Matt McWilliams loves teaching entrepreneurs how to grow their business with affiliates, partners, and just plain old fashioned relationships. He’s worked with the likes of Michael Hyatt, Lewis Howes, Kevin Harrington from Shark Tank, Brian Tracy, and others to grow their affiliate programs.
Building partner programs and affiliate programs are the cheapest, lowest risk, and most scalable way to grow a business. And in this episode, Matt walks us through the basics and reinforces the case for why every entrepreneur should have one.
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Joe Troyer 0:42
Hey everybody, it's Joe Troyer, and welcome to another episode of Show Me the Nuggets, I'm super excited to have a special guest here, Matt McWilliams. And we're going to be talking about how to scale your business to seven figures or eight figures by building a partner program. And that could be a resource partner program that could be an affiliate program. And I'm really excited because Matt has an awesome background, building out partner programs and affiliate programs. In fact, my team did some digging, and Matt's been doing this stuff for a long time. So we found that, actually, he got an award by Affiliate Summit in the pinnacle awards for Affiliate Manager of the Year. And he actually got another award or program that he was working with, got an award here it says, The Most Improved Affiliate Program and guys affiliate program could be partner program, resource program, etc. And we'll get into that in a second. But know that there is a way to grow your business with a one to many type of relationship, where you're paying out based upon results and money collected. So Matt, man, without further ado, welcome to the show.
Matt McWilliams 1:50
Hey, thanks for having me, Joe.
Joe Troyer 1:52
So I'm really excited to have you because I feel like in our world, in my world, anyways, people always think of affiliate programs as I'm going to promote the affiliate. And that's how I'm going to monetize my traffic. But most people have not turned around the equation in their mind and thought about being on the other end, and actually running an affiliate program for themselves or running a partner program for themselves. So I'm really excited today to really unpack that side of it. Because I feel like 99.9% of the training out there is the other side. The people never really thought about how they could set this up for themselves.
Matt McWilliams 2:30
Yeah, I mean, I, it's so important, because I mean, just if you look at the statistics, for most businesses, there are rare exceptions. For most businesses. It's not only the lowest cost of acquisition, outside of just word of mouth, you know, word of mouth is free. But you know, you look at whether it's, gosh, go back, you know, radio advertising, television advertising, stuff like that. Facebook ads, LinkedIn ads, like, with affiliate marketing, typically you're paying a percentage, depending upon the product vary greatly depends. But you're paying a commission that's under 50%. You're paying a commission that's anywhere from five to 40%. Typically, again, depending upon the product, digital products that don't have a cost of goods are going to be higher, you know, 30, or 40, physical products are going to be in the five to 15% range. Try acquiring a customer, typically for that kind of, you know, for that kind of cost. That's why when you look at it, it's usually the lowest cost, you know, acquisition channel. It's also the lowest risk, you know, because here's the thing newsflash, Zuckerberg takes your money before you make anything. You know, if you run an ad, you know, during the Superbowl, the NFL is not like, Hey, here's what we're going to do, it's going to cost you $5.2 million, but you're only going to pay on the money you bring in. So if your ad only brings in $4 million, you only owe us two, they don't do that. No, you're paying $5.2 million, or whatever it is, these days, some outrageous fee up front before you make any money. So it's got the lowest risk, and also has the most, you know, scalability. Like there's a finite number of people with most products, toilet paper being an exception, you know, ketchup being an exception commoditized, you know, consumer goods are always the exception. But with most products and services, you know, let's just say you sell, give me an example from from something, you know, just name a client of yours or somebody that maybe give me an example.
Joe Troyer 4:20
Yeah, so one of my clients, one of my clients, for example, is an agency and they're in one vertical and they do about $7 million a year. Okay.
Matt McWilliams 4:28
Okay, so there is a finite number of people they can target on Facebook, for that agency. If you're in you know, even like something is ubiquitous is like homeowners insurance. I think we're under 50% homeownership now. So less than half the population is even a target for your, you know, your service, let alone the fact that you only write insurance, say in the state of Illinois, and you only write homes over $300,000 who've had one or less claims in their life. Like maybe that's what your company's sweetspot is. How do you target those on Facebook You don't. But with affiliates, it's infinitely scalable. Because there's only so many people you can target on Facebook, and I use Facebook as the example, you can be talking about television, you can be talking about LinkedIn ads can be anything for that matter, Instagram ads doesn't matter. There's only so many people you can target profitably, with affiliates, you know, we've we've promoted offers, you know, to my list, as an affiliate, we've promoted offers to my list, Joe, that weren't super targeted. But we promoted it, we made that company a bunch of money. And half the sales they made were the people they never would have targeted on Facebook, or with any sort of advertising, because we took on the risk of maybe this won't work, but they weren't willing to. And so, I mean, it really just makes sense. And it's, it's what's allowed, every company I've ever run, this is my fourth company. Now, every company we've ever run. We built it on, you know, on affiliates. That's why I teach this stuff now. Because I'm like, you know, I just, every time we did it out of necessity, we tried it every other way, Joe, I'm gonna tell you right now, my first company. We tried it every other week, this is back in 2004. So don't laugh. We tried banner ads, we tried, you know, Yellow Page advertisement, we tried everything. And then we sat there one weekend and looked at each other when we have $5,000. In our bank account. We're like two weeks away from just this business ends. We don't have any investors, we've tapped our credit cards and everything out, you know, I was like, 25, so I didn't have any money. You know, we were tapped out. What are we going to do? And I'd heard about these people called affiliates. And went out and started spent the whole week and it was Memorial Day weekend. 2005 or 2004 2005. Don't remember, it was Memorial Day weekend. Yeah. 2005. And I went out spent the whole weekend, learning how to find affiliates, and actually finding affiliates. And it's what saved our company. Now we did it out of necessity. I'm trying to help people do it before they get to that.
