For a while now, I’ve been listening to a podcast by Jay Abraham. A guy who is often anounced on business seminars as the 21 billion dollar man. A strategic thinker, coach who has a rate of $200.000 per day if you want his advice. He can do that, because he is really really good at coming up with ways for businesses to let them grow at an exponential or better rate. You can find a lot of free material on his website abraham.com. He is very American in his communication, but if you can stand that, then you will find quite a few interesting new ways of thinking. One of these is: Do not settle for linear growth. Now, why is that?
Most businesses have only one method to achieve growth. If they sell a typical Business-to-Business product, then they likely have salesforce that likes to visit both customers and prospocts to explain new opportunties. If the business is an app on IOS and Android, then most likely a lot of Facebook advertising is the most important growth engine. The average Restaurant will give out coupons for a cheaper meal, and so on.
Still a decent number of businesses might have a second growth strategy, but it is generally not that important and it doesn’t get the same attention as the first one. Also, this is usually what most other businesses in their industry do.
This is why most businesses have a linear growth pattern. All is dependent on the one growth strategy. If it works, then they grow, if it does not, then they don’t.
So, how do you achieve exponential growth or even better?
The easy answer is growing through multiple ways of growth. So let’s look at a few of those.
Last week I wrote a blog about the fact that there are the only 3 categories for growth. But within those, there are obviously multiple ways to achieve that growth.
The first thing you should do is look at other businesses in your industry and see how they grow. What is the most common way to achieve growth. As this is likely something that customers expect of you, it is usually not a bad thing to use this method for growth, but you will have a lot of competition.
Secondly, look outside your industry, target market or business model. Particularly industries that are somewhat similar, but have a totally different approach to attracting new customers. Or a different way to increase the size of the transactions or a different way to get more frequent transactions.
Thirdly, take a hard look at your business and try to define every single way that influences one of the 3 categories for growth. Because if you can achieve 25% improvement in 4 different ways, then this results not in a 100% growth, but 144% growth. Usually doubling your sales/marketing budget will not double your business. But find multiple ways to grow your business and you might triple your business with ease.
Fourthly, find ways to leverage the assets of other businesses and organisations, particularly when they don’t optimally use those. If you like to get some awesome examples of that, then you should definitely listen to a few podcasts by Jay Abraham.
Let’s compare affiliate marketing with a dropshipping business
First the affiliate marketeer. I am quite involved with the CTP community, which has shown me a lot about Affiliate marketing and how an Affiliate marketeer seeks to grow their business. So this is where my info on this topic comes from.
The most important asset of an affiliate marketeer is their email list. This is people that signed up to receive emails, usually in return for something. Often a free guide, a free format with 5 steps towards some goal or just a promise for future information.
Why is this so valuable? These people did sign up, which is an active choice and they provided their email address. This is something that people don’t easily do, unless they see some reward for it. Also a lot of people still read emails daily, so this is a powerful way to reach people and after people signed up it is free. I expect that even a well targeted Facebook add is not going to be as effective as sending that email, while it also costs you money.
This email list becomes a lot more powerful when the affiliate marketeers are providing value through the emails that they send. If the emails are providing valuable information and only every once in a while give an opportunity to buy anything, then it is possible to even become the trusted advisor for the person receiving the email. This is called content-marketing. Providing value first and making sales second. This is actually intended to increase sales by the way.
The affiliate marketeer then needs to build their own brand, not just sell somebody else’s product. They do this usually through blogging, posting that to social media etc.
Then another very powerful thing in affiliate marketing is the possibility to earn from the referrals of your referrals, sometimes up to 10 levels deep. The reason some affiliate marketing tools do this is because it encourages the affiliate marketeers, to teach their referrals how to become an effective affiliate marketeer. And through that, everyone benefits.
How about a dropshipping business?
A dropshipping business is also in the business of selling the goods from another business. It can be one source of goods to sell or multiple. The dropshipping business also earns a share of the profit or sets their own prices and then makes a margin. They could even partner with a fulfillment business that takes all the responsibility for handling the orders and the dropshipper is the one to market the products only.
This allows them to buy goods from a manufacturer in China, have it sent to the fullfillment business which handles the orders coming in and all the dropshipper does is having contact with customers and marketing the products. Usually through their own webshop.
Some dropshipping businesses fight for having the lowest prices, but you need really high volume to make that work, so I think this is quite uncommon.
Instead the dropshipping business also creates their own brand, so that customers will come back and trust that the new products that are available are as good a deal as the last product they bought. This is really hard though, since most people will use Google to search for the lowest price possible.
So a lot of dropshipping businesses do reviews of new products, in combination with regular use of discount codes. Also some are specialized in products that are hard to get, which means that in the niche they operate in they hardly have any competition. Which is what you want.
What the dropshipping business needs is people coming back to their webshop, even willing to pay a (small) premium because they trust that the product is going to be good. Simply because it is available on this website that they trust. Or that when the product has a fault to it, that they will be compensated for that in some way.
Let’s make the comparison
Both these business formats are online and can be done by a single person from home. Both need to build their brand and a loyal group of customers who trust the value they provide. Both can benefit greatly from a content-marketing strategy.
What is very different is the extreme focus the affiliate marketing business has on getting referrals. Especially referrals that have good relationships with their referrer, are worth their weight in gold.
Most businesses outside affiliate marketing have no referral strategy, even though it has scientifically been proven that referrals are much more likely to buy, spend more money and stay longer with your business. This is why Jay Abrahams has collected A couple hundred referral based strategies to grow businesses in any industry.
If you have a dropshipping business, you need to really think hard to come up with a way to incorporate some referral strategies in your business. This potentially will create a massive growth for your business, because most of your competition is either not doing this, or has only 1 referral strategy.
Also it is vital that you build an email list, because this allows you to reach your customers without spending loads of money on Facebook or Google ads. And the people on your list are more likely to buy, because they already trust you. Provided that you have been sharing valuable information through content-marketing before.
What an affiliate marketeer can learn from dropshipping businesses is the importance of having your own website. Not just a free splash page where you market someone else’s product. It is ok to start there and get some money in the bank before you start investing. But it should be your goal to have your own website, because this will help you tremendously in building your own brand with loyal customers and a good platform to share that great content-marketing material you made.
Also an affiliate marketeer should be selective in the products they market. A dropshipping business that is looking long-term cannot afford to sell a bad product or a product from a manufacturer that comes with bad service. An affiliate marketer should also look at the products they market in the same way. Is this a product that I want to be connected to my brand.
I have signed up to a few affiliate marketing tool email lists and it is not uncommon to see in those emails something along the lines of: “pony-ranch-list-builder” has been added to our product. This is an epic way to build your email list and you can sign up here and get 25% discount on the premium package if you decide today.
This is quite manipulative and you have not told me anything about this program, so chances are extremely low that you will convince me to sign up. I don’t believe that a succesful dropshipping company would sell a product this way.
If it is an epic new product, then I expect them to test the product extensively, give a full review of the product and how it compares to other products. How to use it effectively and how to make the most of what I am buying.
Conclusion
If you start looking at your business in this kind of way and compare it with other industries that have other ways to grow their business. Then you can improve your business on multiple fronts and that can create exponential growth for you, rather than linear growth.