December 27, 2018
Once you’ve purchased an online business, implementing certain strategies to grow and expand it become important. Whether you have a single business or are running a large portfolio like Ace, this episode sheds light on strategies we have come across or even implemented ourselves.
As we discuss the five strategies you can use, keep in mind your approach will be specific to the business you’re buying PLUS the skills you bring to the table.
From content marketing to strategic acquisitions to CRO and more, this episode offers something for all types of business owners. We’ll cover what each strategy is, where they work, and give you valuable tactics/examples so you have a firm grasp on the topic.
Digging the show? Please do stop by iTunes and give us a review when you get a chance – we’d really appreciate it!
Alright, let’s dig in…
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Justin Cooke: I’d rather be, not a big fish in a small pond, but a big fish in a medium pond.
Announcer: Buying and selling businesses just got a lot easier. Welcome to the Web Equity Show, where thousands of successful entrepreneurs go to learn about buying, growing, and selling online businesses. Your hosts Justin Cooke and Ace Chapman share their real-life advice, examples, and expert interviews to help you build and grow your own online portfolio. Now to your hosts, Justin and Ace.
Justin Cooke: Welcome to the Web Equity Show. I’m your host, Justin Cooke. I’m here with my co-host Ace Chapman, and today we are talking growth strategies, how to expand and continue growing your business or your larger online portfolio that you’ve put together.
Ace Chapman: Yeah, I find myself doing a lot more of this now than I spent time doing [inaudible 00:00:54] now that the portfolio is getting a little bit larger, and we’re kind of going through this episode is going to be on it. It’ll be interesting, from our business perspectives, how you guys are growing Empire, how I’m growing my businesses that are in the portfolio, and so we’ll get to talk about some of the strategies that we’re implementing that work for us.
Justin Cooke: Yeah, it’s interesting, man. You have, and this is kind of unique to you, but you do a lot of deals with a bunch of different people, and then you have some that are part of a fund, and you have some that are kind of your own deals. How do you cross-promote across those brands, or what’s the strategy there? How does that work?
Ace Chapman: Yeah, so a deal that we literally were just talking about that we got an offer in on right now and will hopefully close, when we’re looking at those businesses, it’s really trying to find things where doing some cross-promotion, and at the end of the day, each deal’s going to be a little bit different. So if it’s an SEO business, it may be, let’s put an article on this one that links to the other one. If it’s in the travel space, which is a deal we did earlier this year on two different businesses, then it’s, they both have email lists, let’s do some cross-promotions there. So each situation’s going to be a little bit different, but I’m glad that that’s one of the things we’re going to talk about today, because it’s a really great strategy where you can have 2+2=6.
Justin Cooke: Yeah, I think that’s one of the best situations we’re definitely going to talk about, strategic acquisitions, and that’s one of the points we want to make. Also, regarding your portfolio, when you do deals for the fund, do you only look for deals that have strategic benefit, or do you look for diversity across the portfolio? What kind of deals attract, are attractive to you for the fund?
Ace Chapman: Yeah, so we’re looking at things that are going to match our skill sets and things that we’re already good at, so it’s this very interesting balance between three things. One is, what can we manage, or who can we partner with to manage the site, because that has to be number one. Number two, kind of the diversification that you mentioned, we don’t want all of them to be content sites. We definitely want all of them to be e-commerce, FBA, and that kind of thing. So you lose some of that strategic ability to cross-promote, and strategic ability to leverage a certain skill set.
So you want the diversification, but at the same time, like I said, when you’re doing those strategic acquisitions, you can have a $200,000 deal or a million dollar deal instantly be worth 20%, 30%, 50% more because of that strategic alliance, and so you’re still balancing it with, all right, let’s get to similar deals that are in a similar space, similar business model, because that’s going to allow us to instantly grow those couple of deals. So it’s an interesting balance between those three.
Justin Cooke: Cool, man. Well, we’re getting into all that in this episode, so let’s jump right in.
Ace Chapman: Let’s do it.
