An Unintuitive yet Effective System for Exponential Client Growth

Here I will show you an unintuitive yet effective system for exponential client growth.

The secret is to use client referrals only to grow exponentially.

The real thing to understand here is, most businesses look to bring in more new clients to grow. You can simplify everything AND get better results if you focus on viral growth from existing clients.

The marketplace is crowded. Most businesses focus on shouting the loudest there. But once the client is won over, with heavy cost, these businesses do strikingly less than they could to retain their clients, turn them into raving fans, and strategically make them their best ambassadors for winning new clients. As a result, they need to pay MORE advertising dollars that result in minuscule additional business.

I suggest turning things around. Following Charlie Munger's advice to always invert. What would happen if I only focused on one thing: To wow my clients, turn them into raving fans, AND strategically make them win more clients? - Well, I can tell you what would happen: Each new client brought in would, on average, result in significantly more additional business, without costing me an extra cent in additional advertising. And here comes the very best part: These NEW clients, that have been brought in through my "bought" clients, do not cost me a dime. But THEY ALSO bring in new clients because I will WOW them the same, and expose them to the same mechanisms to foster recommendation and further growth.

The whole approach roots in the principle of maximizing #ltv. When the common approach is to pay huge amounts for each new client, and focus the main energy on doing so, net profit is heavily diminished by high CAC. - But when using all thinkable and unthinkable methods to wow clients AND foster client-referrals, my CAC goes down to, well... ZERO!

Now if I wish, and of COURSE, I do wish, I can combine that with still maximizing the #ltv of each client.

Now putting these two approaches together, following the evergreen principle of #combine, I set my business up for some pretty heavy exponential kind of growth.

So to summarize this not so complicated concept: Coming from the foundational formula Margin = CAC - LTV, I simply use some common-sense levers to bring down CAC and increase LTV. And the strategy to dwindle CAC down is simply by exclusively setting out to a) WOW each client heavily, and b) Use every strategy, hack, and tool to translate this hard-earned WOW into a client referral.

To put this into another formula: I put my full energy into bringing r > 2. r is the referral factor, meaning how many new leads does one client refer. With r > 2, each client brings in two new clients on average. Now what happens if each client refers two new clients, I will leave that largely to your imagination. I will just give you a small hint in the form of a hand-crafted chart: [show exponential growth chart]

Now here comes the important part: As nice as it would be, we cannot have everything in this world. Therefore, deciding FOR something includes deciding AGAINST others. Coming from these principles of #exclusive and #less. I CANNOT do both, focus on bringing in as many customers as possible AND turning them into WOW-propelled referral fans. - I have to decide FOR one and AGAINST the other. This is simply because the energy of my business is finite, and both tasks are mighty. So I MUST decide, for one, to make it right.

And this again might be one reason WHY so few businesses employ this approach. It's crazily difficult to truly WOW clients, AND make them refer new clients. And therefore, as a business, I must focus all my energy on it.

Now, having come so far, you might wonder how I can pull this off for my business?

Here are the steps.

Step 1: Become aware of the strategy.

Step 2: Decide for one and against the other.

Step 3: Build an execution sheet on WOWing your clients.

Step 4: Start an execution sheet on making your clients refer new clients.

Step 5: Work with your execution sheets of Step 3 and 4 until you grow old, or come to a point where you give up because you become frightened of the sheer mass of clients coming to your doorstep.

Now, if you wonder what an execution sheet is, be my guest to read this blog article explaining it.

Oh, I just realize that I have nearly forgotten an important point.

HOW do I bring in clients in the first place?

Now, while this part should only play a minimal part of my strategy, still the initial clients need to come from SOMEWHERE.

To make things as simple as possible, and more importantly, to ensure that I will not spend too much time on that part - neither for setting it up nor for running it - we will use some basic but somehow compelling affiliate strategy for this.

And it looks like follows:

Step 1: Build a Dream 100 list.

Step 2: Turn as many members as possible into affiliates.

Step 3: Shower them with a hefty commission.

Now, here comes the kicker: If you manage the first strategy properly, you will have absolutely no problem in getting second-level free referral-clients from your initial paid clients.

This again allows you to go obscenely offensive with your affiliate commissions. Just because you make your business on the long-game.

And, because you WOW your clients, you will have a great conversion from affiliate-leads to clients. Just because you will drown in client testimonials and other proof that your offer is great (which it must be, otherwise it wouldn't WOW your clients).

Putting all this together, you will have happy affiliates, that should not be very troublesome to manage. Which is GREAT because it frees up the necessary time and energy to focus on your two main parts, to WOW your clients, and make them refer new clients.

I can hear you, I can hear you...

You don't feel fully content until you have heard some strategies on HOW the heck you can make WOWed clients refer new clients. So here, before finishing this post, I give you only a small sample of possibilities:

Give them money for referring clients.

Send them a branded mug for referring clients.

Give them access to exclusive premium content for referring clients.

Put them on a leaderboard and celebrate the most successful referring clients.

Make a sweepstake with a Caribbean cruise for all clients having referred more than x clients.

Do I need to go on, or do you get the idea? - The means are limitless. But they all hinge on one ingredient: Your clients must be WOWed first! - Otherwise, they would never pester their friends and family with recommending your offer - and rightly so!

Yes, yes, yes... I understand...

Now, you would like to know how to WOW clients. But I cannot go on forever with this little blog post. So let's make a deal. I WILL tell you more about this in another post. IF you share your thoughts, feedback, and questions about this one, here.

And that's it for now.

I hope you have enjoyed this little thought-journey that we've taken together in this blog post. And even more, I hope there was some value for you to gain.

Have a great #day!