100,000 orders. The key here is to leverage this relationship, keeping these customers coming back for more orders by creating an association or buyer’s clubs.
Another example might be buying a profitable blog and then increasing its marketing capacity to help your brand reach a bigger audience.
You can also serve as an affiliate, or help to market a product you don’t own. For example, the founders of T&C summit work closely with Daymond John, a shark on the popular show Shark Tank. Once he was convinced of their ability to sell millions of products, Daymond reached out to the T&C founders to help market his newest product for a cut of the profit.
The second step to 10x a digital business is to create recurring monthly
income.
Once you have found a way to increase product, profits and customers the next step is to transition from a one- time purchase to a subscription service.
Using this idea of subscription services over one-time purchases, DigitalMarketer was able to grow their profits from $5.4 million in value to
$27 million in value.
They removed their one-time course offerings and replaced them with a subscription service called DMHQ. The focus went to increasing monthly recurring revenue and converting non-monthly recurring revenue into a monthly payment.
To promote the subscription service of a physical product, give a discount to subscribers. For example, TrueDog by Lori Taylor gives a one-time, non- club price of $21.49. If a customer chooses to buy as a club member (with a monthly subscription) they only pay $19.99 and get free shipping. In other words, give customers a reason to subscribe to your service—like discounts and options as to how frequently they want their product delivered.
The third step to 10x a digital business is to turn expenses into profits. What are your biggest expenses?
How can you convert them to income and then offer them as new products or services?
Use this guide to identify your expenses, how to transition it into a monthly recurring revenue and who the target customer is.
Sometimes less sales can actually lead to more profit. For example, selling 10 MRR products has a much bigger profit than selling 20 one-time products.
AWS generates 8.6x the profit margin with 85% fewer sales. Identifying the largest expenses and decreasing or removing them can increase your profits tenfold.
The fourth step to 10x a digital business is to create a bolt- on business. Creating a bolt-on business requires defining your company’s superpowers and then figuring out what other company has your clientele. That company can market yours in turn for the skills your company has.
For example, Infusionsoft was interested in increasing their lead generation. But as a software company, lead generation is not their expertise. So they decided to partner with DigitalMarketer.
In return for content marketing lead generation, they would run a campaign called “Double Your Sales” that marketed DigitalMarketer. Infusionsoft pays a 10% management fee plus an ad spend every month. Then, each company shares the leads generated.
Infusionsoft is happy because they are getting leads, DigitalMarketer is happy because they are getting leads and getting paid 10% of the ad spend. Bolt-
on business, BOB, is a 5x lead multiplier. Use this form to figure out how to build your bolt-on business:
Increasing the revenue of a digital business is a formula. The above formula has worked across different industries and platforms and is being used today to bring in over $100 million dollars in profit.
Grow your business in the same way the founders of the Traffic and Conversion Summit have by following their growth strategy for increased revenue profit.