Turning $20 Commissions Into A Million Dollar Empire | The Growth Booth #42

Welcome to Episode Number 42 of The Growth Booth, where we are picking up from where we left off in the last episode and talking about what I believe is the fastest way to make $1,000 online. Now, in the last episode, if you missed that, I would recommend that you go back and take a look at that. You can see that at TheGrowthBooth.com, navigate to Episode Number 41, and you'll find out a lot of information about what I believe to be the fastest way to make $1,000 online.

Now in this episode here today, I've got Sean Agnew back, and he's the expert whom I've invited along to share a lot of this information. We're talking about how to transition from a business or an income stream that pays you in commissions, one-off commissions, maybe $20, $30, and turn that into something which is a genuine multi-million-dollar business if that's where you want to take it.

Aidan

In the last episode, we gave an overview of what the business model was. We spoke about how to choose offers, things that are going to make you money. We spoke about the types of pages and traffic. With all of that in mind, Sean, welcome back to the episode. By the way, where do we go from here and transition this from something that just pays you a one-off commission to something that can give you so much more?

Sean

Right. The whole point of the business model is having a good back-end setup, okay? What that means is we already talked about in the previous podcast about somebody clicking on your ad, and they go to your page, right? Your page. You're going to collect names, emails, and sometimes phone numbers. We can talk about the phone number in a second, but it should say its name and email. And then they give you the name and email and then you send them off to an offer. We talked about it being auto insurance. We can stick with that niche, that name, and the email you collect, okay? That means you now own customer data.

There are multiple things you can do with that customer data. You can email it yourself, right? You can follow up with them with other auto insurance offers or related offers, maybe like auto warranty, or auto finance, who knows? The list can go on.  And you need to test and see what works with your audience. You can also just sell that data. There are companies out there that would gladly pay you, and it really depends on the niche. Again, we talked about the phone number. If you have a name, email, and phone number, there are companies out there that could pay you a dollar just to buy your name, email, and phone number in real-time. Maybe you're collecting names, emails, and phone numbers, and you're contacting them, you're selling the data elsewhere. Obviously, you have all the legalities on your page to be able to do that, but having that back end is really how you go from maybe making 5%,10%, 15%, maybe even like losing 5% on the front end. But really all of your profits are coming from that contact that you're doing on the back end.

Aidan

The thing I love about developing the back end is that it's a way that you can provide more value and you can sort of capture this lightning in a bottle. It's not that this lightning just strikes and it's gone. You've actually got a way of capturing it and capturing essentially an income stream because you're able to make money over and over again by providing more and more value to these subscribers.

I guess at the heart of all of this is email marketing. Once you've got someone coming, they've been through the process, and you've made a commission from them potentially and on your email list, how do you go about contacting them? How do you go about making more money, and providing more value? Could you tell us a little bit about what that looks like?

Sean

Yeah, sure. Without getting into the sophistication of it all because there is an entire system, I'll just keep it really simple. But I mean you guys have seen this, everyone on this call has seen this from an e-commerce perspective, just so you can relate. I would imagine any product you've ever bought online, you now get emails from that company, right? Let's say you bought something from Nike, you bought a shoe or something. Anytime they release a new shoe or a new piece of clothing line or whatever, you're going to get an email on that. Sometimes you'll just delete it and sometimes you're like, “Oh, Nike has a 30% off gym short sale and I need some gym shorts,” you click on and you buy. That's the type of stuff we do on the back end, and the email platform we use has lots of automation set up.

Basically, you can set up a follow-up series, what I call it, somebody opts in right away and within five minutes an email shoots out to them and then maybe another one tomorrow and then another one on day two, and so on. You just build out this, maybe three to five email follow-up series. You never have to touch it. You write it once and the system just automatically sends it out after that. What I like to do is - I have a whole episode on email - but you’ve got to keep your list clean. You try to remove people that never open your emails and then you're only left with the people that are interested in your stuff and you just continue to what I call broadcast with them, just one-off emails with offer after offer after offer and you just try to maximize the money that you're making on the customer.

