How to Grow Your Business 500% in 5 Years

“For us, our most important stakeholder is not our stockholders, it is our customers. We’re in business to serve the needs and desires of our core customer base.” – John Mackey

When you think about growing your business, you probably think about acquiring new customers. That is usually the right strategy. But you can also increase sales by persuading your existing customers to spend more money with you. One way to do that is with “back-end” sales – selling your customers more specific, and usually higher-priced, versions of the first product they bought. Another way is with “ancillary” sales – selling them similar and similarly priced but different products.

At a recent marketing seminar sponsored by my largest client, SW, the CEO of a European division, gave a great presentation about ancillary sales. She explained that her division went from $5 million to $22 million in five years, based on a policy of launching about twice as many information products as they were accustomed to launching.

To produce more products in the same amount of time, she knew would have to either hire more people or increase the speed at which the new products were developed. “I didn’t have the budget to add new people,” she said, “so I opted for speed.”

When SW introduced the policy, a few people quit because they didn’t want to do the extra work. “But most everybody else was excited by the challenge,” she said. “It turned out that once we got the system figured out, we were able to have more fun producing more products in less time.”

What SW did impressed me. Borrowing from something she had seen another division do, she chucked the old, laborious, two-year launching program and replaced it with a streamlined, ready-fire-aim approach.

When they get an idea for a new newsletter, for example, they start by creating a short business plan that answers some basic questions:

  • How is this product new or unique?
  • How does it fit in our existing product line?
  • Who will it be marketed to?
  • What is the size of that market?
  • What is the potential size of the business?
  • What will the offer be?

This won’t tell them if the newsletter will succeed, but it will indicate whether they have made any major errors in thinking. One common mistake that even experienced marketers make is planning to produce a product for which there isn’t a sufficiently large market. Another one is projecting sales without having a realistic marketing plan based on what they know about selling similar products to the same market.

Once the obvious and avoidable mistakes have been eliminated by this very minimal amount of planning, they have a creative meeting to create a rough sketch of what the newsletter will do, how it will look, who will write it, etc.

Then they hire a writer and give him a three-month contract to produce prototype issues. They explain to him that the newsletter is completely experimental and might not continue at all if they find there is no market for it. They also explain that even if it continues, they will likely require him to change it a great deal during those three months – and that even if they are happy with the changes, there is no guarantee they will use him to write future issues.

With that accomplished, they locate a good copywriter and have him produce a relatively short (four to eight pages) sales letter to recruit a test panel from their existing subscriber base. They run this ad on their website, offering 100 readers the chance to get the new publication for free in return for their willingness to provide feedback.

They usually get several hundred volunteers right away. They select 100 of them and begin fulfilling the new service by Internet delivery (even if it is intended to be produced in print later on).

“During this time, we ask [the sample subscribers] a lot of questions about what they like and don’t like about the newsletter,” SW told us. “And at the end of the 90-day trial period, we bring our team together for a full-day focus group.

“We end up with a much better product than we had at the beginning, because of all the specific feedback we get,” SW added. “And we also have better ideas about how to sell it.”

This is a superb, ready-fire-aim approach to launching information products. Aside from the fact that it results in a better, more saleable product, it cuts their start-up time in half – from six months (which was already pretty good by industry standards) to less than three months.

I love the idea of writing a sales letter to recruit a panel of sample subscribers, because it forces the publisher to think about all the important selling considerations from the get-go:

  • The promotion’s “big” idea
  • The product’s “unique selling proposition”
  • The prospects’ core emotion as it relates to the intended sale

The sooner you begin thinking about these and other key marketing questions, the better. They are the questions your prospects are going to be asking themselves when they see the ad you will ultimately be using to attract new subscribers.

Another thing I love about this approach is the idea of launching the product through your existing customer base – because your existing customer base should always be your best market. If the new product doesn’t sell quickly (especially when you’re “selling” it for free) to your house list, it almost certainly won’t work when you advertise it elsewhere.

I also love the fact that there is little cost involved in producing the product – nothing but the three-month contract with the writer. A conventional info product launch is expensive, because the publisher has to gear up for print. even though the initial quantities he’ll need will be very low.

I like, too, that the writer can get gradual feedback directly from a group of sample subscribers over the course of 90 days. That is much better than getting speculative suggestions from an editor who may know no more about how future readers will react to the newsletter than the writer does. Getting writers to cooperate with suggested changes is always difficult. Done this way, I’d think it would be much easier.

All that feedback has got to give the advertising team plenty of strong, new ideas for future marketing campaigns. And out of 100 free subscribers, they are likely to end up with several dozen compelling, personal testimonials on the value of the product – some of which might be expressed with dramatic stories that can be used in later promotions.

One more thing about this approach to new-product development that I want to mention: By announcing to your house file that a new product is being tested, you create anticipation. And, to keep them interested, I would recommend that you continue to update them on the progress you’re making with it, including the changes you’re making. That way, when the product is finally released, many of them will subscribe.

I’m going to recommend this program to my other clients. You might want to adapt something like it to your business, too.

[Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]