In an era where “startup” is a hip word, and revenue isn’t required to attract investors, there is ample opportunity to raise money for your business. However, there are still a lot of entrepreneurs who want grow their business with profit, and keep the ownership stake for themselves and their team. Dan Faggella (CLVboost founder) decided to pursue the latter path of self-funding with profit.
In this article, you’re going to discover the three core tenants that you can employ to grow your online business to the $1,000,000 benchmark. Dan was helpful enough to boil down some of these key ideas into a video (above), and I’ve decided to go into greater depth to explain the strategies at play.
These are the proven strategies that ScienceofSkill.com, founded by marketing automation expert Daniel Faggella, used to generate 1.2 million dollars in their third year of eCommerce sales. “Bootstrapping” is something that’s talked about a lot in the startup world, but rarely is it broken down step-by-step.
(NOTE: In addition to writing for CLVboost, I run an eCommerce business of my own, so I had a selfish reason for reviewing and further studying what Dan does! Many of these principles have helped me go from beginner to full-time online entrepreneur, too.)
Nail Your Product Market Fit
There are a myriad of prominent marketers who are constantly referencing how to “nail your product market fit.” In layman’s terms, this simply means that you should build something that other people care about. Your products and services should deliver value to a particular market. This concept is simple, but not necessarily easy.
One of the most common mistakes that marketers make is not knowing the core needs and desires of their audience. Instead of creating products that deliver value to a particular market, they rely on their own expert positioning. Your prospects will seldom possess the same level of knowledge as you.
So how do you create products from scratch that resonate with your audience and boost sales?
Let’s first address what you shouldn’t do. You shouldn’t resort to guessing. You shouldn’t even make educated guesses. Instead, you should assess what constitutes legitimate value to your particular niche. This will require you to define the positioning of your brand.
Your Core Value Proposition
In the over distracted world of eCommerce, you can’t scale a business to the $1,000,000 benchmark by selling generic products. The harsh truth is that Google has made it virtually effortless for people to access free information. If your prospects can find similar content through the search engines, it’s highly unlikely that they will spend money with you.
Your core value proposition will distinguish you from the other competitors in your niche. These three questions will help you create a unique marketing hook that will make your brand visible:
Once you decide on a hook, you’ll need to tie it the backstory of your brand. Your core value proposition should always be reinforced in your marketing campaigns. Be explicit about how you can deliver specific benefits differently than anyone else in your market. Now that you’ve established your market positioning, it’s time to listen to your audience.
- How is the story of your brand different from the competitors in your niche?
- How can you deliver the benefits that your customer is looking to glean in a unique way?
- What are the specific reasons that your customer would purchase from you, rather than an authority in your industry?
Create No Offering Without Validation
If you don’t have concrete validation from your audience, then don’t waste your time creating products. Unfortunately, this is a prevalent approach that seldom generates revenue in eCommerce.
Before you structure your sales funnel, you need to determine exactly whom you are selling to. This will require you to know the objectives and objections of your target audience. Today, I am going to share three techniques that you can use to create offers that resonate with your customers needs.
Strategy #1 – Model The Best In Your Industry
Whether you’re a novice marketer or have experience, there is absolutely no need to reinvent the wheel. Success leaves clues, and digital marketing is no exception. The fastest, most efficient way to create high selling products is by modeling the authority brands in your industry.
As a general rule of thumb, you should strive to find an eCommerce business that generates $1,000,000 annually. Every niche is different, and some are much larger than others. If you’re in the fitness, dating, or finance niche, you’ll discover businesses that are grossing up to a billion dollars per year.
First are foremost, you should ask yourself these questions when analyzing authority brands:
Getting a feel for what people genuinely want is a good starting point for your business. As you continue to build your web presence, you can start supplementing your research with more concrete data.
Strategy #2 – Surveys
Surveys are one of the best ways to garner pertinent information from your prospects and customers. When leveraged properly, they will help define the demographics, desires, and frustrations of your audience.
Science Of Skill utilized surveys to determine the formatting of their products. Since their average buyer was over the age of 45, they were more comfortable purchasing physical DVD’s, opposed to streaming them online.
Strategy #3 – Phone Calls
Although customer research and surveys are great tools, there is absolutely no substitute to calling your customers on the phone. Interacting with your buyers personally will allow you to understand them at a much deeper level.
The best time to call your customers is after you release a new product. The content is fresh in their mind, and they’ll almost often be excited to hear from you. For optimal results, call the initial 20 to 30 buyers from your recent product launch.
Always be appreciative and candid when speaking with a customer. Let them know that you appreciate their business, and that you want to serve them with more value going forward. Once you develop a rapport, you’ll want to inquire about their primary objectives and objections. Here are some of the most important questions that you should ask your customers:
- What types of products are they selling?
- What are the trends that appear to be popular with their audience?
- What types of products are they promoting?
