This episode is sponsored by Clariti.
Welcome to episode 395 of The Food Blogger Pro Podcast! This week on the podcast, Bjork interviews Chad Cannon to chat about strategically growing your business through understanding your audience and selling products.
Last week on the podcast, Bjork chatted with Leslie Stephens from the morning person newsletter about social media addiction and launching her Substack newsletter. To go back and listen to that episode, click here.
Scaling Your Business (and Your Revenue)
This episode is all about the importance of having a deep understanding of what your business does and how it helps your audience in order to scale and grow.
Chad Cannon is from ScaleFactor, a company focused on building and scaling businesses through their 7 Factors of Scale. You’ll learn about three of the seven factors in this episode: Find Your Buyer, Align Your Brand, and Create Products.
Our hope is that you’ll be able to think through new ways to monetize as you’re listening to this interview!
In this episode, you’ll learn:
- How he got his start helping businesses grow and scale
- What the “Law of Thirds” means
- Why founders may want to replace themselves
- What he took away from helping other businesses and applied to his own business
- Important questions to ask about your customers or audience
- How to define your H1
- How to find a buyer or an audience
- Why product is important for food bloggers
- Why sponsors will appreciate your understanding of your brand and audience
- What the product creation process looks like
- How you can learn more from and work with Chad
- Platform University
- Full Focus
- Full Focus Planner
- Business Accelerator
- Kolbe Assessments
- Food Blogger Pro’s Coaching Calls
- ScaleFactor Podcast
- 1000 True Fans
- 7 Factors of Scale
About This Week’s Sponsor
We’re excited to announce that this week’s episode is sponsored by our sister site, Clariti!
With Clariti, you can easily organize your blog content for maximum growth. Create campaigns to add alt text to your posts, fix broken images, remove any broken links, and more, all within the Clariti app.
Sign up for Clariti today to receive:
- Access to their limited-time $45 Forever pricing
- 50% off your first month
- Optimization ideas for your site content
- An invitation to join their exclusive Slack community
- And more!
If you have any comments, questions, or suggestions for interviews, be sure to email them to [email protected].
Transcript (click to expand):
Bjork Ostrom: This episode is sponsored by Clariti, that’s C-L-A-R-I-T-I.com. I’m going to give you a really specific example of how you can use Clariti if you sign up today, and that is poster page specific tracking of changes that you’re making. You can use the notes area within Clariti to make a note anytime that you make a change. An example of when you’d want to do this, let’s say that you’re switching over some of your YouTube videos to be AdThrive or Mediavine video players. You want to make sure that you’re tracking to see, when you look back three months later, the change or the impact that had. Personally, what we’ve noticed as we’ve worked on content is you forget.
If you don’t have a system, if you’re not making a note of that somewhere, you’ll forget. Within Clariti, there’s the ability to leave a note anytime that you’re making a change or improvement on a piece of content to allow you to go back and see how that change impacted things. There’s lots of other ways that you can use Clariti, but I thought it’d be helpful just to give a really specific example. If you want to see what those other ways are, you can go to Clariti.com/food to get 50% off your first month. Again, that’s C-L-A-R-I-T-I.com/food to get 50% off of your first month. You can start taking notes on the changes you’re making and explore all the other features. Thanks to Clariti for sponsoring this episode.
Alexa Peduzzi: Hey, hi. Hello, Alexa here and you’re listening to the Food Blogger Pro podcast. So excited you’re here, thanks for tuning in. Today’s episode is a good one, because we’re talking about scaling up your business and your revenue with Chad Cannon. As you start listening to this episode, I’m curious, you might have a similar experience that I did when I was editing this episode where I was like, “Wow, this is great advice, but I think it’s for future Alexa, 3, 4, 5 year Alexa from this point.” I thought that some of the things that they were talking about, like how to scale a business, and why founders might want to replace themselves and hire a team, and all of that stuff, I just felt like, wow, this is way in the future for me.
But B said something at the end of the episode that I’m just going to copy and tell you right now, so you can keep it in mind as you’re listening, is that as Food bloggers, we really nail the offering content for free. We publish recipes online, maybe on social media, maybe on our blogs, and then we maybe collect some email addresses for our email list, and then that’s where that relationship stops. But in this episode, you’ll learn more about the process of scaling up your business through product. That’s what I want you to think about as you’re listening to this episode, what product or service can you offer your audience that will help them solve the need that they have? That is what I want you to keep in mind as you’re listening to this episode. With that said, without any further ado, Bjork, take it away.
Bjork Ostrom: Chad, welcome to the podcast.
Chad Cannon: Bjork, I’m excited to be here, thanks for having me.
Bjork Ostrom: Yeah, it’s a fun conversation, because we have had lots of conversations before, I was lucky enough to get invited into this group of really great guys. There’s been a few meetups, there’s a Colorado meetup group of guys, and then there’s a TikTok cycle. There’s also a group of guys and girls that are able to get together, entrepreneurs. I’ve learned so much from you, there’s been a couple conversations specifically that I’ve come back and I’ve sat down and debriefed the conversation you and I had with Lindsay. It was like, “Here are the things that I learned from talking with Chad.” It’s really exciting for me now to have you on the podcast and really exciting for me to see you launching your own business, ScaleFactor, which we’re going to talk about. But before we do that, we’d love to hear a little bit of your history and how you’re able to gain all of this knowledge and insight that you have, so give us the quick elevator pitch on your story and your career?
