$1,000,000 Funnels, Part 2: Scaling To 7-Figures & Beyond | The Growth Booth #40

It's the second part of the two-part series where we're talking about million-dollar funnels. If you missed the first episode, the one that we did last week, then head over to TheGrowthBooth.com and navigate to Episode Number 39. You should definitely watch that before or listen to it before listening to this one because that's where we really talk about laying the foundation and why building a funnel might be so much easier than you actually realize.

Now, this is the second part of the two-part sequence and we're going to be talking about scaling to seven figures and beyond. I'm joined again by our amazing Chief Marketing Officer, Allison Hoyt, who's got a ton of experience in building funnels, nurturing subscribers, and basically every part of this jigsaw puzzle, pulling it all together.

AIDAN

As I mentioned in our last episode, we covered a lot of the fundamentals and today I want to dive deeper into the scaling, maybe some more of the technical aspects, some of the tools that you like to use, an how to take this from maybe a trickle of subscribers into something that makes you millions of dollars per year.

With that in mind, when it comes to scaling, if you've got an offer up and running, if you've got a funnel, the basics of a funnel up and running, what are the ways or the key considerations that you like to think about when you are approaching this idea of scaling?

ALLISON

Well, as you said, obviously you're going to make the most revenue out of it if it's your own offer versus an affiliate. You always have to think about the revenue that's coming in on your end but also tracking and metrics are going to be what you use for everything, whether you use Google Analytics for this, whether you use a third-party system.

We are using something called CAKE Marketing (getcake.com) and there are other systems out there as well, like EverFlow (everflow.io) and Tune (tune.com), and what they do is you have an affiliate tracking platform that people can sign up to advertise your offer, you approve them, and the tracking is great. I mean, you could have one affiliate that pushes your offer in three different places and they can use one tracking link and you can see where everything is coming from. I think if you can't track and you can't know your metrics, you don't have anything you can optimize and scale. 

I think it's really important to figure out your numbers first in your emails. If you have a low open rate, what do you do next? You test subject lines. If you have a low click-through rate and nobody's actually clicking once they do open, what can you test? There is your content, your copy in your email, and your calls to action within emails. But when you see it in your ads, it's kind of the same thing. You’re looking at your click-through rate, your cost per lead, what it costs you for a lead to come in, your impressions, and how many of those people are actually converting. You can go by just like how it is set for emails. If your click-through rate is low, what can you test in your ad copy? If your impressions are low, if you're doing a Google search, for example, what can you change in your keywords, in your targeting? If your cost per lead is too high and it's not backing out to where you need it to be, what can you update on your landing page or your lead magnet or things like that? I think there's always a metric that you can look at to know what to test next and what you need to optimize and change to be able to know where it needs to be for your business.

AIDAN

You mentioned something about affiliates there. This is something that we did not touch on in Episode Number 39, but I think it's a really interesting thing to explore as a scaling mechanism, because if you've got an affiliate or even an army of affiliates who have got the ability to drive traffic and make money, I mean, that could be absolutely huge. Is this something that could potentially work for e-commerce? Obviously, that works for affiliate marketing, but could it work for e-commerce software and so on?

ALLISON

Yes, it can work for anything. And this can work if you're just doing, like we said, whether it's the coupon code or lead magnets, the email sign-up, or any sort of paid offer. In this case, these affiliate networks, if they have an interest and they have people that are interested in picking up your offer, they are doing the work for you. You're building the offer, you're building a strong offer, making sure it converts and is interesting. But what they're doing is then farming out your offer to other people and doing the heavy lifting and making sure you're getting that traffic. And that's why it's so important to be able to optimize and have things in place to know what you need to be out on your end. Because if these people aren't converting for you, why? If they're clicking low, why? It really helps you optimize to know what's going on. I want to dive into that a little bit more in just a moment, though. First, though.

AIDAN

You mentioned how we use CAKE as a system to track and monitor metrics. Is this something that you should only use if you're working with affiliates or if you've got no affiliates and you're just managing the traffic yourself? Is it still the kind of thing that you should be using?

ALLISON

Yeah, I think you can. I think there are simpler solutions. If you're just doing small scale to start and maybe you don't want to spend the money on a tracking system, you should always have Google Analytics set up, for example. If you're really just running on one track source, and you're running on just Google or two traffic sources, let's say Google and Facebook, you can definitely use Google Analytics and track your UTM and your codes through there. I think it's when you start going to a bigger scale and you really need to start tracking things. You want to give one link to somebody and let them work with multiple partners to be able to use different sub-IDs. That's when you need a better system. A bigger system. Because analytics is great, but you just need to be able to track the smaller details. I think so.