Justin Cooke: All right, man. So we’re talking growth strategies today. We’ve got five growth strategies we really want to dig into and sink our teeth into, the first being content marketing. I’m happy to talk about content marketing because it’s been a big driver at Empire Flippers and for other businesses that we’ve been associated with. So let’s talk about what content marketing means. It’s basically just adding educational and inspirational content, and providing for your audience through a host of different mediums. And it can be your own blog site, it can be if you have a position at one of the major news sites you can, obviously, write articles there and get yourself some promotion. Blogs on medium, you can do a podcast, you can be on YouTube, you can be on Instagram, and there’s a ton of those social platforms you can use to add content and add value to your audience.
Ace Chapman: Yeah. This is one of the things, it’s a lot of work, but it’s just, I know it’s worked well for you guys, it’s worked well for me in getting interviewed on podcasts, doing YouTube, having Instagram. It requires time, effort, consistency, and it’s just work, you know? So you want to understand that it’s a long-term thing. You’re not going to get those instant results-
Justin Cooke: Wow.
Ace Chapman: … that you have to get when you’re doing Facebook marketing and those kind of things. So it takes that long-term commitment, and honestly, it’s not worth doing if you don’t have a long-term commitment. And there are a couple places that you just, this is a must. If you have a product that’s confusing or complicated and needs some explanation, you pretty much have to do this, even if you’re going to do Facebook marketing, you got to get them into a funnel with some content that’s going to educate them, in order for them to make a purchase.
And also, if you’re in a space where, very competitive and they got a lot of selections, you got to educate them on why this product version that you’re presenting them with is slightly better than all the other type of commodity products.
Justin Cooke: Yeah, if you have to explain the product, if it’s not readily explained, I think content marketing’d be a big help with that, because you’re educating your audience before they purchase. Also, you mentioned competitive environments, competitive or secretive environments, right? So where, typically, the businesses in that space don’t want to release information, they kind of want you to just be customers and don’t want to share the secret sauce. You can really have a competitive advantage by doing content in that space, and kind of giving a peek under the hood to people that are really curious about it because it helps you stand out.
We’re talking about this and I feel like I keep coming back to your business, Ace, and I am, but I’ve noticed with you, you don’t do, you do some content on YouTube, for sure, that’s a channel that works and is effective. And I hear you with the consistency, right? That’s the key, and that’s the difficult part, is doing it day in and day out. I’ve noticed you do a lot of interviews, but you don’t do a lot of content for yourself, you don’t put a lot on a blog, or don’t do a lot of that. But you do a lot of guests interviews on podcasts, that does seem to be a strategy you use. Why do you not do it on your own platforms, in terms of written format? Do you just not prefer it, or do you find that you don’t get as many customers that way?
Ace Chapman: Yeah, I think that a lot of my content and a lot of the interests that people have is knowing, on a service level, about how this industry works, and what buying a business is. So the reason that I spent more time, and now I’m actually starting to do some blogs and even some guest posts and that kind of thing. But the reason that I spent a lot of time at the very beginning just on other people’s podcasts was awareness, because the first thing is just, in order for somebody to be interested in going super-deep, they have to know that you can actually buy a business. That’s what I realized originally, is as I was going on these podcasts, the response that I was getting was just like, “I had no idea it was even a possibility for me.”
So I spent a lot of time just on, okay, awareness, and now starting to go a little bit deeper as more and more people have realized that this is even a thing.
Justin Cooke: It’s also easier to do interviews on other people’s podcasts, or kind of leveraging their audiences, right, because they’ve kind of already got that baked in, and so you can raise awareness that way with quick hits, whereas if you start your own podcast from scratch or your own blog from scratch, there’s no one reading it. Really, you just start [inaudible 00:08:15]-
Ace Chapman: Yes.
Justin Cooke: There’s no one there. But if you’re out there building audience, then when you have something to say on your own platform, you’ve got kind of the baked-in group of customers and potential customers that are listening and paying attention, so that definitely helps.
Ace Chapman: Yeah.
