Last month, as we witnessed the world confront its first global black swan event in generations, we looked at rational actions to take in the midst of near-total uncertainty.
At the time, while there were certainly some opportunities emerging already, focusing on shoring up cash and taking steps to simply stay in the game seemed like the smartest immediate response.
A lot has happened since.
And while we’re surely still in the early stages of how this all plays out – the storm will be raging for some time – what’s becoming clearer is where the winds of change are blowing the strongest.
In plain English, we are witnessing entire industries being forced to undergo rapid paradigm shifts, virtually overnight – where businesses of all shapes & sizes are condensing “5 year trends” into frantic 3-month sprints.
But such a rapid evolution is anything but predictable.
This is akin to sailors in times past whose ships were blown off-course to an extent that when the storm finally subsided, they found themselves in the waters of a different hemisphere… along with a completely different navigational chart (the night sky).
For people like us – marketers, entrepreneurs, & opportunists of various degree – this mass disorientation has created some profound opportunities.
Of these, let’s examine what I think is the most substantial, low-hanging & perfectly timed…
Momentary Amateurs in Uncharted Waters
With the world shuttering its doors and entering lockdown, virtually every industry has had to rapidly evolve to a new indefinite reality; one where prime locations & skilled workforces have shifted from being assets to becoming pure liabilities.
Obvious losers are sectors like travel, hospitality & energy. And short of amazingly well-timed hedging, there aren’t a lot of tools in the survival kit that are effective for these sectors. Their recovery is almost entirely linked to an effective COVID-19 treatment or vaccine… that and the strength of their balance sheets.
For our purposes, the more interesting sectors are ones where survival (and maybe even growth) is possible, but only if there’s a hard pivot to digital strategy + competent execution.
In particular, tons of retailers and consumer goods companies have been scrambling to ramp up their ecommerce / DTC channels, and many are basically starting from zero.
Even brands that had some ecommerce assets pre-pandemic, but where those were more of a nice-to-have vanity project vs a performing channel, are now rushing to get those assets actually working.
And it really is a stampede of companies doing this. As in, tens of thousands daily.
Here’s a rare look behind the curtain at Shopify, speaking to exactly this:
As we help thousands of businesses to move online, our platform is now handling Black Friday level traffic every day!
It won’t be long before traffic has doubled or more.
Our merchants aren’t stopping, neither are we. We need to scale our platform.https://t.co/e2JeyjcEeC pic.twitter.com/6lqSrNUCte
— Jean-Michel Lemieux (@jmwind) April 16, 2020
Now, this isn’t overly surprising on the surface. It makes sense that millions of companies are going to rush to “go digital” for their customers in the midst of a global shutdown, wherever possible.
But here’s the thing…
As we all know, it’s one thing to launch a website or otherwise go digital. It’s another thing entirely to actually turn something profitable.
This is why most of us are well-versed in things like launch strategy, A/B optimization, abandoned cart pullback, drip sequences, OTO upsells… along with a whole host of other table-stakes strategies (to us) that are, in fact, pretty advanced to newcomers.
And there’s a ton of otherwise established newcomers who are finding this out the hard way right now – and getting their asses handed to them, accordingly.
They may have been at the top of their game in the pre-pandemic reality, doing 8 or 9+ figures in revenue (with a similarly pre-pandemic business model). But now they’ve been forced to step into a ring with totally different fighting rules – and they’re punching well below their weight class.
Now, take a moment and put yourself in the shoes of company that’s used to seeing millions in monthly revenue dry up, or shrink down to some tiny fraction, overnight. In that scenario… what are you willing to try doing to bridge the gap and survive until the world returns to normal?
Probably pretty much anything.
There are tens of thousands of (formerly) established companies in some version of this situation, right now.
Here’s how to come to their rescue, and make a small fortune for your troubles…
Million-Dollar Course Correction
Stop me when any of the following sounds familiar…
- Affiliate Contests
- Product Launch Formula
- Backend Offers
- One-Click Upsells
- In, Up, Max
- Multi-Stage Funnels
- 4-Day Firesales
- Gary Halbert
- Agora Publishing
- Autoresponder Sequences
Etc.
