Product, price, place, and promotion. These are just some of the elements considered in marketing a product. These elements constitute the framework by which business owners build their marketing strategy. In this episode, Michael Buzinski, author of The Rule of 26 For Service-Based Businesses: Three Steps to Doubling Website Revenue, discusses why KPIs should be business owners’ focus to help them double their revenue. He also gives an in-depth discussion of his book. Tune in to this episode and get some practical, actionable insights that will help you grow your business.
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The Rule of 26: Use this Marketing Strategy to Double Your Results With Michael Buzinski
I am excited because it’s all about saving you time, money, and effort, but at the same time, getting a greater impact. Who doesn’t want that? That’s why you guys are here. I’m excited to be talking about that with Buzz, Michael Buzinski. He’s a lifelong entrepreneur, a digital marketing thought leader and author, and a Chief Marketing Officer of Buzzworthy Integrated Marketing. To keep things short and simple, he talks about as simple as his digital marketing process. He’s going to talk to us about The Rule Of 26, and there’s a lot more to say about Buzz, but I’m going to let him say it himself. Buzz, welcome to the show.
Thanks for having me.
I introduced and talked about this is all about working smarter. What is it that you were contributing to our audience for how they can work smarter?
I’ve been working with businesses in their marketing and have been in marketing for many years. One of the things that I noticed over time was that the strategy part of digital marketing could be grueling for people because they don’t know where to start. Digital marketing has not been around very long, but it has created many splinters of types of marketing that we can discuss. Back in the day, there was a newspaper or a magazine, and then there became the radio. It was just radio. You did radio ads, then TV and you had TV ads, then the internet created all these other things, social media.
It’s insane, the number of channels. You’ve got things like TikTok. It’s ever-expanding.
I needed to find a way to help people understand what matters to them when it comes to their website marketing, specifically for service-centric businesses, but The Rule Of 26 can be used for any type of business. The book specifically talks about service base, but the similarities amongst other types of businesses definitely lend themselves to the book.
What is The Rule Of 26? The people are like, “You drop this on us, and now you’re not going to tell us what it is.” Why do I need to know about it?
The Rule Of 26 is a strategy that allows you to only focus on the KPIs of digital marketing. KPI is Key Performance Indicator. Within digital marketing, that means something to you. They are KPIs that move the revenue needle. The Rule Of 26 states that if you increase your unique traffic by 26%, your conversion rate by 26%, and your average revenue per client by 26% from your website, you will double the amount of revenue you’re getting from that website.
Let me get it that I understand this because I think that people don’t get it. They’re always so focused on the end of the trail, which is how much revenue and they don’t understand that if you tweak in the beginning, the leveraged and the multiplier that you get at the end. From my understanding, if I can get more people to see me and I can convert more people, even if it’s 26%, that’s going to lead to double the income because of the process as it filters down.
I wanted to find a way to Limit how many KPIs we have to look at. If you go to HubSpot, they tell over 100 different KPIs you can track in digital marketing. I’m not going to look at it. I’m a digital marketer. How am I expecting anybody to take a look at that many? When we looked at this, we said, “Where is it that we get the highest leverage?” We’re leveraging specific KPIs so that we don’t have to increase evenly. We can get an exponential return by tweaking specific KPIs that have a direct correlation with your revenue.
If you increase 26% of your traffic to your website and you get to charge the same amount on average per client and the same average convert from the website as clients, you may have 26% more in income. That’s cool because a lot of times you get marketers who will sit there and go, “There’s this whole magic thing that happens behind the curtain here. Don’t mind all of that. Trust us, in twelve months, you’ll be richer.”
Give me an example. What’s a KPI that you track that has that direct impact that we can see the line through?