Joe Troyer 6:50
Dude, that's awesome. I'm so excited to dive in. I think that building out an affiliate program is an absolute no brainer. I know that in my multiple businesses, like you said, it's one of the easiest ways to get started, I know that I can, I can build a business to half a million a million dollars a year just on partners with very little effort, right, just by a couple of really key important relationships. So I'm super excited to pick your brain. Now that you've done this multiple
Joe Troyer 9:09
Before we go deep, let's talk about how it all got started. Right. And you gave us a little background. You ended up in this affiliate marketing industry.
Matt McWilliams 9:19
A total accident, like I said, we started a company, our business was we sold leads to insurance agents, you know, got back from us. We started in 2004, our biggest two competitors were both publicly traded companies. The third one was owned by a hedge fund. We were the little guy, you know that this is the industry is very small. We were probably we were one of about six companies in the industry at the time. We were the smallest and when I say this most like we had, we hadn't even had our first $1,000 day yet. You know, we were tiny and so one of our our biggest competitor just hit 100 million. So we're gonna probably, we're on pace to do about 200,000 that year just to give you some perspective of the gap between us and them, you know, One, what 500th the size of our biggest competitor, or 150th the size of the next smallest competitor, roughly. So we're the new guy, we're starting out. And like I said, we did everything to try to acquire leads to be able to get people to come to our website, fill out a form, we did SEO, and we, you know, that kind of got us, the thing about SEO is it takes some time, you know, search engine optimization, it takes some time, but when the spigot gets turned on, you know, it's free. And that's good. So we're getting like two 300, we're making like two $300 a day for free. So that's nice. The problem was, we really needed to make about $1,000 a day profit just to kind of cover our expenses. And we weren't. So like I said, we were sitting there, I remember, it was a Saturday morning, Memorial Day weekend, 2005. We're sitting there, we're like, okay, we have like two weeks left, and maybe three, we're not bringing enough money, what are we going to do? And I had just heard about affiliate marketing. And again, like you mentioned at the beginning, I heard about it from the other perspective, like you could you could go promote a company and make some money. And I'm like, Well, one of the things that we had a lot of we had a lot of people who would complete the lead, and we didn't have an agent to sell it to. So I was like, What if at the end, we sent them to another company to fill out another form like, Hey, we couldn't find an agent. But here's a company that can and will make, we will monetize them. I was like, Well, if they feel that a homeowner's insurance lead, what could we could we also say, here's a company that we recommend to go get a mortgage? You know, because one of the number one reasons why people look for homeowners insurance is because they're buying a new home. So it's like, okay, those are great, you know, that's going to add on an extra 50 to $100 a day to our bottom line, which wasn't any small thing. I mean, that was increasing our revenue by 20 to 25%. You know, and of course, that would scale. So that was kind of cool. But I was like, wait a minute, they have an affiliate program, very few, like nobody in our industry had one at that time. Actually, no, I take it back, the largest company did they had a big one, you know, maybe I'll be able to tell story about how we stole a bunch of their affiliates later. Butf I was like, nobody's doing this, they're very few affiliate programs back then probably, you know, a couple hundred, I mean, compared to literally hundred thousand plus today, you know, like name a company pretty good chance to have an affiliate program now.
Joe Troyer 12:27
Matt McWilliams 12:27
So, we we're like, we should start this. And I remember, we can't I'm like, I go off and like, yeah, you you don't pay anything until you bring it? Well, that's huge for us, because we don't have any money to pay. You know, like this Bell, I remember the company Bell South, not picking on Bell south, but I don't even know if they exist anymore. I think they got rolled into one of the 800 other companies. They're like, yeah, if you pay us $5,000, we'll put up your banner ads all over, you know, the Internet, and we're like, that's all of our money. You know, that was their minimum buy. That was for banner ads. So we did it, of course, and then made $8. And I don't mean, we made $5,008. I mean, we lost $4,992. You know, so that that, you know, I'm like, we don't have to spend anything on the front end, right? That's awesome. There's no risk, because if somebody promotes us, and they don't send any leads, don't lose anything. You know, I'm like, it's really just a relationship. We don't have to set up like, we're already functional. We don't have to set up anything. Oh, we do have to set up the tracking, we have to create an affiliate program. So I messaged our programmer who's overseas and like, how long would it take you to set up affiliate program? He's like, well, the codes basically there. It would take me about a day, I can, you know, turn on, you know, I've already built it into the system. I'm like, awesome, glad you thought of that. We didn't even know it existed, so good for you. So about a day later, we had a functional affiliate program. And I'm like, saying all these things, like it would be this and we don't have to target like don't have to worry about targeting. Because this is 2005 there wasn't real targeting back then. Like, you know, it was like the wild wild west of internet. Now you can get like so hyper targeted that you're only targeting like, you know, men aged 32 to 35 with 2.7 kids in their favorite football teams in the NFC West, you know, and so you get so targeted that you forget that you need to expand a little bit. But anyway, we couldn't target back then we could target because they do all the targeting for us because I don't really care if their ads don't work because we don't have to pay for them. And we're like so excited. Then Hunter, our CEO looks at me goes how do we find affiliates? And we're like, oh,think about that.
So literally, like I said for about 18 hours a day. I mean, I we that meeting ended shortly after lunch on Saturday. I was at the office till well after midnight. Got there at like seven o'clock the next morning, all day Sunday, all day Monday all day Memorial Day, like skip the barbecues didn't need a hot dog or you know if I ate the whole weekend. Sticked, lived at the office basically for three straight days. Tuesday morning, actually Monday evening, we got our first affiliate Tuesday morning. I set him up, got him his links. Tuesday afternoon we had our first lead. I still remember the guy's name. His name was Brandon young, Brandon, Brandon Young, from East Mercy from West north, South, some someplace in western North Carolina. Hey, Matt, it's Brian. And he called me up. first month, he only made about $300 with us. But we made, you know, about 200. You know, we made about 200 bucks, we also got more Brandon's and some more people and some more people. And so that's kind of how I got into the space. I mean, that's 15, over 15 years ago now. But I next thing, you know, year and a half later, we were running 12 and a half million dollar affiliate program. And I don't really remember a whole lot, it happened so fast, you know, what happened over the next year and a half. But that's, that's how I got into it, Joe.