For most reading this, I might as well be talking about breakfast cereal. This stuff is part of our daily lives, and has been for over a decade.
But it’s important to highlight just how siloed the marketing world actually is – and how rare this type of thinking actually is outside of the IM landscape.
Talk to your average CMO at a “normal” company, and this might as well be a foreign language. Most marketing decision-makers in the corporate world live in a world of brand sentiment, NPS scores, and content calendars.
And similarly, in the emerging world of 19-year old Shopify experts (ha!) & social media influencers, what qualifies as high strategy is shockingly basic. Most have only a base-level understanding of what we’ve been doing for years, with almost all of their focus on top-of-funnel.
So if you’re well-versed in the IM landscape, and you know what it’s like to run launches, build & nurture an email list, split-test offers and drive performance campaigns that actually need to break a profit – even while this feels like common knowledge in our own industry – you should understand that this is actually a pretty rare skillset.
In fact, these direct response strategies are uncharted waters for most regular companies (and their marketing teams). But it’s exactly these strategies that can now set these same companies on a course for survival in the short term… along with a much brighter future in the long run.
To highlight the potency of this skillset right now, consider that most of these suddenly-distressed brands are in some version of this situation:
- Their established, familiar sales channels are temporarily blocked or anemic
- They’ve launched / are rushing to launch some haphazard online sales channel
- Their business is in emergency cash-preservation mode, and marketing & advertising budgets have been slashed
- They have significant but under-utilized marketing assets (email lists, social audiences, etc) that nobody has taken seriously until now
- They’re scrambling to find a temporary revenue strategy that can buy them enough runway to survive
So, to spell this out clearly… they have great products, a loyal audience, a great need for unconventional revenue creation – and no idea what they’re doing.
If only there was a group of people who’ve been driving unconventional revenue with those things, pretty much exclusively, for the past decade…
This has all culminated in what amounts to a massive, truly once-in-a-lifetime consulting opportunity for people in our weird, wild world of internet marketing.
But how to leverage this, specifically?
Let’s talk about who these clients are, how to (profitably) help them, and where to find them…
Growth Marketing Rescue Missions
Crash Course, Part 1: WHO
First things first – for this consulting strategy, we’re only interested in rescuing proverbial super yachts & commercial tankers, where the value of the rescue operation is enormous.
The idea is to realistically earn 6 figures per rescue – if not 7. And I’ll run through a quick crash-course of how this works below, but for starters, we’re not looking to rescue a whole bunch of smaller boats for a dinky little “rescue fee” or retainer…
So with this in mind, we want to look for businesses somewhere in this ballpark:
- Product business or retailer with revenues of $10M+
- Primary sales channels have taken a big hit from the pandemic
- DTC / Ecommerce is possible, but not currently a strength
- Decent fundamentals: High gross margins (60%+), strong AOV ($200+, but ideally closer to $1K)
- They have a substantial customer database (50K+)
For example, here’s some types of products that fit our criteria, but where the pandemic has strangled conventional storefronts & distribution channels:
- Designer furniture
- Premium kitchenware
- Wellness (wearables, health, beauty)
And for literally hundreds of other ideas, check out this breakdown of best product/market fit categories for DTC, and look for product overlaps that match our basic criteria above.
Note: As a suggestion, I’d take a closer look at products geared towards Gen X & Boomer age demographics. They have a lot more disposable income & savings right now, and they’ve also been largely overlooked by DTC brands to-date, so there’s less competition over their wallet share vs Millennials & Gen Z’s.
Who we’re NOT targeting: Local businesses, small startups, or pre-revenue companies. Unfortunately these just don’t have the right ingredients to make this work – at least not for this model.
Anyway, hopefully this paints enough of a picture for you to understand who the ideal prospects are in terms of the current status, category, & company size.
