WEBVTT 1 00:00:00.000 --> 00:00:04.240 What are the simplest ways? What are the simplest of these levers, the highest likelihood 2 00:00:04.240 --> 00:00:08.400 levers that I have, and then doing this on a consistent basis and expanding the time 3 00:00:08.400 --> 00:00:12.560 presence so that the likelihood that you actually achieve the result approaches 100%. 4 00:00:13.280 --> 00:00:16.160 Welcome to the game where we talk about how to get more customers, how to make more 5 00:00:16.160 --> 00:00:19.360 customers, how to keep them longer, and the many failures and lessons we have learned 6 00:00:19.360 --> 00:00:24.480 along the way. I hope you enjoy and subscribe. What's going on everyone? Got a very special 7 00:00:24.480 --> 00:00:28.480 presentation for you today. What I want to talk to you about is something that I've been working 8 00:00:28.720 --> 00:00:33.280 on a lot more recently, which is helping businesses go from a million dollars a year to a million 9 00:00:33.280 --> 00:00:38.240 dollars a month. I've now been having these conversations regularly with the entrepreneurs who 10 00:00:38.240 --> 00:00:43.920 are doing between one and five-ish and they're trying to get to one and then two, three million 11 00:00:43.920 --> 00:00:50.320 dollars a month and beyond. I wanted to give you an expansion on the framework that I think I've 12 00:00:50.320 --> 00:00:54.960 talked about before where people come out, they pay about 50 dollars a day of consulting and I 13 00:00:54.960 --> 00:00:59.280 walked them through the ways to grow business. We basically spot check and figure out where we 14 00:00:59.280 --> 00:01:07.200 feel like the biggest lever or opportunity is and we go all in on that. Fundamentally, the ways 15 00:01:07.200 --> 00:01:14.960 to grow business, there are only two. Within those two, there are subsets obviously. One is you can 16 00:01:14.960 --> 00:01:24.560 increase acquisition, which is getting more customers, selling more units. I've talked about 17 00:01:24.720 --> 00:01:29.520 in other videos how to do this, but there are six ways to do this. One is through paid advertising, 18 00:01:30.320 --> 00:01:35.520 which everyone automatically divults is the only way. The next is through earned media, 19 00:01:36.720 --> 00:01:43.280 which is right now as you're listening to this, this is earned. Third is owned, which is going to 20 00:01:43.280 --> 00:01:51.120 lists that you have. Fourth is through partners or affiliates. That's like if you have another 21 00:01:51.120 --> 00:01:55.040 company that serves your types of clients, but in a different way, you might partner together 22 00:01:55.040 --> 00:02:03.120 and refer clients. Number five is client referrals. As in your own clients, sending other business to 23 00:02:03.120 --> 00:02:08.320 you, which if we feel like that's an opportunity, then maybe we could have really aggressive 24 00:02:08.320 --> 00:02:19.120 referral program. Then finally, manual outbound. Those are the six ways and then obviously within 25 00:02:19.120 --> 00:02:24.000 those, there's endless amounts of subcategories. Within manual outbound, you can have cold, 26 00:02:24.000 --> 00:02:29.920 cold email, cold messaging and things of that nature. You could do that across different platforms, 27 00:02:29.920 --> 00:02:32.800 cold messages are going on Instagram, cold messages on Facebook, cold messages are on LinkedIn. 28 00:02:32.800 --> 00:02:39.200 All of those are tactics, but this is the strategy. Referrals would be referral systems like Dropbox 29 00:02:39.200 --> 00:02:42.560 had, you know, refer a friend. You could pay them. You could give them percentage off. You can 30 00:02:42.560 --> 00:02:46.000 give them bonuses or give them swag or give them extra services that they wouldn't normally be able 31 00:02:46.240 --> 00:02:50.240 to have. Partners, how can we create an incentive program where we can pay you for continuity? 32 00:02:50.240 --> 00:02:53.920 We can pay you per deal or, you know, how can we integrate ourselves into your business so that we're 33 00:02:53.920 --> 00:02:59.760 just the second step or third step of your client journey owned. This is the lists that you have 34 00:02:59.760 --> 00:03:04.400 absolute access to that no one can touch or remove from you, right? Like if I own an email list or 35 00:03:04.400 --> 00:03:08.640 I own a phone number, then that is something that I own that I can't always use to get more customers 36 00:03:08.640 --> 00:03:15.760 with. Earned is the platforms that choose to distribute our content information because we provide 37 00:03:15.760 --> 00:03:19.600 value to the users, right? So like if you're getting value from this, then the platform says we're 38 00:03:19.600 --> 00:03:23.600 going to display this to more people and then maybe at some point in the future be like, hey, Alex, 39 00:03:23.600 --> 00:03:28.320 you know, I'd love to have you help me go from a million year to a million a month, etc. Right? 