Joe Troyer 15:37
That's awesome. So if, if you were to consult or work with a company like now, knowing what you do, and you were to help implement, like a playbook in their business to build out an affiliate program, what's the what's the 80/20? Like? What are the what are the three or four or five things that you got to do? You got to do well, and like you'll conquer the affiliate world?
Matt McWilliams 15:56
Yeah. Number one is, where do you find affiliates? You know, you got in the 80/20 is you focus on three areas, if you have customers, start with them, you know, and in most industries, again, some of what I'm going to focus on three places to find affiliates. We have a whole free report we'll talk about later, there's 15 places, but some of these don't apply to everyone. You know, like I told him, maybe you should work with nonprofits, nonprofits make good affiliates. And they're like, Well, that doesn't work in my industry. Okay, well, why don't one of the other 14 places? Yeah. But number one, start with your customers. If you have customers, turn them into affiliates, this particularly works really well with retail products, digital courses, services, you know, I mean, most things, you know, there are there are a few examples where it might not work as well, I can't think of any but that's number one. Number two, look at your competitors affiliates, and go steal them. Like literally, you go to this website, and if you've ever heard of it's called Google. You go to Google, you type in the name of your biggest competitors, maybe add the word affiliate or partner or commission. Here's the reason they should be disclosing that they're an affiliate, when they promote them, we won't get into that. But that's why we type those extra words in. If it's if you're in a niche where, you know, if you're in a niche where your biggest competitors is Walmart, what I just said only works if you add the word affiliate, because Walmart's too ubiquitous, like every you know, Walmart's mentioned a million times in the news every day, if you're in a niche, where you're let's say you're in the digital course niche, and your biggest competitor is, you know, such and such, you can probably just type in the name of the course. And eight out of 10 results will be an affiliate, you know, so just kind of depends on how popular So focus on literally going in siphoning off, you know, some of your partners or your biggest competitors affiliates, that's what I did. And that is the quickest way to get your first like five to 10, you know, medium to small sized affiliates that are gonna make you anywhere from a few hundred to a few thousand. Again, we're talking about the 80/20? Like, how do we go quick? How do we just get it like proof of concept. And there's some like there's there's a certain email that we send, there's a very specific structure to this email, which we'll get into but like this initial reach out what you want it to be super short, and we've got a template in that report. But So number one, your your customers number two, your competition's affiliates. And then number three are people who are what you might consider to be competitors.
You find a way to be Coopetition not competition. So the best example of this is a company I came into. Back in 2009. I started actually working for them for about a year, the only company I've ever worked for since turning 19. Otherwise, I've always been an entrepreneur, but actually was an employee of the company. And I came in on the very first day I was like looking at this as like, what are we doing boom. And I was like, Okay, I want to go to every one of our competitors. Because we were the most expensive course in guitar training by a factor of three. We were also the best, the most detail. We were also the most universal, we covered everything from just guitar theory, music theory, to how to play blues, guitar, jazz, guitar, fingerstyle, guitar, whatever, you know, electric guitar acoustic guitar, I was like, I want to go to Dan Denley, who has a blues guitar course. And I wanna say, Dan, here's what I want to do. Lesson 14 in our course, is all about blues guitar, at the end of lesson 14. I want to go to them and say, hey, you may want to go more in depth into blues guitar. Here's a course we recommend. Yeah, and I want to promote you in return, and you're gonna pay us you know, 40% Commission, you're gonna piss $40 because this course is only 100 bucks, you're gonna pay 40 bucks. In return. I want you to promote us to your list to anybody who hasn't bought your course within six months, or bought your course more than 90 days ago. For the first six months of that relationship. You focus on selling your course but if they still haven't bought your course there's a reason. It's probably they're probably never going to buy your course. recommend something else. So then we went and then if they bought your course more than 90 days ago, you go to them and say basically opposite of what we said, hey, I've taught you blues guitar, if you want to learn other styles, go grab this course, I want to go to the membership that charges $7 a month, the company called ultimate guitar. And I want to go to ultimate guitar and say, hey, what you guys do is teach people how to play the four chord songs, you know, if you know anybody knows anything about guitar, you know, it's G, E minor, D, and C, like find me Wonder Wall, or Good Riddance from Green Day, or Brown Eyed Girl, right? Like you, I can teach anybody how to play those. And I don't even play guitar that much. You know, like, I can look at a song and go, if it's only got those four chords, I'm good. I can play those all day long and sound like I'm a, I can play at the beach, I can sound like I'm professional, right? Because that's really all most people want to do when they play guitar. But you have people who are like, I want to get more serious about this. And you're just teaching them how to play the four chord songs. So how about this, you recommend them to us. So we just went to all of our competitors, and turn them into partners and took that program from about a 1.2 million a year affiliate program to a four and a half million dollar affiliate program in a matter of a year. And so your customers, your competitors, affiliates, and your actual competitors, because I never looked at ultimate guitar as a competitor with a $200 course they have a $7 a month membership. We're not even playing the same sport. We're not competing for the same customer. And the same was true of us, we would go to people and say, hey, you've been on our email list because we had a you could be on it. We had 50,000 people on our email list, you never bought a thing from us. It was the other thing we built. When I got there was we started building an email list of non customers. And we went to them and said, Hey, you haven't realy bought, it's not the exact language. But effectively, you haven't bought anything from us. Maybe it's because our course is $200. And you don't have $200. Here's ultimate guitar for $7 a month, you can learn to play the four chord songs, great way to start, we recommend them go sign up. And the cool thing about is they go over there. They play the four chord songs, they get hooked and what they do, they come back to us, we actually found that 22% of the people they refer to us originated in a referral from us. We turn them into customers by selling them to someone else's totally like you can't do that with Coke and Pepsi. And that's what you have to understand is in most industries, most not all, most industries aren't Coke and Pepsi. Most industries aren't Ford and Chevy, you know, how often do you buy a new car? I don't know, the average person I'm just going to guess buys a new car every seven years. That's just a guess I have no idea. We buy one about every six years. So Sure. last car we bought was either going to be an Acura RDX, or, or the Lexus RX or whatever. There were only two cars. One company, one in one company lost. Now it happened to be the RDX by the way, I just wanted to say great car, we're probably gonna buy another one. Okay, but that's not the point. One company one and one company lost, there was no way for them to work together. Like, Hey, I really you didn't buy the RDX figure on it. But let me recommend the Lexus are actually you know, like, that doesn't happen in that world. Because it's, there's not enough, there's not enough to go around. But in most industries, there's enough to go around and you can work with your competition. So that's the 80/20 in terms of where to start finding affiliates all about.
