SFR 162: Scaling Buyers – Stephen Larsen

SFR 162: Scaling Buyers

Aug 3rd, 2018 anchorwave

I LOVE having the market tell me they like my product with their wallets. However, getting a MASSIVE amount of buyers is really step #2 for me. Here’s why…

A little while ago, somebody was probing me about my business, “Hey, Stephen, why hasn’t your funnel hit a million bucks yet?”

The simple answer to this question was “because my business isn’t at the point where it is scalable yet.”

If you try to acquire too many customers before your business can deal with them, you’re going to end up in BIG trouble!

You might be thinking, “Stephen that’s stupid, why would you not want tons of customers?”

Let me explain…


I remember the first time I found myself in a situation where a funnel I built brought in too many sales. Before I worked for ClickFunnels, I built a freakin’ awesome funnel for a company which almost bankrupted them.

This is what happened:

  • We launched the funnel
  • Day #1: They’re excited. They’re like, “Oh my gosh, this is so cool. Look at all these sales coming in!”
  • Day #2: They’re like, “Wow, that’s a lot of sales!”
  • Day #3: They’re like, “Turn it off, turn it off. You’re going to bankrupt us!”

At the time, I didn’t understand what was going on… “What? That doesn’t make any sense? I’ve never met anyone ever who wants fewer sales!”

No to money

It wasn’t until I was working at ClickFunnels that I finally understood that your funnel and your business are two entirely different things.


Russell and I were building a funnel for FiberFix and when we turned the funnel on we nearly 3x-ed their revenue in a few days. “BAM!” The sales came in real fast. Which sounds fantastic, right? But it was the same story:

  • Day #1: “Wow!”
  • Day #2: “Whoa!”
  • Day #3: “Stop, turn it off, or you were gonna bankrupt us!”


A funnel is only a way to sell stuff. A funnel is NOT a business… and while I knew that, I didn’t fully understand the importance of having systems in place when you’re building a business.

I’m a master at the funnel builder. However, the business building side, I’ve had to learn that stuff as I go along


When you start out as an entrepreneur – your focus is often solely on selling.

Entrepreneurs and business owners are not necessarily the same thing.

A business owner comes out of college and thinks, “Hey, I’m gonna go build a business.” They often get VC funding to create the structure of their business, then they create value.

An entrepreneur, on the other hand, solves problems and makes value first. When they make money, they use that cash to build the system to help them sell even more.

In my opinion, it’s the best way to go because:

  1. You are market lead – you don’t build a product that nobody wants
  2. You own your business – you validate your product before you invest in it, i.e., no VC funding


However, if an entrepreneur acquires customers too fast – without having the business systems in place to support them, then… Holy Crap… their revenue will outpace their businesses ability to cope.


If you don’t have a business structure in place, it’s likely that:

  1. Every single support ticket will be handled differently
  2. There is no process to handle customer complaints
  3. Each time somebody purchases from you fulfillment is a different scenario

Frankly, if your systems are a mess – as your business scales – YOU’RE GONNA DIE!


That’s what I was running into the first three months of the year. It was horrible.

As the sole operator in my business, I did over 200 grand real fast. Then everything slowed down. I didn’t completely understand why I was unable to push my product forward to my potential customers even harder?

You see, while I was already a funnels guy, I needed to become a business systems guy too.

So what I’ve been doing lately is setting up systems that will allow my funnel and my revenue to scale.

I started my business at the core of the actual value ladder because everything else kind of spiders out from there:

  • I know that the market wants my product (because my revenue began to outpace my business)
  • Next, I had to stop focusing on sales for a while to fix my business
  • Now I’m entering a new phase and getting ready to turn my ads back on so I can scale.


There is always a cost to acquire a customer

When we think of the cost to acquire a customer, we typically assume this means money. However, there are multiple costs to consider when you acquire a customer:

#1: There’s a cost to acquire as far as money goes

#2: There’s a cost to acquire as far as time goes

#3: There’s a cost to acquire your business systems i.e., stress it places your systems under

If you’re not willing to pay for ads to acquire a customer, you’re going to pay with your time. My podcasts are one way that I’m purchasing customers with my time.

