Podcast

Episode 123: 5 Selling Systems to Scale Your Traffic Campaigns and Grow Your Business [Part 1 of 2]

By November 14, 2017 No Comments

What do you do when your selling system isn’t scaling or generating ROI? You have to define your selling system’s goals.

John Grimshaw, DigitalMarketer’s Analytics and Data Manager, joins the experts for a two-part episode that will help you understand the metrics to track so you can define your selling system’s goals and ultimately scale your campaigns and business.

IN THIS EPISODE YOU’LL LEARN:

  • The “eating the data vegetables” concept that will allow you to grow and scale your business and reach a new audience.
  • Use the “Perfect Selling System Questionnaire” to determine the goal of your selling system so you know which systems to scale, which to optimize, and which to scrap.
  • Why making money should not be the goal of every selling system (« and how breaking even can generate opportunity for business growth).

LINKS AND RESOURCES MENTIONED IN THIS EPISODE:

Get John’s slides here
Episode 86: UPSYD: The 5-Step Framework to Generate More Customers
Episode 106: How Much Can You Afford to Pay to Acquire a Customer?
Episode 123 Transcript (swipe the PDF version here):

Keith Krance: Hello and welcome to Episode 123 of Perpetual Traffic. We’ve got another guest with us today, so back to back guests. Awesome guests, though. Today, we’ve got John from DigitalMarketer coming on. I’ll let Molly do the nice little introduction. But, he’s going to be talking about five selling systems DigitalMarketer needed for growth. Break even or bust is what he called it. So, I’m excited. We were just talking before we hit record and this is some good stuff. I’m going to be taking notes. I hope you are, just not while you’re driving. If you’re driving while listening to this, just listen to it again. What’s up, guys? How are we doing?
Molly Pittman: Doing great.
Ralph Burns: Awesome.
Molly Pittman: Happy to be here. I think this is a really important episode that everyone should probably listen to two or three times, just to make sure the concepts really settle in your brain. John’s going to share these five selling systems, which are funnels. We’re just calling them selling systems so that they apply to more businesses. Five selling systems that DM has used to achieve growth and I think it really goes to show there are more than one way to do this stuff. Everyone in the industry is looking to find this one funnel that they can make all of this money off of and scale to infinity and beyond, not that doesn’t work. But, if you really want to build a business, a stable business, have stable acquisition, you really have to have multiple funnels, multiple selling systems that are helping you achieve your goals.
So, I think you’re going to learn a lot from John Grimshaw today, especially in terms of data and what numbers you should be tracking inside of these funnels. And what you’ll find is that different funnels should be measured in different ways. So, he’s going to share some different numbers and the way that DigitalMarketer tracks the success or performance of funnels or selling systems. I’d like to introduce John Grimshaw, he’s DM’s analytics and data manager. John, you’ve been with DigitalMarketer for, what? Four years now?
John Grimshaw: I think it’s been three years.
Molly Pittman: Three years?
John Grimshaw: Hard to tell at this point.
Molly Pittman: It feels like an infinity.
Ralph Burns: And beyond.
Molly Pittman: Yeah. So, John and I have always worked hand-in-hand since pretty much the moment that you started. John is the data behind the business. John probably knows … Or, I know he does, John knows more about DigitalMarketer than anyone else in the building and the reason for that is because he’s always looking at the data. And he’s the first one to tell us, “Hey, we need to pivot,” or, “Hey, there’s a fundamental flaw in the business,” or, “Here’s a huge opportunity.” So very, very important, brilliant data person and overall marketer and a dear friend. So, John, thanks for coming on.
John Grimshaw: Yeah, absolutely. Thanks for that awesome intro. Yeah, every time Ryan gets an email from me, I know he just does not want to open it ’cause it’s always bad news.
Molly Pittman: Churn is high.
Ralph Burns: You should send him an email every now and then, “Hey, Ryan, I found a big bag of money just out in the parking lot.”
Molly Pittman: That’s happened a few times actually. Didn’t you find some money one time?
John Grimshaw: Oh, I’m in the middle of finding a giant bag of money right now, actually. I should be done with it next Tuesday.
