The Five Evolutions of A Business: A Digital Marketer Case Study – Lessons Learned While Pivoting, Re-purposing + Repositioning A Good Company Into A Great One, And An Unsaleable Lifestyle Business Into Multiple High-Value Acquisition Candidates
In this multi-part case study, we will take a close look at the evolution of DigitalMarketer from lifestyle biz-opp promoter into a sought-after high-value professional business.
Getting there wasn’t easy, and the journey is still incomplete, but the 5 lessons we learned along the way should prove invaluable to any of you who may be 1) wrestling with decisions about which direction is best for their business, 2) uncertain about which audiences to keep and which to let go, 3) confused about how to evolve their branding and company image, 4) perplexed as to how to hire wisely, manage their business, motivate and compensate their teams, or 5) feeling a little bit lost and seeking direction on how to get from where you are now to where you want to be 3 to 5 years from now. Take heart, because we’ve been there and we can help.
In this case study, we will explore the 5 evolutions of a business and their related corollaries. They are…
The First Evolution: Up-Level Your Brand
Just over five years ago, I attended my very first Traffic & Conversion Summit as a partner in the Digital Marketer family of companies. That event, in 2013, was the first time I had an opportunity to participate in the event as an owner.
While almost everything about the event (speaker line-up, panels, AV, production, sponsors, offers, etc.) had already been in place months before I came on board, we still didn’t have a big name to help promote the event. Perry was lobbying hard to have a celebrity speaker, and he and I convinced Ryan and Richard to move forward with the addition of a celebrity (actually a set of celebrities) to the event.
That’s how William (“Bill”) Shatner came to T&C, and Tucker Max, Guy Kawasaki, Tim Ferris and Kamal Ravikant as well. I was able to use my celebrity broker connections from my infomercial days to secure Bill Shatner and Guy Kawasaki, and Ryan pulled some favors and got his buddies, Tim Ferris, Tucker Max and Kamal Ravikant to stop by the event and speak for free.
Corollary 1: Tap your network to associate your brand with up-market personalities and brands.
Ryan and I were able to leverage our existing network to connect with and secure these well-known personalities who had independent followings and great brand equity.
We all agreed that by adding celebrities to the T&C line-up, we could reposition the event from just another Internet Marketing event with cool content into something more. This was an intentional up-leveling of the quality and brand for DM and T&C through differentiation and association with strong professional, corporate friendly brands.
Corollary 2: Stop short-term thinking profit-grabs that can damage your brand value in the long-run
The DM and T&C of 2013 were outstanding companies, brilliantly conceived and developed by Ryan, Perry and Richard. However, DM’s offers tended to be focused on business opportunity seekers, making money and “hacking” the system.
One of the biggest problems with the nature of the courses DM was selling in 2013 and 2014 was that they were specific to new platforms or new features of new platforms, so they didn’t really have much of a shelf-life.
That is, you couldn’t create a catalog of evergreen products because things would change, buttons would move on platforms, platforms would evolve, and hacks would stop working.
Without a catalog of products to supplement new offers and launches, we needed 10-14 new products per year to allow for the flops and keep the money coming in to support the team and owners.
However, this market was very tempting because it was relatively easy money. Perry and Ryan could look at whatever the new hot thing was in online marketing and spin out an offer for how to do it or how to make money at it in a few days.
At first blush, you might think that this quick cash from a series of great offers and great products put together in almost no time would make an amazing business. And, if you are not thinking long-term, or if you really only want a “lifestyle” business that makes several hundred thousand dollars per year, you’re right!
But, it was a massive burden to conceive and create 10-14 new products, 10-14 offers, 10-14 hooks, 10-14 sales letters, 10-14 email sequences, etc., etc. in a single year. Add to that coordinating support for so many products, and wrangling affiliates to support each offer and then maintaining each product as a stand-alone course.
Oh, and don’t forget, not all of these hot new offers actually appeal to the market enough to be successful. Despite Perry’s uncanny ability to see around corners and identify the hot new thing, and despite consistently putting out high-quality products, inevitably, three or four offers per year just wouldn’t perform.
I remember sitting in the lobby of the Manchester Hyatt as we were about to kick off T&C 2014. Ryan and Perry and I were talking about the challenges of the 10-14 offers per year business model, and we decided that we needed to change it or we were going to always be limited to being a smaller opportunity-based company.
