WEBVTT 1 00:00:00.000 --> 00:00:05.480 No, there's a reason that companies that serve enterprise or Fortune 500 or Fortune 100 2 00:00:05.480 --> 00:00:08.200 companies get the highest multiples when they sell. 3 00:00:08.200 --> 00:00:13.080 It's because those customers are the most valuable and they stay the longest and pay the 4 00:00:13.080 --> 00:00:14.320 most. 5 00:00:14.320 --> 00:00:17.960 Serving a better customer makes you a better business. 6 00:00:17.960 --> 00:00:20.280 The wealthiest people in the world see business as a game. 7 00:00:20.280 --> 00:00:23.480 This podcast, the game, is my attempt at documenting the lessons I've learned on my way to 8 00:00:23.480 --> 00:00:26.320 building acquisition.com into a billion dollar portfolio. 9 00:00:26.320 --> 00:00:29.120 My hope is that you use the lessons to grow your business and maybe someday soon partner 10 00:00:29.120 --> 00:00:30.800 with us to get to a hundred million dollars and beyond. 11 00:00:30.800 --> 00:00:32.600 I hope you share and enjoy. 12 00:00:32.600 --> 00:00:38.440 80% of customers will bankrupt your business and keep you poor forever. 13 00:00:38.440 --> 00:00:42.520 So here I was sitting in this conference where I was at the Cool Kids table because we had 14 00:00:42.520 --> 00:00:47.680 our software company, Alan, that just had crossed 10 million ARR and your recurring revenue. 15 00:00:47.680 --> 00:00:51.800 And we got recognized for being awesome and so I thought I was hot shit. 16 00:00:51.800 --> 00:00:53.880 And so applause died down. 17 00:00:53.880 --> 00:00:57.880 The host of the event gets up there and he's like, our next speaker is head of pricing 18 00:00:57.880 --> 00:01:02.360 and packaging at Vista, a $50 billion private equity fund. 19 00:01:02.360 --> 00:01:09.840 I was like, oh, I am poor and don't know what I'm talking about. 20 00:01:09.840 --> 00:01:14.840 And so the speaker got on stage and what he said changed how I saw selling and making 21 00:01:14.840 --> 00:01:17.880 money for the rest of my business career. 22 00:01:17.880 --> 00:01:21.720 So as soon as the speaker opened his mouth, I was like completely focused on what he's 23 00:01:21.720 --> 00:01:22.720 saying. 24 00:01:22.720 --> 00:01:25.200 I was like, what is this guy's secret for pricing and packaging? 25 00:01:25.200 --> 00:01:30.600 And so he said the way that Vista approaches acquiring a new company starts with its customer 26 00:01:30.600 --> 00:01:31.600 brace first. 27 00:01:31.600 --> 00:01:32.800 And I was like, what are we talking about? 28 00:01:32.800 --> 00:01:36.000 I was thinking it must be marketing, it must be sales, like how are they growing all 29 00:01:36.000 --> 00:01:37.000 these companies? 30 00:01:37.000 --> 00:01:40.960 And for context, their benchmark is they want to triple a business in three years. 31 00:01:40.960 --> 00:01:43.320 That's what they target to do, triple in three. 32 00:01:43.320 --> 00:01:48.600 And they're buying multi billion dollar businesses and trying to triple those type of businesses. 33 00:01:48.600 --> 00:01:51.160 And so the way they had to do it had to be smart. 34 00:01:51.160 --> 00:01:54.400 And so what they would do in the diligence process where they actually do research on 35 00:01:54.400 --> 00:01:59.480 the company before they buy them is they actually do more research on that business as customers 36 00:01:59.480 --> 00:02:01.640 than that business already had. 37 00:02:01.640 --> 00:02:06.080 So they would extract all the customer data from a business they were going to buy. 38 00:02:06.080 --> 00:02:10.560 And then they would force rank every customer that business had ever sold since the beginning 39 00:02:10.560 --> 00:02:16.200 of time by who had been with them the longest and who had spent the most money. 40 00:02:16.200 --> 00:02:21.440 And then they would look at the customers that were in the top 20% and say, are there 41 00:02:21.440 --> 00:02:27.080 commonalities between what channels they came through, similarities of industry, etc. 42 00:02:27.080 --> 00:02:32.560 And if there were, and that was not pulled out specifically by that business, they would 43 00:02:32.560 --> 00:02:39.320 acquire the business and then cut all acquisition channels that brought in the 80% and then 44 00:02:39.320 --> 00:02:43.840 looked at the acquisition channels that brought in the 20% that was the highest paying customers 45 00:02:43.840 --> 00:02:46.480 and they would double down on that. 46 00:02:46.480 --> 00:02:50.160 And what I realized was this was Pareto's principle on steroids. 