Justin Cooke: Let’s talk some tactics or some examples of content marketing that I think are interesting. One of them would be drafting, right? And this is basically finding other hungry entrepreneurs or businesses that are at or around your level that maybe aren’t direct competitors, but are in other interesting spaces or parallel spaces, right? And what you can do is, if they’re putting out content, you’re putting out content, you basically, without even a formal agreement, just kind of work off of each other. You comment on each other’s stuff, you show each other stuff on social media, and it just, as you do more of that, because you find their stuff interesting and it helps your audience, they can start doing that for their audience, as well. And it’s basically an informal kind of agreement to work together and to share each other’s content.
And as they grow, if they’re hustling and really growing out their business or their portfolio of businesses, that helps your business grow, as well. The kind of formal version of that would be more of an actual syndicate. So you can find content syndicates, and these are groups of people, and the people listening to these podcasts are probably seeing some of this. You’ll see Pat Flynn, and I forget the UK guy, but they have kind of a group of people that they share each other’s content pretty regularly, and that’s more of a formal agreement to share each other’s content and attend each other’s conferences and speak at this thing or that thing. And they’re able to kind of really kind of build their audience together as a syndicate.
Ace Chapman: Yeah, I think the biggest mistake that people make with this strategy is trying to go too big, too soon. Doesn’t mean it’s not worth a try, but in your niche, trying to find the other people that are kind of where you are, and understand that they have a lot of value for you to grow your audience, as opposed to just thinking, oh, I need to get Pat Flynn to share stuff, which will be way more difficult. So building those relationships, and it’s a great strategy, because you can lead with it being generous on your side, and kind of be the first person to start to share their content, then come back and let them know, hey, it’s not a problem if you don’t want to share it. But yeah, really great tactic.
Justin Cooke: Yeah, man. The second one we’ll talk about today is multi-channel selling. And this is typically around a product, whether it’s a physical product or an info product, or possibly even a service-related business. And this just involves testing and scaling additional sales channels for your individual product or service. Some places we’ve seen this effective is, you have an Amazon FBA seller, and they say, “Look, I’m going to start listening. I’m going to figure out the Ebay platform”, or, “I’m an Amazon FBA seller and I’m going to go to the UK or the European markets, I’m going to check out, see if I can get on the house partner network.” And if it’s an info product, maybe launch it on Corsaro or Udemy, or something like that, and you’re looking for new additional channels.
So it’s just basically, you already have kind of the sales channel that’s working. Maybe you have a couple of them and you’re looking to really expand them, and so you look for kind of third, fourth, fifth generation partners that you can work with to get your stuff in front of their audience.
Ace Chapman: Yeah. I love this, when it comes to informational products, because you can change the actual product, and then be able to sell it in different forms and in different channels. So if you have a product and it’s a physical product, basically, if you can sell it through FBA and stuff directly, you might go to somebody else and they’re willing to wholesale your items and sell it to their audience. But with informational products, I mean, you can take that same information, that video course, turn it into a coaching program, turn it into a book, it just goes on, and on, and on in splitting those things up. And so that’s cool to be able to go through multiple channels in different forms.
Justin Cooke: It was using this approach that, we had a guy that is, years ago, but I think he was one of our first retreats, and we met him, great dude. But he bought a small e-commerce business from us, I think it was $25,000, $30,000, something like that, ended up using this kind of multi-channel selling, and found a couple of channels that were very, very effective. And I think, two years later, he was at the retreat again and was telling us how he’d done. Business was probably worth at that point, I think this was about a year ago, maybe, $750,000, $800,00. So it had gone from $25,000 to $750,000, like a 30X growth in two years.
So I mean, these can be super-effective. I’ve seen this, that’s, I think, an exaggerated example, it’s a very large example, but I’ve seen people 2X, 3X, 4X their business through channels, particularly in the e-commerce space. I know it’s very effective there.
Ace Chapman: Yeah. I have another example with a client, and it was actually a deal that you guys, we did with you guys, and so we bought the business. It was in a herbal space that also had something with, it kind of was in a festival-type space. They had sold the product online, and he started going directly to these festivals and selling it, and also getting people on some recurring buying, and same thing. I mean, the business was originally like a $50,000 business, and it’s easily now $300,000 business. So sometimes it could just be thinking about a channel that nobody else is considering, like especially in today’s day and age, let me go out in person and sell something, as opposed to the keyboard jockey.