Joe Troyer 23:07
So after you find affiliates, what's the next thing I guess? pitching affiliates? Right? So when it comes to an effective pitch? Matt what gets an affiliates attention? Right? What's the thing to open the door so that you can actually have a conversation?
Matt McWilliams 23:24
Yeah, I mean, the most important thing is you got to get the first email read. There's a couple of secrets there. Number one, you're actually not trying to get them to say yes, in the first email, that's the biggest mistake I see is. So it's like, I have this company. And we started in 1984. And it was started by my grandfather. Oh, by the way, my grandfather's favorite color is purple. And now what happens is this email goes long. And we have this feature and this feature and this feature and this feature, when's the last time you read an email? I can't this isn't even fitting on camera. When's the last time you read an email from somebody you don't know? That's that long. What if it was that long? Would you give it a quick look, of course, of course, the first email that you send effectively, again, we've got a template we can we can share with everybody that's in this PDF. But the first email basically says, Hey, here's why I'm reaching out to you. Here's what I have, kind of share more info. It's a three or four sentence team of four at the absolute most, we're not looking for them to say yes, some people will say no, every now and again, we'll get a yes. Typically the yeses that I get these days and from people I have an existing relationship with. But I would say maybe one out of 100 people that I reach out to cold. They just were so hot, and maybe they were already thinking about Gosh, I was actually hoping somebody reached out to me. I mean, it does happen, you know, so they say yes. Well, you're looking for my favorite three words, Joe, tell me more. Because now what you've done is you've opened the door to a conversation. You've now they've now given you permission to write an email this long, it's never that long, it's never, you know, like 800 words, but they've given you permission to say, Okay, here's the deal. Here's my here's my product, and here's who it serves. Here's how it helps them. Here's how it similar to this thing that maybe you promoted before for reaching out to a competitor's affiliates, but here's how it's different. That's important. You want to acknowledge that you're not trashing the other company, you know, it's you just lose them right away, like, Oh, yeah, you're an idiot, you're promoting something, that's crap. You just say, here's how it's similar. It's very similar to this, but it's different in that the light shines brighter. And also, the light bulbs last 25% longer. And that's good for the environment, you know, whatever, you give the details, like, we pay a 30% Commission, and it's a lifetime cookie, that means that, you know, they get paid forever, you know, for the lifetime of the purchasers and, and you can earn up to, you know, $19 and 14 cents of sale on this, you know, $60 product or whatever the, you know, the math is, let me know if you have any questions. Now, the key is, when you reach out that first time, we all know this, hopefully about email, or any form of, you know, communication could be an Instagram direct message. It could be a Facebook message, it could be a tweet, be whatever, um, you're gonna hear back from about five or 6% of people. And so we follow up every, every eight days. For 10 times, there's only reason we pick eight days is then you're following up on a different day of the week. That's literally the only reason. It's also kind of around that time when open rates tend to completely go to almost zero. Most emails are open within five days, you know, there's some stragglers on day six, and seven. So we mail them on day eight, is a really high value prospect. Then, after about five or six emails, we stick to email initially, because I mean, most people when they're doing this, you know, if you've got millions of dollars laying around totally cool, then skip to step two. Most people doing this don't, you know, I mean, when I first did it, we literally had like, a couple thousand bucks, and we kind of needed that to pay people. So maybe you're in the middle. So we start off with email, because it's quick, it's easy, it's free, you know, but eventually we'll go to physical mailings. And we'll reach out to them. But the biggest thing is that first email, it's got to be short and sweet. You're not looking for Yes, it is absolutely no more than four sentences.
And then yeah, I mean, that's how you reach out for your customers, you reach out to them. And it's kind of the same thing with your customers, it's not a cold reach out. So you have a little bit more leeway. Maybe it's five or six sentences, but you're still not trying to write a book to them, you're just trying to get them to start that conversation about this new transaction. If it's a competitor, I mean, literally like, I mean, I've perfected this over the years, we will reach out, and it's like, I'll give you the exact email that I would use today. If I were reaching out to Dan Denley, I probably use, I probably made the mistakes that I just talked about. When I reached out to Dan the first time it was probably too long. But it worked. And we did millions of dollars together in business. But I would probably reach out and say, Hey, Dan, it's Matt from learning master guitar. I'd love to you know, I'm new to the industry. And I'd love to, you know, chat sometime. Let me know, you know, when's a good time for you? Or, hey, Dan, you know, it's Matt actually have some really cool ideas for how we could send each other some business without cannibalizing your own sales, do you have some time to talk in the next week or two? minutes? two sentences, right. In most industries, that'll work. You know, most industries are pretty, you know, they're most industries don't have a ton of, you know, people there's, you know, it's not like they're they're talking to their competitors every single week. And they're like, I talked to a competitor last week, you know, No, nobody, nobody does that. So yeah, I mean, it's very short, very sweet. And then it's just the follow up, you know, I think so we do 10 times, over the course of the first three months, then usually, we'll press pause for about two or three months, and then we'll do 10 more times. You know, because sometimes people just aren't, you know, they're going through a season of life, or they're not checking their mail or whatever. Like I said, if it's a high value prospect, we'll move to things like physical packaging, and we'll try different modes, we'll try, we'll email them three times, then Facebook, message them, and then you know, email them two times, then Instagram, messaged them, and then well, you know, two more times they reach out on LinkedIn. And then when we take that break, then in the next round, we'll like, focus on, you know, more LinkedIn, or more, whatever We'll see, we'll look I'm like, you know, they haven't tweeted in a year and a half, probably just remove Twitter from, you know, reply, just not dm them on Twitter. But if they're super engaged, it's like, wow, they've responded to 56 people in the last week on Twitter, let's just open message him on Twitter. You know, let's just message him, like, we'll do the research and try to figure out what's going to be the best way to reach out to them, we'll look and see who they're friends with on Facebook and go, man, they know so and so. You know, so and so comments, don't they? They had a five message exchange with so and so on a Facebook post. And I'll reach out to Brian. I did this just recently, my friend Brian Dixon said, Hey, Brian, can you give me an intro to Jennifer? He did. Now Jennifer and I know each other and bada boom, bada bing, you know, and like after trying to engage with this person for months and with no success like that we have success and so you have to keep it's really just persistence
Joe Troyer 29:57
For sure. 100% so I love that you talked about the different types of affiliates, you know you said customers, competitors, and then competing? competing affiliate, competitors affiliates, what I picked up there is that your pitch to each one is different. Because it's, it's all about what's in it for them. And you got to really understand that. I think, anyway, but especially when you get out of the internet marketing world, so to speak, and you're trying to run a partner program versus an affiliate partner program, right? It's more you scratch my back, I'll scratch yours. And a lot of times, there are, there are a lot of competitors. And you got to figure out what is what is the symbiotic way that we can do this without cannibalizing. Like you said the list, right? How can we do this in a way that actually makes sense? So I thought you had some really, really good takeaways there.