Molly Pittman: Were they payments that should’ve gone through or something?
John Grimshaw: The scariest thing you’ll ever see in a business is when you go look at all these things that didn’t fire that were supposed to, but the automation of the system was messed up and you just say, “Oh, no, this explains so much.”
Molly Pittman: Yeah, if we manually process these payments, we can generate 50 grand today.
Ralph Burns: Wow, how about that?
John Grimshaw: That’s pretty much … Yeah, testing it out, I did that last week.
Ralph Burns: The guy who finds the money, that’s awesome.
Molly Pittman: That’s how important John is to DigitalMarketer and data usually is one of the last things that a business owner looks at or one of the last hires that they make and I strongly recommend, if you do have the resources, to hire a data analyst. Someone like John, there really isn’t anyone more valuable that you can add to the business. So, that being said, John, do you want to kind of tell the story of how this came about and drop some knowledge on us?
John Grimshaw: So, yeah, it’s nice that you referenced that I’ve been at DM for a while ’cause the story kind of starts back in summer of 2015. So, I was working with Molly and she’s been doing Facebook and doing Facebook well for as long as I can remember. And she kind of started to notice this trend that the relevance score wasn’t where we wanted it to be, costs were climbing, and ROI was not what it wanted to be. And at this time, we were usually making something like 30 percent or so ROI after about seven days on the track that we were running. But, we just were really having trouble scaling. We kept saying, “Oh, we can’t take this campaign out to enough people, it doesn’t work when we go outside of this little bubble,” ’cause we were still living in internet marketing land.
And so, Molly went to Ryan, she went to Rich, the president of DigitalMarketer, and said, “Here’s kind of what I see happening. If we stay where we are today, we’re never going to be able to accomplish our mission of doubling 10,000 businesses. We’re never going to really hit the critical mass of customers and subscribers and people using and benefiting from our courses that we really need to get done what we want to do.” So, it was kind of this moment when we decided we were going to take a step away from this more B2C, selling more to the individual, and go more B2B, really think about how to sell to businesses. And this is when we started our product, DigitalMarketer HQ, actually.
So, this is when we made this kind of big decision and planted this flag saying, “It’s time for us to really figure out how to 5x the number of people we’re reaching and the number of people that we can really run through these programs and teach.” When we made that decision, we were like, “Great, let’s take everything we got today and just change the audience completely, just blow it out. We want to go huge.”
Molly Pittman: And by the way, if you guys go to digitalmarketer.com/podcast, this is Episode 123, you can actually look at John’s slides and you will see a graph, the terrible thing that happened.
John Grimshaw: Yeah, I’m looking right at this picture right now and I can see the moment we made this choice because the ROI was pretty nice for the week or whatever right before. It was 80 percent or so immediately, and then within a span of about three weeks, it had dropped to negative 87 percent. So, it was just this amazing grounding moment. We’re like, “Alright, we’re going to do this. We’re going to really just commit and pivot and take this out to everyone else.”
Molly Pittman: And scale.
John Grimshaw: So, we just threw our doors wide open and just had some crickets come inside. It was like, “Oh, no. This is bad.” So, our immediate ROI just completely cratered. It had been, like I said, kind of averaging around 30 percent and our average at the end of all this was negative 87 percent. And so, it was one of those moments when you say, “Something or many somethings about what we just did didn’t work and it doesn’t mean that we can’t do this, but it means that we really need to hit the time out button and dig in and figure out what’s going on.” And so, we just started looking at this ten ways from Sunday, trying to figure out what it was that we needed to do to make this work. And at the time, we kept running traffic because at the end of the day, we needed the traffic for the business.
And if we wanted to kind of conduct these tests and figure out what was working and what wasn’t, we were going to have to keep sending people to this. So, a few months later, a dozen tests later, the immediate ROI had not really improved. We’d tried all these different things, new creative, new ways of presenting the offer, all that kind of stuff. But, it never really did what we expected it to it. Immediate ROI never jumped back up to that 30 percent or so. But, we were making money. And we knew we were making money not just from our email list, not just from subscribers we already had in the business. We knew that our traffic was generating revenue. And so, it was kind of this awesome pivotal moment where we said, “You know what? Things are working, we just don’t have a good way to measure how well they’re working anymore. We’re no longer living in this tiny little pond where we’re really familiar with and know exactly what we want.”