Chad Cannon: Yeah. Well, first off, thanks, I can say I’ve had similar of those conversations. One thing I love about you and probably why this podcast is so successful is you are so great at asking very intentional questions, with being curious. I think you’re one of the sharpest people I’ve ever met, but also. One, as an avid learner, I can tell you’re an avid learner. I’ve learned so much from you, so thank you, thank you for having me.
Bjork Ostrom: Yeah.
Chad Cannon: A little bit about me, I don’t want to go back through the whole story, but the genesis that got me I would say plugged into this personality space or companies that are reliant upon maybe books or intellectual property around a personality. I started in book publishing early 2010, so 10 plus years ago, working directly with authors and brands, helping them build their tribe, ultimately, to sell a product. In that sense, it was a book, and ended up working on about 35 New York Times bestselling titles in about five years, which was really, really fun. Then a handful of the A-list authors said, “Hey, what would it look like for you to come and work with me, helping me build my brand, grow my email list, do all the marketing funnels, all the stuff that requires to ultimately sell more products? Not just the books, but how do we take this intellectual property and build a business off of it?”
So I started a marketing agency serving a handful of authors, and that really took off to the point where I had to have a reckoning moment with my number one clients to say, “Hey, the agency has taken off, we either basically came to this decision that, hey, over the next six to nine months, I’ve got to exit out. Because you’re only 10% of the agency’s revenue, but 50% of my time and that’s just not going to work long term.” Had a great conversation, loved what they were doing, that person was Michael Hyatt. Two days later, they came to me and said, “Hey, what would it look like for us to hire you and have you come in full-time and really help us scale the company?” At that point in time, which was about five years, ago, they were a sub seven-figure business and now are in the mid eight-figure business.
I transitioned out of that last April, so we’re coming up on a year, which is just crazy. It feels like it was just yesterday, but I was with them almost a total of seven years between contract and full-time and learned so much. We pivoted that company twice from being just… When I joined, it was a one product, low, low price point, monthly membership site called Platform University, and we had a course around goal setting. It was close to a seven-figure business and 98% of the revenue was all membership and courses. Two or three years later, we got rid of the membership, and ended up becoming courses. Now today, less than 2% of the company’s revenue is related to courses, and we just had a different vision. Michael wanted to step out, so we transitioned from a personality business to a brand business that is now full focus, the Full Focus Planner, which is a product we rolled out maybe four years ago, that’s now sold 2 million plus copies.
Then a business coaching program called Business Accelerator, really were my two babies to help grow and build, that now equate to 98% of that company’s revenue, and that mid eight figures and really have a vision. Really, they’re set up to get to a nine-figure business over the next probably five to 10 years, which is super exciting and love what they’re doing. Then I’ve transitioned from there to consulting, helping small business owners. Loved that phase of helping that sub-seven figures, helping them realize the vision and through tools, and resources, and my experience to just get people through that. Sometimes it’s a seven figure, that block of seven figures, sometimes it’s the eight-figure mark depending on where the business is at.
Bjork Ostrom: Yeah, it’s one of the things I that’s so great about your story is that I think similar to players, I think of players and coaches and that analogy, it’s like you want to be your coach? I could be your football coach, and I would maybe be able to learn some stuff, teach some stuff, or Tom Brady could be your coach, and he would probably have a lot more insight than I would. For you, having the experience of going into a business at a point where it’s at, in this case, seven figures.
Then scaling it up, you have the gone through that experience in a really intimate way to then step back and be able to look at another business and say, “Hey, I can see how you can have a similar experience in a way that probably they can’t, because you’ve been through it, you know what it looks like, you’ve seen it.” One of the questions that I have for you about that experience was, and it might seem like a simplistic question, but was it harder than you thought it would be or easier than you thought it would be, to take a company and grow it to mid eight figures, which I think to most people just seems unimaginable.
Chad Cannon: I think the first from seven figures to the beginning of eight figures, it was easier than I thought. Then after that, to getting into the mid eight figures, that was extremely challenging. Because in our business model, that’s where we really started to need a lot more headcounts, you started to have division of labor, and layers of leadership, and direct teams, and things of that nature. It became just a totally different ballgame. Most of the executives were quick starts, and we were visionaries-
Bjork Ostrom: Explain what that means?
Chad Cannon: Yeah, so there’s an assessment called the Kolbe assessment, and breaks down to four things, quick starts are typically highly entrepreneurial, high risk. When you’ve got an idea, you just go and you’re quick to make it happen, because you’ve already thought through all of the things that could go wrong, and you have a plan for it pretty quickly. We could easily just sit in a room and agree, hey, we’re going to go make all this happen, and go do it. But then when you’ve got layers of teams and starting to communicate, there’d be a breakdown. It’s like, “Man, we can’t move this ship as fast as we once did,” when you get to that size. We saw this play out, I mentioned Business Accelerator, which was our business coaching program. I got the insight not only in what we did with Michael Hyatt and Full Focus is we helped thousands of other businesses grow and scale as well. I got the front seat…
Bjork Ostrom: Not only did you see it by growing that company, but you also saw it because what you did was help other companies grow.