For example, if Nike, just so it's a very relatable situation, if you bought a pair of shoes from Nike for $100, Nike made $100, often. But if they kept following up with you, you could be on their list for years. You might go buy gym shorts in a sale. You might go on Black Friday to buy a new pair of shoes. All of a sudden, maybe you buy a shirt, gym shorts, more shoes, a hat, I don't know, and all of a sudden, instead of making $100, maybe Nike made $500 off of you. Your lifetime value goes from $100 to $500 and so that is the power of email marketing. And we've been using this business model since I got started, so it's very, very powerful and very lucrative.

Aidan

You know, when I got started with my online business, it probably took me about two years, maybe not quite two years, maybe 18 months, but it took me a long time to start using email marketing. I was in a position where I was making these one-off commissions, and I was like, right, I'm making these one-off commissions. I don't need email marketing. I didn't need to go down that path. But I'll tell you what, that was probably one of the biggest mistakes that I ever made in my online business, was delaying getting into the process of actually using and leveraging email marketing, because the technology is amazing, and that's where you can really ramp things up and scale.

I think people are also a bit gun-shy for whatever reason about using an email marketing platform. Maybe they think, “How am I going to do this? How do I send an email to people? How do I capture an email in the first place?” Any thoughts about that, for people that are a bit wary or almost afraid of getting going with email marketing?

Sean

Yeah.  Again, I come from a political science background, so I don't know anything about writing emails, right? When I first got started, I was like you. My first ever niche was in the rent-to-own space back in 2014. I want to say Facebook. You guys don't realize how new Facebook is, like their advertising platform. In 2014, you could get 5¢ clicks. I had the ZIP-submit offer paying me $0.90. Basically, all somebody had to do was put their ZIP code on the page and I would get paid 90¢, and I was paying 5¢ to get somebody to the page. And like, one out of every six or seven people, I'm literally spending 30¢ to make 90¢. And you can imagine at scale how crazy that was.

I was like you. I was like, “I don't need an email list,” and then Facebook costs started to go up. That offer went away, and I was like, “Shoot, I don't have the ability to make any money.” And all those clicks that I sent out, I have nothing to show for it anymore. When you're advertising, there are some days where if you are just sending directly some people are like, “What do I need to collect the email for?” Why don't you just go ahead to the auto insurance offer? There might be a day where you spend $1000 to make $1,400 and you profit $400, and the next day you spend $1000 to make $800 and you lost $200. That happens and now you have nothing to show for it. At least if you stick an email in the front, you're able to collect this data.

Writing the emails is what I did. What I did is I went out, and let's just stick with auto insurance, nice and easy, I would go to Google and I would start typing in keywords like “how to get auto insurance”, “best auto insurance Miami”, “cheap auto insurance”, “low-cost auto”, just different keywords. I would see what ads are popping up, I would click on the ad, I would opt into that list, and then I would see what kind of emails I get and I would just monitor my competition, what are they sending, and then I wouldn't copy their email word for word. We can have a whole conversation about why that's bad, but I would mirror my emails after what they were doing.

This is another pro tip. You already are probably getting marketed like 40, 50, or 60 emails a day from all these different companies. What I like to do is take a look in your inbox every day on email subjects that make you think, “Oh, that's interesting.” You might look and you're like, “There is this stupid guy again.” Then all of a sudden you stop, you're like, “Whoa, this subject line is really catchy, and it made me stop and want to click on it.” And then I would literally copy that subject line on a notepad and I have a list of 300 different subject lines that I can test out and then you just test and then marketing will tell you whether that's a good subject or not. Get on your competition list, watch what you're getting, email, and test away. And then what you're going to be left with is probably like 30, 40 emails that you can just keep rotating through over and over and over.

Aidan

I've got a folder that I created inside my inbox called promotional emails. Anytime I see one of these eye-catching emails or one of these ones that just make me pay attention, I automatically drop it into there, and then when I'm writing emails for any of our businesses, I open up that folder and just browse through. It's an absolute treasure trove of information for copywriting.

