This is the one concept that’s led to more income increases for me personally than anything else.
Nice word, huh? But what the heck does it mean?
Well, a lever lets you move a heavier weight with less force. The longer the lever — the greater the leverage — the more drastic the effect.
In business, leverage refers to the use of your time, thinking, resources, abilities, and assets to generate an outsized income relative to the time and income put in. The bigger leverage factor you put on your career and your business, the more money you can make from the same or less time.
I have a handful of personal stories to illustrate. And this starts with increasing your income as an employee, and carries all the way through to growing a multi-million dollar business.
How I used leverage to give myself my first big raise…
Shortly after graduating from college, I got a gig answering phone calls for the local gas company, in their customer service center.
I’ve written about this gig before. It was horrible. Either I was doing totally mundane things like entering orders for folks to get their gas turned off or on as part of their move… Or, I was getting screamed at by an unhappy customer — usually in that state as a result of their own dumb behavior.
But here’s the worst part of that job. What I did — answering those phone calls — had a mostly fixed value for the company.
My value was based on how long I was on the phones. If my butt wasn’t in the seat, I wasn’t creating value.
And this is always the lowest-paid type of work there is.
It’s always “hours for dollars work” and seldom makes you more than an average income.
But then I discovered marketing. And got my first marketing job…
I was able to give myself an instant raise of about 50% by moving into a job where I was creating income-generating assets for the company. And very quickly my income had more than doubled from the customer service gig.
The reason? Because in this new role, I was creating marketing. Marketing that was generating revenue and value for my employer even when I wasn’t working. I’d work my 40-hour weeks, but the marketing was attracting customers and generating sales 24/7. And the better my marketing was (even if it didn’t take me longer to create), the more money it made.
The nice thing was, it was easier work, too! I was having more fun, and getting paid more for it.
And the secret was I’d developed the skill of marketing that was automatically worth more than normal hours for dollars work because it was generating real revenue for my company even when I was off the clock.
But then, I hit a snag…
You see, in that company, the owner didn’t see marketing that way. Even though I could show him the value generated for him 24/7, he wasn’t willing to pay me for all the revenue I was making him.
Yes, it was paying more than the customer service gig, simply by the nature of the work. But that was the extent of the leverage.
That said, there was another opportunity within the business… In sales.
And what I could do within the sales department was use my marketing skills, but get paid a commission for the sales generated.
Sure, the total results I could use leverage to generate were smaller — I wasn’t in charge of the whole business’s marketing anymore. But my income was leveraged through commission — working that same work week, the more I sold, the more I made.
And so I found ways to create marketing and lead generation systems (more leverage) that would help me sell more in the same amount of time.
And my income kept going up…
Still, I wasn’t totally happy, because I knew I wanted to work for myself. Plus, I was about to move across the country, and there wasn’t really the opportunity to continue that job.
That’s when I started my life as a freelance copywriter, and applied leverage to that…
Now, a lot of copywriters specifically write a project for a set fee. And that’s an okay replacement for an hourly job working for someone else. As long as at the end of the day, you’re taking home what you need to take home.
And you can get a tiny bit of leverage from that in efficiency. If you’re getting paid for a project that’s expected to take 40 hours, but you can finish it in 30, you’ve applied some minimal leverage to that. Because you got paid for all 40 hours worth of work, but you have 10 left over at the end that you can use for another paying project.
But that wasn’t enough for me. That’s why I’ve always gravitated towards and insisted on royalties.
Royalties are the highest form of leverage I know of for freelance copywriters. You get paid based on the results your marketing generates.
Yes, you should get that fee in advance, for a few reasons including the client totally mangling your project and destroying results (it happens more than you’d imagine).
But the fee isn’t really where you should make your money. You should be making your money as a freelancer (particularly in direct response) from the leverage available in royalties.
Let’s just say for a moment that you could do two projects that would pay $5,000 each.
One is a flat fee — you get paid $5,000 for the work, and you’re done. No matter how much it generates in sales.
The other has a royalty kicker — you also get an additional 5% of sales generated.
Now let’s say both projects — which each took the same amount of time to complete — generate $1,000,000 in revenue for the client.
With the first project, you still only earned $5,000. With the second though, you get an additional $50,000 in royalties — bringing your total compensation for the same amount of work up to $55,000.
And yet, it’s not the only kind of leverage available in your business.
Here’s another way for copywriters, consultants, coaches, or any other service business to add leverage…
I don’t want to limit this to copywriters. And so this recommendation actually applies whether or not you write typical royalty-generating direct response copy.
The best leverage in any service business is to start selling a product that doesn’t require you to be present to make money.
Or at the least, a product or service that is basically the same amount of work to deliver to 1,000 people as to 10. (Yes, of course there’s more customer service and so on with 1,000 — but I’m talking about product creation, high-level fulfillment, etc., that can’t be replicated by an “hours for dollars” employee.)
My recent foray into this is partially what you’re seeing with Breakthrough Marketing Secrets.
The actual content part of my workshop would have remained largely the same with 2 people, 10 people, or 100 people. And so every person added represented leverage. And now that I’ve recorded it and am putting it on DVDs, the leverage increases even further.
Any kind of speaking or content delivery creates leverage for your business — particularly if you can record, duplicate, and sell it en masse. Newsletters. Membership sites. Webinars or teleseminars. The medium has minimal importance to this discussion — all these media allow you to replicate yourself in a way that leverages your efforts.
But you’re not limited to content.
Just about anything that can be sold, can be sold with a good direct marketing system.
And direct marketing is the strongest business leverage there is. To be able to spend a dollar today, and have it bring back a new customer with another dollar in hand. To be able to develop a relationship with your group of clients and customers and sell to them over and over again. To do it all largely on autopilot, and certainly in a way that provides tremendous leverage…
After all, a sales letter that works to sell 10,000 items may take the same length of time as it would take to write a sales letter to sell 100. And yet, if the items yield the same profit, you’re able to generate 100X the revenue from the same effort.
And finally, using leverage to build a multi-million dollar business…
I’ve had my hands in, worked with, and assisted in creating the success of multiple multi-million dollar businesses.
And I’ve seen that once you have the selling thing figured out, the biggest leverage is in creating and simplifying every system in the business. Make as much of the business as possible repeatable by someone else. And then hire someone else to do it.
Ultimately, the goal is to create businesses that largely run themselves — or at least don’t require your direct involvement.
If you’re serious about building real businesses (and not just a work-at-home copywriting gig that pays the bills), both are required reading.
There’s even leverage beyond what I’ve written about here covered in Ready, Fire, Aim — dealing with replicating your business model through multiple businesses — as a strategy for creating a business empire. And Mark speaks from personal experience when he writes about that. Again, required reading.
No matter where you’re at today, here’s what you should take away from this article…
You can increase your income by adding another level of leverage to your business.
It’s really the best way I know. Most of us can’t actually add more work hours in our weeks. Our time is full already. And so we have to pursue different opportunities, compensation structures, or even completely different business models. And that’s how we add leverage to what we’re doing now, and boost our income as a result.
Yours for bigger breakthroughs,
Editor, Breakthrough Marketing Secrets