We were making money from the existing line of DM products and the continually required new offers, but it was putting a huge strain on the company. Perry was tiring of creating offer after offer after offer, and we all agreed that the company wouldn’t be able to grow much more if we didn’t take radical action to make a change.
So, we stopped selling business opportunity products. We killed the “money grab” mentality in our business and decided to focus on the long-game.
Just like that.
We stopped that profitable, but harmful and limiting, activity.
And that’s a really important lesson…
If you are doing something right now that is profitable, but it is either damaging your brand because it is out of favor with the public or the government, or it is not congruent with the future version of who you want to be or what you want your business to stand for, then it’s time to think about making the hard choice to stop doing that thing and move in the direction you want the future you and your future business to be.
Here are some possible scenarios for moving from one phase to another in your business…
- Up-level your audience. Maybe you’re selling business opportunity type products like DM was, or perhaps you sell to a newbie crowd or you offer inexpensive physical or info products to a beginner audience, or investments to small investors, or you cater to “wantrepreneurs.”
If so, consider targeting an audience that has more money to spend, is less time-consuming to support and will use or take action on the products you sell.
- Up-level the quality of your product or service. Maybe you have slapped together a course and you could take the time to improve the quality of content and production. Or, maybe you drop-ship other people’s products from China and you could invest in improving the products and making them better while creating your own unique offers. Or, maybe what you do is kind of “me too” and you are just one of a number of businesses offering basically the same thing.
The idea here is to distinguish yourself as a category of one, someone or some offering that is truly unique and valuable in your market. If you do that, you will inevitably create a more valuable company and a more loyal audience.
- Up-level your Customer Experience. Last, but not least, think about how you can improve your customer experience. Maye you have an offer or offer process that isn’t the best possible experience for your customers and prospects. Maybe you’re making good money, for now, but there are lots of unhappy customers or even the happy customers do not like the overall selling experience.
The ultimate money-grab in the live events business is the platform sale. How many events have you been to where there was an endless parade of speakers who told you all about the what and why but never shared the how, then offered to teach you the how for $500-$20,000 if you would just run to the back of the room and whip out your credit card to buy their training?
This is how most of the live events in our industry work. But they do so at the expense of the customer experience. Event attendees are hammered with so many offers that eventually they will not pay to attend these types of events, even when the events are free.
So, when I became a partner at DigitalMarketer and Ryan and Rich and Perry and I all sat down to talk about the future of our signature event, Traffic & Conversion Summit, we decided that creating the best customer experience meant no longer making platform offers.
Since that time, T&C has grown from just under 1,000 attendees to over 6,000. And, we actually make substantially more money from at-event sales now than we ever did selling from the stage.
In 2018 T&C had about 100 sponsors who paid to exhibit at the show. We sold thousands of tickets. And, DM, War Room, Print & Fill, Plattr, Real Estate Worldwide, companies that in the past would have sold from stage, each purchased booths from T&C and sold millions of dollars of products and services without a single offer from the stage.
This dramatically improved the brand and the reputation of the event and the customer experience and it all came about as a result of killing the money-grab in favor of creating an amazing customer experience.
In 2015, the second year we did not make offers from the stage at T&C, someone came up to me after one of the sessions and excitedly shared with me that he had an idea of how we could make twice as much money from the event. All we had to do, he said, was set up sales tables at the back of the room and staff them with order-form filled, clip-board wielding sales people and make offers from the stage.
He was right, and wrong at the same time. If we did that, we might make more money for a year or two, but in the long-run the customer experience would suffer and ticket sales would wane, like they have for many of T&C’s competitors, and eventually the amazing asset that is T&C would become substantially less valuable.
Following Our Own Advice…
Over the past few years, DM and our other businesses have followed the advice given above.
We decided that DM was not going to continue to be a “me-too” money-grabbing company that created how-to-make-money-doing-X type courses, and that we wanted to be a corporate training company targeting entrepreneurs who already had a successful business and their employees.
We stopped creating the types of courses we had created in the past and Richard and Ryan conceived a certification program that would provide 8 core trainings that all digital marketers should master to ensure a minimal level of competency.