All three of those. We talked about the unique traffic. I’ll give you an example. If I have 100 people coming to my website and I have 10% of them converting to clients. I’m charging $100 and get $1,000. If I had 126 at a 10% conversion rate, it means I get $12.6 at $100, which gives me $1,260, which is roughly a 26% increase right there. Let’s take that and increase the conversion rate by 26%. Now we’re going to add 26% to revenue. If you do the math on that, you’re going to get 52% more revenue by only increasing each of those two by 26%. It’s crazy. If I increase the average revenue per client by 26% on top of those other two 26%s, I get a compounded effect. I no longer get 78%. I get 100% more revenue from those clients from the website.If you increase your unique traffic by 26%, your conversion rate by 26%, and your average revenue per client by 26% from your website, you will double the amount of revenue you're getting from that website. Click To Tweet
Everybody gets it. You explained it clearly. I love that. It’s that compounding effect as you go through and work on each of those stages of the process. Most people get and understand how to drive more traffic. There are various different methods to do that. I’m a little bit more interested in they’re scratching their heads, “How do I get people to convert? I know how to raise my prices.”
If you don’t mind, I’d like to spend a moment talking about the conversion because I feel that that’s one of the things that people don’t spend any time or money on because they’re spending it on getting more traffic and they’re not taking advantage of each of those. Give us some tips with that in mind so that we can create that leverage from the conversion piece of it?
I want to go back to average revenue per client because it’s directly correlated with your conversion rate. In that this, you don’t necessarily have to raise your prices by 26% to get an average of 26% income. One of the things that we find is that attracting the right type of client without even touching your revenue and how much you’re charging can increase your average revenue per client by 26% because not all clients are created equal.
We can identify our most profitable clients, the people who ask for the least amount of time for the most amount of revenue. Basically, the people with the highest impact with the least amount of effort are the most clients for you and are also usually your happiest clients. If we can identify those people, we can have less clients. If we have less clients paying more, we’ve increased the average revenue per client. Once we’ve identified who that is, then we go back to that conversion rate optimization. We take a look at how we’re talking to visitors on our site.
They were talking to those people.
Remember, you can make some of the people happy some of the time, but you cannot make all the people happy all the time, nor should you, because it’s very unprofitable. It wastes a lot of time trying to be everything to everyone. I’m sure you’ve had plenty of people tell you that on this show before, but I’ll say it again in marketing, market to who is most profitable to deal with, the people that you can’t wait for them to call you. When you see their email in your inbox, you go, “What do they want? I’m ready to serve them. I’m happy to serve them. They get me. They pay me. They appreciate me.” Those are the people we want to talk to.
When we look at websites, there are two things that most businesses fail to do, and this is why they have a low conversion rate. One is they talk about themselves. We’ve been trained to do that. What does a brochure do? It says, “We are so-and-so and here’s what we do.” We’ve been taught the website is an online brochure. That’s what you do. No. Now with search marketing, inbound marketing, blogs, social media, and all of that stuff, people are asking the internet questions.
They’re looking for answers to their problems, not your expertise, solution, or your accolades. People are selfish in this specific instance. They’re looking for a solution to their pain or problem, or they’re looking for a path to their dreams because that’s the only two things you can do. You can solve a problem, overcome any issue, whether it be pain or a mathematical problem, or you’re attaining a dream, “I want to go on a vacation. I want to grow my hair back.”
When we’re talking, first, we have to take the Is, wes and uses out of our vernacular, and the yous and yours, then we have to talk specifically to the perfect client’s pain, not everybody’s pain, just the current perfect client’s pain, then we can propose a solution and paint the picture of what it looks like when they apply this solution to their problem, so they can see how they are going to feel, what are they going to look like afterward? Only then can you suggest that, “If you want to learn more, click here and we’ll tell you about us.”
They have to connect that you are the person who can solve their problem and then they want to know how.
They don’t care how much you know until they know how much you care. If everything is about them, it doesn’t matter who you are. They will eventually need to understand who you are, like, and trust you, we get that, but that’s not the first page at all. Some people, “You put that in at the bottom.” “No. I put frequently asked questions at the bottom. About Us can be up at the top of the link.” You’ve been given permission when they say About Us, Our Team or any of those links. That’s when they literally, with their mouse, asked, “I want to hear about you,” then you can talk about yourself in relation to what you do for them. It’s not about your accolades.