40 00:03:28.320 --> 00:03:32.000 And then finally, there's paid, right? And then within paid, there's obviously a million subcategories. 41 00:03:32.000 --> 00:03:39.120 You could go GDN, you could go to Bula, you could go Facebook ads, Instagram ads, and YouTube ads 42 00:03:39.120 --> 00:03:43.760 and pre-roll and you know, like search and the million other ways that you can use those, but 43 00:03:43.760 --> 00:03:49.840 fundamentally these are the categories, all right? Now, the backside of the business is increase 44 00:03:51.520 --> 00:03:56.480 customer LTV, right? Now, I'm going to define this really quickly because everyone kind of understands 45 00:03:56.480 --> 00:04:00.000 increasing the number of units that seems straightforward, right? Like if you get more customers, 46 00:04:00.000 --> 00:04:03.200 it's just like what's the customer? Somebody who starts pay you, right? Increasing acquisition 47 00:04:03.200 --> 00:04:08.560 people seem to understand. Increasing LTV seems to be significantly more amorphous, right? It's 48 00:04:08.560 --> 00:04:13.840 something that's less understood. And one of the difficulties is that the term itself is usually 49 00:04:13.840 --> 00:04:19.600 poorly defined, all right? And I'll give you an example. So if I had a meal prep business, 50 00:04:19.600 --> 00:04:25.920 for example, and let's say it cost me $9 to create and deliver a meal to a customer that shipped, 51 00:04:25.920 --> 00:04:32.880 all right, to the door. And let's say I charged $10 for that meal, right? And let's say the average 52 00:04:32.880 --> 00:04:38.560 person buys 10 meals a week, that's $100 a week, and you know, for a month, that's $400 a month, 53 00:04:38.560 --> 00:04:42.400 just using rough math here, right? And let's say the average person stays with me for, 54 00:04:44.000 --> 00:04:49.200 I'll just use 10 weeks because it's 10 times 100, so 1000, all right? So someone on my marketing 55 00:04:49.200 --> 00:04:54.880 department might be like, hey, dude, we're spending $200 to get $1,000 customer. This is awesome, 56 00:04:54.880 --> 00:05:01.440 let's crank up the ad spent, right? Because the $1,000 LTV went in reality, the LTV of that customer is 57 00:05:01.440 --> 00:05:08.800 not $1,000. What is it? Think about it for yourself for a second. It's a hundred bucks. Why? 58 00:05:08.800 --> 00:05:15.600 Because my gross margin, what I'm actually making on the sale minus cost of goods is a dollar 59 00:05:15.600 --> 00:05:23.120 on a $10 purchase, right? Cost me $9, all in, and I make a buck, right? And so I'm making $100 60 00:05:23.120 --> 00:05:27.760 over the span of the lifetime, because $100 a week, times 10 weeks, is $1,000. So I'm making 61 00:05:27.840 --> 00:05:33.600 $100 in total gross margin per customer. So if it costs me $200 to make a hundred, I'm literally 62 00:05:33.600 --> 00:05:38.240 just losing $100 in every customer I require. That's not a good play. And so the delineation, 63 00:05:38.240 --> 00:05:42.880 the thing that needs to be peeled off here is what is the gross margin over the lifespan of the 64 00:05:42.880 --> 00:05:48.160 customer, all right? That is what true lifetime value is. The problem is that some of the writings on 65 00:05:48.160 --> 00:05:52.560 this, a lot of the writings are on this topic, talk about software companies, and typically the 66 00:05:52.560 --> 00:05:56.880 gross margins on software are close to 100%, which is why there's such some of the biggest companies 67 00:05:56.880 --> 00:06:00.560 out there. And so they just kind of assume that the revenue that someone's going to create is 68 00:06:00.560 --> 00:06:07.920 going to be close to, or basically interchangeable with the gross margin over lifespan. So they use 69 00:06:07.920 --> 00:06:13.120 this interchangeably, but it's not true for most of us who don't sell software, right? Who don't sell 70 00:06:13.120 --> 00:06:17.440 air, right? And so if you have hard costs of goods and it has to be the gross margin over the 71 00:06:17.440 --> 00:06:23.280 lifespan of the customer, that is what lifetime value is. I might even redefine it as LTGP, which is 72 00:06:23.280 --> 00:06:30.000 lifetime gross profit, all right? Real quick guys, if you can think about how you found this podcast, 73 00:06:30.000 --> 00:06:34.640 somebody probably tweeted it, told you about it, shared it on Instagram, or something like that. 74 00:06:34.640 --> 00:06:39.360 The only way this grows is through word of mouth. And so I don't run ads, I don't do sponsorships, 75 00:06:39.360 --> 00:06:43.600 I don't sell anything. My only ask is that you continue to pay it forward to whoever showed you, 76 00:06:43.600 --> 00:06:48.240 