That's awesome. I think maybe what a lot of people may not realize here is that there's actually a lot of science around the whole email marketing part of it. It's almost like a recipe as well where there are best practices, there are best times of day to send out emails, there are best days of the week to send out emails, and there's even a formula for how often you should send promotional emails and whether or not you should drop in purely value-add emails in the middle. And that's, again, another conversation that we can have another day, but I think the point is that if you can find someone who has really got this dialed in and replicate what they're doing, then that's a great way to get started.

You mentioned autoresponders earlier, and one of the ones that we use, and we can't really share that with people right now for different reasons, but it is something that we're going to be able to share with people in the weeks ahead. If you stay tuned to your email inbox as a subscriber of the show, you might be able to learn a little bit more about some more of the trade tools that we use, including autoresponders, which is really a key part of this. Now, not all autoresponders are created equal. When you are doing online marketing, what are some of the issues or challenges that you face with autoresponders and why is it something that people should be aware of when they're diving into this type of business model?

Sean

Right, so I've been around email marketing now for a decade and I've watched it evolve and I've literally sent over a billion with it emailing well over a billion emails in my career. When I first started out, I remember being with an email company and I didn't know what I was doing and I'm making money and I'm like, “Man, I can make like $500 for every email I send.” like, “Screw it,” and “I'm sending out ten emails today. Sweet. I had a $5,000 day.” And then after three weeks of doing that, the email company was like, “Oh yeah, that's awesome. We're shutting you down and never mail with us ever again.”

That was a good lesson learned. I was like a half-a-million-person email list and I didn't back it up and I got shut down. I lost all those emails. I just started all over. Good quick money though, but you learn really fast.  I got a little better and I got shut down from another email account. When I got shut down from the second email account…

Aidan

Do you think you got shut down because they were considered some way you were spamming?

Sean

Yeah, 100% I was spamming people, like straight up spamming people, sending them spamming content, making money, like that type of stuff. When I got shut down the second time back in 2016 or so, maybe like a couple of years into my CPA business, I was like, “Okay, time out. This is not a way to operate.” I don't want to just keep bouncing around, email platform, email platform, they're just all going to shut me down. I really took email marketing seriously, and I've been extremely compliant ever since.

Email companies want to see engagement. They want to see that you have high open rates. Generally, they want to see your open rates above like 15% to 20%. That means if you send 100 people an email, they want to see 15 to 20 open it. They don't want to see bounces. Meaning like, you got a lot of bad lists and bad emails on your list that the email company can't deliver to. They don't want to see a lot of spam complaints. You guys have seen it when you move something to the junk folder that gets tracked by these email platforms, right? If you're mailing too frequently, if you're sending too much spamming content, people will market spam that goes against you. They don't want to see too much spam content itself.

Specifically, Gmail, which makes up something like 75% or 80% or something like that of all emails out there, know trigger words. If you're using words like “Free money, act now” guaranteed there's a whole list of trigger words that will just automatically send us any time. Gmail knows, they're like, “Okay, this guy's just spamming people.” You just go straight to the junk folder. It's very critical that you sort of follow these rules that exist in these email platforms. They're not a lot of rules, but you're mailing good-value content. You're not spamming people. You're keeping your open rates high. You're cleaning your list. If people are not opening your emails, you just get them off. You don't mail them ever again. If you do that, you're going to make a little less money than if you spam the heck out of people, but you're going to stay on your platform forever. I've been emailing now on this new platform that I've been on for the last five years, and I've never had any issues.

Aidan

I think a lot of it is just making sure that you do the basics really well. For example, you only email people who have given you permission to email to them. You make sure that there's an easy way that they can unsubscribe if they want to unsubscribe. And I think sometimes people I'm talking to think, “Oh, you know, well, I don't want to send this email because maybe some people are going to unsubscribe.” That's another thing I think that's more about understanding the psychology of all of this is you need to understand that a certain number of people will unsubscribe, and that's just fine. It might not be that you're providing poor value or anything. It may just be that their need has changed or they've solved what they originally were trying to solve when they opted into your email address. I think learning to live with the fact that some people will unsubscribe, that's the nature of the beast and it's absolutely fine. 

Send your emails in a way that uses a lot of these best practices to make sure that you never get into hot water, never get your accounts banned, and so on and so forth. Then make sure also that you're using an autoresponder, which I guess is really designed to work with this type of business model.