Sales Funnel Radio with Steve

The cost to your business is something that most entrepreneurs don’t consider until they notice that their sales are slowing down because the business can’t cope with the sheer volume of customers.

I know that a lot of entrepreneurs face this challenge, which is why I’m talking about it here.


Man on wall

So far I’ve talked about when it’s NOT a good idea to acquire a huge amount of customers – which leaves us with the question:

At what stage in your business is it ideal to bring in a mass of qualified low-cost leads – and more importantly, what’s the best way to do this?

I’m entering a new phase of building a business, and I want to show you how I plan to find the mass of qualified customers that I need to scale my business. *HINT* it has to do with Affiliate Outrage.

Here’s a quick summary of the phases my business has been through so far:

#1: Does the market even want what I’m freaking selling?

#2: Let’s turn it up – starting to scale

#3: Revenue starts to outpace the business

#4: Business systems overwhelm – working on the business rather than in it

#5: Time to turn down my revenue and turn up my business systems.



The next phase of my journey is a strategy that Michael Masterson talks about in the book Ready, Aim, Fire. (It’s a fantastic book! If you’ve not read it, I highly recommend it.)

The first section is dedicated to the systems you need to put in place to take your business from zero to a million.

I’ve only read the first part because that’s all I care about right now. And although I already have a 2 Comma Club award with Russell, I want my own.

Wall of Two Comma Club Awards

In Ready, Aim, Fire, Masterson says:

So although your primary focus should be customer service… (you need) to acquire as fast as possible, what we call a critical mass of qualified customers, the number of loyal customers you need in order to make all or most of your subsequent selling transactions profitable.                                                                  Once you have a good number of qualified customers – you will be in a really good position, where almost every new product you come up with will be successful because so many of your existing customers will buy it…    You need to understand the dynamics of generating long-term profits through the development of large circulation, low-cost products, sold at a loss on marketing by up selling high-end products to this larger base.”

What Masterson is saying, is this:

#1: Acquire as many customers as fast as you can.

#2: Once you have a lot of them – every single subsequent transaction will be profitable because so many of the existing customers will buy your upsells. (That’s saying ‘use freakin’ funnels.’)

#3: The way to do that is by producing large circulation, low-cost products that you sell at a loss – so you can make money on the backend with your market validated ‘core’ offers

Does Russell Brunson make that much money by selling his book alone? No, he doesn’t. It’s all the upsells in the backend that make the profit

When I realized that the market had given my products the thumbs up, (and I had adequate business systems in place), the next step is for me to go out and acquire a mass of qualified customers as quickly as possible.


Affiliate Outrage is one of the campaigns I’ll be using to bring in some “large circulation, low-cost products, sold at a loss on marketing by upselling high-end products to (a) larger base.”

Affiliate Outrage Image

Affiliate Outrage is my way of widening the net by teaching anyone how to be an affiliate for any product. There’s no cost up front, but it helps me to nurture leads and direct them to higher value backend products.

It’s the reason why Clickfunnels has so many awesome front-end offers.

Do you know that when somebody buys a book, on average, it gets passed around up to nine times? Nine times! So when you sell a book, there’s the potential for it to be read by nine people.

That’s the reason why we sell so many books. It’s the reason why we do so many FREE + shipping offers.

It’s not to make money, it’s to acquire a critical mass of qualified customers. Which is precisely what Ready, Fire, Aim is talking about. Does that make sense?

If you want to follow this process to scale your business, here are the action steps:


  1. Check that the market wants what you’re selling i.e., start with validating the core of your value ladder
  2. Make sure that your business systems are ready to scale
  3. Figure out the low-cost offers that have the high circulation potential to open the floodgates to your backend offers

Woah yeah its funnel time baby

I’ve built so many funnels for so many other people, it’s fun to finally turn back and do my own for a while.

Until next time – Go Crush It!

Hey, wish you could geek out with other real funnel builders, and even ask questions while I build funnels live? Uh-oh, wish granted. Watch and learn funnel building as I document my process in my funnel strategy group. It’s free, just go to and join now.

The post SFR 162: Scaling Buyers appeared first on Sales Funnel Radio Blog.