We need to figure out a new way to say, “Hey, this is good. This is bad. This is how we should be selling this product, selling our service, reaching out to new people.” So, it was a really cool moment and I had to go pretty deep to come up with a way to measure it. So, basically, I came up with this system that let me do attribution for about two years for 12 different funnels where every single dollar we made from these customers went back to the week that they joined our email list.
Molly Pittman: What slide is that one on, John?
John Grimshaw: 16.
Molly Pittman: It’s scary.
Ralph Burns: So, just so I’m clear, so the pivotal moment here was you were running this particular campaign, but looking at very … In a micro sort of way, basically, you were spending a dollar and you were getting a dollar 30 back at a seven day time period. And the pivotal moment was when you scaled, you were spending a dollar and at a seven day time period, you were only making 13 cents or there about. Is that, sort of for our people who are trying to visualize what the real problem was that obviously led to this solution, is that accurate?
John Grimshaw: Yeah, that’s exactly right. We’d been so used to this experience of just every time we put a dollar in, we were going to get more than that out.
Molly Pittman: It was like magic.
Ralph Burns: It’s a money machine.
Molly Pittman: Yeah, but the audience tired, so we had to pivot the business.
John Grimshaw: Yeah, so it was a huge moment. And yeah, it was really scary ’cause you went from just feeling like you could do no wrong with traffic to …
Molly Pittman: Will this ever work again?
John Grimshaw: Yeah, everything felt bad, everything felt scary. But, the good news is, we got to the other side and figured out kind of what was going on.
Keith Krance: Epic.
Ralph Burns: Yeah, and this is just to add a part to this. This episode here is almost like a book end to Episode 106 where we talk about this a little bit, but not really as in depth as John’s going to be talking about here, which is the lifetime value of a customer and how you kind of use your advertising to figure that whole thing out. So, if you haven’t listened to Episode 106, I would go back to it. We use a really, very basic, simple formula to try and figure out how much you can pay for a customer and this is sort of the graduate course, I would say, in this episode with John.
Molly Pittman: So, what happened?
John Grimshaw: Yeah, so the kind of little teaser is we’re going to talk about these five systems that we kind of came up with when we went through that process of really breaking down all of these different pages, all these different offers, all these different campaigns we were using to drive traffic, we came up with five kind of key systems. But, before we can really dive into talking about what those five things are, there’s two important kind of data concepts to cover. And so, this is what I want to call eating the data vegetables. So, you’re going to get the dessert, which is the systems DigitalMarketer used, but you got to have a little bit of Brussels sprouts, some green beans, and a few carrots before we can go too, too deep on that.
So, the first one is attribution and attribution is how you figure out who’s job it is to clean all the dirty dishes in the sink. And so, there’s this kind of visual of my house, I used to live in a house that didn’t have a dish washer. And there was basically just about 70 dishes in it, I didn’t even know we had that many. And so, how did we decide? I’m sure we’ll fight to the death, who was going to clean that? And attribution is kind of how you can think about that for sales. So, who’s job is it, who gets credit, or in this case, responsibility, for the mess or the responsibility for the sale? And is it the person who put the last dish in the sink? Is the person who put the first dish in the sink? Is it whoever put the most in?
That’s kind of questions we want to answer with attribution. You’re really trying to say, “What is the piece or pieces of content and ads and little touches that we had with this customer that really made this happen?” And so, there’s a lot of different ways to model it. And the truth is, there’s no one right answer. You can look at last click, that’s where you’re going to say, “Whatever the last thing the customer did right before they purchased gets 100 percent of the credit,” and that’s what a lot of email marketers use because email is one of the best ways to close the sale, right?
Molly Pittman: Of course.
John Grimshaw: So, they’re saying, “Well, we are really good at this because we make hand over fist money every time.”
Molly Pittman: Right. It’s like email is the highest revenue function and it’s like, “Yeah, but where’d those people come from?”