47 00:02:50.160 --> 00:02:55.280 And so the typical concept is that 20% of customers spend 80% of the money. 48 00:02:55.280 --> 00:02:59.600 And so what they would do is say, okay, well, what if we had 100% of the customers being 49 00:02:59.600 --> 00:03:04.800 that 20% if they accomplished that alone, they would already have 4xed the size of the 50 00:03:04.800 --> 00:03:10.480 business accomplishing their tripling in three without even having to increase the volume 51 00:03:10.480 --> 00:03:16.040 of sales, but only by picking better customers to sell to begin with. 52 00:03:16.040 --> 00:03:20.160 After the speaker got off stage, I was completely shook because we were selling every single 53 00:03:20.160 --> 00:03:25.080 person at the time to get to about 1.7 million a month and six months in our software company. 54 00:03:25.080 --> 00:03:28.040 Anybody who had a credit card who said they wanted to do it, we would take them. 55 00:03:28.040 --> 00:03:32.400 But what that resulted in was more customer churn, different customers with different 56 00:03:32.400 --> 00:03:36.600 desires and wants, which means we had to build different features into our product suite 57 00:03:36.600 --> 00:03:42.680 to service all these different people and differing margins based on the differing desires 58 00:03:42.680 --> 00:03:45.200 of the customers, which was bad. 59 00:03:45.200 --> 00:03:49.040 So I've been quoted by saying that the market that you serve is the most important 60 00:03:49.040 --> 00:03:53.080 lever on your business success because if you're selling toilet paper in COVID, it doesn't 61 00:03:53.080 --> 00:03:56.640 matter how good you are at marketing, how good you are at sales, how good you are at 62 00:03:56.640 --> 00:03:58.560 branding, you're going to sell out. 63 00:03:58.560 --> 00:04:02.240 And so if you have a supply demand curve that's in your favor, you're going to win. 64 00:04:02.240 --> 00:04:09.040 A subset of that concept with market being the most powerful is what slice of that market 65 00:04:09.040 --> 00:04:10.760 you go after. 66 00:04:10.760 --> 00:04:16.040 This is where you become more nuanced and exactly who you choose to serve and more importantly, 67 00:04:16.040 --> 00:04:17.880 who you choose not to. 68 00:04:17.880 --> 00:04:22.040 Because if you think about the definition of strategy, which is how you allocate limited 69 00:04:22.040 --> 00:04:26.520 resources against unlimited opportunities, this is a strategic decision. 70 00:04:26.520 --> 00:04:30.040 You have the opportunity to sell certain people and take their money. 71 00:04:30.040 --> 00:04:34.520 But because of your limited resources, you choose not to sell to those people. 72 00:04:34.520 --> 00:04:35.840 That is strategy. 73 00:04:35.840 --> 00:04:38.160 So after diving really deep in the process, I got it. 74 00:04:38.240 --> 00:04:41.880 2020, you sell more of the 20, if you sell four times more of the 20, you make a lot more 75 00:04:41.880 --> 00:04:42.880 money. 76 00:04:42.880 --> 00:04:43.880 Got it. 77 00:04:43.880 --> 00:04:44.880 But how do I actually do that? 78 00:04:44.880 --> 00:04:47.480 And so I went really deep on this, reading lots of different SaaS metrics books so I could 79 00:04:47.480 --> 00:04:51.480 come down to a simple process that I could apply to every single company in our portfolio 80 00:04:51.480 --> 00:04:52.480 at acquisition.com. 81 00:04:52.480 --> 00:04:56.480 Now, at the time when I learned this, I only had three businesses, which was Prestige Labs, 82 00:04:56.480 --> 00:04:57.480 Jim Launch, and Alan. 83 00:04:57.480 --> 00:05:01.360 And I'll show you the four steps that we used and what happened after we implemented 84 00:05:01.360 --> 00:05:02.680 this at Jim Launch. 85 00:05:02.680 --> 00:05:07.240 The first step is that you survey all of your existing customers past and present. 86 00:05:07.400 --> 00:05:11.440 If you can't get the past and respond at the very least, get the current customers respond 87 00:05:11.440 --> 00:05:12.440 to the survey. 