AIDAN

I think when you're getting started at the bare bones, you'd have something like Google Analytics installed, which is free. Super easy to install. But when it comes time to start scaling, then that's when you can invest in some of these more sophisticated, more user-friendly technology with more scale potential like the likes of CAKE and I think you mentioned TUNE was another one there.

You've circled in a couple of times on this ability or importance of being able to pinpoint things that might not be working. I think that's what's really magical about being able to analyze the data around your traffic is that you can laser focus in and say, “Well that's not working,” or not working as well as it might be because of this or this. Sometimes in the past, I've had people come and say to me, “I've set up this website.” It could be an affiliate website, it could be an eCommerce website, whatever. “I've set up this website and I'm not making any money from it. What's happening?” The first thing I can do is dive into their metrics and say, “Okay, well, you're getting lots of traffic, so the amount of traffic is not the issue.” Maybe it's the type of traffic or maybe it's the conversion, maybe a landing page sucks or at the other time in the spectrum, it might be that you just log in, you're just not getting enough traffic because there are really two main or three main levers that are going to determine how much money you can make from your funnel, from your subscribers.

One is the amount of traffic that you got coming in, the other is the conversion rate, and you multiply those two things together and you're going to know exactly how much money you can make. Then the third is the lifetime value or the repeat buyers that you can get. Something that I think a lot of people forget is that when you double these factors, they kind of compound on one another. If you've got traffic as one of the factors, and then you've got conversion rate as another, and then you've got lifetime value as another. Let's assume that your traffic was 100 people per day or per week or whatever it is, just 100 people and your conversion rate was 1%, and you're making one dollar per order. If you double your traffic to 200 instead of 100, then you are going to double your revenue. But where it's really exciting is if you double your traffic and double your conversion rate, then you're getting 200 visitors instead of 100. You're getting a 2% conversion rate instead of a 1%. You haven't just doubled the amount of money you've made, then you're going to quadruple it, and then if you double that again by doubling the profit per order, I think you would have multiplied it by eight, if I'm doing that math correctly in my head. It doesn't take much to really wrap things up. When you're looking at making small tweaks to some of these levers, and there are not that many levers that you can tweak and you can dive deep into the numbers, you can always pinpoint what the problem is. You can make a slight iteration and you can continue. I think that's one of the real keys to scaling there.

ALLISON

Yeah, I think that you're right. It could be the smallest thing. It could be a button color, or it could be changing your CTA. I mean, I always say that you should always be testing something because even if it's at its best, you can make it better, and I think that's really important to remember.

Another thing that you mentioned, the data is so important, some people, like you said, may get like ten views and they're like, “Well, it's not working.” You didn't get enough data to even know that it's not working yet. I think that's really important to keep that into consideration as well. You do need to test, you do need to spend some money or get enough views, even if it's organic, to know what's really going on. And then, as you see, start optimizing and start really digging into the numbers and seeing what you can change to make a difference.

AIDAN

Have you got a preference for a tool that you have a system that you use for split testing different pages, like two pages, and you want to see which one is working? Is there a tool or system that you use for that?

ALLISON

I know you could do it in a lot of these page builders, but I've used Optimizely in Google, and it links to your Google Analytics and your AdWords and your tag manager and all of that stuff. And it's a free tool, so you can easily put your HTML in there on your landing page and split test however you would like, it'll go to the thank you page or wherever you want it to go, and it's a perfect testing tool to know what's going on.

AIDAN

Another one that we've used a lot over the years is called Visual Website Optimizer VWO.com. It's probably a premium tool in the space, but it is absolutely amazing. And I'm not quite sure how it works, but once you've got this code on your page, which again is super simple to install, and they help you do it and everything, you can actually log into Visual Website Optimizer and you can make a second page and you can sort of dynamically change things just by looking at the page. You're not even uploading a second page. I don't know exactly how it works, but it's a really cool way, and you can quickly make modifications and tests and it gives you your confidence intervals and the chance of success of a certain page change.