Matt McWilliams 30:57
Yeah, I mean, I would, like it works in almost every niche. It really does. You know, if you collect if you collect contact information, and somebody doesn't buy from you, then try something at a different price point. Now, if you have a product suite, you know, which most companies actually don't, really. But if you have a product suite, if you make a I'm looking at a tripod right now in my studio, so if you have, if you have a $50 tripod, that one's probably about $120, you have 120, a 500, and a 2000. I don't why on Earth, you'd ever have a $2,000 tripod, let's just say you do probably a bad example. But let's roll that you may never need to promote a competitor. But what if you don't have I've just happened to have it on my desk? It's totally not an advertisement for the mother, I shouldn't I should have an affiliate link. I think I do. I just don't know what it is. But what if you don't make a handheld one, you know, like this little guy, the switch buyer where if you don't make a handheld, you have no intention of making one. And then you reach out to your audience and you say, you haven't bought the other tripods, you subscribe to our videos about how to make better videos, but you haven't bought one of our tripods. And you just ask this question. And you have you have three links. Why have basically why haven't you bought our tripod? Why haven't you bought one of our tripods. Link. Number one, I already have a tripod, it works great. link number two, actually, I already own one of yours. And link number three, I need a different kind of tripod than what you have. And when they click link number three, it goes to pieces. Okay, what kind of tripod do you need? Do you need a handheld? Yes, I do, then you promote the switch pod. And now you've taken this customer from somebody who's going to make you exactly zero dollars into I think you make 10 bucks off of em, which is probably about what you make selling him your cheapest tripod, you know, in terms of sales, the cool thing about it is you make 10 bucks, okay, maybe you make 17 selling him your cheapest tripod. But with this one, you don't have to do any of the customer service. You don't have to do any of that. And now you've got with this company, because I know for a fact that's the only kind of tripod that you know, Pat and Caleb make. So what if, what if they're promoting and they're saying Why haven't you bought the switch pod yet? Well, it's because I really need a bigger, you know, more sturdier tripod that I can use outside, that'll stay put, because this one's you know, once again, it's meant for handheld or like desktop, it's not the big kind. So that's what they need. So they do the same thing. And now they sell some of your $200. You know, or whatever I said $120 tripods, I mean, you work in it, you're not neither one of you is hurting your own sales in any way, shape, or form. In fact, you might actually be helping it because if the reason why they haven't started producing videos is because they haven't found the right inexpensive handheld tripod, and you help them solve that problem. Now you get a following on YouTube. Now, what do they need, you know, nine months later, a bigger one and a better one, because they have the money to buy it. So it actually works out really well. Like I said earlier, 22% of those people that Dan Denley sent us were people that we had originally referred to him that, they never would have bought anything from us.
Joe Troyer 33:54
It's the ascension model without you actually having to create the product because
Matt McWilliams 33:57
and I will say this, this is the other thing it teaches you. We're not talking about promoting other people. But one of the lessons we learned was we really needed to create we proved concept about two and a half years after we started working down we created our own blues guitar course yet, you know, and it proved but it proved to do we could have been like I think that would do popular. Oh, you could survey if I created a blues guitar course would you pay $99 for a surveys can be I mean, you saw the 2016 election basically it was surveys, right? That were wrong. You know, that happens all the time. But if we actually sell a quarter of a million to half a million dollars worth of Dan's blues guitar course, that's proof of concept that if we made the same product, we probably sell just as many if not more
Joe Troyer 34:41
Love it, what, so we've talked so far about where to find customers or where to find affiliates how to pitch them. I think kind of the last pillar and tell me if I'm missing something, but I think the last pillar is how do you manage how do you retain them? How do you keep them happy? Right? How do you get them to keep sending you traffic versus having Yeah, I sent that one email and it's over. Right, like, thanks. See you later, you know?