I think most of the autoresponders that are out there these days, the big names, they're not really designed for online businesses. There are some that are sort of more specific to e-commerce, I think you could say, but most of them are not really designed for this sort of offshoot of affiliate marketing that we're talking about here today. I think any time you get the opportunity to work with a specialist solution, it pays itself off over and over. And just now, in terms of the cost of email marketing, because some people might think, “Email marketing, that's going to cost me another $50 a month,” can you give our listeners here some perspective about that cost and why it's probably the last thing they should be worried about?

Sean

Yes, in the grand scheme of things, we spent a lot of money on our email platform, but we're also generating over $2 million a year in revenue. If you actually look at it as an actual percentage of revenue, it's pennies that we spend on our email platform. There's a cost to doing business. In this business we talked about on the last call, you need something that's going to help you build pages for $40, $50 a month. You need a mail platform, probably $50 a month to start, usually. You're talking $100 in software. I challenge you to try and go open up a brick-and-mortar or any sort of business for $100, right? It really is pennies in the grand scheme of things.

Aidan

The thing that I always keep coming back to, and again, this is one of the reasons that I really love what we're doing here, is that none of these are fixed costs. The very first month that you're paying $20 for an email autoresponder, I would expect that you're going to make more than the cost of the act. In fact, if you're paying $20 in your first month, you're probably going to make a couple of thousands back in that first month. I mean, it's all related to how many people are on your list and so on and so forth. But the cost becomes so incredibly negligible that it's just a complete no-brainer. Even Sean and I pay multiple thousands of dollars every single month, but I can send out an email to half a million people in 20 seconds if I want to, the time it takes to write the email and I press the send button. And how much money can I make on an email that I sent to half a million people? A crap ton of money. A seriously huge amount of money that makes the cost of a few thousand dollars, in our case, completely negligible. And you're not talking about a few thousand dollars there, you're talking about maybe $20 or $30 a month.

So again, these are tools that are directly correlated with making money. And if you're not making money, then guess what, you just cancel the tools and you might be $30 out of pocket. If you are someone that's worried about some costs here, I'll tell you. I referred to this as potentially being the Holy Grail of online business right now and all of the headaches have been removed and the costs are pretty much as close to zero as you can get. You don't need a special store platform, you don't need to buy inventory, and you're not dealing with customers. You do need some budget for traffic, but again, because you can measure the profitability of your traffic like the very same day that you send the traffic, like the same moment that you send the traffic, you can either turn it off if it's not working or scale it up if it is.

I think the fact that at least all of the costs that I can think of that are associated with these businesses are directly tied back to making money, that makes it a lot easier to get going here. Any other tools that people need to sort of support a business like this? Tracking, I don't know what else is.

Sean

Yeah, I mean you do need to go buy a domain. You can get the domain for like $10 or something along those lines per year. It's like $1 a month. It's like nothing. Yeah, if you're using a funnel building type software, you probably don't need hosting because usually, you can connect your domain to that software. You don't need that.

Tracking at scale, I think it's quite important. It's not something you need to start with or I would start with at all, but tracking just helps you marry the revenue you're making from the offer with the cost of your ad. You can know which keywords in Microsoft or Google are actually getting you the money that you are making.

Aidan

Sorry to jump in there. When you are just getting started, you're dipping your toes in the water. You're not going to be running dozens and dozens of different keywords or something like this. You should, on a napkin kind of a thing, be able to just sort of figure out what's converting and what's not. That's why when you get started, you don't need to worry about tracking. But obviously when you scale your business thousands per day, then it would be nice to have a tool that does this.

Sean

Yeah. And the tool that we use, don't quote me, I could be wrong, I think it's $129 a month or something in there. It was $150, let's just say something along those lines. That's a fixed cost. It doesn't go up the more you… it's just that is what it costs. So, like at scale, let's say not even at scale, let's say you're a few months in the business, you have 5000 leads on your list, and you want to use tracking. You're probably paying like $100 for your email, another $125 for the tracking, and another, I don't know, you're probably paying like just under $300 a month. But there's no reason why you shouldn't be making a few thousand dollars a month at that type of level. So, again, the actual cost to do business is so negligible compared to the revenue that you're making.