Justin Cooke: Dude, that’s hilarious. Number one, I know the business you’re talking about, and number two, I didn’t even know you were involved in that business. That’s so funny. But yeah, dude, that’s, yeah, it’s around 300,000 now? Did they add some recurring to it?
Ace Chapman: Yeah, they were doing some recurring. I don’t know how big it is, but anytime you can get those folks on a little bit of recurring, that’s a great thing.
Justin Cooke: Yeah, man. That’s sick. All right, man, let’s talk about our third kind of growth strategy, the conference and trade show, and possibly retreat approach. So this is just basically where you or people in your company are attending, or even setting up or running, conferences, trade shows, and retreats. And this is in and around your industry, and for your customers or potential customers, et cetera. Where we found kind of this conference approach, the trade show approach to work, is when you have a really unique angle on your competitors. Either you’re doing something significantly different, something that’s kind of new, that’s kind of an iteration of what’s being done, and going to these kind of trade shows and conferences is a way for you to kind of get the word out there in the industry that you’re doing this.
If it’s easily replicatable, often you go to those trade shows, those conferences and you’ll see them add that on. If it’s not, then it can really give you a unique advantage. It may get your name out ahead of them before they’re able to kind of replicate it. It’s really helpful when you have a premium price point when you’re attending these conferences and trade shows, because you’re going to need the money to pay for this growth strategy, which can be quite expensive, depending on your industry. Attending conferences, definitely running conferences can be pricey.
Ace Chapman: Yeah, it’s pricey, and obviously, it takes some time. One of the things that I spent a lot of time doing early on and then kind of got out of the habit of, was trying to go to as many conferences as possible, and the relationships that you build, it’s just crazy. I mean, the last couple weeks I had a lady who reached out that, I met her at a conference probably four or five years ago, and something came up, it was kind of in my crosshairs, and she reached out and basically kind of wanted to engage us to help her with some stuff. But, you know, those things just keep on giving for years and years, so it’s a great strategy.
Justin Cooke: Yeah. They can be. Especially with conferences, and my approach to conferences in general, is that I’d rather be at the right conference than the larger conference, right? I mean, there are some massive conferences out there, where, like, “Oh, if we just got there and we just made the right connections, we just got our name out there, it would be so helpful and so good.” But you know, it’s kind of a gamble. Maybe it’ll work, maybe it won’t. I’d rather go to where I know our customers or potential customers are, even if it’s in a smaller group setting, because it’s just typically more effective. I’d rather be, not a big fish in a small pond, but a big fish in a medium pond. That’s generally kind of my approach.
Let’s talk about some of the tactics and examples that we’ve used and that you’ve used well. And one of the things we do is the baller party approach. And that’s a weird way to put it, but basically, if the conference is on the weekend, it’s on a Friday, Saturday, Sunday, then on a Wednesday or Thursday before the conference when people are kind of arriving or whatever, we will plan this baller party, and we’ll get in touch with some of the speakers, some of the attendees that are in our audience, or customers, or potential customers, and kind of get together a really cool group of people, and then ball out.
So we’ll get a limo, and we’ll get bottle service at the club, we’ll get cigars and scotch, and kind of get this awesome night planned, and then take them out on the town and show them a really, really, good time. A lot of times, depending on the conference, obviously, a lot of times it actually costs less than some of the sponsorship packages, but the great thing about it is you get some of these thought leaders, some of the speakers, some of the already-vetted attendees that are there to have a really good time, and really kind of set the conference off right. And it gets them talking about you throughout the conference.
So we found some success with that. We’ve done that at quite a few conferences this year, and plan to continue carrying that out. We also, it’s important to know if you’re kind of throwing a conference for yourself or for your industry, that it might end up being a loss leader for you. It’s not unlikely for them to lose money, or kind of barely break even. But if you can spend every dollar that you’re spending there well, and try to really provide value for the attendees, and that means getting discounts, trying to get down every kind of bill that you can, and squeeze out every bit of value you can out of the vendors that you’re working with, then you can throw a really good time for your attendees and give them a ton of value. And that helps you attach your brand to the industry, to the trade show, to the conference.