Chad Cannon: Exactly. Yeah, I think it was… Yeah, it’s really fun, we saw this law of thirds and we built content around us. If you’re a startup, and you’re in this phase of trying to generate your first little bit of money, or maybe you’ve hit that six figures. There’s something that happens at 300K that just evolutionaries… Things have to change in your business. Most people, as a solopreneur, you can, if you’ve got the right business model and the right product, you can get to 300K pretty easily. Then, from 300K to a million, depending on who the business owner, and again, what your product is, that’s where the biggest leap is. A lot of people, once they get to 300, they’ve got their site set on five or 700, but really your site should be set on a million. There’s something about this law of thirds, the domino. Then, once you’re at a million, it’s 3 million, and then 10 million, then 30, and then 100. There’s just some different layers that you have to do.
I would say from 300K to a million, you got to become… If you’re the main rainmaker, your product is the primary… If you’ve got a widget or different things like that, you’re going to sell it, it ends up being that you need to delegate and go and move to a different level. There’s always this layer if you’re the founder of replacing yourself. If you get involved too much in the weeds, you’re going to become… John Maxwell says this, you ultimately become the lid on your business. There’s the law of the lid, and every business is different. That may be at a million that you become the lid, it may be 3 million. The thing that we always said for ourselves, at some point, everything we do from here on out as a business is unchartered territory. Because if we’re growing, we’ve never done this, we’ve never been there before. We were always about who, not how. Who’s been there before us? How do we learn from them? Finding those resources.
Bjork Ostrom: That’s great, I want to put a pin and come back to that 300K being easy thing, because I think for a lot of people listening, especially in the early stages, they would think, that sounds fantastic. How do I do that? We’re going to talk about that with the first three steps of scale, the scale factors that you talk about in your system. But before we do that, I’d be interested to hear a little bit more about your own journey. One of my favorite things to do is have conversations with people like yourself, who have some level of repetition in a specific area. As boring as it might sound, like accountants.
Or if we’re talking to people who specialize in advertising, or somebody who does due diligence on businesses, or somebody in SEO, who’s really good at that. In your case, we talked about having grown the business that you’re working within Michael Hyatt now Full Focus, they had a rebrand. But you also had probably hundreds of businesses that you were able to see inside of those businesses. I want to know, now that you’re starting your business, you’re into it, what did you take away from those experiences that you’re saying, “I’m definitely doing this or I’m definitely not doing this?”
Chad Cannon: Great question, I think one of, to touch on a little bit around that 300,000 being an easy number, I’m not trying to discount the work. There’s a hard work to get there, but one of the things that when you talk to thousands of businesses and you see across every… I think at one point, we had over 300 industries recognized in our coaching program. It wasn’t like we specialized in serving financial services, or HVAC companies, which there’s companies out there that own that vertical, that was not our approach. Is that one of the things I realized is there is people with all types of backgrounds, all types of educations, making a lot of money with very little know-how of how to run a business.
Bjork Ostrom: Sure.
Chad Cannon: They’re passionate, so one of those things, this imposter syndrome of like, “Hey, fake it till you make it, and when’s my team going to realize I have no idea what I’m doing?”
Bjork Ostrom: Sure.
Chad Cannon: We ask those questions in a room, every CEO raises their hands to be like, “Man, I’m making it up as we go.” If you’re listening, it’s okay, you probably fit that bill. But I think to come back to your question around hey, what… Which I think plays into these first three factors. We’ve been trying to diagnose what made these companies successful, me and my business partner, said, “Hey, what are these seven factors?” We’re not going to have time to jump into all seven of those, but what are the three… What’s the most important? Which, first and foremost, is how to find your buyer. We may be jumping ahead here, but I think I can’t answer this question without really wrestling this to the ground.
Bjork Ostrom: Well, it’s maybe a good transition into it is these… My guess is the factors came from you pulling out some of the things that you recognized and then now applying it to what you’re doing.
Chad Cannon: 100 percent, 100 percent.
Bjork Ostrom: Yeah, you’re dog fooding it. For those who aren’t familiar, the idea of being like, “You’re eating your own dog food,” meaning you’re probably using the system that you’re teaching to build your own business.
Chad Cannon: Totally, I would say you can’t… Most businesses start with a product, and they may intuitively know who could buy that product, but it’s typically product driven, which that factor isn’t until the third factor. For us, and again, this is about scale, this isn’t necessarily about bringing something to market. A go-to-market strategy, other things that you could argue that maybe product is before your buyer, whatever. But this is saying you’ve got a business, you’ve got proof of concept, you’ve started to generate some type of revenue. But to really scale that and take it to the next level, you have to be really clear this first factor’s all about who is your buyer, we call it find your buyer. It’s not just important about who your buyer is, but where are they? How do you communicate to them? Where do they meet?
Get really clear about that, because you can’t get clear on the product or how to communicate about the product until you first know who your buyer is. What are their pain points? What are the challenges? What are the things that they’re getting caught up on? Is our product solving that need? Because a lot of times, we see this if it’s a CEO or the founders generating most of the sales, they are winning sales by sheer founder story, or their own just charisma, and that’s only going to get you so far. You’ve got to be really clear, there’s nothing… We have this all the time where, man, I hired a salesperson, it just didn’t work. That’s a big red flag that the founder never figured out how to really articulate the founder’s story, where someone else could tell that and really do the magic of selling. It was just so natural to them, because they saw the need, all that, but they didn’t actually deprogram their process, and so that’s-
Bjork Ostrom: Yeah, go ahead and finish that thought, and then I have a follow up.
