Editor’s note: This article was first published in December 2015; Ruffino’s revenue figures, his monthly advertising spend, the landing-page conversion rate and the webinar described as his latest all reflect that time.
Two businesses offering the same product start out with just $100 in initial capital. Twelve months later, one of them is bringing in about $800 a month. The other is making $200,000 a month. We might think that one of the entrepreneurs has more experience than the other, more education, or is smarter. But it has nothing to do with that.
We’re talking about Russ Ruffino, a young man who didn’t come from a prestigious university and whose longest work experience was as a waiter before he entered the world of online business. According to Ruffino, the only difference between the business that brings in just $800 and his own ($200,000) comes down to sales cycles and a few myths that crop up whenever people give advice on how to build a profitable online business.
See also: 29 ideas for making money from home or online
Ruffino says that it used to take him months to close a $279 sale, whereas now it takes him just 48 hours to make sales of $5,000 to $25,000 to complete strangers. He achieved this by changing his online strategy, moving from a slow sales cycle that earned him $120,000 a year to a fast sales cycle that took his business to $2.4 million a year.
Nobody would choose a slow sales model on purpose, but certain myths lead us to it. When we decide to start an online business, we are usually advised that:
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We must create blogs and YouTube channels and produce good content for months to make ourselves known before we start selling.
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We must start by offering something free, then move on to selling a low-cost product or service before we can offer our more expensive products.
But Ruffino disagrees with these claims.
His message coincides on some points with the one Tim Ferriss set out in The 4-Hour Workweek:
- You don’t need to create content for months for someone to buy your product.
- You don’t need to build a large community, following or fan base. Obviously, if you have one, it helps.
- You don’t need to sell a low-cost product before you can sell the product with the higher profit margin.
- All you need is a well-designed fast sales system.
Ruffino boils his system down to a diagram that he himself published in Inc.
Clearly, online we can offer our product to thousands of people, but only a percentage of them will end up buying it. Starting with the most obvious point: the more people we reach, the more people we will sell to. Then what remains is to improve the strategy to increase the percentage of sales (conversions).
Step 1: Go out and hunt for potential customers.
The days of creating something and having people come to you on their own are over. If customers don’t walk through the door of your business, “we will have to push them”. If customers don’t come to our business’s door, we have to take the business to theirs.
Ruffino says he spends between $15,000 and $20,000 a month on Facebook and Twitter ads. To reap a harvest, you first have to sow.
But he warns that any advertising spend can be excessive if you can’t target it properly. Ruffino bases his model on focusing on problems. He pitches his product to customers according to whether they have a specific problem his product can solve.
Remember, as we have said before, “if your product is for everyone, you don’t have a business”. Sometimes paid advertising on social media is ineffective because we reach many people who aren’t interested in what we’re offering. Ruffino says he has learned to target his potential customers explicitly, using an indirect approach to do it, such as targeting people by the specific pages they follow, among other things. That tells us their interests when we choose an audience filter for the people we want to reach.
Obviously, if we sell cars, people who follow car pages are more likely to be interested in us than people who follow electric bike pages.
Step 2: Create the ad.
Most entrepreneurs want to go straight for the kill at this point when they create an ad. In doing so, you are already putting up a first barrier at which a percentage of people will drop out.
Ruffino uses the ad instead to invite people to sign up for a free online seminar (webinar). The webinar is aimed squarely at potential customers, as it deals specifically with a goal they want to achieve or a problem they want to avoid or solve.
More than 15 years of testing show that the most important part of an ad is the headline, so you have to test different headlines to see which is the most effective: the one that best attracts people to click and register for the webinar.
Step 3: The landing page.
Ruffino has learned what a landing page needs to look like to increase the conversion rate, which he says currently stands at 20%.
A. A single link. The latest webinar he is offering is titled “How to get 5 new clients this week without spending anything on advertising”, and the whole page has only one link. In other words, visitors have only one button to click: “register”.
Most websites offer a navigation menu. He has learned that it is best to limit visitors’ options as much as possible. On his page you can do only one thing: sign up.
B. A direct headline.
The headline should be based on a goal and offer the solution to a problem:
How to get (do, achieve…) something without “insert problem here (without difficulty, without money…)”.
Psychological studies show that a very direct approach gives the impression that you are speaking directly to that person. If someone doesn’t identify with the headline, they probably wouldn’t have bought what you’re selling anyway.
