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39 - How We Went From $0 To $100,000,000 Using Growth Hacking And Sales Funnels (Without Taking On Any Outside Money)

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39 - How We Went From $0 To $100,000,000 Using Growth Hacking And Sales Funnels (Without Taking On Any Outside Money)

Listen To Today's Episode: 

Episode Recap:

On this episode Russell gives a presentation at the viral video launch of how Clickfunnels went from $0 to $100,000,000 using growth hacking and sales funnels.

-- Step by step how Russell was able to grow his business without you outside funds.

--  How he was basically paid to introduce people into the Clickfunnels world.

--  And why funnels are the key to growing your own business without having to take money from venture capitalists.

So listen to this episode to find out what Russell thinks is in the future for email, that will make having a large list even better.

Subscribe To Get All Future Episodes:

Best Quote:

I didn’t get it at first. It took me a couple of years before I understood this concept of whoever can spend the most money to acquire a customer wins...

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Transcripts:

What’s up everybody, this is Russell Brunson. Welcome to the Marketing Secrets podcast. I am still planning on giving you guys a huge recap of the viral video event, bubble soccer, everything else that went down at the event, because some crazy stuff happened. I’m also trying to get permission from Gary V to let me share some of his presentation with you guys here. So that’s the game plan. If I’m able to do that, you’ll see it soon. And you’ll see my recap soon as well. But this week I’ve got my inner circle here, so I am in there locked away.

So what I did want to do is I got the video clip from my presentation at the event about how to go from zero to a hundred million dollars in sales, how we did that by using sales funnels and growth hacking. And it was a shorter presentation, but I think it was really, really cool. I’m sure I talked really, really fast. I was also really tired, I’d only slept one hour the night before. So if it doesn’t make any sense, that’s kind of the context of why. But hopefully it will give you guys some ideas about how to scale a company.

You hear me talk about the Dotcom Secrets book a lot. Whoever can spend the most money to acquire a customer wins, and sometimes when you hear that it’s depressing if you don’t have a lot of money, so I’m not going to win. And that’s how I felt, especially when we launched Clickfunnels and we’re competing against two companies, one that had 40 million dollars in funding and one that had over 100 million. How do you do that? And this presentation shows you how we did it. So after we do a little Marketing Secrets intro here, I’m going pick right up with my presentation from the event, I hope you love it. Thanks so much and we’ll talk to you guys soon.

I put together this presentation because like I said, the biggest question I get, especially from people who are building their own companies is “how in the world have you grown Clickfunnels so fast without having any money, any capitol, any outside funding at all?” So I put together this presentation this morning. Like I said, I had one hour of sleep last night, then I got up and started working on this presentation.

But to kind of walk you through what we did and some of the mind shifts that I think are different that will hopefully help you guys as you’re growing and scaling everything you are doing.

So the title of my presentation is how do we use growth hacking and sales funnels to go from zero to a hundred million dollars in less than three years, we’re a week away, without taking any outside funding. So the first thing I want to go over really quickly, for those that didn’t know what I was talking about earlier, I’m going to go over what a funnel is really quick.

So what is a funnel? If you look at, actually let me step back. The reason why I want to talk about this is it’s been interesting, I’ve been doing this internet marketing game for 15 years now. This is my 15th year in the business selling all sorts of stuff, and it’s interesting because recently there’s been a whole bunch of books coming out on growth hacking, all these cool new ways to growth hack. And it’s funny because we get the growth hacking books and read them, it’s like, that’s all the internet marketing stuff we’ve been doing for the last decade. And now it’s like, real businesses are catching on, figuring out these things that are really, really cool.

Showing all these funnel things, this is the growth hacking, this is the movement, this is where things are going that we keep talking about.

So what’s a funnel? To explain a funnel, I think the easiest way to begin, is to show what a funnel is not. So this is a traditional style website. This is what Clickfunnels is kind of going against all the time. Most people have traditional websites, they have all sorts of ads. They’re paying for Facebook, Youtube, Google, all these things and they’re driving it into these websites, and it’s literally slamming a whole bunch of people into a brick wall.

I know that because this is how I got started. I was trying that thing and it did not work. I always say that a traditional website is kind of like having a really bad sales person who is shy and all they do is hand out brochures, and then pray the person comes back. That’s a traditional website. What a funnel is, is basically having the best salesperson on planet earth, come and meet the person at the front door, find out their name and walk them through the process. Find out what they want, how they want it and giving them exactly what they want.

So that’s kind of what a sales funnel is. My whole philosophy in business kind of, like I told you guys in the last presentation, when we started Clickfunnels three years ago, we had two major competitors that we were looking at. Number one had just gotten 43 million dollars in funding and number two had just had over 100 million dollars in funding. I’m coming in with me and Todd and we’re bank rolling it with our big old credit cards and we’re like, “Okay, we’re going against these huge giants that have hundreds of millions of dollars, how are we going to win?”