Matt McWilliams 35:07
Yeah, that is the big thing is it's the secret sauce of what we teach. There's really a couple pillars in inside of that pillar, I guess. Number one is just great relationships. No die affiliates is what I always say, you know, you can't know every single one of them if you build. I mean, we, I guess when I worked with Shutterfly or Adidas, for example, we had hundreds of thousands of affiliates. I did not know all of them. I knew our top couple hundred, though, I knew that. I mean, it wasn't the 80/20 it was like the 95/5, you know, 95% of sales are going to come from 5%. If I knew the 5%, I knew that 5% or 2%, or whatever, you know, I knew every one of them. And, and to this day, I still like, you know, I, I know their email addresses. And I know, you know, I still communicate with a bunch of them. We're not even doing business together. And I still, you know, I still have their in their cal, in my calendar have their birthdays. You know, every day, I have about two birthday message, two birthday reminders pop up, and I'm shooting a couple texts to people you know, or giving them a call, wish them a happy birthday. So ya know them have you know, their relationships. The list meets all the basic stuff that we learn, right? If you're in sales, right? Don't say how's your wife doing? Say, how's Katherine doin? You know, like, it's a little thing like that. If you say, how's your wife, I'm like, you don't even know me. All you know is that I have a wife, you know that I am married, like, congratulations, you can figure that out by looking at a picture of me on my website, where By the way, underneath that picture, there's a caption that says my wife's name, and you mean to tell me you didn't manage to pick that up and write it down? You know? So know their wife's names, know that they know that they homeschool versus and that, you know, know that know what their favorite sport is know where they went to school. I mean, if you can't remember this stuff, go to their frickin LinkedIn profile before you talk to them. Um, I a little trick, you know, I would look up, I would keep all these little things. And so it's like, I remember back in 2010, no, 2011. When, trying to think who won that year, it was 2011 when you UConn beat Butler in the national championship game, NCAA Final Four. And I specifically remember before the game, I made a list of everyone I knew that went to UConn three people and went to Butler one. And I knew no matter what, that night, I was going to be texting three people or one person, actually, I ended up texting all four. Because I texted the guy from you know, who went to Butler and just like, Man, what a great game, it was so close, right? You know, but like little things like that. It's just relationships. That's number one. Nothing will ever Trump though conversions. You know, and ultimately, what affiliates care about in all partners care about is if I send, let's just say 1000 people to you, oh, it's my gonna make per person. You know, if I send 1000 people to you convert it, let's just say it's a medium end product, it's not a super high, it's not a you know, multi thousand dollar product where you might convert, you know, one or 2%. And, you know, it's not toilet paper, where you convert 70% of the people, right? So it's a it's a medium, it's $100 product. So you're going to convert 50 out of 1000 people. And let's just say for argument's sake, let's just say it's a 20% commission on $100. That's $20 times 50. If I'm doing the math, right, I think is 1000. Is that rough? I don't know, that's good math there. So I'm gonna make $1,000 on 1000 people, dollar per person, that's actually pretty decent. Anything north of about $1 50 is really good. So you're just looking at the math and going, Hey, Okay, I'm gonna make you know this much money. But if I promote this other person, and they make twice as much money as a problem, so we either have to adjust the commission, or you got to have better conversions. And so you want to convert? Well, you want to have good commissions, people ask me all the time, like, how do I determine the commissions you know, you have to account for cost of goods. So we have a whole formula, you subtract cost of goods, you subtract, you know, things, and cost of goods is incremental cost of goods. So, I'll give you an example, if every, if every one of these I make cost me $20, that every time I sell when it costs me $20, if I shoot a course, and it costs me $25,000, to produce the course, I spent $25,000, whether I sell one or 1000, you know, so that doesn't count. You know, if I have to buy lights for a studio, that doesn't count, you know, as a cost of goods. So your incremental cost of goods, if I have to hire a coach, for every 400 people, I sign up, and I paid that Coach $40,000 that's a cost of goods at you know, what, 10, a hundred bucks per person, you know, hundred bucks every time I sell a course, cost me $100 for a coach, you know, that's a reasonable, so you subtract that. But ultimately, really, what it comes down to is if your competitions at 25%, you'd better darn well be between at least 20 you can get away paying a little bit less than the competition, maybe if you're the new guy, you probably can't. And in fact, what we recommend typically is you find a way to match the competition, even if it kills your margins. Like you can't lose money, of course, but even if you're like, man, I mean, I'm only gonna make 7% Well, it's 7% of something versus 100% of nothing, you know, Not to mention, as you get better as you improve as you improve your conversions, and as you improve, as you cut your costs, that 7% will become eight will come nine will become 10 will become 11. And eventually, you can actually pay more and run the competition out. I've done that in one business where we just came in, we paid our affiliates so much we didn't make very much, it kind of sucked for the first six months. But eventually, we actually literally caused an entire company, our biggest competitor shut down their affiliate program, they could not compete, we knew that we knew their cost of goods were too high. And we knew that they were not willing to not make a certain amount of money. And eventually, we forced them to close their affiliate program. So we got all of their affiliates.
And by that point, we had optimize things to the point where we're making a lot of money, but now we were making, you know, 20% of a crap ton as opposed to whatever we would have made if we'd had a lower commission. And so yeah, just serving them, making sure they're converting making sure they're making money, knowing them relationships, 101, it's really, it's all that stuff. I mean, whether you manage it in a spreadsheet, or in a in a CRM, calendar reminders, I mean, this thing right here, I call it the magic rectangle. You know, I mean, this thing right here, it tells me when I need to do everything, right now, it's reminding me that I need to write my kids some notes for the day. Also, I need to order shoes, I need some new gym shoes. And so it's like the magic rectangle, it tells me when to do stuff and what to do. And it's like, I don't care how you manage it, you can use a task manager, you can use Asana or, or Trello, doesn't matter. But as long as like you're maintaining those relationships. And so for me, it was just a rhythm of every day, I was reaching out to five people, you know, I'd reach out to five people that were already affiliates and serve them I also had a rhythm to reaching out to new affiliates. Typically, we reach out to about 10 to 15 new affiliates every single week, just on end, you know, nonstop every single week, just consistently, I try not to reach out to 50 a week and then none the next, you know, but like, it's just that rhythm. You know, every day, I'm gonna reach out to five people, I'm gonna shoot five people, sometimes it is the simplest stuff. It's like, I'll go to their Facebook profile and see that their kid want to literally, you know, championship and it's like, Dude saw your post on Facebook. That's awesome. Like, that's it. Something that just makes him feel again, man actually gives a flying crap about me because I do. Yeah. Like I could probably sell more stuff. But it's, it is relationships 101. And you know, and like you said, Yeah, the conversions and the Commission's are important, but it's, it ultimately comes down to just relationship management.