In certain professions, we have awards, “If you’re seeing a video here, you can see. I have a couple of words there too.” We all have them if we’re good at what we do. Those are almost a given. People rather see what other people say about you. I’ve met some award-winning gurus in my day who were worth anything. They’re good at getting awards, but do they create results. Back in the day, I had this thing that says, “Less prestigious, more results.”
I forget a teacher that says, “Less talk. More action.” I love what you’re saying and the fact that you’re delivering it in a very simple way that I think everybody is reading and is getting. What’s the biggest challenge? Now I know what to do. What do you suggest next? Where are the biggest challenges that people aren’t getting to the next step of implementing?
Implementation is the next challenge. It’s really because there are two types of people. There are people with more time than money or more money than time. For those entrepreneurs who have more time than money, they have to figure out what to do. The book is full of tactical objectives that you can handle on your own and there are opportunities to get help with any of them throughout the book. It’s a short book. It’s only 120 pages as well.
I wanted it to be practical and things that people can do, but we also know that you’re going to hit a ceiling of capabilities. If I can get you at least 26% more income now, and even 52% and we run out of steam at that last 26% that lever there, you’ve saved a lot of money and you’re already making more money. Now we can afford that investment. The flip side is finding somebody you like and trust. Do it for you because you have more time than money. Your time is more valuable than the cash that you are willing to invest to get more money, which is buying more time. That’s where that whole dichotomy of time is money comes from.
As entrepreneurs, we’re eager to spend our time, yet it is the one commodity we can’t replace. We can always make more money. I see the biggest hurdle is in implementation and deciding whether you’re going to do it yourself or you’re going to find somebody to do it for you. In my case, we have done with you solutions that help people maybe in that middle where they have some time and money, but they don’t have all the time nor do they have all of the passion to learn a new skill because marketing is a skill and they know that they are better to invest money so that they can keep the time where they’re more passionate and in their genius zone.
One of the things that I’ve seen in working with clients, and I’m not sure this is time or money, but it requires your time, is that they’re not set up. They don’t have their numbers. There are a lot of companies and even bigger companies that you’d be surprised that they don’t even know what their conversion rates are. If that’s the case, then do I start there or do I start somewhere else?
Just so people understand that if they’re not even in a place where they know what those are, then they’re not even in a place to measure it and see what kind of progress they’re having. Should they chicken and the egg? Should they work on their systems and get that clear or should they start to implement and do the systems later?
In the book, I lay out very specifically that you have to know your numbers. You have no idea where you’re going. You don’t know what 26% looks like unless you know your numbers. The nice thing is you can identify at least one of those numbers by opening up your QuickBooks. That’s pretty easy. We see this many people, “This is our average.”
You’re talking about the average revenue per client. It’s tricky for some companies who may have multiple different products and variations of their products.
We keep it simple. That’s your average.
I wanted to bring that up because people get caught up in those little details. They don’t get further because they go, “We can’t come up with that. It’s too complex. Which one do we take?” Keep it simple and take the average across everything, is what you’re saying.
I boil that down to a year. You have a dentist who says, “A new client to me is worth 8 to 15 years worth of revenue.” It’s how many patients per household.
Those are different statistics. Lifetime value is different than your average revenue.We're eager to spend our time, yet it is the one commodity we can't replace. We can always make more money. Click To Tweet
The average revenue per client is only based on what time period you’re doing average revenue because it could be average revenue per client, per month, quarter, year, a decade or whatever that looks like, then you have your lifetime. What we say is let’s keep it in the year. In the last twelve months, you’ve had X amount of clients and you’ve had X amount of revenue. Divide revenue by the amount of clients you’ve had.
There’s your average revenue per client. There’s one. Now you take a look at it and go, “Is that profitable? How many of those are profitable?” All that good stuff. We talk about them in the book, and then there’s the conversion rate and the traffic. That’s where we get into Google Analytics. It’s one tool that will tell you both of those, plus a bunch of other stuff that you probably don’t care about.
