Hidden Multipliers in Your GEO Program w/ Jason Cohen

Jason Cohen (0:00)

If the quality is great, no matter how bad you are to everything else, you win.

Ross Hudgens (0:05)

Right.

Jason Cohen (0:05)

If the quality is bad, then no matter how good you are to everything else, you lose.

Ross Hudgens (0:19)

Jason, excited to have you. One of the things I saw in your book that I knew we had come on and talk about, multipliers that kind of undercurrent SEO and AI search, one of the things you talked about in the book is how affiliate marketing was a powerful channel for you and WP Engine. You helped grow it to almost, I think, 300, 400 million ARR, which is really impressive. But you spoke to the fact that you kind of took a specific lens on the affiliate channel that helps you dominate, made other competitors ignore that. What was that specific?

Jason Cohen (0:52)

Yeah, it's a great story, and it's in the introduction of the book because the book is about things like this.

Ross Hudgens (0:57)

Yes.

Jason Cohen (0:57)

But I'll tell you the whole story. You don't have to buy the book for this story. I'll give it to you right now, all the details. So the first observation is that affiliates, when you plot them in terms of how much they can send you, it's this crazy power curve. It's like maybe it's an ultra power curve, right? It's like there's a few big ones, and then there's this massive tail that doesn't matter.

And in fact, a lot of them in the tail, what they do is they send you one forever. Like, they'll never send you another one, because what's really happened is they're a freelancer or something like that, and they have a client, and the client already wanted you, and they realize if they sign up as an affiliate, they could just get paid a little bit, but they're not really, you know, so that's what a lot of quote unquote affiliates are in an affiliate program. Okay. So anyway, so that's why this is a super exaggerated thing. So once we realize that, which of course this took time, but I'm shortcutting this, right?

Ross Hudgens (1:43)

Yeah.

Jason Cohen (1:43)

So once we understood that, just a few affiliates, in our case, something like 7 or 10, but obviously that number will vary, are like all of what the affiliate program can be, right? The rest of it doesn't matter. And so therefore, it's valuable to quote unquote overspend or take too much time, quote unquote, to woo them or to have them. And then the other thing we realized is, since there's so few, it's a zero-sum game. It's not like, social media is not a zero-sum game. I could have a great Twitter feed, and then my competitor has a great Twitter feed, and that's fine. One doesn't really take from another. You could try to argue about attention, but it doesn't really.

But in affiliate, since there's so few that matter, it is a zero-sum game. If I get one, that's one fewer that you can get. And since there's only seven, so what we realized is, okay, so if we get even half of these, then it's very hard for any competitor to have meaningful growth through this particular channel.

So if we can overspend to dominate this channel, then you could say, if you just look on a dollar-for-dollar basis, you might say, well, this isn't the greatest ROI thing. But when you consider that that means a competitor can't use this channel and will have to go elsewhere, you'd say, oh, okay. And the way I would describe this internally was this way. I would say, if I just said I have a magic wand, and I can just make it so that no competitor can use affiliates, what would you pay me? That doesn't even mean that you get it. I'm just saying nobody else can have it. What would you pay to shut that down for everybody?

Ross Hudgens (3:22)

Interesting.

Jason Cohen (3:22)

And it's like, well, you would pay more than a dollar, and you wouldn't pay $10 million. Yes, yes. So that proves there's a number.

You can decide what it is, and okay, you don't have to decide exactly. But what you can do is say, okay, so what's the ROI affiliates you would like to have? Because now you're computing, like, what can I pay for a new sign up or whatever the metric is? Plus, I can pay this extra amount if the affiliate is exclusive to me.

Ross Hudgens (3:51)

Okay, so you negotiate an exclusive deal.

Jason Cohen (3:53)

But you pay them more, because that means they can't sell those things, right? So you're going to have to pay them more. So you might realize, now, these are made up numbers, but you might realize I would have paid $100 per conversion, but I'm actually going to pay $200 per conversion. But this is the logic, because $100 of that is actual ROI, and the other half is this thing of like, but if they do it exclusively, I shut someone else out and I'm willing to pay another $100.