John Grimshaw: Battle of attribution. And so, yeah, we want to know how to assign credit for that success and it’s not really for, like with email, to say that all the credit goes to them. So, while there’s no one right answer, when we were doing this, there were two kind of things we were looking at it. Originally, it had been that last touch, that immediate. So, looking at a sale that happened within about six hours of the last click a customer had. So, it’s really good if you want to evaluate, immediately, when you put a dollar in, how much are you going to get out? Or, over the period of a week, if you’ve got a follow up system for whatever your campaign is through email, that’s going to get some of the credit for that, too.
And then, the other one that really we used and that let us figure out what was working here is this previous opt in model. So, instead of looking at the last interaction a customer had, we kind of changed the conversation and said, “What we’re going to do is try to assign credit to when this person went from being someone who maybe read a blog post, maybe liked us on Facebook, but had not become a lead,” and that moment when they joined our email list, that was the moment. That was when we said, “Alright, this is the pivotal change in the relationship.” And we wanted to give credit there and figure out what was happening ’cause we knew we were making money, we just didn’t know how to properly say, “This is doing a good job and this is not.”
So, this was a big part of it, was switching to thinking about previous opt in, last opt in, first opt in, whatever you might do or want to call it there and giving that credit for the sale. And then, the other one is ROI and ROI, I know it’s been talked about plenty on the podcast, and so I don’t need to blare the point. But, it’s just thinking about when you’re making a choice in life, when you’re going to go see a movie, do you want to do something that is gratifying in a sort of intellectual way? Go see something critically acclaimed, the movie La La Land or Moonlight. Or do you just kind of want to turn your brain off for a couple hours and go see whatever movie Mark Wahlberg is in right now or something with robots fighting each other?
Molly Pittman: I think that’s what Ralph watches.
Ralph Burns: “Transformers 17.” Yeah, that’s it.
John Grimshaw: Yeah, when we’re talking about ROI, we want to understand that relationship between choices we’re making. So, it’s thinking about, you’re going to spend some money on a movie ticket or you’re going to spend some money on a Facebook campaign and you want to know what is going to provide the best value for you and there’s different things you’re going to want every time and we’ll talk a little bit more about how you might choose which system fits your need, but you just want to know that ROI really focuses your attention on traffic as a tool to recapture money. And so, you’re spending money on ad purchasing, you’re spending money on physical products if you have them, or hosting your digital products, so there’s some real costs. And it’s important to kind of put those at the front of mind.
And ROI, when you hit zero percent ROI, that’s basically when you recaptured every dollar you put into creating that product and every dollar you put into promoting and selling that product. And that’s when you know that you say, “Hey, I did all this great work. I put these amazing products together. I went out and I sold them and I basically have paid for everything I did.” So, everything that comes after that, that one percent ROI, that is money in your pocket. That is when you’ve gone and said, “This is amazing. I have put all this stuff together and finally, I’m getting to see real return for what I did.”
Molly Pittman: Heck yeah.
John Grimshaw: Attribution is about helping us decide what gets credit for success and then, ROI is helping us measure how successful we were. And so, by kind of taking these two things together, we were sort of able to go back and reexamine and challenge all of our sort of pre-conceived ideas about what success looked like with traffic. So, the recap is, we basically expanded our market at DigitalMarketer. We said, “We’re going to go out and serve and entirely new class of customer that’s basically brand new to us and we’re going to create massive value for them and we want to do it in the best way possible where we can bring the most people in.” And we knew we were having success, but we didn’t know what was working or what we should more of or what we should do less of. And so, redefining how we were measuring success was kind of the key to changing how we thought about paid traffic and letting us scale and grow the business and reach this total brand new audience.
Ralph Burns: Which is super helpful for you guys because in order to reach the goal, 10,000 business, doubling the size of 10,000 businesses is the goal, right? It’s not all going to be in the internet marketing digital marketing space.
Molly Pittman: Exactly.