One of my first mentors, Dan Kennedy, he used to say this all the time. “Whoever can spend the most money to acquire a customer wins.” So I’m looking at these companies who have hundreds of millions of dollars in funding and I’m like, I’m screwed. I’m not going to be able to win. These guys could out spend me every single day.

And I started looking at this more and more and I didn’t get it at first. It took me a couple of years before I understood this concept of whoever can spend the most money to acquire a customer wins. Like I told you before, I went to college here at Boise State, I wrestled here and I used to carry my buddies on back up and down the football stadium, every single day before practice, this is my hometown. Here in Boise, one thing we’re famous for, those who are not from Idaho, we’re famous for potatoes and the very first product I ever put together was a DVD teaching people how make potato guns.

You probably heard me tell this story before, but it was a DVD how to make potato guns. I set it up online, I was learning about internet marketing, it was really simple. I had a one page website, I had Google ads. That’s all that we did back in the day. So I went to Google, started buying ads, I was spending about $10 a day on Google ads, and I was selling a $37 DVD on how to make potato guns. So I spent $10 a day on ads and I usually averaged about one sale per day. So Russell as a college kid was making a whopping $27 per day profit, I was putting into my pocket, which was pretty awesome.

And that was kind of my beginning. And then what happened, a little while into this whole game, Google shifted how everything worked and I got in big, big trouble and literally overnight, my website was the same but I went from spending $10 a day in ads to spending $50 a day, overnight. So I was spending $50 a day and sending it to the exact same website, but I was only making one sale. Same thing. So I was losing $13 a day.

And my beautiful wife, after about 3 or 4 days of that said, “You have to stop. This is not a good business. This is really, really bad.” So we stopped and eventually had to cut up our credit cards and I thought I’d missed the bubble. I’m like dang it, we missed it. And those are actual pictures of us cutting up our credit cards, back in our first home.

About that time I had a friend who was also in the business and he came back and said, “Russell, I think I’ve figured this out. My little website..” He had the same problem. Google raised their prices, algorithms changed, and a bunch of my friends got out of the business. One of my friends came back and he’s like, “I figured it out. I started adding in these things.” He called them OTO’s which stands for one time offer, or basically an upsell. He says, ”I’m charging upsells to my products and I start making more money from every customer, and now I’m able to afford my ads again. I turned my ads back on. I was like, “That’s cool, but I don’t know how…How can I do that? I don’t know how to do that.”

I was like, “I have a potato gun DVD. What should I do?” and he’s like, “Well, people who buy potato gun DVD’s, what else do they need? How else can you serve them?” And I was like, “Well, we could buy them, the next piece is they have to buy a potato gun kit, so they’d have to buy pipes and a BBQ igniter, all these other pieces.” And he’s like, “Well you should sell a kit.” I’m like, “Well I don’t want to make kits. That would be really not cool.” And he’s like, “See if you can find someone.”

So I ended up finding a guy in Northern Idaho who actually was drop shipping potato gun kits, did a partnership with him and I made my very first funnel. This is my funnel transition. So people who buy my DVD, I’d upsell a $200 potato gun kit and we’d send it out in the mail. So what’s cool is I’d turned the Google ads on back in the day, and what happened is I was still spending about $50 a day, but then one out of three people would start buying the potato gun kit. So we did the math on that, one out of three people, means I was averaging about $60 in additional sales with every DVD that I got, that I sold.

Which means I was spending about $50 a day on ads, and now I was making $102 in ads, and all the sudden it worked again. That was magic. Literally when I made that shift I went from losing money to making $52 a day in profit. I was like, this is it. Biggest thing in the world.

For me obviously, potato guns is a very small market and I didn’t stay there long, but the concept of that rang through my head, I was like this is how it works. And my moral that I learned from this whole experience was that funnels make me money, websites make me broke. So my obsession for the last decade of my life has been this. A lot of you guys have been to my events for the last decade, teaching this concept. Showing you guys, this is the key.

So when I started doing this and realizing it, that message I had heard from my mentor kept coming back to my head saying, “Whoever can spend the most money to acquire a customer wins.” That was the key. Whoever can spend the most money to acquire a customer wins. So as we came into this game of Clickfunnels and looking at people with hundreds of millions of dollars in venture capital behind them, I’m like how in the world can we compete with that? I was like, I can’t do it. Head for head they can all outspend me, but if I can build a funnel that’s right, I can change everything.

f you look at the reason why we have grown as fast as we have, is because we can literally outspend everyone. We get probably three or four times a week, different people trying to put money into CLickfunnels, and most of these we tell them no, but a couple we’ve entertained because it’s interesting and we’re curious what they think we’re worth, it’s really fun.