***
Crash Course, Part 2: HOW
So you’ve identified the perfect sector and found some viable companies that are scrambling to get their DTC channels working, and some initial conversations are happening…
But how in the hell do you structure an engagement with a distressed brand that still nets you 6+ figures?
Well, there’s a few ways, all of which involve some creative structure & ingenuity. But for the sake of making this fit inside a crash-course, let’s just focus on a simple service model & comp structure that you can likely adapt to fit most scenarios…
A Simple, 3-Phase Service Model for DTC Newcomers:
There will generally be 3 stages of an engagement along these lines…
- Warmup: Lift overall sentiment & engagement around the brand, and build excitement for upcoming products / promotions.
- Launch: Leading with a flagship product (ideally a new one), run a classic Jeff Walker style product launch, where compelling scarcity & a few substantial affiliates are key
- Grow: Immediately on the back of the product launch, roll that momentum into an evergreen DTC funnel offer that is then optimized and supported with paid channels & affiliates (aka: “influencers”).
The Warmup Phase:
For brands with no consequential DTC channel, it’s very likely that their owned audiences (social, email) have been neglected – only receiving occasional corporate updates that nobody cares about, along with a steady procession of low-effort promotions.
So there will be some initial work needed to first understand, and then re-engage with that audience. Plan on this taking at least 1-2 months. And that’s if they have product / supply chains ready to go.
A good place to start could be a transparent narrative around how the pandemic has impacted the brand, but how they’ve still managed to be part of “the solution” (or whatever) during the last couple months. Then, steer content towards building some excitement around what the brand’s been working on (new product or new delivery model), and tie an authentic connection between that and the brand’s underlying mission.
Throw in some initial giveaways / contests, and this will go a long way towards waking people up…
The Launch Phase:
This is your typical pre-launch ramp up that culminates in a 4-day scarcity window, with significant pricing / product advantages for customers who get in during that window.
Key components should involve pre-launch list building (in partnership with key affiliates), and a strategic upsell for launch customers in the near term once the dust settles.
Companies who haven’t seen or tried this will need to be educated on how effective it is – this may involve some visual modelling on your part. You’ll need to clearly showcase the impact of a launch both during the event, but more so the “growth aftershocks” that follow for several months thereafter.
Plan on the launch phase taking 1.5 months, including the actual 4-day event itself.
The Growth Phase:
This is where most brands screw it up.
Where product launches are akin to using a sledgehammer to break into a market – building an evergreen funnel that can drive sales consistently is a much more scientific process. As in, it takes a lot of trial, error & optimization to get something working.
For our purposes, here’s what this looks like:
- Building foundational marketing automation (email sequences, notifications, etc) across key areas of the customer journey to drive prospects through the funnel
- Setting up an A/B optimization process for their funnel
- Amplifying sales with paid strategy (build out basic prospecting / retargeting campaigns)
- Building a recruitment strategy & resources for affiliates / influencers
- Optimizing on all of the above, ongoing (or handoff to an agency partner who can)
Obviously, that’s a lot. I recommend staying either strategy-only, where you basically hand them a roadmap and then plug in a trusted agency, or you dive in as a close service partner, but with a much deeper compensation interest.
A middle ground in between is executing on the “first draft” of their funnel, A/B processes, journeys, ad campaigns, etc. and then handoff to an agency to run optimization.
A Simple, 3-Piece Compensation Structure:
I could easily fill 20 pages going deep into strategy here – there’s a lot of nuance involved around how to price things, especially at this level of consulting, so it’s something we’ll need to save for another day.
However, in this example, let’s just keep it simple & top-level. I’m sure anyone motivated to try this can figure out the details & missing blanks when the time comes.
With that said, if I wanted to creatively get to 6+ figures on a single project – with a distressed brand, no less – here’s how I’d price each key section of the above engagement…
1 – Pricing the Warmup Phase: This is pure risk on your part, so you can’t bundle it into performance-only. Don’t share this with the client, but you should have a minimum, internal “day rate” that you use as a guide for pricing items in a defined scope.