or however you found out about this podcast that you do the exact same thing. So if it was a review, 77 00:06:48.240 --> 00:06:51.520 if it was a post, if you do that, it would mean the world to me and you'll throw some good karma 78 00:06:51.520 --> 00:06:58.000 out there for another entrepreneur. Now, I have talked about this in the past that there are three 79 00:06:58.000 --> 00:07:02.720 ways, sorry, two ways that you can increase the backend, right? You can get them to buy more times, 80 00:07:02.720 --> 00:07:10.000 you can get them to buy to cross-elps. But after doing kind of a more deep dive on this, tactically, 81 00:07:10.560 --> 00:07:15.040 here are the five ways, and each one of these ways, just like the acquisition, you can increase 82 00:07:15.040 --> 00:07:20.000 on a business, all right? Number one is you can increase the price. Very simply, you do the same 83 00:07:20.000 --> 00:07:26.240 exact thing, but you charge more. That increases the lifetime gross profit on a customer. The second is 84 00:07:26.240 --> 00:07:31.360 you can decrease the cost. So this is one that a lot of people overlook. If I can figure out a way 85 00:07:31.360 --> 00:07:36.080 either through technology to decrease my cost of goods, so let's say with that meal example, 86 00:07:36.080 --> 00:07:40.320 let's say I figure out a new way to ship it, and I can decrease the weight, or I don't have to put 87 00:07:40.320 --> 00:07:45.360 as much ice in the box, then my cost goes down, so my gross margin goes up, right? That does grow 88 00:07:45.360 --> 00:07:50.720 the business. I make more money. It allows me to spend more money in acquisition, etc. So decreasing 89 00:07:50.720 --> 00:07:57.440 cost or figuring out a way to fulfill the same thing in a lower, with a lower cost would be an 90 00:07:57.440 --> 00:08:03.520 improvement in the business. The next three are related. There are cousins of one another, all right? 91 00:08:04.160 --> 00:08:10.240 Number three would be reselling. So that's within the context of like a recurring business, 92 00:08:10.240 --> 00:08:14.560 like if you someone buys monthly membership, they're basically getting resold over and over and 93 00:08:14.560 --> 00:08:19.360 over again. So that gets into churn, increasing activation, all that kind of stuff. And so that's 94 00:08:19.360 --> 00:08:27.120 where you get the increasing LTV based on resell slash retention, all right? The fourth is through 95 00:08:27.120 --> 00:08:33.680 cross cells, all right? This is where you're selling someone something else that they also need, 96 00:08:33.680 --> 00:08:40.160 all right? So this can be done in two ways. One is you can have another business, like an example 97 00:08:40.160 --> 00:08:45.840 of that within one of our companies is that we have gym lords, right? Which is our gym company, 98 00:08:45.840 --> 00:08:50.320 right? gym launch in our community's gym lords. And then prestige labs is the supplement company 99 00:08:50.320 --> 00:08:54.400 that's specifically made four gyms because a lot of gyms, like there's a lot of things that normal 100 00:08:54.400 --> 00:08:59.520 supplement companies don't do that we specifically designed it four gyms to solve a problem. And so 101 00:08:59.520 --> 00:09:04.160 as a result of that, if they choose to sell our supplement line, that is kind of a soft cross cell. 102 00:09:04.160 --> 00:09:07.200 Like we're not actually selling them, but they're choosing to sell our products. So it's another 103 00:09:07.200 --> 00:09:13.280 revenue stream for the business. That's a, that's an example of me owning another way to increase 104 00:09:13.280 --> 00:09:19.200 lifetime value. A different way would be let's say click funnels, right? That's a software that 105 00:09:19.200 --> 00:09:23.760 a lot of our gyms use. And so we're an affiliate of click funnels. And so in that, we get a certain 106 00:09:23.760 --> 00:09:27.920 percentage back from click funnels for referring customers to them. So the flip side is that 107 00:09:29.120 --> 00:09:35.040 we are partners of another business. And so we have integrated them into our business, 108 00:09:35.040 --> 00:09:39.360 and then we get paid for that. I don't want to create a landing page software that's not within 109 00:09:39.360 --> 00:09:44.160 my core. And so as a result of that, I will find the best one and then I can recommend it 110 00:09:44.160 --> 00:09:49.520 and get a commission as a result of that. So that again increases lifetime value. All right. And then 111 00:09:49.520 --> 00:09:56.400 finally, you've got upsells. All right. And I like to delineate this because you think differently 112 00:09:56.400 --> 00:10:00.960 about each of these things, right? This is someone's buying the same thing more times. This one's 113 00:10:01.760 --> 00:10:06.240 with an upsell. Someone's