Ralph Burns: So, this is about influence. How can you influence more people in a positive way, and I would assume there’s a paid traffic component to this, on Facebook? And I think if you don’t know this kind of stuff, this is going to be limiting for your … You’re going to hit this wall. This is any business, this isn’t just DigitalMarketer, it’s any business. And I think managing customer accounts like this, they are struggling with this a lot and I’m going to have all of them listen to this episode, by the way.
Keith Krance: This is super relevant.
Molly Pittman: I couldn’t agree more. It’s really just concepts that you have to grasp for scale. Great job, John. Excited to hear the rest.
John Grimshaw: So, you ate your vegetables and now we can…
Molly Pittman: Dessert, ice cream.
John Grimshaw: That’s right.
Keith Krance: How do we do it?
John Grimshaw: It’s kale chips, sorry. Bad news.
Ralph Burns: I want the mega stuff Oreos now.
Keith Krance: Just blend them all together. Juice it.
John Grimshaw: We talked a little bit about that spreadsheet I had and the idea was thinking in cohorts and cohort is just a fancy term that we use to say, “It’s a group of people that have some shared characteristic or a couple shared characteristics.” And so, for this process, the two shared characteristics were the week that someone became a lead and the source that sort of brought them in and turned them into a lead. So, what Lead Magnet was it? Or what form on our website was it that really made them go from just being someone who was an observer, to someone who raised their hand and said, “I’m interested in learning more and hearing more about what you guys do.” So, when I went through and took our 12 biggest campaigns that we’d spent over the years, something like a million dollars, 1.2 million dollars, something like that on.
And really dug into this, looking at it with this previous opt in attribution, I was able to go through and say, “Every week, we got a little bit more money from this group. The first week we brought them in, we were getting that negative 80 percent ROI where we’re putting in a dollar and getting 13 cents back.” But, after a few more weeks, you’d see a little bit more money come in and a little bit more money come in. And we did this over time and just kind of kept looking at it and kept thinking about it.
Molly Pittman: And John, for other businesses, this would mean that they’re buying other products, maybe you put them in a continuity program, you up sold them something, so just keep that in mind.
John Grimshaw: It’s not just subscription products and it’s not just that for us, it’s all these different tiny little things where someone says, “Oh, man, I need that execution plan,” or, “I want to subscribe to this subscription box product,” or, “I’m going to go in and get my hair cut every six weeks, something like that.” So, it could be anything because really, this is thinking about customers and how they become not just one time buyers, but people that have a relationship with you and people that you can help grow and improve their lives with whatever it is you’re selling. So, what we did when we were looking at this is we went in and said, “How many days is it taking us basically to break even, to hit that zero percent ROI?” And we realized that for our different campaigns, we were getting different numbers.
And we were able to go in and kind of say, “This feels like the win, this is where we used to be back when we were in this really small, narrow little audience,” was we were going to jump past that zero percent mark and we’d do it in a week or 10 days or something like that. But now, it was further out, it was more of a time commitment. But, this is kind of the second time we planted the flag. So, we had first said, You know what? We’re going to expand and reach this new audience no matter what it takes because it’s what the customer needs to grow their business, it’s what we need to really reach all these people that we want to help.”
And this time, we said, “You know what? Before, success was not getting that extra 30 cents out of it, it wasn’t that 30 percent ROI. It was about putting money into a system and getting a customer out of it and getting back to even, where we felt okay to go out and find new people and bring them into circle, bring them into the DM family, or whatever business, and help them for a long time.” But, we had to get to that initial point because you can’t just go out and throw away hundreds of dollars or thousands of dollars or tens of thousands of dollars forever because at some point, the business ceases to exist.
Molly Pittman: That is not scalable.
Ralph Burns: You need cash reserves. Ideally, you start off with something that’s very ROI positive and then, as you expand, hopefully you have enough cash in the bank to sustain yourself for whatever period of time that it takes you to bring back, to get even.
John Grimshaw: Yeah, and goes back to this quote that Ryan said and this is the first thing I ever heard Ryan say and it’s one of those things that I just … There are so many times when I’m looking at something and I keep unpacking it and saying, “Wow, this works in so many ways,” but, “He or she can spend the most money to acquire a customer wins.” So, if you’re willing to put in 10 cents more than your competitors on average, over time, over a longer period of time, you are going to win. You’re going to be the business that gets that extra person who’s on the fence between the two. You’re going to be the one that has a plan to grow and really is bringing in new customers, expanding your product lines, and just transforming your business. And kind of on that line, I know there are going to be some people listening to this saying, “Well, I really like making money.”