Aidan

Something else that we speak about sometimes is this idea of 1,000 True Fans or 1,000 Raving Fans, and the idea goes that if you've got a small subscriber base, let's say just 1,000 subscribers, then you should be able to make $100 from those 1,000 subscribers over the course of a year. And if you can do that, then with 1,000 subscribers, you could have a $100,000 business. Because they are subscribers on an email list, you don't need to spend money to get those people coming back to buy anything. It's essentially free traffic at that point. This is something else that we haven't spoken about, but we're probably sort of inferring much larger subscriber numbers, but you don't need to have tens of thousands of subscribers to do well from this. You really can make a fantastic living with a sort of a micro base of subscribers there. That's pretty cool.

What about exit strategy, selling the business potentially? What are your thoughts on that?

Sean

Right, so we actually, interestingly enough, have had a couple of people kind of pursue us in the last couple of years. We're not at that point yet, but I think exit strategy-wise, it's an interesting question. There are a couple of ways to maximize the value of your company. And I think the first way to maximize the value of your company is obviously to increase profitability as much as you can.

What I'm working on right now is replacing my activities in the company. I actually still do all of the ad buying in the company. I'm the guy running all the Microsoft ads, all the Google ads. I have a business partner who is my chief operating officer, he's our mailer, and so hiring those two critical pieces allows me, and my COO, to back out of the business and be more, owners and less, workers. That increases the value dramatically and also increases the ability for you not to have to work if you ever sold your company.

I don't want to sell my company and get X amount of money. And then they're like, “I need to stay on for three years.” I want to exit my company. And then they're like, “Okay, you need to consult for 90 days, and then you can bounce because I already have everybody running within it.” As you're growing, I think the three critical hires in this business  - to not remove yourself -  I'm not going to go to a beach and kick my feet up and do nothing but be more of a CEO, the visionary - is you need to have somebody who's going to mail your offers. You need to have, I call them a technical guy, somebody that's going to be able to build pages and set your offers up in the tracking and do that type of technical stuff that's not that hard to do, but they just take it off your plate. And then you need somebody to go out and run the ads - a media buyer, somebody who's going to run your Google Ads or Bing ads and things like that. At scale, you start making $15,000, $20,000 a month. You might want to go get yourself a developer in India or something for a couple of grand a month. Maybe you want to hire a mailer for $50,000 a year. And maybe now you're not making $20,000, but you're only making $14,000. But now you have two other people, and those two people can dedicate their entire blood, sweat, and tears to the activity. They should be able to increase your revenue from $20,000 up anyways to pay for themselves. And you'll get yourself a media buyer, maybe you're spending, I don't know, $1,000 a day on ads. But now they have a media buyer who's there 40, 50 hours a week. They can take you from $1000 a day to $3000 a day. That's how you really scale the business and that's how you can eventually exit, which is the path I'm on right now. We have three critical hires coming up in the next 90 days, and my goal is to sell the business for an eight-figure exit in the next three years. We'll see. We can circle back in three years. We can do an interview on that down the road.

Aidan

Yeah, I look forward to it. What you're really talking about there is putting the cogs of the machine in place and turning it into a genuine hands-off lifestyle business, where you are the owner, the founder, the director if you like, but you're not involved at all in the day-to-day operations. I mean, you can just be looking at the reports, watching the money coming in and doing whatever it is that you want to be doing, working on your next big thing, getting on the golf course, or whatever it is.

I think when I'm thinking about selling a business, the thing that makes it the most attractive, first of all, it needs to be profitable. I mean, if it's not profitable, it's not highly profitable, then it's not going to be as attractive. Secondly, it needs to be simple because the buyer who's coming in needs to be able to get their head around how this works. And this, sometimes with an online business, it's easier said than done. But with the type of business model that we've been speaking about in this episode, in the last episode of The Growth Booth, it's probably the simplest business that there is. I mean, we can show people, “Hey, look, people come to this page, and where do those people come from? They come from Microsoft or Google or whatever. And how do you make money? You make a commission. How does this scale?” Because you got it anyway, it's just the most simple business that's out there, and it's also going to be more appealing to a potential buyer if it's scalable.