88 00:05:12.440 --> 00:05:16.320 To get as many people as possible to fill out the survey, force them to do it during 89 00:05:16.320 --> 00:05:18.200 live support calls that you have with them. 90 00:05:18.200 --> 00:05:19.640 So you give it to all your reps. 91 00:05:19.640 --> 00:05:22.880 And when they hop on with them, you have them fill out the survey live with them. 92 00:05:22.880 --> 00:05:25.360 And that way you can make sure they fill it out correctly and that every single person 93 00:05:25.360 --> 00:05:26.360 does it. 94 00:05:26.360 --> 00:05:29.440 If you don't have that many reps, you can get all of your customers on the next support 95 00:05:29.440 --> 00:05:30.440 call or whatever it is. 96 00:05:30.440 --> 00:05:32.880 And you can do it all together at once live. 97 00:05:32.880 --> 00:05:36.480 And if you want to have even more engagement, give them a soft benefit for filling it out, 98 00:05:36.480 --> 00:05:37.800 some sort of bonus. 99 00:05:37.800 --> 00:05:42.120 An easy way to do that is to have some sort of content that might be exclusive or mini 100 00:05:42.120 --> 00:05:46.120 training or something like that that is very short, very tangible value. 101 00:05:46.120 --> 00:05:49.120 And you give them that as a bonus just for completing it. 102 00:05:49.120 --> 00:05:52.960 On the survey, you want to ask every relevant detail that you want to know and explain what 103 00:05:52.960 --> 00:05:54.240 those are in a second. 104 00:05:54.240 --> 00:05:56.960 So first thing we ask in the survey is demographics. 105 00:05:56.960 --> 00:05:57.960 Who are they? 106 00:05:57.960 --> 00:06:02.440 Age, gender, political affiliation, geographic location. 107 00:06:02.440 --> 00:06:03.800 Are they singular, divorced? 108 00:06:03.800 --> 00:06:06.840 Do they have a partner or multiple partners in their business? 109 00:06:06.840 --> 00:06:09.040 The second is before and after stats. 110 00:06:09.040 --> 00:06:13.280 So you can think about this from a business to business business or a business to consumer 111 00:06:13.280 --> 00:06:15.680 business, either way it works. 112 00:06:15.680 --> 00:06:21.320 So in a B2B business, it would be like revenue and profit before, revenue and profit after. 113 00:06:21.320 --> 00:06:24.480 Number of employees before, number of employees after. 114 00:06:24.480 --> 00:06:27.960 Their churn before they started working with you, their churn after, their pricing before, 115 00:06:27.960 --> 00:06:33.680 their pricing after, every relevant metric, number of new clients, lifetime value, all 116 00:06:33.720 --> 00:06:38.200 of these things would be questioned that we would ask on the survey for the business stats 117 00:06:38.200 --> 00:06:39.360 or the personal stats. 118 00:06:39.360 --> 00:06:41.640 You can just think of this as results. 119 00:06:41.640 --> 00:06:46.360 The next is aspirations, which is what do they actually want to have accomplished when 120 00:06:46.360 --> 00:06:47.880 they bought your thing? 121 00:06:47.880 --> 00:06:53.320 What was their envisionment of what job was to be done by you and the services or products 122 00:06:53.320 --> 00:06:55.320 you have that they hired you for? 123 00:06:55.320 --> 00:06:58.200 You'd be surprised by how different the answers might be. 124 00:06:58.200 --> 00:07:00.560 This will inform lots of stuff that I'll get to later. 125 00:07:00.560 --> 00:07:02.440 The next is the buying process. 126 00:07:02.440 --> 00:07:05.560 Was there a specific trigger that caused them to buy? 127 00:07:05.560 --> 00:07:09.160 When they were thinking about the decision, what were the variables that they were considering 128 00:07:09.160 --> 00:07:13.720 and what was the moment that they decided to do it and what was that variable? 129 00:07:13.720 --> 00:07:16.040 Was there a specific testimonial they consumed? 130 00:07:16.040 --> 00:07:18.400 Was there a number of pieces of content they consumed? 131 00:07:18.400 --> 00:07:21.880 Was there a specific piece in general that they consumed that forced them or caused them 132 00:07:21.880 --> 00:07:23.440 to want to buy? 133 00:07:23.440 --> 00:07:24.960 Where did they see us first? 