Our thesis at Closers.io is the fastest, most effective way to scale any high-ticket business to $100K monthly, if not more. What we’re going to cover is two phases, and we’ll keep it very simple.
Phase One: Validation
I’m going to make a bet that what I’m about to tell you, you’ve probably heard a version of this before. In fact, I would be surprised if this feels familiar. But the interesting thing is, 75 percent of those people can’t even scale past $100K a month because of this very reason.
So if you’re a full-service agency, a marketing consultant, a business coach, or any of those types of businesses, you’re probably guilty of this, so read carefully.
Outcome One: Packaging
We need to achieve three key outcomes to have what I call validation. The first one is the packaging. A good way to think of packaging is not what the offer is for, but the messaging of how it’s communicated effectively to the marketplace.
That messaging of “how It’s communicated effectively to the marketplace” needs to follow the 3S formula – that means you have to solve a specific problem for a specific person in a specific way. That 3S formula is required for any cold client acquisition you’re doing.
There are a lot of issues if you don’t have the 3S formula down:
You’ll never get cold acquisition to work.
You’ll never be able to charge premium pricing
Outcome Two: Economics
You must have pricing that initially gives you 70 to 80 percent plus margins.
When I started, I got to almost $150K-$200K a month with just me and a few employees. I was doing everything myself, but I probably had 80 percent plus profit margins all the way through. You have to have those margins in the beginning (but not long term) so that when you start hiring, you have room for those margins to come down.
Too many people start their margins so thin that as soon as they hire more people, they become a bottleneck. So instead of creating a business, they have a glorified job because they have no choice but to do it themselves; they don’t have the budget to hire somebody else or find great people.
Outcome Three: Scalability
You must have a fulfillment system that can hold enough clients to do 100 to 200 or more a month. You have to change the model if you can’t take on enough clients to surpass a seven-figure goal.
This doesn’t mean planning too far ahead and hiring out all the positions when you’re at $50k a month. Quite the opposite, actually. With the right model, you should do all the roles first in your business before slowly giving that to your team members.
If you have the right packaging and scalability but don’t have the right economics, you will have weak margins and ability to hire. If you have economics and scalability, but need the right packaging, you’ll never get cold acquisition to work. You will have constant fulfillment bottlenecks if you have the right packaging and economics but not the scalability. But if you have all three, you have validation.
Classic Bad Example
The easiest example is the full-service, one-stop-shop marketing agency. I’m well aware there are people like Neil Patel who do over $100 million with a full-service agency but keep in mind these are huge contracts they’re doing. They’re typically working with Fortune 1000 companies or bigger, and Neil has a unique acquisition system because he’s really good at what he does.
But for many of us who are bootstrapping, we don’t have that initial huge brand, so we got to do things differently. We need to have those three validation outcomes, so let’s go through the issues with the full-service marketing agency:
- Because you do everything for everybody, there’s no specific person, problem, or method to offer – making it hard for your cold acquisition to work. There has to be a problem-based niche.
- You constantly rely on referrals, word of mouth, or other networking stuff. Because you do everything for everybody, you’re not a specialist. And because you’re not a specialist, you can’t charge premium pricing, so your margins suck, and you don’t have the profitability or skill to hire a team. You end up doing everything yourself and get burned out.
- Because you do everything for everybody, the client journey is different for every single client. There’s no standardized, one-client journey for the business.
- You typically have to outsource, which is very expensive. On top of that, it’s hard to find good outsourcers that outperform what you could have built in-house. So you either have to outsource, which is expensive, or do it all yourself.
- You’re also likely to be selling all the clients yourself because they’re coming to you with different types of problems. Every single deal is customized because you have no standardized diagnostic and prescription process to teach your salesperson.
Bad Example Solution: Conveyor Belt
If you are experiencing the same problems as the classic bad example above, you need to have what I call the conveyor belt.
To establish one, you must ask yourself: what makes what you do superior to everybody else? Ask what common mistake people are making in the marketplace and what you do differently to have a different result – now that’s the packaging.
And for the economics, you’re now a specialist, so you can charge more. Your margins are better, and it’s easier to hire a team.
As for scalability, everybody’s coming in with the same problem and wants the same result. Now that you have the conveyor belt, we can create a standard operating procedure for every part of our fulfillment process. You can also teach your team systematically how to do it. You will do the same thing every time, so the conveyor belt streamlines things and eliminates complexity, improving your margins and releasing fulfillment bottlenecks.
Now that you have the conveyor belt, you can develop an offer with the right packaging, economics, and scalability. Once you’ve sold it yourself 10-20 times, then we can go on to phase two.
Phase Two: Optimal Selling System
I got this from Michael Masterson – the pen name of Mark Ford, the co-founder and business partner of Bill Bonner. Agora is a $1.5 billion company and the outcome of the optimal selling system.
Phase two is to find a consistent, repeatable, predictable, and scalable way to generate new business revenue on an ongoing basis. You might be thinking, “Duh, okay, I already know I need to find a way to consistently generate new business, new interest, and new revenue.” I’m sure you do, but similar to phase one, let me just say if you’re below three million a year and your bottleneck is leads, there’s a 90 chance that you don’t know how to do this correctly.
There are two components of the optimal selling system or OSS: we need consistent, repeatable, predictable, skill way to generate interest, AKA leads, and consistent, repeatable, scalable way to convert that interest into business into dollars.
Imagine a diagram: first, you’re throwing out a signal to the marketplace that generates interest. Then that interest gets found in a conversion mechanism, and a portion of that interest gets converted into business. Once there’s an increase of inputs into the system, there’s a correlation of increased output.