And I like making money, too. I think everybody probably does. But, at the end of the day, there’s an opportunity cost here. If you get 100 percent ROI on every dollar you spend online, you have stunted your business. You have said, “I am not going to let my business grow and flourish like I believe I want it to, instead I’m going to hold it back and say that it’s more important for me to, every single time, turn profit instead of getting out there and reaching more customers,” and putting your product out there for more people and just letting others know that you’re out there and raising your hand and saying, “Hey, I’m here. I can help you.”
Molly Pittman: Yeah, I mean, I can’t emphasize that enough. That’s why when I see marketers, especially agencies that say things like, “My campaigns have a 500 percent ROI,” or this or that, and not that we won’t say that when we’re speaking of a particular campaign, but the highest ROI agency or individual, well, the highest ROI isn’t always the name of the game. There’s so much scale left on that particular campaign if it’s going to cold traffic. Now, if that’s going to warm traffic, of course you want a high ROI because your goal is just to make more money from people that you’ve already acquired. But, if you’re talking about cold campaigns that are bringing in new life to the business, which are the most important. It doesn’t get more important than that.
The higher ROI that you have means that you need to scale more because there are more customers out there that you can acquire. The more customers you acquire, the more money you’re going to make on your monetization campaign. So, I just can’t say how important that is.
Keith Krance: It’s when you’re looking at it from a short term ROI perspective, when people are looking at it from a 500 percent ROI in seven days, or one day, or thirty days. But, what does ROI stand for? Return on investment. So, let’s compare it to a traditional investment like investing in the stock market or investing in real estate or 401k or anything like that, right? How do we look at those investments and measure them against other investments? Even if it’s venture capital, you’re looking at it from an annualized perspective, so if those guys want to compare to some of the campaigns you’re talking about here, let’s look at 12 months. That’s why if you look at your WIKA reports or whatever data system you’re using and it’s great when you can say, “Okay, in January, we spent 10,000 dollars,” let’s say.
“We made back 10,000 dollars at the end of the month, or maybe we made back 7,000 dollars.” But, how did that 10,000 dollars do the rest of the year? So, you can actually go back and look in some cases in December and see that 10,000 dollars actually generated 65,000 dollars plus all these leads and subscribers. And so, think about it that way when you’re doing this, it’s an investment because you’re not only going to be bringing in more money later on when you do the things that Molly and John are talking about today, but you’re building a bigger … Like if it’s real estate, you’re adding more units to your apartment. You’re building a bigger subscriber base and customer base and so, you’re building that asset much bigger and much stronger.
Ralph Burns: And this is a mindset shift. So, we see this firsthand, like you guys are doing this for DigitalMarketer, we see this first hand when we reach a certain point at scale with our customers. And where they still think that they need to have 100 percent ROI on day one and it just … As you scale and as you move out and as you generate more cash for the business, it just becomes unsustainable. Now, ideally, you want to spend a thousand dollars a day and make a thousand dollars a day, and then, scale that to 100,000 dollars a day and make 100,000 dollars a day. If you can do that, great. But, chances are as you start to expand your audience outside of your easiest niche, the ones that are probably aware of your solution, going back to the UPSYD episodeor aware of your competitor’s solution.
You have to go into a deeper type of audience, which is going to cost you more money, that are unaware of your solution, unaware of who you are, unaware that they might even have this problem that exists. So, we’ve done this, we’ve done this just recently actually, with a customer that’s now spending 100,000 dollars a month and they are now going negative because they know that within three months, they’re going to make all that back and then some. And we analyze it every single month. So, it’s a mindset shift, it’s scary at first. If you don’t have cash in the bank, you really can’t do this if you don’t have cash in the bank. But, as you grow, it’s absolutely necessary.
Keith Krance: You can start small, yep.