So we were at lunch this day with this group and I’m talking to the guy and he’s going over everything, and he asks the question they always ask on Shark Tank, “How much does it cost to acquire a customer?” And I hate when people ask this question because he’s not going to get what I’m going to tell him. I was like, “Well we’re running Facebook ads, for the home page, we’re spending about $120 to acquire a free trial member.” And he was like, “Oh that’s amazing, based on that, what I can do is go and put in $50 million in cash and we get this many customers…” and all this stuff and I was like, “Well, well, real quick. We actually turned those ads off.” And he’s like, “You turned those ads off.” And I’m like, “Yeah. I gotta pay for this out of my own pocket. I don’t want to lose $120 every customer.” And he’s like, “Well how are you guys growing fast?” and I said, “ The reason why is because we have funnels.”

And I explained to him some of my front end funnels, like my book funnels, some other funnels. I said, “Look, for every single person that comes to one of my funnels, if they buy one of my books, we spend on average about $10-12 on a Facebook ads, or other ad platforms to sell a book, but then through that funnel we average about $32. What happens is we spend $12 and get someone to buy one of our books, we make net, $20 of cash in our pocket, and then we introduce them to Clickfunnels. So every single customer, before we tell them about Clickfunnels, they actually pay us money and we put that money in our pocket.”

He’s like, “That doesn’t make any sense.” And I explained it again. And he said, “That doesn’t make sense.” And I explained it three or four times and he stopped and said, “If what you’re saying is true, that will change business forever.” I was like, “That’s my whole message. That’s what we do. That’s what funnels are all about.”

So I want to walk you guys really quick through this and then we’re going to have Gary come up here in a minute. But one of the key concepts you guys need to understand, and this a concept we call a break even funnel. Those of my inner circle members who are here, we spent a lot of time on this, but the break even funnel is a funnel where you break even, so you can literally get customers for free. When you have that, you can grow your company as quick, as big, as fast as you want. So we spend a lot of time on that. So this is a break even funnel, where I put a dollar in advertizing in and get at least a dollar back out, and if I’m good at it, I can get two or three dollars back out. Now I’ve got a customer, I’ve got some cash, now we can put them into the other things that we have.

A couple of examples of some of our break even funnels, I grabbed these from some slides this morning to show you some examples. This is my Dotcom Secrets book, this is a couple of months ago stats. We got about 5400 leads, we sold 23,095 books, our average cart value during that time was $30.81, so we spent $45,000 in ads, we made $52,000 in sales so our profit was $7,763. Most people would look at a company our size and be like, that is a waste. You just wasted a lot of….you just made $7 grand, that’s not a big deal.

But that was to get customers. We got 5400 people that then, the next week we would say, “hey, by the way, there’s this really cool thing called Clickfunnels.” And I got paid $7,000 to get those 5400 people onto my list. That was one of our front end products. This is a split-testing book, same kind of thing. We had 2,000 leads come in last month, 1300 book sold, average cart value was $12. Ads we spent $4000, sales was $18,000, so we made $13,000 but now we got 2000 people that we can introduce to Clickfunnels. So we got paid to get all these customers.

One more example is Perfect Webinar, same kind of thing. Leads, sales, I’ll go through this quickly. We made $4000 and got 1600 customers we introduced into Clickfunnels. Now if you walk through those three funnels alone, and we have about a dozen or so front end funnels that we use in different platforms and things, last month from this, basically our front end revenue was $96.000, our ad costs were $81,000, so we netted a whopping $14,000. Most people would be like, “Man Russell, with a company with 120 employees, you’re going to go broke fast.”

But what’s amazing about that, is that it brought in literally 30 or 40,000 new people into our world, who then we took them through the rest of our sequence. They’re introduced to us, now we can go and build a relationship with them, talk to them, serve them, help them understand what we do, what we believe, and introduce them to our other products and services. And for us, obviously that is Clickfunnels

So if you look at that, what it means for us, is we literally get almost a thousand trials for free every single day, like clockwork. That comes back to what we talked about before. That’s how we’re able to grow so fast. We can literally outspend everybody in our market. There’s nobody else that can do that.

And what’s cool for you guys, whatever business you’re in, that’s the key. Remember whoever can spend the most money to acquire a customer wins, and when you figure that out, it makes it so you can grow really, really quickly. Any kind of business, any kind of venture, anything that you want to do. So that, you guys, is how we use growth hacking and sales funnels to go from zero to a hundred million dollars in just three years without taking on any outside funding. Thank you.

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