buying a better version of the thing. So this is think about this as 114 00:10:06.240 --> 00:10:13.600 more premium or upgrading. And this is buying again. All right. And so each of these five ways 115 00:10:13.600 --> 00:10:18.160 increases the lifetime value of the customer. And obviously there's a mill. I can write a whole 116 00:10:18.160 --> 00:10:23.440 book on pricing. You know, there's a hundred ways to decrease costs for a product or cost of 117 00:10:23.440 --> 00:10:29.760 delivering service. Entire books on churn and activation and onboarding all that kind of stuff 118 00:10:29.760 --> 00:10:33.040 to decrease the likelihood that someone's going to leave, increase likelihood. They continue to stay 119 00:10:33.040 --> 00:10:38.960 with you again and again. Cross sells looking at all of the different things that a customer who's 120 00:10:38.960 --> 00:10:42.960 going to work with you may eventually buy as a result of doing business with you and seeing which 121 00:10:42.960 --> 00:10:47.200 of these things would I potentially want to create? Which of these things would I would potentially 122 00:10:47.200 --> 00:10:51.520 want to buy? And then what which one of these things would I potentially want to just partner with? 123 00:10:51.520 --> 00:10:55.200 Right. And if you're earlier on, I would definitely recommend doing more partnering and less 124 00:10:55.200 --> 00:10:58.960 building because then you probably have too many companies and it's a nightmare. All right. So 125 00:10:59.680 --> 00:11:05.040 and then finally, okay, how do I how can I identify customers who are more likely to want you 126 00:11:05.040 --> 00:11:10.640 have a higher level of service and then ascend them into that? And so when I'm looking at a business 127 00:11:10.640 --> 00:11:13.440 that we're trying to take from a million dollars a year to a million dollars a month or multiple 128 00:11:13.440 --> 00:11:18.960 million dollars a month, this is my framework. This is what I'm looking at to answer those questions 129 00:11:18.960 --> 00:11:24.480 and then figure out where do I feel like where they're at if I'm rating these? Where do I see the 130 00:11:24.480 --> 00:11:29.840 biggest opportunity the lowest hanging fruit that has the highest likelihood of success 131 00:11:30.960 --> 00:11:35.200 for that business so that we can achieve it? And typically when we go through this into our process, 132 00:11:35.200 --> 00:11:42.400 I might just say, all right, we're just going to do this. That's it. Because at the end of the day, 133 00:11:42.400 --> 00:11:46.720 if you're trying to grow your business, the point of doing an exercise like this is not to feel 134 00:11:46.720 --> 00:11:52.800 overwhelmed, but to feel clarity. You should feel calmer after doing this exercise and focused on 135 00:11:52.800 --> 00:11:58.720 exactly what needs to happen in your business in order to grow it. And so fundamentally, two ways 136 00:11:58.720 --> 00:12:02.880 to grow, get more customers, make them worth more. And then within getting more customers, 137 00:12:02.880 --> 00:12:06.480 there's six different sources of getting customers and then within each of those sources, 138 00:12:06.480 --> 00:12:11.520 zillions of tactics around that. And then within lifetime value, you can increase the price, 139 00:12:11.520 --> 00:12:16.160 you can decrease the cost for you so you increase your margin. You can resell these people over and 140 00:12:16.160 --> 00:12:21.040 over again or retain them longer. You can cross sell them or have some affiliations with businesses 141 00:12:21.280 --> 00:12:24.800 that they are going to do business with as a result of working with you. And then finally, 142 00:12:24.800 --> 00:12:30.320 figuring out ways that you can ascend them into higher levels of service. All right. And so looking 143 00:12:30.320 --> 00:12:34.560 at the entire business to think, what are the simplest ways, what are the simplest of these levers, 144 00:12:34.560 --> 00:12:39.360 the highest likelihood levers that I have, and then doing this on a consistent basis and expanding 145 00:12:39.360 --> 00:12:44.080 the time price and so that the likelihood that you actually achieve the result approaches 100%. 146 00:12:44.080 --> 00:12:48.160 And that is the process that I am now doing with the companies that we're working with that are doing, 147 00:12:48.160 --> 00:12:51.840 you know, a million, two million, three million, sometimes five million a year that are trying 148 00:12:51.840 --> 00:12:56.800 to get to a million, a month, two million a month, four million a month, et cetera. So anyways, 149 00:12:56.800 --> 00:13:01.920 hope that was valid before. Hope that made sense. And yeah, keep being awesome. Lots of love, 150 00:13:01.920 --> 00:13:13.040 subscribe, like all this stuff. All right. Bye.