John Grimshaw: Yeah, that is exactly right and it’s awesome to hear about examples you have. I live in the world of DigitalMarketer and so, when I saw this, it was a scary moment, it was a scary change. But, I love hearing that other businesses are learning to adopt this mindset because it is really how you do, what you want to do for your business, what your business needs to grow and thrive. If you want to stay flat, never get outside of your bubble, I mean, you can make all your money back and then some in just a few days every time. But if you really want to reach out there and grow and build a strong, sustainable business, and transform lives with your products, you have to be willing to put yourself out there. And you’re right, it is all about cash reserves and we’re going to get into that.
Not that I’m necessarily going to share the exact cash reserve amount, but how to think about risk versus opportunity, that’s really the name of the game. And so, we kind of had this mental shift where we had to say to ourselves that making money is not the goal of every selling system. And it is the goal of some. When we’re selling tickets, we don’t want to go into the hole. Tickets are expensive. If we’re having to pay 1,500 dollars or more to bring someone to T&C, that’s not going to work out well for us or them because we’re not going to be able to give the best experience. But, there were a lot of systems that we were using to drive leads and drive customers that we had been used to being super profitable. And in this moment of shifting our intent, shifting our audience, we had to kind of let go of that expectation and tell ourselves it’s okay if we’re not making all of our money back within the next day or making all of our money within even the next 30 or 60 days for some of them because the investment and that opportunity was there.
We just had to let ourselves chase it. So, we decided there were four kind of key things that we needed from every one of our selling systems. And those four things were that we need to at least break even at zero percent ROI and not only that, but we needed to break even in a reasonable amount of time. We couldn’t say, “Hey, in 12 years, we’re going to be totally flat on this. We crushed it.” That’s not an option. Who knows what the internet looks like in 12 years? We’re going to be having that 1,235th podcast episode, VR glasses and gloves and it’s going to be a weird interactive experience. You can’t wait 12 years ‘because you don’t know what’s going to happen, so reasonable amount of time is really key. And you need to use the revenue potential of a customer or a lead that’s coming to see how many days you can wait.
So, if we’re trying to move some product that the end goal is to sell something that only costs seven dollars or something that only costs 10 dollars. There’s not a lot of opportunity there for us to make our money back. So, we can’t spend 100 dollars in hopes that someone’s going to buy a 10-dollar product. If it’s a subscription box or maybe cosmetics, something that they’re going to buy again and again, that really changes what the revenue potential is. But, you kind of need to understand with any given system, the thing that you’re selling or the things that you’ll be selling, how much opportunity is there? How many times are people going to come back to the well and buy again? How expensive is the product up front? Is there a continuity component, all that.
And then, the last one, and I think the most important one, especially when I was kind of managing the way we were building these systems, is you need to have one singular specific goal. You can’t ask too much of your system. So, this was again, that kind of letting go for us. We couldn’t say, “Hey, we not only want to acquire new leads and a high volume of leads, but we also want to make tons of money from those leads.” Trying to do all of those things in one selling system, back in the wild west of 2015, maybe, maybe you could do it every once in a while. Maybe to this really audience, we could pull it off. But, when you really want to grow and take the next step, or even if you’re in a really competitive market, trying to do everything with one selling system, every single time you’re going to be fighting yourself because you have two or three things you’re trying to accomplish and you might be getting two of them.
But, not the third. So, do you turn it off? Do you leave it on or do you have to change everything and optimize for that one thing you’re missing?
Molly Pittman: How do you know what is successful? How do you know what to track?
John Grimshaw: Yeah, that’s my favorite question. People are like, “Hey, can you tell me how this is doing?” I say, “I absolutely can tell you that. What is it you want it to do?”
Molly Pittman: So, true. People say that all the time, “Molly, how are my ad campaigns?” It’s like one goal for each campaign, measure that one thing. Not that there aren’t smaller numbers that lead to the bigger number that you can look at to judge success, but having that one success metric is so important.