The other thing is to have an OSS, we want a conveyor belt. But to do that, we have to have a specific problem for a specific person in a specific way; if we don’t, our signal will not work for cold acquisition.
Classic Bad Example
Imagine a full-service marketing agency: how do they get business? Is it through word-of-mouth or referrals? Maybe they go to an event here and there, doing trade show networking and getting inconsistent business. Even if this company is doing a million to two million dollars a year, they will be bottlenecked by not having an optimal selling system.
What’s happening is the owner is doing everything themselves: they’re doing all the sales, they got to direct all the fulfillment, and the business is just so dependent on them. At the end of the day, as Robert Kiyosaki says, you want to have a business that doesn’t rely on you even if you leave for six months.
Good Oss in Practice: Generating Leads
For a good optimal selling system in practice, I’m going to credit Alex Hormozi. He talked about the six ways to generate leads: word-of-mouth referrals, affiliates, owned media, earned media, paid media, and outbound. Any of them could work and be a system, but some are better than others.
For this to work, you need a predictable system where you know how many referrals you will get per client. Preferably, that should be above 1.1 per every client enrolled. Technically it could be below 1.1, but your churn would have to be very low for you to scale with referrals.
However, word-of-mouth referrals are very difficult and they’re not predictable. It’s not something I would rely on as a strategy, but that doesn’t mean you shouldn’t do word-of-mouth referrals. This may not be the proven pathway, but that doesn’t mean you shouldn’t accept referrals.
To make affiliates an optimal selling system, you need to find new affiliates and get them interested. You must convert, onboard, and activate them into successful affiliates. Then, you have to retain them and repeat that at scale.
That could be an optimal selling system, but I haven’t seen this done with service-based agencies. Jason Fladlien is a good example, but I can’t think of a service-based or a coaching/consulting agency business that used affiliates to scale to $500k to a million a month. However, I’ve seen this done with supplements, software, and lower-ticket products, so this process does work.
I work with two of the biggest brands in the personal development and info industry, who are doing nine figures a year. Let’s put it this way: if they launch a new offer, they could fuel the offer just from their email list and the media they own. That’s because their email list is over three million people strong.
Now if your agency is just starting and you’re a specialist like an e-Commerce or CRO agency, you’re probably not going to have a million-person list. You’re probably not even going to have a hundred-thousand-person list. Owned media is very hard for a lot of us to do, but it could be what fuels your optimal selling system.
Similar to owned media, earned media could be an optimal selling system. But to get a consistent conveyor belt, you need over a million followers. You could have less, I would say about 300k-500k+ very active and engaged followers, but it’s still not ideal.
Let’s say you have 500k followers and put out three videos weekly on YouTube. You’re getting really good views and it’s filling your sales calendars consistently – that’s great! That’s technically a system, but that system depends on you pumping out three videos a week. If you went away, would you still have that business? Likely not.
Every once in a while, I have clients with a million YouTube subs who never need to touch any of this other stuff. They just leverage their brand, but for most of us, this is different from the proven strategy of what we will do if we start from zero.
Five to ten percent of my thousand-plus clients have reached a million yearly through cold outbound. That could be cold emailing people, cold calling people, or called DMing people. If I took every 10 of my clients at $100k a month, I’d say one of them got there through cold outbound.
Cold outbound works because when you raise the inputs into the system, you get more outputs. You can add more dialers, make more dialers, build new sales teams, and create new DM teams; as you build that, the inputs increase and you get more outputs. This could quickly scale to eight figures just through good old-fashioned cold outbound.
About 90-95 percent of my clients who get to seven or eight figures use paid media, so take that with what you want. I would focus on a strategy of paid media.
Paid media is so effective because you have your ad spend input and the creative and the VSL in the funnel. The more ad spend you put in, the more outputs you get. It’s not a corollary one-to-one input-to-output because of diminishing returns, but it has inputs-to-output like nothing else I’ve ever seen.
You only need to do it once and reap the benefits for a long time. Paid media is fast, especially compared to other methods, and it’s accessible; nowadays, anybody can run Facebook, TikTok, or YouTube ads.
The question then becomes, what’s the best paid media model for your business? We use a very high-level model that got us $2.8 million in cash collected in October 2022. I call it the Marketing Development Reps, or MDR model, and there are three core variations of this funnel, but they all follow this basic format:
- We run an ad
- We collect the lead in two different ways:
- Direct – we go out to the marketplace with our messaging and state our offer. Or we’ll tell a story and allude to a secret that’s not necessarily communicating the intent of our offer, but it’s something that somebody in the market wants.
- Indirect – we send a 20-minute VSL, and its title is very valuable to the prospect but doesn’t explain anything about our offer.
- We run our conversion mechanism, which could be a two-hour-long live webinar where we’re starting directly by giving a bunch of value, and then we CTA.
You’ve probably heard of all that before, but here’s where we get a little different: we email every single lead we get. You’re missing out if you’re not emailing your list 40 times a month. We don’t email our leads daily, but we do it 40 times a month.
We popularized the MDR process so much three or four years ago that we now use an outbound MDR team. They’re like outbound reps, but they capitalize on leads generated by marketing, and within 5-10 minutes, they call and text every single lead we collect. Most of the revenue we do is always from our outbound setting team capitalizing on leads generated by marketing, and when we switched to this method, our business exploded.
Now you know that phase One, Validation, is the foundation to lay your bricks upon. You now also know the most proficient way to get your phase two, Optimal Selling System, solidified. And finally, you know that the MDR model is the model that we use to scale to $30+ million in 26 months.
With all that information at your disposal, it’s up to you to analyze your business model and determine the best way to implement these phases. If you do everything right, you’ll see results as your business grows.