Chad Cannon: Yeah, I said that’s where it comes down to first in that process, you’ve got to know who your buyer is, because then it articulates how you communicate, et cetera, et cetera.
Bjork Ostrom: It’s probably not in and of itself an issue if the founder is making everything happen, but it is an issue if you don’t want to be the one making things happen forever.
Chad Cannon: Correct.
Bjork Ostrom: It’s the difference between potentially a job that pays really well and a business that runs really well. If you have a job that pays really well, it’s like you continue to be the salesperson, or in our world, you are forever the content creator, you’re the one doing all of the content creation. Again, it’s not that that’s bad, in some scenarios you see that, and it’s like that’s what people actually want, is they want to be that. Not necessarily to scale, but if you do want to scale, and that’s what you’re all about, and that’s what you talk about, you need to figure out how to step away from that so you aren’t the main person making everything happen.
Chad Cannon: Yeah, I would even say for your business, and this is going around some memory based on some conversations we’ve had, you started out, your wife had this personality of doing recipes online and built an audience and a following, accidentally/purposefully. At some point, it became like, “This could become a business.” If I remember right, advertising was the first place where it’s like, “Hey, this is potentially where the…” But you guys ultimately decided to do a membership side, and other things that you had to get clear on, hey, who do you want to serve? But you didn’t start out that way, because it was just like, “Hey, we were…” Maybe I’m making…
Bjork Ostrom: Yep, that’s right. We have these different buckets, different audiences that we focus on. One of the things that I think is really important, and actually, we’ve just started doing these coaching calls within Food Blogger Pro. One of the things that’s been interesting for me to reflect on as I’ve done these is one of the through lines in those calls is this idea of find your buyer. It’s a little bit antithetical to what a site Pinch of Yum would be, because Pinch of Yum has a broad reach. It’s not very specific, but we do have…
When Lindsay creates content, she thinks okay, this is somebody who is probably busy, they’re not going to be somebody who wants to create a three-hour meal for the sake of creating a three-hour meal. She wants to make sure that she’s creating recipes that are good, but also accessible, and you could get all the ingredients at Super Target. To understand and narrow that down, so it’s not trying to be everything to everybody, but that’s still a pretty broad focus. Where it’s more specific, and maybe the example gets to be a little bit easier is with Food, Blogger Pro like, “Oh, we know really specifically who that is that we’re after, and who we’re focused on, and can get really specific with that.”
In those coaching calls, one of the things that I come back to is for somebody who’s just starting out in year one, in year two, who is it that you are doing this for? Don’t just create a recipe because you see an opportunity to rank for it in keyword research and you can get 2000 additional clicks. You need to be, first and foremost, hyper-focused foundationally on what it is that you’re offering to somebody in order to then use those skills, like keyword research, content creation, to build on. But one of the things I come back to is this idea of an H1, and for those who aren’t familiar, it’s what is your header? When you land on your site, what are you saying to somebody so they can look at it and be like, “Oh, this is for me,” or like, “This isn’t for me.” I think if somebody’s in those early stages of content creation, that’s what you need to be doing, so how do people figure that out?
Chad Cannon: Yeah, well, everything you just said is actually the process we take people through, through these first three steps. It proves just the business model, this find your buyer. Which you say that that’s broad, but what I would say you hit it on the head, Super Target, they’re busy, they’re overwhelmed, it’s moms. Is your customer a Target customer or a Walmart customer, those are different. It’s just the reality. By definition, disposable income’s going to be different, their look, their feel, their taste, all the things that they see and it comes into your brand. The second factor, A, is align your brand. There’s more detail than that, but I’m just going off of what you just shared. It feels broad, but it’s where we start with every one of our clients, because you can’t do anything else until you really get that crystal clear. The thing is, is you’ve got such a proven business model, and you’ve done it over and over, so it feels broad to you. But that is the sign of a really good business model is that the top of the funnel is broad.
Bjork Ostrom: Sure.
Chad Cannon: Then as you get to the third factor, which is C, is create the products. There’s a layer of products, so the riches are in the niches, as Amy Porterfield says, is okay, so out of that slice of the Pinch of Yum, this big audience that we have that we’re attracting, that are busy. But guess what? Every one of them needs to make dinner every night, or maybe four or five nights a week, because maybe they don’t have the budget, they’re not the type of people that go out to eat. Again, this is all definition around find your buyer, more than likely, they’re eating at home the majority of the nights, cooking and all of that. Maybe they enjoy it, maybe they don’t, but it’s something that has to happen. If their kids are going to eat, they have to do it.
Then, you’ve got this ability to create the product. Okay, out of that, who is going to buy? Then, for each product, there’s another layer of who that person is. Again, the three factors I think we can dive into is, one, find your buyer, which I think we’ve really hit the nail. Hit it too much, it could be like, “Okay, move on.”
Bjork Ostrom: Sure.
Chad Cannon: Second is align your brand, you just talked about H1. Okay, now you know who that is, what’s the message you’re going to say to make sure that that person knows, hey, they get me, this is my home, I can trust them, they’ve got authority, et cetera, et cetera.” That means that’s your website, that’s your social, it’s your color scheme, all of those types of things are dependent upon obviously who your buyer is. Then create products, which that’s the fun part to talk about, that I’ll nerd out on. I don’t want to jump too far ahead and just give it back to you to see if there’s any thoughts you have there.