134 00:07:24.960 --> 00:07:26.480 Did someone refer them? 135 00:07:26.480 --> 00:07:30.600 These are all relevant questions so we can start with an idea of who this person is. 136 00:07:30.600 --> 00:07:35.000 The second step is that you now sort by the customers who have spent the most money with 137 00:07:35.000 --> 00:07:36.000 you. 138 00:07:36.000 --> 00:07:38.280 You have all the survey results, step one. 139 00:07:38.280 --> 00:07:42.680 Step two is that you sort the results by the people who have spent the most with you. 140 00:07:42.680 --> 00:07:48.000 For the purposes of this exercise, take the top 20% and ignore the rest. 141 00:07:48.000 --> 00:07:54.080 Step three, and this is the money part, is that you see what they have in common. 142 00:07:54.080 --> 00:08:00.320 The idea here is to find the fewest threads that they all share because ideally, if you 143 00:08:00.320 --> 00:08:04.480 could just find one thing that's a little bit weird that they all had, it massively narrows 144 00:08:04.480 --> 00:08:05.480 it down. 145 00:08:05.480 --> 00:08:08.680 For example, they all said they were from a certain town. 146 00:08:08.680 --> 00:08:12.720 That would allow you to laser focus your messaging, your marketing, all on that town. 147 00:08:12.720 --> 00:08:15.680 If that was just the one thing that they all had to come, that would be amazing. 148 00:08:15.680 --> 00:08:17.160 That's not always the case. 149 00:08:17.160 --> 00:08:21.280 Oftentimes, it's two or three things that they all share. 150 00:08:21.280 --> 00:08:24.840 This is where going through doing the boring work, reading every one of the responses of 151 00:08:24.840 --> 00:08:29.400 that 20% to see what are the needs they had, where do they come from, what is the business 152 00:08:29.400 --> 00:08:35.200 size, how old was the business, how old are they, that you start to see common factors. 153 00:08:35.200 --> 00:08:39.600 Step four is that you execute against these new qualifiers. 154 00:08:39.600 --> 00:08:42.760 There's two important things in the execution process. 155 00:08:42.760 --> 00:08:45.040 The first is how you speak. 156 00:08:45.040 --> 00:08:50.200 You will change all of your messaging to specifically talk to these three or four qualifiers 157 00:08:50.200 --> 00:08:52.080 that they all share. 158 00:08:52.080 --> 00:08:55.840 You will be really upfront with your new customer requirements and you will be upfront 159 00:08:55.840 --> 00:08:59.080 in your marketing of who you serve and who you do not serve. 160 00:08:59.080 --> 00:09:04.600 If you know that it's only people who are doing $20,000 a month out of Minnesota who are 161 00:09:04.600 --> 00:09:09.080 conservative leaning, you can do that and that becomes your new messaging. 162 00:09:09.080 --> 00:09:13.560 That means that everybody who's not in that bucket will be repelled by your marketing, 163 00:09:13.560 --> 00:09:17.480 but the people that are in that bucket will be even more magnetized towards you because 164 00:09:17.480 --> 00:09:21.560 now everybody up to this point came into your business by accident. 165 00:09:21.560 --> 00:09:24.440 Now they will be becoming into your business by design. 166 00:09:24.440 --> 00:09:28.680 You will also still catch some of the bad customers that you have before. 167 00:09:28.680 --> 00:09:32.280 This now means that you have to have a new level of discipline, meaning if someone comes 168 00:09:32.280 --> 00:09:37.040 in and they're not from Idaho and they $20,000 a month and politically leaning whatever 169 00:09:37.040 --> 00:09:41.840 way you want, you would actually turn them down and you say, sorry, you don't meet our 170 00:09:41.840 --> 00:09:45.920 requirements for becoming a customer and that's because you did the math and you know that 171 00:09:46.000 --> 00:09:50.440 they're not worth it compared to these other customers that were 3, 4, 5 times more. 172 00:09:50.440 --> 00:09:54.680 The second step of execution is reverse engineering the sales process. 173 00:09:54.680 --> 00:09:58.880 You look at the reasons that the best customers said they bought and you look at where they 174 00:09:58.880 --> 00:10:03.120 came from, you increase the volume of effort on the channels that the best customers came 175 00:10:03.120 --> 00:10:06.360 in from and then you look at the reasons that they chose to buy. 176 00:10:06.360 --> 00:10:07.360 What were the trigger events? 