In fact, we used that recently to massively improve a mobile landing page. What we had on the desktop page was we essentially had two headlines at the top, we had a headline, and a sub-headline. When we put that on mobile, what it did was it pushed the opt-in form down that much more. And as a result, on mobile, we were getting a 33% opt-in. Right when we eliminated one of those headlines just on the mobile version, it boosted the conversion rate by about 20% up to 55% or something. It almost doubled it really. But it went from sort of 33% to about 55%, and that was by removing one headline. And we never could have gotten to that if we hadn't had the ability to be able to do a split test.

I think that's another way; split testing is a great way to really up your game when it comes to what you're ultimately getting there. I guess another thing that you can do is to work harder or think more strategically about what goes into the email sequences. Any ideas or thoughts you've got about using your email sequences to scale or maybe make more money over the lifetime value of the customer?

ALLISON

Yeah, I think it's important to remember, like you just said, it's the lifetime value. Even if people do not buy right away, I mean, this happens to us, this happens to everybody. Someone may not buy what you're offering in the first email or on the Thank You page, but they could buy something else you're selling.

Even though you're bringing them in on that niche and kind of like those like-minded offers, there are still times that people will be on your list for 30 days or more and not buy anything that you're selling within that email sequence. Try sending them something different at that point. If they're not buying your offer, or maybe this specific one that you are trying to push them, they may be totally interested in something else.

I think after your initial email sequence of whether it's pushing your offer to somebody else's, there's been plenty of times that you let them go onto your regular marketing list. I know when I was with Agora, what we did a lot was your exit gauntlet, your exit sequence, when you go to get them off of your regular list because, whether it's 90 days or 120 days, they're just not buying anything you have, start sending them other offers. It doesn't hurt you at that point. It could be something that they're interested in and you're making money off them before you just stop emailing them all together anymore.

AIDAN

I love some of these names that people come up with, like Exit Gauntlet, who came up with that? It's a brilliant name. 

ALLISON

I really am sending them through gauntlets. These welcome sequences, these exit sequences. You are not letting them out until there is no escape. 

AIDAN

Exactly. It's important.

In my own mind, the way that I always think about this is I'm always giving people an option to unsubscribe if they want to unsubscribe, right? And if I've got something valuable that I want to share with someone, I feel like I'm doing them a disservice if I don't share it with them. If someone has signed up and maybe they, using an example that I gave in the previous episode, want to learn about ways that they can care for their skin, and I've got or I have found a really good affiliate product that is about caring for your skin or having skin that glows or whatever it is, then if I don't share that with them, then I might be holding back something that they really want to get. And if they don't like it, if they don't want to get it, it's so simple to unsubscribe, and we always make sure that that's the case. I think that's absolutely it.

Once they get through the initial sequence, get them on what we call broadcast emails, which are emails that are not necessarily all planned and built into the system, but emails that can be sent out occasionally. It's just a no-brainer to do that.

Thinking about the actual funnels that you build, how many emails would you typically have in one of these? I'm asking ‘how long is a piece of string?’ Because I know you can have one or two emails and you have 50 or 100. But if someone is getting started, all things being equal, how many emails do you think they should aim to have in their sequence?

ALLISON

I like to do about seven or eight and as you said, it does depend because a lot of fast platforms that we have, we give them 14-day trials. You could hit them every day for those 14 days, or you could do ten emails on the 14 days. It's just important in those cases if there's a timeline to kind of hit them in the beginning, let them know what's happening, the end of the trial is coming. And that can be the same for a coupon code that you get paid, “It's about to expire. Use it now. Last chance,” kind of thing, and then for an eBook or just bringing them on more if they're a free product. Yeah, I would definitely hit them every day for seven to eight days, giving them contests, giving them useful information, not only selling them but giving them value and telling them what's coming next, and then if it's a paid product, I would still hit them for a good three to four days, reinforcing why they bought and what good information they're going to get, how to go about it. And if you do have a higher-priced offer or something else to sell them, to cross-sell them, I would definitely add that in there as well.

AIDAN

Yeah. One of the best ideas or concepts that I've ever come across in email marketing is something that a friend of mine, Andrew Chaperone, who has been a guest on The Growth Booth, previously talked to me about, which was about soap opera sequences. A soap opera sequence is essentially what all the big blockbuster TV shows do. Game of Thrones was amazing with it back in a few years ago now. Lost, they used to do it incredibly well, but basically any of the biggest and most successful blockbuster series on TV, they use cliffhangers at the end of each show or before each commercial break, if you're watching on TV where there are commercial breaks to get you coming back after typically at the end of the show, it will be something huge is happening or about to happen, or there's something unknown and that's called creating an open loop. You create an open loop in one email and then you close that in the next email. You can think of your emails not as a one-off thing, but as a series of messages that work together.