Bjork Ostrom: That’s great, I think my first thought to spend a little bit more time with find your buyer is how much of that is I want my buyer to be this, versus here’s realistically after doing some research who my buyer should be.
Chad Cannon: Yeah, that’s a great question. One of the things we always do is we come up with what we think it is based on historical data, but then we’ll also justify that with an audience survey to make sure we’re not totally, totally off base before we make any big changes under that second factor of A, aligning your brand. If we’re going to make website changes, and big messaging changes, or things like that, we’re going to really do the work to make sure that we’re not just… More times than not, it’s pretty…
You know your business really, really well, and more than anything, it’s not the audience that you want to serve, it’s more does the audience have a need and do they have budget to buy your product? Is the question you should be asking more than and is this a big enough need that someone will pay for and that there’s not a free competitor. Can someone get the same amount of… Your product’s case in point, how many free apps are there with recipes, and YouTube, and all of those things? Yes, there’s a competitor that’s free, but you guys have figured out a way to do it better, more organized, simple, you probably know what those key things are to get people to buy.
Bjork Ostrom: Yeah, this is one of those quotes that I feel like has been attributed to multiple people in multiple different ways. I just Googled it in real time here, Frederick Buechner, it’s this quote that, “The place God calls you is the place where your deep gladness and the world’s deep hunger meet.” I feel like there’s other versions of that quote. This is one, maybe a different version of it, “Your vocation in life is where your greatest joy meets the world’s greatest need.” What I like about that is, it’s trying to find the cross point for that where what you said is, you can’t just do anything and just say, this is what it’s going to be, here’s who my buyer’s going to be.
There has to be a need there, and within that, if it’s going to be a business, we’re not talking about non-profits. Which you could have a conversation around that and that would be also worthwhile conversation. But if it’s just strictly business, where there’s a need in the world, and that would mean that people have the ability in some ways to compensate or to pay for that. And your great joy or your great desire overlap, there is opportunity there. It feels like what you’re doing is a great example of that, you naturally have this ability to see inside of a business, to see opportunities for growth, to understand how people can unlock that and there’s a need for that. Business owners want that and can pay for it.
I love that as maybe a final thought that we can have around that find your buyer. There is some decisions that you can make as a founder and a creator to say, “Here’s who I want it to be.” But you also then have to make sure that it’s something that hasn’t been… There isn’t something out there on the market that’s free, and that people that you are serving have the ability to pay for it, and they’re available as customers. Love that, we can wrap up on find your buyer. Align your brand, why is that step number two? Sometimes you’d hear people say, “You don’t want to get into tweaking your logo, just get to work.” How much of this is logo tweaking versus more contemplations around the greater meaning of what a brand is?
Chad Cannon: Yeah, great question. I’m one that believes in minimal viable products and ship it before it’s perfect. This is definitely not getting everything perfect before we roll and update out to the market. I think why I say it’s aligning, again, this framework is really meant for people that already have proven some type of market fit and they have some version of customers that want something. This isn’t something… This isn’t like going and helping startups, this framework, it’s like we’ve got something we know we’re winning, but maybe it’s not winning at the level that it could be. We have to sometimes go back and be like okay, who you thought the buyer is and this idea of what got us here isn’t going to get us there, that you then have to… There may be some tweaks you need to make, which means we have to then align our brand, otherwise, we’re going to miss the boat in who we’re communicating to.
A lot of times, that’s simple tweaks to websites. Sometimes that’s like… What that does is then it says, “Okay,” and social media, it’s going to change our content. If we have a podcast, that means we may need to change our intro, it may need to change the guests we bring on, the questions we ask. All of those things is really what I talk about alignment. You think about a car, over time, your car has to be aligned every 30, 60, 90,000 miles. It’s not something that happens every month or whatever, but over time, things just get out of whack. You do business, let’s do this, or you talk to someone and someone gave you this piece of advice so you went and did something. Then just over time, it gets misaligned. It’s just that exercise to say, “Okay, what needs to be aligned now that this is true about who our buyer is?”
Bjork Ostrom: Your point that you made earlier is this isn’t for somebody who’s just starting, necessarily. This is for somebody, when you talk about ScaleFactor and the factors, so maybe we’re burying the lead here. But the seven factors, spells out factors, so find your buyer, align your brand, we’re going to talk about create products as well. But we’re just going to talk about those first three, people can follow along with you have a podcast that we can talk about where they can hear more about that, obviously, work with you. But the factors, the seven factors, are for a business that’s having some success, people are buying stuff, in our world, they may be able to get some sponsored content deals here and there. Maybe they have an actual product that they’ve selling and getting some traction with that. But what you’re saying is this is about coming in and saying, “Is it simplification? Is it cutting stuff out?” It is subtractive or additive, usually, when you think about aligning your brand.
Chad Cannon: Nine times out of 10, it’s subtractive. More times than not, people do more than they need to do, and so it is. A lot of times, I mean, when someone brings me in or we have a discovery call, they think they’ve got a product problem, or we’ve got a team problem, or depending on what it is, but I come back, nine times out of 10, it’s that they can’t clearly articulate who their buyer is, which means they can’t do it downstream. The marketing team is not on the same page, all of those types of things. This is why and me and my business partner, we really fought over which factor goes first. Just to be candid, I was in the product, as a quick start, I’m like, “Let’s just get the product, let’s get it to market, let’s see if it works, blah, blah.”
