Optimized Ecommerce EP 073 – How to Build a Seven Figure Business Through Compound Layering

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Matthew Stafford Sep 29, 2021

Welcome to Episode 073 of Optimized Ecommerce – How to Build a Seven Figure Business Through Compound Layering. I’m your host, Tanner Larsson, CEO of BGS.

BGS means Build Grow Scale! It is a community that we founded where eCommerce entrepreneurs and physical product sellers come to learn how to take their businesses to the next level.

Jason Portnoy is a father of 2 amazing little ones. He is also an entrepreneur—the founder & CEO of JPORT Media, a full-service digital agency that helps clients build their brands, win, make more revenue, get more clients, and increase exposure.

He is a contributor for Social Media Examiner, Addicted2Success, Thrive and The Good Men Project. He has also been featured on radio, magazines, and newspapers—as a social media marketing and entrepreneurial thought leader.

Jason is on a mission to deliver effective marketing strategies for businesses of all sizes because not enough businesses understand how to implement effective digital marketing.

Here’s just a taste of what we talked about today:

Jason explained how he came up with the whole concept of Compound Layering.

The concept of Compound Layering originally comes from the financial world and Jason heard this from the nation’s top life and business strategist—Tony Robbins.

Tony Robbins gave a great example that most people would understand:

When two people are playing golf and are about to tee off. One of them said, “Let’s play 10 cents a hole”.

Then the other player said, “Okay, not too bad”.

Right before the first player was about to hit the ball, he said, “Let’s double every single hole”.

Then the other player said, “okay, not that bad.”

As the other player starts doing the math in his head, 10 cents, 20 cents, 40 cents, what most people don’t realize is when the player gets the whole 18, it’s worth around $13,000.

Tony Robbins connected that principle to how investments work. How do the best investors in the world use compound interest to their advantage?

It was Warren Buffett who said, “Genes don’t matter and all these things don’t matter.” It’s the rule of compounding. Albert Einstein called it the eighth wonder of the world.

With all those concepts, Jason started looking into that and said, if people grow their wealth like this, how could people grow their businesses like that?

Then, he discussed how to apply Compound Layering to the four main leavers in a business.

The four main levers in a business are:

Awareness, this is where people know your brand exists, that’s traffic coming to your site. However you want to measure that through your website visitors, impressions on your ad etc.

The next one is conversion, it’s the number of people who saw your ad and went to your website and bought your products.

Then we have the price, which is your average order value.

And the next is the buying frequency. Those are the four main areas that make up a truly successful e-commerce business.

In the service-based industry, there is a fifth lever—lead generation. But if you doubled each one of those, you don’t get a 10x growth, 2x growth, or 5x growth, you actually get a 32 times multiple.

The multiplying effect is just so large and you can even break that down. You don’t even need to double what you got—which is 10% better in all these areas.

Instead of calling your agencies and asking, “How to scale more on Facebook? And how to dial in more on this?”

You should be telling your agency how do we get 10% better on Facebook, then you should be calling a guy like Tanner and ask, “How do we get to 10% better on a conversion rate, also your email marketing? How do we get 10% better on repeat buyers?”

And then, speak to your team and ask them, “How do we get better in average order values?” —whether that’s upselling, cross-sells, etc…

That question, “How do we get 10% better or keep incrementally better ads up?”

It’s not a 10% return anymore, it’s massive, it’s almost 16 times growth. So that’s where the compound layering comes in.

Businesses these days are looking at it all wrong. What they need to focus on is their incremental growth, because that’s achievable. Lumping all your resources on one tactic doesn’t work.

We also discussed a few other fun topics, including:

  • The benefits of Compound Layering.
  • How to start applying Compound Layering in your business?
  • Inefficiencies in every single business that can be capitalized.

But you’ll have to watch or listen to the episode to hear about those!

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