In email number one, I might say something like, just thinking back to another example, I used to be involved quite a lot in the woodworking niche and in the sequence of the funnel that I built for that. In the email sequence, one of the early emails said something like, “Make sure you open or find out what the golden ratio is and it will transform all of your projects,” but it didn't tell what the golden ratio was. The golden ratio was essentially like this ratio of how high something should be based on how long it is, and people use it in woodworking and craftsmanship and design and many other things. That created an open loop. People who were on that email sequence wanted to know, “What is this golden ratio?” and I would say, “Check your email tomorrow to make sure you can find out what this is,” but then I deliberately left a gap.  I gave them two days and what happened was I had people email me saying, “Hey, I never got an email. What's the golden ratio? What is it? I need to know what this is,” and I said, “Okay, yeah, we'll get it over to you tomorrow,” kind of thing. It was just a good example of how you can create this unfulfilled need inside of someone by leaving them with a cliffhanger or dangling something in front of them that you don't quite deliver.

The key, though, is that you always eventually fulfill it, otherwise you'll alienate people. But I think you can do this in lots of different ways and you can almost also take sidetracked. And you started talking about this in the last episode that we did together, but using the PS section of an email. I like to use this as a way to talk about topics that might be somewhat unrelated to the main message they trying to get across. But I can take people off on a tangent. I could talk about it, I could say something like I could sign off with my name and then I could put “PS. I've just discovered a brand-new tool which I think is going to help me make an extra 20% profit this year,” or “PS. I've just discovered this brand-new anti-aging cream that does X, Y, and Z, and I'll let you know how that goes in the near future.” And then I've got this in my mind and I can come back to another p.s. later on in a few emails, say, “Oh, remember that tool that I mentioned? Turns out it's really good. If you want to check it out for yourself, then go here.” You can have multiple messages, you can have multiple layers, you can have multiple facets, and really build out an email sequence to something amazing. And when you put some thought into this, it wouldn't surprise me. I know from experience that you can double the conversion rate and double the profits just by spending some time thinking about your messaging and making it really clever and strategic. I think there's a lot that can be done there with the email sequence.

ALLISON

Yeah, I think that a lot of people think once the actual web funnel is done as we said, you just send them an email and you're like, “Hey, you'll hear from us.” The email sequence is so important. I mean, this is where you're literally building your audience, cultivating that bond, building the relationship, they're getting to know you and anybody you want to introduce. I think people follow that, and as you said, it keeps them wanting more and wanting to know what's next. As long as you do fulfill it, I think it definitely keeps people interested, reading, trusting you, and wanting to buy what you're selling. The web funnel is just such a small portion of that, it's just getting them on. And then the email funnel is that lifetime value, doing the rest of it for you.

AIDAN

Yeah, and I think we mentioned at the beginning of the last episode that the funnel is really just a means to an end. What you really care about is the relationship that you're building up with the subscriber. That's what's going to make you money. That's what's going to allow you to provide value as well. If you keep that in your mind, I think that will keep you in a good stand as you're progressing with building out your funnel.

Now, one of the things that I mentioned was we would talk a little bit about how much money you can make from subscribers and how many subscribers you might need to make a million dollars in a year. And something that I'm a huge enthusiast about and I'm passionate about is that you don't need to have a huge subscriber base to make a huge amount of money. The theory goes, you can work into this mathematically, but if you take a number, like how much money can you make from a subscriber in a year? Have you got any thoughts on this? Again, I know I'm asking how long there's a piece of string, but if you had to give a number across the board, any ideas about how much money you might be able to make from a subscriber in a year?

ALLISON

Yeah, I mean, the interesting thing that I thought was, and I know we've talked about this previously, but the 1000 True Fans idea. If you have a thousand true fans, you can have more than that, those are people that actually buy that trust you, anything that you are pushing as your own or somebody else's that you trust. Because they trust that you will only give good ideas and products to them, that they follow you and they'll buy those as well. You could take that idea of 1000 True Fans and you can make $100 off each of them in a year. And the idea is that if you have 2000 fans and they only are worth $50 each to you either way, that would equal $100,000 in that case as a place to start.  