But the reality is, when I went back and looked at the companies that really scaled successfully and even in our own, it always came back to really wrestling down this question around finding your buyer. Which then meant if there were changes to that, we had to then align our brand before we could actually develop a product or tweak our product to make sense. To your question, it’s more about simplification and subtracting than adding, which is typically refreshing. Sometimes, it’s big changes to the business model. I would also say, companies that really get scale, they aren’t afraid to change their business model. That doesn’t mean that you’re totally getting away from food, all these people in here, in this, it’s more about, hey, maybe there’s a totally new product. Because we’ve learned, we’ve gotten the feedback, and all this thing, or it’s a different shift. It’s like, “Hey, we’re actually trying to hit too many people, but if we really focus down our niche, we would actually be more successful. We wouldn’t have to do as much.”
Bjork Ostrom: Yeah, and I think that’s one of the things they see in this industry often is people trying to reach the masses. One thing I often come back to is Kevin Kelly, this famous 1000 True Fans. I think there’s varying levels that you can apply that to, but especially if you do have product that you can sell, which is another thing that I think is important for me, as a podcaster in this genre, to remind people of is the importance of product. Not just content monetized through ads, but actually having a product that you’re able to sell. The importance of being specific enough where you’re not going to maybe have a million fans, but if you have 1000 true fans that Kevin Kelly post is all about musicians.
If you have 1000 true fans that buy an album and go to your show whenever you have one, you can have a sustainable career. Now, the question then is around scale, which is what you talk about and being able to scale that. But it makes sense when you think then about aligning your brand to say, “Great, you’ve identified your desire and the world’s need, and people who are able to then to pay in some way for that.” Then you look at the next level and say, “Knowing what I know then about the buyer, how do I create a brand that speaks to them?” If you were to say in a sentence what align your brand is, is that what it is? Is something that your buyer, once you’ve identified them, connect with it, resonate with it, and people who aren’t your buyer then say, “This isn’t for me,” is that at its core or what you’re trying to do?
Chad Cannon: 100% is that when they hit your website, the first 20 or 30 words they read, they say, “This is for me,” or, “It’s not for me.” Because there’s nothing more frustrating than someone getting into your funnel that isn’t for you, and you’ve got these vanity metrics around. But then, if you’ve got a sales process, and you get on the phone. It’s like, “Oh, they weren’t warmed up or they’re not even in that, they don’t even understand what we do, or they’re someone that doesn’t even make sense to be on the phone with.” Normally, because upstream the communication wasn’t right. That’s what alignment is all about, is to separate those of who should be our buyers and who should be maybe our fans, that someone that can talk about it. Our website is scale/factor.co, I think we try to be really clear about who we are, but we also try to add value in that sense that if it’s not for you, maybe you know someone it is for and pass it along, that’s ultimately the goal.
Bjork Ostrom: That it’s still okay if somebody comes and there not for you, because if you’re clear enough, somebody else could look at it. In our world, maybe it’s somebody who eats in a specific way, a specific diet or something. I might go to that and be like, “Oh, that’s not for me.” But then I might have a friend who’s trying to eat less carbs. Keto whatever.
Then, if somebody is that, I would be like, “Oh my gosh, I found this great site, let me introduce you to it or pass it along.” I think in your world, getting on the phone, people you’d be like, “Yeah, for sure,” you have this process, one of the things you do is get on the phone. I think for some listeners, they might be like, “Getting on the phone, wait, that’s a part of the business?”
But I think where it would translate is if you are somebody who’s doing sponsored content or working with brands in any capacity, you’re going to be able to have those conversations a lot easier if you have a really clear alignment of your brand and you don’t know who your buyer is, because good brands are also going to know that. The best match is going to come from when a brand sees somebody who’s similarly aligned, a company sees somebody who’s similar aligned, and they can come to you and say, “Oh, it makes a lot of sense for me to connect with you and work with you, because you are focused on real food and that’s what you do, or you are focused on CSA cooking,” whatever it might be.
Chad Cannon: Totally.
Bjork Ostrom: Those conversations suddenly become much easier, because you have a really aligned brand that makes it clear that somebody can work with you.
Chad Cannon: Yeah, so case in point, what you just said, I actually did an all-day strategy session with the company that really creates these little, basically, baby books. Every mom wants to create a baby book, but everyone’s got… They’re overwhelmed, they don’t have the time. Your kid’s two or three years old, and every mom has this guilt of, man, I wish I would’ve done that then. They built an app, got really clear, did this, and they really struggled around the alignment piece once we got clear on who their buyer was, we really niched it down. Immediately, it was like, “I’ve got three or four friends that now they understand who the buyer is that are great brand deals for them.” I introduced them just last week, and I just got this text as we’re talking, “Hey, thanks again for the introductions. Everyone seems super excited working together and I appreciate you setting it all up for us.”
Bjork Ostrom: That’s awesome.
Chad Cannon: Yeah, they would’ve never gotten there if they weren’t willing to do that work of even saying, “Man, I think this is actually going to make our product revenue smaller, not bigger.” My guess is that the business we just passed along their way with the brand deals, just looking at their size of audience is probably going to generate 100 to 150K in their business.