I think in terms of an exit strategy, this is a business that ticks all of the boxes. People like to buy simple businesses that can run in almost a hands-off fashion to them. If you've built a team that can sort of be sold as part of a package with the business, then that's even better.

One of the things that I picked up when you were talking about that, about your team and so forth, and we haven't spoken about this in this episode or the previous episode, but it sounds like the way you've got this business set up, it's an incredibly lean operation. You don't need dozens of employees for this. Is that right?

Sean

Yes. At the scale we're at, and we're trying to scale even further, I have myself, I'm the CEO. There's actually a really good book called Rocket Fuel on this, and they talk about the story of Walt Disney. Walt Disney was a visionary, but he was really bad at executing stuff. I'm a good media buyer. I have all these amazing ideas, but I'm not the best executor in the world.  I hired a chief operating officer, and his job is to take my vision and execute it, and together it's amazing. So go read that book. I'm not a big book guy, but that's great too. Yeah, it's a great book.

There's the two of us there. We sit at the top of the organization. Then I have a developer. I'm hiring a second one because we are growing. But let's just say you're a little smaller. You need a developer. Somebody's got to send your emails out and somebody's got to buy your media. And then we have a virtual assistant in the Philippines that does a lot of our reporting, like our P&Ls, and just like a basic day-to-day list, clean, just basically like very minutiae tasks. There are really just six of us in the entire company right now.

Aidan

To run a multi-million-dollar business, rapidly growing, that has high-profit margins and half of your workforce in developing countries where a salary could be $1,000 for a couple of months. Correct? Yeah, there's a lot to like about that.

One thing I promised I would share with people in the last episode, and maybe this is a good way to wrap up, is that in 2006, a mutual business partner of Sean and I, Steve Clayton is what I'm talking about, bought a website that was making money using the exact same model that we've been talking about here in the past two episodes. He bought that website for around $30,000. And for the decade to follow, that website was making six figures a year. Absolutely amazing. And it was actually getting traffic organically. It didn't have any paid ads going at all. It just had Google organic rankings, which is another sort of avenue to get traffic that we haven't spoken about today, but if you can get Google rankings and you've got an offer on a page, then fantastic. There is actually a formula for getting Google rankings and free traffic as well, and we can talk about that another day. The point of the story is that this was an example of where Steve bought an existing business, someone who just wanted a change. They sold their website; he bought it for I think it was around $30,000 and was making six figures year after year after year.

This was back in 2006. Now the business model hasn't changed all that much. Some of the tactics have changed, and some of the ways we drive traffic have changed. The technology has, if anything, got just incredibly simpler to use. And we've got so much more sophistication in the way that we can track and the way that we can make sure that we're actually making money from different traffic sources that we're using. I think it just goes to show that this is a business model that's not only got longevity but so much to love about it right now. I think this is definitely going to be something that you're going to want to watch and maybe even dip your toes into as well over the next twelve months or so.

We'll have more to say about it and more ideas and thoughts in the weeks and months ahead. Stay tuned for all of that. Now, Sean, I'm conscious of your time here. Thank you for tuning in with us again for the second episode in a row. A real pleasure to have you here. I know that there's so much more we can dive into and hopefully, we'll get a chance to do that and also to have you back on in three years’ time to talk about your eight-figure exit.

Sean

Yeah, let's remember this episode. I will tell you right now, three years from the very moment in time we'll get on a call. We'll talk about how to exit your business.

Aidan

Yes, that'll be an episode like number 242 of The Growth 

Booth. That's what you're going to have to navigate through to find out all about that.

Hey, look, guys, thank you for tuning in here. We love creating this content for you and I hope that you found it useful. You can head over to TheGrowthBooth.com, Episode Number 42, to see the show notes, all the special links and so forth that we've mentioned, and make sure you subscribe. Make sure you subscribe so you can get notifications about more updates, and more shows in the future. That's a wrap for this episode. I will see you on the next episode of The Growth Booth. Bye.