- What topics are these people discussing on forums?
- Why did you purchase from me?
- What is the core benefit that you are looking to glean?
- What did you like most about this recent product?
Understanding the objectives and objections of your customers is an integral part of the selling process. As mundane as it may sound, calling your customers will give you insights that can make a profound impact on your bottom line. You can either do this yourself, or delegate it to one of your employees.
Create a document that entails the primary desires and frustrations of your customers. Use this data to create compelling products that deliver these benefits in a unique way.
Contrary to popular belief, a great product doesn’t automatically generate revenue. Once your offers start resonating with your niche, you’ll need to optimize your traffic sources accordingly.
- What is the biggest obstacle that you’re encountering?
- What would hold you back from purchasing future products from us?
- What did you not like about this recent product?
Master Your Traffic Sources
Optimizing the traffic sources was the conduit to scaling Science Of Skill to the $1,000,000 benchmark. When you nail your market fit, it will drastically increase your sales conversions across every medium of traffic.
“Nail It And Scale It”
There are a myriad of traffic channels on the web. Here are some of the core methods of traffic that Dan leveraged in growing his eCommerce business:
Before you decide to put all your eggs in one basket, you should focus on the traffic strategies that are conducive to your niche. The fastest, most efficient way to do this is by modeling the authority brands in your industry. Spend some time analyzing their social media channels, blogs, and emails. Eventually, you’ll be able to identify some trends in their traffic sources.
- Social Media
- Affiliate Marketing
Shoot Bullets, Then Cannonballs
Once you determine the traffic sources in your niche, you’ll need to test each channel pragmatically. If a particular traffic strategy appears to be working for you, it will seldom generate revenue over the long-term.
The key is to incrementally test various methods of traffic before spending the bulk of your resources. When you can steadily rely on a particular source of traffic month over month, you can begin increasing your investment. Science Of Skill employed this strategy to scale their monthly recurring memberships by a multiple of five.
Optimize The Backend
In the world of information marketing, some of the most prominent brands have virtually no backend at all. For Science Of Skill, the vast majority of their time is spent optimizing conversions on the front-end. However, they still spend roughly 20% of their efforts on the backend of their eCommerce business.
Dan has spoken at length about back-end optimization in a number of interviews in the past, here’s two that are worth listening to if you’re interested in optimizing revenue with back-end email messaging:
If you continue to provide value to your buyers, they will naturally want to learn more from you. Science Of Skill offers a multitude of products to their existing customers through a series of calibrated email sequences. They segment their buyers based on criteria related to their primary goals and frustrations. When you understand the behaviors of your customers, you can tailor your messages to accommodate their core desires. This strategy has helped them increase their bottom line and customer lifetime value.
Why Dan Faggella has a Metrics Obsession
One of the biggest challenges in the world of eCommerce is determining the core metrics that are conducive to your brand. If you don’t know the precise numbers that matter most, it will be virtually impossible to scale your brand to the million-dollar benchmark.
Determine The Right Metrics
The business model of Science Of Skill is predicated on continuity driven offers (subscription revenue). Therefore, the metrics that provide the most reliable data are:
- Current active memberships
- Memberships sold last 24 hours, last 7 days, last 30 days, last 90 days
- Revenue collected this month, projected membership revenue from remainder of month (based on active memberships set for re-bill)
- Email deliverability, weekly open and click-through rate trends
- Weekly membership revenue collected per subscription program
It’s absolutely paramount to do your due diligence and figure out the most important metrics for your business. If you consistently monitor arbitrary data, it will be virtually impossible to project your profits. Take an honest inventory of your business model and determine the core drivers of revenue. Spend as much time as you need to ensure that these numbers are clearly defined.
Create a document that meticulously tracks these metrics each week. Once you adhere to a weekly regimen, you can begin tracking your monthly metrics. You’ll want to invest in software that automatically populates the pertinent data in your business.
Rally The Team Around The Metrics That Matter
When you distinguish the core metrics of your business, it’s time to make your team explicitly aware of them. When everyone shifts their focus towards the core data that matters, it creates a cohesive environment amongst your employees. This process was a catalyst to the rapid growth of Science Of Skill.
Metrics are an integral part of scaling an eCommerce business to the seven-figure threshold. If you aren’t monitoring your metrics consistently, it will be difficult to assess where your brand currently stands. Make a concerted effort to find 2 to 6 metrics that illustrate the core revenue drivers of your bottom line. Always be cognizant of these numbers, and never rely on skewed data.
These three core tenants that Dan articulated in his video (and subsequently, this article) are ubiquitous for any niche in eCommerce. ScienceofSkill.com utilized these techniques to scale their online business to $1,000,000 annually in just three years, and the same principles are likely going to get them into the 3-4 million dollar range this year in that same business.
If you haven’t already – get that metrics dashboard set up, and your customer surveys out!