It can be your brand out there, rather than your competitors.
Ace Chapman: Yeah. Those events are really great. When I’ve done the Deal Maker Weekends in the past, obviously, you guys have the Empire retreat, [inaudible 00:18:47], one of the things that happens is, obviously, you’re building a relationship with the people that are there, but it gets you in front of your whole audience. So just them knowing that you’re throwing that event, then seeing the posts and that kind of thing from other people that are in your market and in your niche, it just keeps you front of mind, even outside of the work that you do for the event and the attendees that are there.
Justin Cooke: Yeah, man, I like the name, Deal Makers Weekend. That’s a good one, buddy. That’s pretty cool. I know I’ve seen the pictures and some of the videos you have from that, looks really cool. Do you set it up? You have someone that sets that up for you. It’s a lot of work, though, isn’t it?
Ace Chapman: It’s a lot of work.
Justin Cooke: It is. All the coordination that the details, we’ve got a guy, Mike Swigunski, on our team that is absolutely fantastic, and I’m throwing his name out there, give him a little props, man, because the guy, he works his butt off to make these things happen, and it is not easy. So when it pulls off and it’s really cool and really good for the attendees, it’s an awesome experience.
Ace Chapman: Yeah. People ask me all the time, “Why don’t you do more Deal Makers Weekends?” It’s like, “Because it’s a lot of work.”
Justin Cooke: That right, man. We were talking about that just recently, we’re like, “Should we do maybe two of these get-togethers, retreats a year?” And we’re like, “Ah, I don’t know.” Because have our whole, not our whole team, but our management team there, and ah, it’s just a lot of work. I’m happy to do it, I’m just not happy to do it all the time.
Ace Chapman: Yeah.
Justin Cooke: That’s like our fourth growth strategy, which is strategic acquisitions, and we were talking about this at the top of the show. Where basically, this is buying another business that closely aligns with or adds value to something one or many of your businesses are already doing. And this tends to work in niches or industries where there’s cross-selling opportunities in niches where maybe you’ve already got the hard part solved, or part of the hard part solved. This might be, you already have traffic and customers that would be interested in the product of the business you’re thinking about buying. You buy that business and you already get their current customers, along with all the new customers you’re going to provide right away, immediately after purchasing the business.
So you can immediately have that business add value to your current customers, and effectively make more money.
Ace Chapman: Yeah. So one of things that we already talked about was, when you got a couple businesses, and they’re in a niche, you can do cross-promoting. And if they’re in the same niche, that’s great, but there’s also the benefit that even if they just have the same business model, you’re able to leverage economies of scale. So you can use those same people, resources, and [inaudible 00:21:14] people on those businesses and save money even if you may not be able to cross-promote and make more money.
Justin Cooke: Yeah. If you’ve got a team of customer service agents that are already working on a business that you own, and this new business you’re purchasing is really going to need those agents or already has a team, whatever, and you can just basically leverage your current team and kind of bake that into your organization. I mean, that’s, you’re making your team more efficient, and you’re cutting the costs of applying those agents into the business. So that can definitely make some sense.
All right, man, let’s talk about our fifth and final point here, which is conversion rate optimization. This is a great growth strategy, and this is basically just testing through your site to get more conversions out of the traffic that you already have. So you’re getting visitors, you’re getting customers, but by making some tweaks to your business, to the funnels that you have and you’re using, you just get more customers or the people that are already coming. This tends to work when you have higher traffic sites, higher traffic businesses with less customers or kind of lower conversion rates, whether that’s because of the high price point or it’s because of kind of a lack of understanding of what converts.
And one of the things that we found where this is particularly effective, is when the business was built to run out of love or passion, or it’s someone’s passion project, or it’s something they kind of built from scratch and put their blood, sweat, and tears into because they love the niche, the industry. A lot of times the people that are in those businesses that love those businesses and love the subject, aren’t exactly the best converting, and sometimes feel icky about trying to really optimize for conversions, right? Because they’re like, they love, they’re not in business for the business, they’re in it for the love or the passion of it.
