The Compound Effect: What It Is, And How To Leverage It In Your Business

– Quote of the day:

The Compound Effect: What It Is, And How To Leverage It In Your Business

This last monday I went out to grab a beer and watch Monday Night Football with one of the more successful people I know, a gentleman by the name of Tom. He’s been a mentor for me in general business and life over the last couple of years, and everything he’s ever told me has been spot on. Throughout his life he’s managed to do very well for him self on Wall Street, but has managed to stay incredibly down to earth and real. He’s been a great mentor to me, and has shared with me many a valuable lesson.

Anyway, we soon got talking about business, as he’s always curious about how I’m doing, and what progress I’m making in my ventures. We talked about the progress I’ve made, what I was doing on a daily basis, and what I needed to get better at. Towards the end of the conversation I asked him a simple question, “What are some of the principles you’ve lived by that in your opinion have the greatest impact on your own personal success?”. 

He covered a few, one being the importance of hard work, another being the importance of having the correct mindset and learning “how to think” vs. “what to think”, and lastly he talked about being aware of, and leveraging the compound effect. 

Here’s the lesson: 

Firstly, whatever you choose to do in life, you must strive to be the best you can be at that activity, and you MUST BE CONSISTENT (consistency in our industry is a rare thing). When you’re consistent in any activity, at whatever your current level of skill may be, the compound effect starts to work for you.

Side-note: This is especially true in our industry in the realm content creation, and so I’ll use it as an example.

Please realize this though, the compound effect is much different than the consistency effect, and is much more powerful.

So… Lets say that you were to get of your own head, throw your imperfections to the curb, and start creating a blog post everyday. Firstly, after about 3 months, people would start to take notice, and you’d begin to build your audience. This consistent action in of itself is the “consistency effect”, and will yield results alone. 

But… you must next take into consideration a few other principles. Firstly, the more you practice any particular activity, the better at that particular activity you will get. So… after a year of blogging consistently for lets say 5 days a week, it would be conservative to say that at that point you would be at-least 15% better at the activity of blogging, and more realistically would be 20%-30% better. You’d start to understand keywords and back-links, and then start to understand what kind of content your audience really likes.

This incremental gain in skill is the first aspect of the compound effect. Next, as you begin to become more efficient at creating valuable, content rich blog posts, your audience will continue to grow, but now at a much faster rate due to your increase in skill and knowledge of your craft. Your audience growing at a faster rate is the second aspect of the compound effect. Now, As you build your audience more quickly and build a relationship with your audience more efficiently through the targetted content you create suited to solve their problems, you can expect your audience to share your pieces of content through social media at a much more predictable pace than when you started blogging a year ago… After-all, you now have a relationship with your audience, and are continually scaling the size of your audience on a daily basis. This increased social presence through the viral sharing of your content will once again speed up the pace at which you build your audience and presence in the marketplace. Your audience growing through organic, viral means as a result of your audience sharing your content on social networks is the third aspect of the compounding effect. Finally, as you continue to apply your new increased skills as a content creator, your audience growth will continue to snowball through the means we just discussed, and at an undefinable point, you will have become a known leader and authority in the industry (all a leader and authority really is is an individual with a loyal following), making it that much easier to grow your audience and make sales through increased social proof and an overall more powerful presence in the Marketplace. Being looked at as a Leader and Authority in our industry is what we’ll call the “final piece” of the compound effect. 

Truth be told though, the compound effect never stops working for you, as long as you continue to leverage it. Your audience can always get bigger, your influence can always grow, and your marketplace positioning can always increase… As long as you continue to tap into the compound effect. 

The same principle applies with any aspect of Online Marketing and life in general. If you start with Paid Facebook ads today, don’t expect to create an incredible ROI right out of the gate. As time passes though, you’ll become more efficient, create a more positive ROI, have more money to reinvest, and be able to scale your ads to a larger level very consistently, resulting in building your list and audience more quickly and making sales more efficiently. If you were to hit the gym today for the first time, expect to be lost. But do it consistently enough and apply the knowledge you pickup along the way, and you’ll soon know what you’re doing in regards to the weights, diet, sleep, and supplementation, which will result in you achieving the physical appearance you’re looking for.

The final thought… It’s important to realize that while the compound effect can be incredibly powerful, and can work for you and your business in an incredible way, it can also work against you in the same manner. When you start cutting corners in your business, staying out a little bit later than you should, and having that extra drink or two when you know you shouldn’t, you’ll soon find yourself in a rut through the compound effect working against you. Late nights lead to slow mornings, and slow mornings tend to lead towards even later nights. Before you know it, you’re in trouble, and you don’t know why.

It was the compounding effect working against you instead of for you.

So… be aware of the immense power of the compound effect, and choose to have it work for you, and not against you. Choose to leverage it in your life and business and move forward, instead of letting it drag you down. Once you start to feel the compound effect working for you, there’s no going back! 

Did you get value out of “The Compound Effect: What It Is, And How To Leverage It In Your Business”? If so, please let me know what you’re biggest takeaway was in the comments section below, and don’t forget to hit the Facebook Like and Google + share buttons!

To Success, Yours and Mine.

Misha Wilson

P.S. PS: Want to Learn How to Use the Internet to Get More Traffic, Capture More Leads, and Make More Sales, All While Building An Ultra Responsive E-mail List That COMPLETELY LOVE’S YOU? If so, sign up for a free trial of Elite Marketing Pro RIGHT HERE! , the system through which Ive learned most everything I currently know. FAIR WARNING THOUGH: Getting Good at Anything takes time and effort. THERE IS NO MAGIC BULLET.