Bjork Ostrom: That’s incredible.
Chad Cannon: Which would be a 10% increase in what they’re doing right now.
Bjork Ostrom: Yeah, the interesting thing for me, even in that little conversation, is I hear you say there’s these moms who feel guilty about it, then like, “Wait, or dads, it could be dads too,” but it’s like that’s not their buyer, that’s not their buyer. They’ve gone through the work of saying, “This is who we’re focused on, is this specific individual in this specific situation.” Obviously, there’s dads out there who, myself being one of them, feel guilty for not doing a better job of documenting my kids younger years or whatever it is. But probably what happens is the way that they align their brand, build their messaging, pick their copy, whatever it might be, is around that specific buyer. Like you said, there might be a reduction in some ways around the revenue from a certain category, but it results in long-term alignment to be able to build and scale.
Chad Cannon: Yeah, I mean, you think about… We talk about this in the podcast when we talk about aligning your brand, there’s a company called Duluth Trading Company out there. If you’ve seen those commercials, the voice is extremely manly. They’re going after the rough and tough, the hunters, the people that are out… The products are all geared towards those people. But can you imagine if a female were the voiceover, and it was soft, and it wasn’t as punchy? Granted, we’re talking stereotypes here. But there’s stereotypes are stereotypes for a reason, that if someone isn’t that manly man, they’re just going to tune it out. But those that are like, “Man, that’s me,” they’re going to lean in. That’s an example around aligning that plays out, they decided to do TV advertising, which means their TV ads need to align with who their buyer is.
Bjork Ostrom: Yeah, there’s a couple of car commercials that I’ve watched recently, I wish I could remember what they were, but it was almost like a parody at how extreme it was. I don’t know, it was Ronaldo or some soccer player and it was like, “Oh, this is so over the top obvious.” But I’m sure, as a really established brand with smart people working on the marketing, they’ve made that decision intentionally.
Chad Cannon: Yeah.
Bjork Ostrom: We’ve talked about finding your buyer, aligning your brand, I think those make sense. Then the product part, this is an exciting one, how do you know what product looks like? You know, talked about MVP, how much of that is having conversations with those buyers that you’ve identified to pull a product out of them, versus guessing what a product might be and then developing it? What does the create your product stage look like?
Chad Cannon: Yeah, so we typically try to start by just giving a big 30,000-foot view around what’s possible if we have the right product around unique value proposition. Because what we say, you as the business owner are going to know your customer and the products you can create better than anyone. But a lot of times, what people can’t picture is an ascension model for their customers, maybe it’s just one product. But the easiest thing to do is to create multiple products for the same customer, and so what if that were to be true? We have this thing called the Revenue Expansion Model, if you don’t mind, I mean, since we’re only going to dive into three. If you go to 7factorsofscale.com, the number seven, factorsofscale.com, this visual’s in here, I’m going to try to bring it to life audibly. But it’s in there and there’s actually exercises for each these factors to give you just the taste of if you were to play this out. You can do it for yourself, if you’re listening.
But we use this expansion model through the lens of a hotel. There’s this lobby piece, which in a hotel lobby, I always say on a hot summer day in New York, I always try to find a hotel because I can bum Wi-Fi, I can go to the bathroom, I can get AC. All those things are free. There’s a hotel brand that I typically look for, I’m not going to look for any… I’m not a Holiday Inn Express person, I’m more like a JW Marriott, so I’m going to go look for that. There’s a brand association there. I would say anyone that’s listening, or even you, Bjork, what you’re doing with the podcast, this is a lobby activity. You know are trying to build an audience, bring people into what you’re doing by free, free means I’m even giving away an email address.
It’s just straight free content. The more people you have in the lobby, the more likely they are to ascend. Then there’s the mezzanine, and in your type of business, this intellectual property business, typically, a mezzanine product is something in exchange for an email address. This could be a webinar, it could be a PDF, it could be anything that adds… What I always say is solve someone’s problem in 10 or 15 minutes, and they can read it. Granted, a webinar is typically longer than 10 or 15 minutes, but that’s a more advanced mezzanine activity for people. It’s really as much of a sales activity as is a marketing legion activity. Then you’ve got the standard floor, so this is where you first… That’s your first product. In a hotel, 80%… Probably only 20 to 30% of the revenue comes from this, but it makes up the majority of the landscape of the hotel.
Maybe it’s 50% of the revenue, depending on your business, but this is the biggest part of the hotel. Then you’ve got the premium floor, obviously, it’s more access, it’s more expensive, then you’ve got the penthouse. If we were to have three products, one of the things I always tell people is, “Okay, what’s your standard floor? What’s your premium? What’s your penthouse?” Thinking about this, and I’m fast tracking this, this could be a whole day work shopping with someone, but just to get the big picture. What we found in coaching thousands of businesses, and actually, this was something I learned from Jeff Walker, author of Launch, and created the product launch formula and online launches. Probably this formula equates to billions of dollars sold of products online, is 10% of your current customers will pay 10 x what they’re currently paying. Bjork, I don’t know, what would you say your standard floor product is, and what do they pay for it?