Joe Troyer 42:30
For sure, I love the recommendation to like, figure out how to match what other people are paying, right? Like, because if you can do that, it becomes a whole lot easier. And it's not just the relationship, right? And people are greedy, right? It takes a while to build a relationship. And so I find if you can match the commissions it works out a whole lot faster. I'm not saying don't build a relationship. But it makes it a whole lot harder for somebody to say no, immediately.
Matt McWilliams 42:59
While you're waiting for one more thing on that Joe, actually, if you can find a way to stand out. So if there's a way, so I'll give an example, some of our front end funnels. On our so we have, we have a funnel, where the first offers $37. The next offers 97, the final offers 1000 or 2000, depending upon the funnel, we pay 80% Commission on on the $37 and the $97 products. Like that means you make like no money. First of all, we pay Facebook about 105%. commission, we're paying about 100 like our our make whatever night 37 plus 97 is we're paying like $5 more than that to acquire them. We're willing to do that, because then we make all of the, you know, the when we sell a thousand dollars of course. But it's it's mainly it's a way to stand out and it's 80% on 140 bucks, you're certainly paying the standard 40% commission on the thousand or $2,000 product. But it's something where the affiliates go, Whoa, 80%. Like that's almost insane. And so it's a way to kind of cut through the clutter to stand out to prospective affiliates. It also allows us on occasion, we'll run a promotion, we're paying 100% commissions. So I think we're going to do that in October, actually, for the month of October on on a specific funnel. And then I think like next January or February, we'll do it on a different funnel so that every quarter ish, we'll just we'll do 100% commissions, and it's 100% Commission on the first two things of the funnel. And technically we lose money because we have to pay the credit card processing fee. But it's just a way of getting people in sales go up. And then sure enough, what happens the following month when we then pitch them on the higher thing we sell a crap ton of them. And so it cost us what an extra 20% it was totally it's still cheaper than Facebook. It's still cheaper than everything else we can do. And it gets them excited. And here's the thing. It's not like if we do that in October it's not like they just turn off their promo on November 1. the lift in November, all the way through the following You know, when we do the promotion again, it'll eventually begin to teeter off a little bit. But it's so much higher in November than it was in September. All because we did something in October. And so it really didn't cost us any money actually makes us money, you know, we'll just do that it's only an extra 20%. So there's little things you can do. We didn't get, you know, we din't talk about that. But like, as far as like, the ongoing stuff, it's all about keeping up their excitement keeping them engaged. We call them ETMs or ETPs. You know, excuses to male excuses to promote. We're looking for just like, it could be anything. I mean, it could literally be like, we did one this year, it was like, hey, it's my it's Matt's birthday. So we're doubling commissions all weekend long.
Joe Troyer 45:41
Yeah, I love that
Matt McWilliams 45:42
double double commissions. Why? Because it's Matt's birthday was in ETP. You know, it's Labor Day weekend. So we're doubling commissions, like, you could do stuff like that. That's super fun. You know, make up, try stuff out, see what works for your affiliates. And for you know, for your company.
Joe Troyer 45:57
We've done some stuff. I love the hundred percent. We've done some stuff for big affiliates, when we're doing pushes, or contests and just been like, Alright, great. So you're here, you get to here and we're gonna, we're gonna give you 100%. But we're going to prorate it back to your first sale, because then the money is huge. And then they're like, wait a minute, like they just lose their mind. Like it's a feeding frenzy. So it's just like, so we don't promise it at first, we'll get them on board. We'll get them excited. We'll get them competing. Get their egos involved, right? And then we'll put that out. And that's worked really, really well.
Matt McWilliams 46:29
Yep. In the beauty of that you just mentioned, a really cool, like, that's a one on one engagement. That's not every affiliate gets this. But like, we'll look at these numbers. So we're about at that time, or we'll do this. We'll look at where an affiliate is through q3 compared to q3 of last year. Let's just say through q3 of last year, they sent 100 sales there q3 of this year, they sent 150. So they're down 25%. We'll look at their total for last year, you got kind of write these numbers down or picture them mentally. Total last year, they made 300. We will say hey, last year, you made 300 sales and other down this year, so they're on pace to do like 240. We'll tell them that. We'll say hey, last year, you 300 if you beat that by even one sale, I'm gonna give you a $25,000 bonus or a 5000. It just depends on the course again, if you're trying to open a $25,000 bonus, but if it's if you're selling a $2,000 course, yeah, $25,000 bonus if you if you match your number, they're like holy freakin crap. Now here's what happens. This is the beauty of that. First of all, nobody ever lands on exactly 301. one of three things typically happens really want to, they end up, they push, they push, they push, they hit 342, they hit 321. So you only pay that $25,000 bonus on the 60 sales. That they that they were from where they were going to make to what they did to the 300. The other 21 sales were free, essentially, but you make. So now you've got an X, you go well, that's 25,000. I mean, that's a lot of money. Yeah, but on an extra 81 sales. If you if it's a $2,000 course, for example, 81 sales, and you're making 12, you're paying a 40% Commission, you're making 12. So you're making what $96,000, and you're paying 25,000, it's pretty good deal. Or they push, they push, they push it instead of 240, they hit 288, they missed the goal, you paid nothing, and you made an extra $60,000 just because you gave them a goal to shoot for. And those type of things where it's like you can do these things, and you can get a little crazy with it, we'll do I mean, same kind of thing. It's like, we'll look at the numbers. Let's say it's during a product launch. So two, five day, you know, launch sequence, right. And three days in, we know, we know, we know, we know from their past performance, and from our, our macro level, you know, performance, that three days in we're at about 45%. That's normally where we'd be, you know, for this particular promo. And so we're looking at and they're at 45 sales, so they're on pace for 100. We'll look at and say you're on pace for 100 sales. If you hit 120, we'll give you a $20,000 bonus. Again, they're not going to hit 120 they're gonna hit 137. Or they're going to hit 111 in die trying and either way, you know, we make extra money. It's a win. So yep, little things like that. Go along with them.