Let’s say this is $1,500 per day. In that case, if the Warmup Phase is scoped out as 45 days (30ish business days), and this client represents project #1 out of 3 as far as your max capacity, then the rough calculation looks something like this:
($1,500 Day Rate)(0.33 Project Allocation) x 30 Business Days = $15,000
What this does is it gives you a ballpark, so that however you end up pricing out your deliverables / SOW items, as long as it lands somewhere in the $13K – $17K range, you’ll at least hit your operational minimum.
2 – Pricing the Launch Phase: This is the big initial lever, and it’s also where you can front-load much of the total project value. I would build a tiered commission structure on the gross margin (price minus COGS) that runs something like this for the launch:
* 35% on gross margin up to $200,000
* 40% on gross margin between $200,001 – $250,000
* 45% on gross margin above $250,001+
Example: If the launch generates $275,000 in gross margin, then your commission would be $200K(0.35) + $50K(0.40) + $25K(0.45) = $101,250
Try to build the tiers so you’re reasonably sure you can hit into the middle brackets, but where hitting the top tier would be a bit optimistic.
Depending on your investment into the launch, you may also want to append a minimum fee (on a “greater of” basis), but that might be a hard sell. Use discretion, and play it by ear – since it will be a lot easier to demand a much more aggressive fee structure without the backstop.
Remember that you need to strongly position this as totally net-new earnings for them, that they wouldn’t have otherwise – and that you have a number of opportunities to consider. Also worth mentioning that the buzz from a launch can actually last for several months after the initial event.
3 – Pricing the Growth Phase: Where the launch is more of an end-to-end process that you can control – in contrast: building, testing & optimizing an evergreen DTC growth channel with them is going to involve a lot of stakeholder collaboration, iteration… etc.
In short, it’s messier, it takes longer to produce results, and there will be variables outside of your control.
For this reason, I’d use a blended performance structure that does a “greater of” calculation against a minimum retainer vs performance earnings. An example might be the greater of:
a) $9,500 /mo retainer for X amount of strategy, advisory, etc, OR…
b) 30% of gross margin attributable to the DTC funnel
There’s a bunch of ways to get fancy with this: strategic lock-in periods that trigger on key events, long-horizon lookback periods, etc. But it’s a deep topic, and we don’t have room to cover it in depth on this post.
Regardless, hopefully these examples give you a decent starting point as far as how a rescue engagement like this can be structured in a way that’s mutually compelling, realistic as far as balancing risk, and in the 6-7 figure opportunity range.
Let’s now quickly go over how to find these types of clients…
***
Crash Course, Part 3: WHERE
In a perfect world, you’ve already been building an audience of loyal readers in the retail & consumer goods space, in which case you could just pitch this idea to the list and wait for the first wave of requests to fly in.
But the world is far from a perfect place (especially in 2020), and so you’ll need to get a little creative.
There’s a hundred different ways to do this, so let’s just focus on the two that will be the most likely to generate prospective client conversations inside of 1-2 weeks…
1 – Ecommerce Design Agencies
Right now, as I’m sure you can imagine, pretty much every agency in the Ecomm space is getting pummelled with requests from brands in this situation, rushing to get online.
Virtually none of these agencies offer any kind of growth services like what I’ve just described. If anything, perhaps they package up some sort of vanilla “social media management” service that basically amounts to posting pretty pictures on instagram with some obvious hashtags.
But you can bet that most of these clients will be scratching their heads, wondering what to do next with their shiny new ecommerce channel that said agency just built.
Start with anyone you know who’s in this space, and try to get some intros to agencies like this, and pitch them on a cross-referral arrangement.
You may need to offer some kind of kickback. And in some cases, you may need to act as a “supplier” under the agency’s banner (try to avoid if possible). But in general, you’d be surprised how willing some of these agencies will be to work with someone who can actually help their clients downstream.
It ultimately reflects well on them if they can connect their client to value.
Anyway, this is one (very effective) way to tap an existing sales channel with qualified clients.