DM then set about creating those 8 core trainings, crafting them in a way that would enable them to be mostly evergreen with categories like Customer Value Journey and Customer Acquisition and not focusing so much on what buttons to push.
DM standardized the quality of the courses in terms of content, value to the customer and production quality. It hired a content director, optimization director, inside sales force director and all the staff needed to make the new vision a reality.
And from that, DM evolved into a hugely valuable company providing high quality products to a high-quality audience with a unique brand personality.
You’ve seen how T&C has grown from a customer appreciation and course creating vehicle into an industry-leading expo and trade show that draws thousands of marketers each year.
At Rival Media, we have evolved from selling courses on vertical gardening to a lead generation company that provides high-quality products and services to customers across a wide variety of platforms, including printing and content agency services.
What To Do Next To Break Free From The Money-Grab Mentality
If you find yourself suffering at all from short-term vision and you know that you are in a “money-grab” mentality, then you probably also know that it’s time to make a change. While there may be a very short term blip in your income if you decide to switch from short game to long game, you can see from the experience of every single one of our companies, it is absolutely doable.
Remember, these three things can help you break free of the grip of the money-grab:
- Up-level your audience
- Up-level the quality of your products and services
- Up-level your customer experience.
Corollary 3: Professionalize your branding.
If you want to up-level your brand, then you will have to create a brand identity that reflects consistently across your media properties, products or services, and marketing messages. This means you need to intentionally “professionalize” your branding and image and, possibly, your target market.
DM literally professionalized its desired avatar, moving from at-home biz-opp wantrepreneur to 1) businesses and entrepreneurs that were already successful and had existing employees and teams, 2) those who worked for such businesses, and 3) digital marketing agencies serving such businesses. These avatars were literally professionals, where once they had been those seeking to make money online.
To appeal to these new avatars, DM changed its branding, upgrading the copy and imagery to match the new DM character diamond as a quirky and somewhat impulsive marketing savant that insisted on proven step-by-step marketing technique breakdowns while irreverently bucking the system.
Ryan and Richard developed brand guidelines and implemented the professionally cartoony look that DM has to this day. The quality and all aspects of the DM website, logo, imagery and copy were upgraded to reflect the new, more professional brand image.
Gone was any copy with income claims, replaced with case studies. Gone were make money from home offers, replaced with certifications in core business areas like “customer acquisition” and “customer value optimization.” Also, noticeably, gone was the exclusive focus on Ryan Deiss as a “guru,” replaced by Ryan Deiss, as a spokesperson for DigitalMarketer.
DM also positioned itself as THE authority in the field of digital marketing by offering its own testing, certifications and credentials, a jobs board, a “Certified Digital Marketing Professional” designation, and a “Certified Partner” program licensing DM content to third party digital marketing agencies who could then sell that content to their customers. All of this was intended to and succeeded in up-leveling the DM brand and image with significantly higher product offerings and branding.
Just today I saw one of our War Room members going through a brand and image professionalization. Tucker Max announced that he was changing the name and branding of his “Book-In-A-Box” brand to “Scribe.” The name evokes a significantly higher level of service, and it will help Tucker up-level the quality of his customer and increase the appeal of his brand as an appropriate strategic partner for bigger businesses. Great job on that professionalization Tucker.
T&C up-leveled along with DM. Messaging for T&C 2014 targeted DM’s new avatars described above. “Make money” gave way to highly-vetted professionals delivering case-studies, Two “Shark Tank” sharks spoke, sponsor booths replaced platform sales, 1 main stage became 3, and the production budget for AV and experience was almost tripled to create the environment of a world-class event.
That year, our sponsor team sold 10x the sponsor sales of the year before, and those sales steadily increased over the years with 2019 sponsor sale projections topping $2.3 million, a 57x increase over 2013 sponsor sales.
End of the First Evolution
In this installment, we explored the First Evolution of a Business, which is to Uplevel Your Branding. This can be done by tapping your network to associate your brand with up-market personalities and brands; stop short-term thinking profit-grabs that are damaging your brand in the long-run, and professionalize your branding by implementing brand guidelines, improving your copy, imagery and messaging to appeal to a better audience, better strategic partners and higher-level potential acquirers for your business.
In the next installment, we will explore Evolution 2: Play Chess Not Checkers: Moving From Reactive to Strategic Thinking.