The two that we want to know are conversion rate and traffic. I literally give that service away. It’s in the book. There’s a way to contact us to get that for absolutely free because I don’t think that entrepreneurs need to be spending time trying to learn how to do it, nor should they need to spend money to do it. That information is crucial to your own business. I have a mission of obliterating entrepreneurial poverty. To do that, I need to arm entrepreneurs with the knowledge they need to run their businesses.
We could talk all day, but unfortunately, we have a limited timeframe and perhaps I’ll have you come back and we dive a little deeper into some other issues. Before we end the show, I want to ask you a couple of quick tips here. The first thing is how do you define productivity and why?
I’ve had my business for many years. To give you a little bit of background, I reorganized my business after fifteen years because I basically grew my company broke. We had multi-7-figure revenue years and I wasn’t paying myself 6-figures.
You focus on growth and not profitability.
I was looking at growth, not scale. When we talk about productivity, I always look at leveraging and scaling because that is where we can see productivity. To do more is not necessary to get more. At some point, you have that point of diminishing returns. I always look at it as like, “If I give 20%, that’s great, but if I can get 40%, does that mean I start getting 50% or 60% out?” That right there is productivity.
Staying inside my zone of genius is productivity because I can get done and be a lot more and leverage my talents if I can stay in that zone of genius. That took me a long time to learn, but if people can look at their business as what you’re doing right now, can it be defined as working in your business or on your business? Everything in your business is not as productive as on your business.
I talk about it with the 80/20 rule that you should spend at least 20% of your time on your business strategizing so that you’re getting 80% of that impact. Obviously, depending on how many people you have on your staff and so forth, more time, more leverage and so forth. That’s the minimum. I find that a lot of entrepreneurs are not even spending that.
The goal is to go all the way to 80% because you’re getting 80 times 4. You’re not getting 80% of your time on the strategy to get 20% more. You’re getting 80% of your time to exponentially scale your business.
Every 20% creates leverage.
You’re getting sixteen times the output.
I think it’s even more than that because I think that there’s a greater leverage component to it. Where can people reach you a buzz? Give us a quick shout-out of the best place to reach you.
Did I miss anything? Is there anything that I should’ve asked you that you want to quickly share?
That’s a great conversation. I hope everybody got a little bit of something out of it. I feel like we got some truth bombs in there.
I’m sure they did. Thank you so much for being here.
Thank you so much for having me.
Thank you all for being here. Buzz delivered and he did it in a simple way for you to understand. There were a lot of bombs in there. Even in that statement at the end that he said about how he grew his company broke. If you just think about where your company is in diminishing returns and focus on scale and leverage using this Rule of 26 is a simple way to start yourself in that direction. Go ahead and get his book. Get in touch with Buzz. See how he can support you or do it on your own. Get his book, whatever it is. Shift that mindset, focus on profit and scale, and create that leverage in your business. I’ll see you in the next episode.
About Michael “Buzz” Buzinski
Michael “Buzz” Buzinski is a life-long entrepreneur, a digital marketing thought leader, an author, and the Chief Marketing Officer of Buzzworthy Integrated Marketing. He has worked with over 750 service-based businesses and helped them make their digital marketing S.I.M.P.L.E. (Streamline, Identify, Market Research, Plan, Launch, and Evaluate). Using the Rule of 26, Michael can double any website’s revenue. Michael’s sole mission is to help entrepreneurs avoid the time drain and frustration of managing profitable digital marketing campaigns.
Michael and the team at Buzzworthy work exclusively on the integrated marketing needs of privately owned businesses. Their service offerings are focused on increasing their clients’ digital presence, and they are dedicated to the bottom line while creating the highest return on investment and giving business owners the freedom to focus on their business. Buzzworthy has been nationally recognized by the American Marketing Association for its innovative approach to digital marketing for small to medium-sized businesses.