2 – Cold Outreach
This is an entire category of sales & marketing, so I can’t realistically stuff it into a few paragraphs, so I’ll just give you the coles-notes playbook as a starting point:
– If you haven’t yet, read Predictable Revenue. It’s around $7 on Kindle.
– Use tools like BuiltWith.com and StoreLeads to build a prospecting database of sites that have recently started using ecommerce platforms & tools (like Shopify, BigCommerce, Magento, etc), and then cross-reference them against authority metrics + just eyeballing them to pull out a shortlist of actual, established brands.
– Scoop up recent press from various brands entering the space. An easy way to do that is just searching PRNewswire directly for core keywords: DTC, Direct to consumer, etc.
– Once you have a list of sites, make a prospect list of actual people/emails by using an enrichment tool like VoilaNorbert or FullContact (I’ve found Norbert works best).
And then, just send them a super succinct / casual email to the CMO & CEO asking if there’s an interest to explore a performance growth engagement. Literally something this simple:
Hey James,
I saw on reddit that XYZ Furniture just rolled out a DTC channel last month. Congrats!
If you’re interested in exploring, my agency specializes in performance growth for DTC brands. (We’ve helped XX, YY, and ZZ this past year).
The vast majority of our fees are earned from net-new revenues we generate.
Would love to see if there’s something here – if you’re open to explore.
Let me know, and we can line up a quick call to see if there’s a fit.
Cheers!
And that’s it. Try to send an informal message like that to 10-20 prospects a day, and you’ll almost certainly have some phone calls lined up in 1-2 weeks.
Anyway… obviously, I’m just scratching the surface here, but bottom line – this ain’t rocket science, and given the universal urgency in these sectors, you won’t have too much trouble at least generating some interest (if not some engagements) by pitching agencies and/or prospects directly.
On the larger view, while this consulting model has been viable (and profitable) for a long time already, I’ve never seen such a perfect alignment of market conditions as I do currently.
For anyone who’s willing to give this a shot, I think this is a uniquely substantial opportunity for any competent growth marketer to launch a consultancy… with one hell of a tailwind, right now.
Speaking of substantial opportunities…
Tailwinds & Undercurrents
About 5 years ago, I retired my old brand; “The Lazy Marketer”.
Not because there was any ill-will towards my prior work, and certainly not towards my customers & readers. I was simply ready to move on from the typecast of being an unintentional thought-leader in affiliate marketing.
I’d grown tired of that industry as whole… and I’d basically run out of things to say. So I put the brand on ice, and that old domain now forwards to this blog.
I went on to have a full range of experiences & outcomes in growing & building startups, most recently as a SaaS founder (Zag).
Zag had some promising starts – including a wild launch on AppSumo – but one thing became clear very quickly: there was a lot more demand for growth insights as a consulting service than a self-serve toolkit. So we pivoted into consulting as a primary, along the lines of the model I summarized above, which has gone really well so far.
Note: Zag is still operational & we support existing customers, but is now mainly used as more of a perk for our consulting clients.
Anyway, as I mentioned several months ago now, I’ve also been quietly chipping away at a new product series that will better accomplish what Zag was trying to do (showcase game-changing opportunities), while still giving us the bandwidth to focus on growth consultancy.
We’re calling it Undercurrents, and it’s going to be a product series by none other than…
The Lazy Marketer
Albeit with a new logo + look&feel (coming along well so far, can’t wait for the curtain reveal)
I figured I might as well resurrect a great brand, but for a whole new world of opportunities.
The first release is a big one:
A full masterclass & mastermind around what I view as being the biggest opportunity for marketers like us in the aftermath of a pandemic: 7-Figure Consulting.
As in, how to generate 7 figures per project… using a killer business model that clients love, isn’t hard to sell, and that I see virtually nobody properly utilizing.
We’ve touched on a few aspects of it in this post, but this is just a teaser.
The masterclass is done and now being previewed by some colleagues, as of last week. Now we’re just sorting out the mastermind logistics.
It launches in a few weeks. More details soon.
Stay safe, and stay tuned 🙂
~ Chris