C. The timer.
The page has a countdown to the next showing of the webinar. So you need to register before it starts if you really want to watch it. Ruffino says the timer has helped him increase registrations by 15% because, according to Robert Cialdini’s principles of influence, a countdown creates a sense of scarcity. People value things more when there is a danger they might stop being available.
See also: Tips for becoming a successful entrepreneur
D. Testing.
You need to test constantly, both the headline of the landing page and where to put the register button. Do conversions go up when it’s on the right or on the left? Which headline is more popular?
The LeadPages tool can help you analyse this kind of data, as well as providing the countdown widget.
Step 4: The power of webinars.
Ruffino says that if you create a good webinar, well focused on solving a very specific problem that very specific people have, you can get 50% of them to become customers. And no marketing campaign is going to give you that.
Users spend more time on free webinars than on almost any other form of online content. According to various studies, 55% of visitors who come to read an article spend less than 15 seconds on it, even though an article takes only a few minutes of your time.
A 45-minute webinar, on the other hand, gets more than 30% of people to watch it to the end, even though the viewer is giving up the equivalent of the time it takes to read 15 full articles. But, I insist, only as long as the webinar is good.
Webinars help build a deeper relationship than an article, especially if you speak from the heart. People see you and hear your voice. If you also give them the chance to interact with you via chat, you will be building bonds that increase conversions.
In short, many people may read an article because they saw it on their feed or because a friend shared it on social media, but with a webinar, the person has deliberately decided to spend their time finding out what it’s about. So everything indicates, according to Ruffino, that webinars, used well, can be the most profitable sales tool for online businesses.
Step 5: Filter your customers.
Bearing in mind that what Ruffino ultimately wants is for people interested in his service or product to phone him, he doesn’t want to waste his time or anyone else’s.
In his webinar he provides real value, trying to solve the problem he promised in the “hook headline”, within what he can explain in that time. Free content will not always be watched by people who are interested in your product or who need it. They might even have needs that your product can’t meet.
See also: 15 habits and choices for success in business and your career
That’s why Ruffino makes a point of saying loud and clear who his product is not for. On the face of it, the more people who called him, the more chances he would have of selling. But in fact it doesn’t work like that, because if everyone called him, they would only waste his time, and he couldn’t focus on those who would genuinely be interested in, or need, that product.
As Tim Ferriss said, every now and then we have to fire some customers, because some of them only stop us from focusing on the ones who are really worth focusing on.
Step 6: Talk to potential customers one by one.
Processes are increasingly automated so that people buy on their own, but when you offer, as in this case, an expensive personal advisory service, the most effective approach is to have a conversation with them to make sure they have understood what we can really solve for them and what we can’t.
We would also have the added advantage that, in a conversation, we can use our natural charm (sales techniques) to win over the undecided.
Don’t take money from the wrong people, because if they are not satisfied afterwards, they will only criticise you on social media, which can damage your image, brand and business.
Step 7: And finally, take action.
Some entrepreneurs have good business ideas but never get beyond a modest monthly profit, while others manage to build a profitable business with a steady income of $5,000, $10,000 and much more.
The difference between them, apart from the sales cycle, is not skill or intelligence. It’s the fear of taking action:
- Fear that the strategy won’t work.
- Fear of rejection.
- Fear of success, which is usually the fear that sales will take off and we won’t know how to handle it (a blessed problem to have).
- Fear of charging too much.
- And who knows how many other fears…
The truth is that fear is what makes people mediocre, settling for mediocre profits, mediocre customers, mediocre products… until they end up living in Mediocreville.
Ruffino says he has never considered himself smarter than anyone else. He didn’t start his business with the backing of venture capital firms, but with $100 he had. He had no business experience, so he says he looked for ways to make up for his shortcomings with boldness.
And it hasn’t gone badly for him.
This answers the question “how can I get rich in a few years?” Going by Ruffino’s case and those of a few other entrepreneurs who have used similar techniques, it seems the recipe for success starts, first and foremost, with a lot of guts.
Further reading
- How this entrepreneur turned $1,000 into a business making $200,000 a year
- How to find a profitable product to sell
- 10 things nobody tells you when you start a business
Featured image: Stephan Ridgway, CC BY 2.0, via Flickr.