John Grimshaw: Yeah, yeah, and it doesn’t mean … I look at all kinds of information and in Facebook, they give you tons of raw data because there’s a lot of information you need to make really smart decision. But, when you’re trying to think, flipping the switch, yes? No? Do I keep running traffic to this or not? That kind of main overarching goal is really what you need to go back to again and again to say, “This is something I want to be doing and I know it’s working,” or, “You know what? We had this goal of driving a bunch of leads and we’re making money, but we’re only making 100 leads every month. I don’t think this is the campaign for that.” You might say, “Alright, according to that one goal, we got to turn this off.”
The kind of questionnaire we used, and this is more simplified, is what is the goal of the system? So, what does the business need? Does it need revenue? Is it in its infancy? Is it a smaller business and it’s just trying to get this digital thing off the ground? Then, it’s going to be revenue. Or, is it a bigger business with some cash reserves that’s really trying to go out and grab and kind of sink some flags into a new audience, a new customer base? Well, then leads are going to be the goal. Or maybe it’s like you really want to find a very specific kind of person. So, it might be about having conversations, something like that. So, you really need to decide what it is you want for your business from the system. And then, in line with that, you need to define success.
So, a success revenue, is it leads or subscribers? Could be phone calls, it could be anything for any business, you just need to know going into this exactly what it is you want success to look like. And then, the last one is how much risk are you willing to take to accomplish the goal? And risk kind of lives in this relationship with opportunity. So, the more potential there is, the more opportunity, the higher the product price is, the longer the continuity is, the better the experience is for the customer to make them come back again and again, the more risk you should be willing to take. And that was kind of the mindset I really liked adopting, was thinking about different systems as having different levels of risk and I’ll kind of talk about that with all five of the systems and how much risk this one or that one might let us take.
So, everyone needs to agree on what success is. They need to be realistic and you need to do this in a certain period of time, that’s where the risk comes in.
Keith Krance: Okay, this is amazing stuff here, John, and I’m going to jump in here because I’m thinking that time-wise, that you’ve given us such an amazing perspective of how to really look at your model in general and how to look at traffic and campaigns and I know we haven’t gotten into the juicy five systems yet. But, I’m thinking that what we’ll do is we’ll break this up into two episodes. Next week, we’ll have you go through the five systems. This way, then, you can go deeper. You don’t have to rush through those five things and so, the listener, you guys can get a much better understanding of that.
Molly Pittman: I’m on the edge of my seat.
Keith Krance: What is it?
Molly Pittman: Yeah, I think it’s best. I think it’s best. So, now you guys have to come back next week.
Keith Krance: You have to come back next week, maybe John, if you could just recap at all? Just a quick little recap. Anything, if there’s one or two more things that people really need to understand or how they could prep for next week, or anything like that. Other than that, we’ll wrap it up and next week, we’ll go deep into the systems.
John Grimshaw: Absolutely. So, the big ideas are you need to understand what your different systems purpose is. So, every system has one singular purpose that’s really, it’s overarching goal and that’s what you’re going to use to drive it. And in that same vein, not every system’s purpose is to make you all of your money back immediately. Some systems are about bringing in leads, some are about making sales, some are about starting conversations. And so, you want to make sure that you’re not living in this world where every single dollar you put in needs to pay you back a dollar and a half or two dollars within seven days, within 14 days. You need to be willing to go negative and aim for that break even on different systems because that is how you generate opportunity for your business.
And just keeping in mind that when you want to really reach out there, scale, and hit the next level, part of that is being willing to take on risk and you need to remember that increased risk always correlates with increased opportunity. And so, that’s kind of how we want to think about these systems. Some allow for more risk, some allow for more opportunity. So, you got to find the balance.
Molly Pittman: Awesome, John.
Keith Krance: Awesome.
Molly Pittman: We’ll see you next week.
Ralph Burns: Way good.
Keith Krance: Cool, cool. And once again, Show Notes are at Digitalmarketer.com/podcast and this is Episode 123. So, next week, the second half, part two, will be 124. Until then, we will talk to you soon.
Ralph Burns: See you.
Molly Pittman: Sweet.
Keith Krance: See you.

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Episode 122: 5 Hiring Questions to Ask When Hiring a Digital Marketing Consultant or Agency
Episode 124: 5 Selling Systems to Scale Your Traffic Campaigns and Grow Your Business [Part 2 of 2]