AIDAN

I think that's interesting for sure. I think directionally as well, you don't necessarily know if you make $100 from each subscriber or $50 or $20, but directionally, it gives you something to work with, an average of it. If we back out of that $1 million number and say that you want to make $1 million from your subscribers, each subscriber is going to be worth $100 in the period of one year. And just remember that a subscriber in reality is probably going to stick along with you much more than one year. We've got subscribers in our business that have been with us for over 15 years. But if we just say one year to make that assumption and $100 per subscriber, that would mean that you would need 10,000 subscribers who are engaged and who would spend $100 with you, that would make you $1 million.

Now, if we back out of that, reverse engineer that 10,000 subscriber number because it sounds like quite a big number, if you were to get 10,000 subscribers in the period of one year, that would mean that you would be accumulating subscribers at a rate of 27 per day. If you could get just 27 subscribers per day, not a huge number for a year, at the end of that year, you have 10,000 subscribers. And if you bought those subscribers in a strategic way, if they're targeted, if they are focused, they're interested in your product, then that could absolutely provide you with the foundation of a $1 million per year business.

 I think this is incredibly exciting. We've taken this idea and we've scaled it way beyond $1 million. And it's not complicated. You start with these bare bones, this foundation that we've spoken about here. You pour a little bit more traffic in the top, so you get more traffic coming in. You get more conversions coming in. You figure out ways to increase your profits. You figure out ways to get repeat buyers. They are the four main metrics.

I sometimes talk about these things as being related to the math of money. There are really four factors that you can alter, and they are the amount of traffic, the conversion rates, the profit, and the number of repeat buyers you get. If you were to double each one of those things, you would 16x your profit. A lot of people just focus on one element here. There are lots of different elements that you can focus on and tools like the CAKE that you've spoken about can make this so much easier. It doesn't take that much work, just a bit of focus and you can absolutely build a business here that does hundreds of thousands or even millions of dollars per year. Hopefully, that's enough to get everyone pretty excited about why funnels are so powerful.

ALLISON

Yeah, and 27 subscribers. I mean, what you're saying a day, that's so attainable when you think about that number, right? Like 27, anybody can do that. And I think it's important. As we said, you can start with the bare bones. Start to get out there, start optimizing and build out your funnel from there. You do not have to start with anything crazy long or all these offers on the back end, but just start building that audience and building that relationship. Start getting those 27 subscribers a day, and that's the best place to start.

AIDAN

And you could do it with organic traffic. I mean, 27 subscribers, 50% opt-in rate. If you're getting 50 to 60 visitors coming to something a page each day, and it's very targeted, half of those people could subscribe, which would get you to that number, and then almost mission accomplished. At that point, you're one step closer to achieving this funnel, which, again, is something that can provide you with the lifeblood for your business for years and years to come. And when I look at the success that we've had in our business, running 15, 17,18, I don't even know what it is for years now, it has revolved around this concept of subscribers, bringing them into the business. It doesn't matter if it's software, it doesn't matter if it's e-commerce or affiliate marketing, but these relationships, building them up in a systematic way.  I'm really excited about what funnels can do, and I think it's something that everyone should start as soon as they possibly can.

I don't know if you've got any other final thoughts that you want to leave there with people. Otherwise, I think we've covered a lot of ground, and we can wrap this one up.

ALLISON

Yeah, just the basic reminder that no matter what business it is like we said, it's affiliate marketing, e-commerce products, like, the audience is the place to start. It's so important to build that community of people. And once you do that, I think everyone will find, like we said, that the funnels aren't that difficult. It's just keeping that relationship going and getting those followers. And that's the hardest part. And once you get past that, you'll be good to go.

AIDAN

Awesome. Good stuff. Thank you so much for everyone listening to this. You can see our show notes; we will link out to some of the different tools and some of the different ideas that we shared, as well as all the good transcriptions and everything else that we do over at TheGrowthBooth.com. Navigate to episode number 40 and again, if you haven't watched or listened to Episode Number 39, make sure you do that and make sure to tune in next week, because next week I'm going to continue to build on this, and we're going to talk about the fastest way that I know of that I can think of right now to make $1,000 online. You're absolutely going to want to tune into that and it will build on what we've covered in this episode in the previous, it'll be a good one to tune into.

Thank you once again for listening, and for tuning in to The Growth Booth. It's a real pleasure to have you listening to us, and I look forward to seeing you on the next episode. Bye.