Bjork Ostrom: Yeah, so I would say, and what’s… As a quick aside here, I think this is really valuable. If people take away anything from this, I feel like this can be one of the takeaways. Because I think what happens in our industry is we have those first two steps, content, everybody’s coming, it’s free, and then exchanging your email to get on a list, and then that’s it, that’s where it stops. I think there’s so much untapped opportunity, not even in penthouse, but just that level three of figuring out what is that next thing that you could offer that would be helpful, valuable, make a difference in somebody’s life. I think it’s exciting to think about that. For Food Blogger Pro, I think it’s the membership site. You could do annual or yearly, and it would be depending on when somebody signed up, it would be 99 a quarter or 350 a year, but that’s what the pricing is right now.
Chad Cannon: Yeah, so 350, and let’s just say, I don’t know if you share these numbers, but let’s just say there’s 1000 of those buyers. The formula playing it out, 10% will pay 10 x that, which means 100 people would pay you $3,500, and 10 people would pay you $35,000. That being said, you still got to have a unique value proposition. The value’s got to be there, all of it. But when you get in a room and say, “Hey, that means there’s 10 people in your ecosystem that would pay you $35,000.” If that were the case, what could we dream up that could be that price point? Again, that may be too far advanced for some people right now, but even coming back to someone that’s got a podcast, we’ve seen this play out, even if they don’t even have a product quite yet, is time is money.
If someone’s a podcast listener, unique podcast listeners, or even in my space, this is like if someone has bought your book. Someone that sold 100,000 copies of a book at $20, that we can say, “Okay, that’s standard floor.” We can start to think about, hey, that means you’ve got 10,000 people that are willing to pay you $200, and then you’ve got 1000 willing to pay, et cetera, et cetera, so that just goes up. Even, we’ve seen that book sales and podcast listeners can be the same. For me, being in the publishing business, we never thought about, hey, how do we justify someone buying $20 for a book? It’s always about justifying the time that someone thinks that the problem this book is going to solve, they have enough time to actually read it, because the reality is-
Bjork Ostrom: It’s not the cost, it’s how long it’s going to take to read it.
Chad Cannon: Exactly, so in a podcast, people are consuming, spending 45 minutes on this, that means it’s something extremely important to them. What other things do someone do granted because they can do something else while they’re listening to a degree, which is why podcasts are so successful. Whereas a book, it’s like dedicated, you have to be fully present. But it allows for this trust building and authority, that’s so important for your customer to ultimately become, or a prospect, to become a customer or a buyer. It’s all about building trust and authority from the outset.
Bjork Ostrom: Yeah, that’s great, we covered a lot. I know that you have a hard stop here, so I want to wrap up and make sure to respect that. That’s only the first three and there’s seven more. First of all, I’d be interested to hear you talk a little bit about if somebody is interested in working with you, what does that look like? Who would those people be? My guess is you have a good understanding of who your buyer is. But also, if people just want to learn more, if they’re fascinated by this, if they think there might be some nuggets there. I know you’ve also started to create some content around it, so I would love for you to just share a little bit about where people can find you and potentially work with you as well?
Chad Cannon: Yeah, absolutely. If you want to just get a PDF, it’s a robust… I think it’s almost 40 pages where we really dive into these seven factors. Just go to 7factorsofscale.com, and seven is the number, factorsofscale.com, and opt in to get that. Within five minutes, you’ll get that. We have a podcast that also… 40 to 50 minutes on each factor, going deeper into it. Then, if you’re someone… Again, this is for someone that’s got a product, and I would say probably minimum revenue of half a million dollars, and that you maybe are frustrated that the business isn’t growing at the level that you think it is, and that you know seven figures is something you can do, but there’s just something missing.
Maybe you’re not clear on who the buyer is, maybe you’re not sure about the product, maybe you’re not sure around sales and marketing. Factor six is repeatable sales motion, something that we didn’t get into, but that’s really, where does sales and marketing combine? How do we leverage that? How is that something that is consistent? We know when a lead comes in, what’s the percentages that come out? Again, that’s the sixth factor, it’s not even in the first three, because you got to get these other things dialed in before that. I would say those are the best ways, download the resource, listen to the podcast for free, and then if you go to scale-factor.co, that’s the website, and you can find out more information.
If you are looking to say… What we do is we always schedule a discovery call, there’s a button there that says, “Schedule call.” Takes you to a form, you can schedule. Again, at that time, it’s all about adding value, helping you grow and scale. Normally, the first engagement is typically an all-day strategy session, where we’ll come in and work on the business and just go through these seven factors, or maybe three or four of them. But in that discovery call, we get clear to say, “Hey, here’s the three or four factors that I think are really missing in your business, that we’re going to really hone in and knock out of the park.”
Bjork Ostrom: Yeah, that’s awesome, we’ll link to those in the show notes as well. Chad, thanks so much for coming on, really appreciate it.
Chad Cannon: Thanks, Bjork. Appreciate it, take care.
Alexa Peduzzi: Hi, hi, Alexa here from the Food Blogger Pro team, we hope you enjoyed this episode of the podcast. If you want to go even deeper into learning how to monetize, grow your food blog, your food business, we highly suggest you check out our Food Blogger Pro membership at foodbloggerpro.com/join. It’s there that we share all of our course content about monetizing, photography, video, and everything that food creators need to know in order to move the needle on their business. We also hold live Q and As every single month, as well as study halls, where we get a chance to break into small breakout groups and connect with each other in a really intentional way. Talking about specific topics, like creating recipes, keyword research, and more. It is just one of the most positive places on the internet, in my opinion.
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