Joe Troyer 49:34
Love it, man. So we talked about where to find affiliates how to pitch on how to manage and keep affiliates. Is there anything that you're like, man, I'd be remiss if we didn't talk about this, or is there anything that we didn't hit? I think we did a really good job.
Matt McWilliams 49:48
I mean, I think the big thing is just to do it. I mean, you gotta
I hope I made the case. You know, like
cheaper, lower risk. more scalable way to grow your business than to have an affiliate program. And it's like, I just say all the time, I'm like, I'm not saying that every small business, you know that every six and seven and even eight figure entrepreneurs should follow what the Walmarts of the world and what the targets of the world and what the best buys in the world. They're doing. What Amazon's doing, they all have affiliate programs, like not only do the mom and pops have affiliate programs, not only can you go to an affiliate network like shareasale, and find, you know, 10,000 programs, you look at these companies that were mom and pops, I think of Fanatics. I don't know if you know who fanatics is. But when I've known Fanatics, I know the guys who run their affiliate program, they're actually dear friends of mine, they were running it when it was like a $5 million affiliate program for I mean, like their affiliate program was almost the same size as the company I was running in 2010 just helped me helping them out like it was we got them from about 1.2, I think two, or 1.2 1.4, to like just four and a half million dollars and Fanatics was barely bigger than us. Fanatics is a massive company now. All on the backs of affiliates. That was 100 100% of their growth, to be able to get to the point where they could do branding, where they could where they actually had the pockets to be able to do branding in the pockets to be able to run Facebook ads in the pockets to be run television ads, and banner ads. That all came because they had an affiliate program that was making them a massive amount of profit. And so all these companies have affiliate programs that should tell us something. Yeah. And I've never once had a niche, or price point that doesn't work. So starting affiliate program, that's I mean, for sure. I feel like you have to you have to
Joe Troyer 51:42
for sure. And and I think the only thing is, is that in some cases, some people don't want to be compensated. It sounds strange, right? But sometimes there's there's there's ulterior motives, or there's motives that are stronger than the affiliate payment. And what you have to understand is, who is that partner? What do they want. And that's why I say, it's not just an affiliate program, it could be a partner program, we are one of the companies that I own does white label fulfillment for agencies, everybody that, that we work with our resource partners, they're agency coaches, they just want when they help somebody get a client, that they have a safe pair of hands to actually get the fulfillment done. Because if they don't, they're leaving, they're gone. Like, the person can't keep the deal, they don't get the return on investment. And they don't want their hands dirty, so to speak, they just want a safe pair of hands to do the job. So they can retain the customer long term. So just put yourself in their shoes and figure out what they want. And that'll go a long way. And this can be used for a traditional affiliate program, it could be used for a partner program, either those, those terms, and and I think you'd be remissed not to really, really, you know, take a look at this strategy. So Matt, dude, this has been frickin amazing. We'll make sure and link up to, to the free report in the show notes, so that everybody can see it. And then to wrap this up, man, one question, instead of asking you to recommend three books, I do something a little different on the show, I feel like that's overplayed on on every podcast out there.
Matt McWilliams 53:15
I cannot recommend only three books. There's like 100, that it completely transformed my life. So I'm glad you're not asking that question.
Joe Troyer 53:22
Well, good. So let's let's let's dial it in a little bit. What's the one book that as you look at your business, you think has made the biggest impact and why
Matt McWilliams 53:32
it's got to be such a such a cliche answer. But it's got to be influenced by Robert Cialdini. I mean that book is. So I'm actually looking at a book that I'm getting ready to read for about the seventh or eighth time just to kind of go through it is How to Win Friends and Influence people. That was that was the book that kind of got me started. What what Cialdini did was took that book and added for that part of my brain that kind of relies on the fact, like, I can read How to Win Friends and Influence People go, yeah, that that passes the smell test. But where's the psychological evidence for that? And Influence has that. So it's like the thing about Influence, as well. Sorry about Influence. It's the best marketing book ever written. It's not a marketing book. And it's the best customer service book ever written. It's not a customer service book. It's the best sales book ever written is not a sales book. It is the best parenting book ever written. It is not a parenting book, it is the best marriage book ever written. It is not a marriage book. that's saying a lot about a book. I mean, it's it's all about influence. It's all about persuasion, you know, and it's got so it's got the nerdy stuff that really appeals to that nerdy side of me, you know, the the, the psychological studies and all that. And I'm going to geek out on that, but it's also got the practical applications. And I mean, that's it's, it's, it's also the book that led me into that world, The Small Big and I wouldn't have read Gotcha. Pre suasion, you know, I wouldn't have read any of his other books, I wouldn't have that. So, and it's been the lens through which I have read every other marketing or sales. And I read I mean, I've read at least 200, marketing sales and entrepreneurial books. That book has become the lens through which I see all those and I see, like nobody's teaching anything that Robert Cialdini didn't write about, it's, it's actually very rare. It's fascinating. You want like, oh, if you do your webinar this way, I'm like, yeah, that's, like page 82 of Influence. Like, and I can remember these things, you know, like, Yeah, he wrote about that. And yes. And he referenced what he wrote in influence, you know, so that's the book, man. It's got to be Influence
Joe Troyer 55:40
That's awesome Matt. Definitely, we'll have to check that out. I haven't read that book until deenis. I've read a couple others will definitely check that out. Matt, man, thank you so much. If somebody wants to reach out and connect with you personally, is there a place that they would find you on social media that you're most active?
Matt McWilliams 55:53
Uh, yeah, just go to if you go to Matt Mcwilliams.com Ford slash Facebook, that'll redirect to my Facebook page. Yeah, just reach out to me there and hit me up on Facebook and say, Hey,
Joe Troyer 56:05
I man thanks so much. I really appreciate it. I know everybody's gonna love this episode. Guys. Again, I can't talk about this enough you would be remissed if you don't do this. This is a playbook in every one of the companies that I'm working with on coaching. I'm running I'm investing in and in you should be as well. Hope you guys enjoyed this episode, Joe Troyer signing out.