And so by applying just some conversion rate methodologies that are effective, you can just squeeze a lot more out of that turnip.
Ace Chapman: And I take it for granted, because if you’re somebody who’s listening to this podcast [inaudible 00:23:10] under podcast, and you think that everybody knows very basic things, especially when you get into a larger business. And you know, we’ve bid a seven figure deal recently, where the owner of the business had a deal to collect emails and was selling them for 50 cents apiece during a certain period. So he wasn’t collecting emails before that, he put up a popup and was collecting emails, collected a bunch, made a ton of money.
When the buyers for those emails were done with that campaign, they reached out and they were like, “Okay, that’s the right [inaudible 00:23:42] campaign, all your money.” Great. So I’m like, “Okay, great.” And then my question after that, obviously, is, “All right, so how has the collecting of emails gone since then?” And his response was, “Well, we stopped because they didn’t want to buy them anymore.”
And you know, could, what, but you know that these are valuable. So there are basic things that you don’t want to take for granted. You need to conversion rate optimization, don’t just think, oh, well, this person has been running the business for five years, surely they’ve done A/B testing, you should go in there and start to test as much as possible.
Justin Cooke: Yeah. I was just talking to someone a couple days ago, and the guy has a ton of visitors to his business. I don’t want to what’s the niche, I won’t say the niche, but a ton of visitors, and people to the site would kind of take these quizzes, right? And so he made his money on ads. And one of the things he was not doing was collecting email addresses at all. He would just have them take quizzes, people submit, click on the ads, whatever, was not collecting email addresses at all. And I was like, “That is absolutely crazy. It’s absolutely crazy.”
Offer them some benefit and they can give their email. And he was like, “Well, I don’t want to force anyone to give me emails.” Well, what if you’re offering this thing of value, that’s not a force. In fact, if you want to be really soft about it, you can offer them something of value and then have them supply their email, and even give them an option where they can say, “No, thanks, I still want it anyway.” Right? So that’s like the softest sell ever. Just try that and see if you can get some email subscribers, and I know that guys going to get a ton.
But I love hearing about businesses like that, because they’re just, I mean, you’re just like, “Oh, there is some value, there’s some gold in them hills”, you know what I mean? We’re going to-
Ace Chapman: Exactly.
Justin Cooke: We can get something done here, for sure. And it’s only, that’s the kind of trick is, I found it around people where they’re, it’s their passion project, it’s something they really love, they really, really care about. It’s just like, to say they’re in the dog rescue niche, or whatever. I mean, they’re not in that because they’re trying to maximize their profits, or whatever. They’re there because they love dogs, rescuing dogs, right? And I’m like, “Oh, why don’t you just ask for an email over here, why don’t you start emailing them a little bit about these products that are available?” They’re like, “Oh, that’s cool, we can make some money.” I was like, “Yep. That’s a good idea.”
So anyway, man, yeah, really, really fun stuff. I love conversion rate optimization, it’s definitely something we use in our business, and I know it’s something you use, as well. Let’s wrap this up, man. I think that kind of covers our five growth strategies we wanted to talk about. Again, the approach that you’re going to use for your business or your portfolio of businesses is going to be really dependent on what type of business you have and also kind of the skill sets that you’re bringing to the table. It also, I think, there’s an approach that some people take, particularly when they’re early on in their business, where they just kind of throw shit at the wall and see what sticks.
And that works for small businesses, but as you grow or as you build out your portfolio, you’re going to be more methodical, more surgical in your approach, and your kind of like marketing channels on your sales channels, because the ones that are working you’re really going to want to scale, and that can sometimes mean spending a lot of money, spending a lot of time, putting a lot of resources into those. And you want to know which ones are working, rather than just testing out a bunch of different strategies.
Well, that’s it for this episode. If you dig it, please head over to webequityshare.com and leave us a comment and let us know what you think. You can also drop us a review on iTunes, and we’d really appreciate it. We’ll be back with another episode next week where we look at how to exit larger businesses and portfolios. See you next week.
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