177 00:10:07.360 --> 00:10:08.360 What were the things that they consumed? 178 00:10:08.360 --> 00:10:12.160 What was the number of pieces of content and then we start to try and recreate the best 179 00:10:12.160 --> 00:10:16.320 customers buying experience rather than having happened on accident? 180 00:10:16.320 --> 00:10:20.720 Here's a little tip of why this makes you so much more money for no more work. 181 00:10:20.720 --> 00:10:25.560 You make far more money because of how much more valuable they are, not because of how 182 00:10:25.560 --> 00:10:27.280 much more valuable you are. 183 00:10:27.280 --> 00:10:31.640 But if you sell to a more qualified customer, you in a very real way can make them more 184 00:10:31.640 --> 00:10:33.040 money for the same work. 185 00:10:33.040 --> 00:10:37.120 So if I did CRO, so conversion rate optimization for an e-commerce business that was doing 186 00:10:37.120 --> 00:10:39.960 a million dollars a year and I added 10%. 187 00:10:39.960 --> 00:10:43.760 They would go from $1 million a year to $1.1 million a year. 188 00:10:43.760 --> 00:10:47.880 Now if I did that same work at a business that's doing $100 million a year, they would go 189 00:10:47.880 --> 00:10:50.760 from $100 million to $110 million. 190 00:10:50.760 --> 00:10:55.960 So same work, I made $100,000 a value here, I made $10 million a value here. 191 00:10:55.960 --> 00:10:57.800 Who do you think I can charge more? 192 00:10:57.800 --> 00:10:59.680 This guy, which one was more work? 193 00:10:59.680 --> 00:11:03.680 Neither, they were the same work, but I get 100 times the output. 194 00:11:03.680 --> 00:11:06.480 So it wasn't because of us, it's because of them. 195 00:11:06.480 --> 00:11:11.040 So if we pick the right customers, we're able to charge significantly more and it's because 196 00:11:11.040 --> 00:11:14.800 we really are in a real way providing more value. 197 00:11:14.800 --> 00:11:18.480 So usually at this point, I get the question, what if I have no customers? 198 00:11:18.480 --> 00:11:23.120 How can I do this survey and reverse segmentation of the customers to figure all this stuff out? 199 00:11:23.120 --> 00:11:28.480 Well, there's a reason that Y Combinator, one of the best startup incubators out there, 200 00:11:28.480 --> 00:11:32.680 picks founders who have passed experience in the industry that they're trying to pursue. 201 00:11:32.680 --> 00:11:36.400 And that should make sense, because there's a lot of depth of experience that just comes 202 00:11:36.400 --> 00:11:39.960 through us, most is from being in an industry for a long period of time. 203 00:11:39.960 --> 00:11:42.880 And rather than trying to have someone have this steep learning curve, it's better that 204 00:11:42.880 --> 00:11:46.680 they already know the industry, lingo, the beliefs of that industry, and the common problems 205 00:11:46.680 --> 00:11:49.760 that that particular avatar is suffering from. 206 00:11:49.760 --> 00:11:53.000 So the fast track for somebody who's new, so this is you who doesn't have any customers, 207 00:11:53.000 --> 00:11:56.360 is to start with an industry that you argue of something about. 208 00:11:56.360 --> 00:12:01.160 Most of us have at least some inside knowledge, due to friends, our parents, what they did. 209 00:12:01.160 --> 00:12:04.960 Like, you'd be amazed that if your father was a mechanic, how much you know about cars 210 00:12:04.960 --> 00:12:09.000 just by growing up in a household where your father does a certain thing, right? 211 00:12:09.000 --> 00:12:13.320 Or if you had certain jobs growing up that were in certain industries, you'd be amazed 212 00:12:13.320 --> 00:12:16.840 how much you know compared to somebody who who wasn't in that industry, right? 213 00:12:16.840 --> 00:12:21.160 Like, I know nothing about cars, but a friend of mine, his dad's mechanic, he says all 214 00:12:21.160 --> 00:12:25.840 this stuff about cars, carburetor, whatever, I have no idea what he's talking about, but 215 00:12:25.840 --> 00:12:29.200 he thinks it's ridiculous that I don't know, but I just wasn't around that. 216 00:12:29.200 --> 00:12:31.920 All of my parents were eye doctors of different kinds. 217 00:12:31.920 --> 00:12:36.640 I know a ton of stuff about eyes for no reason, but me hearing them talk about it. 218 00:12:36.640 --> 00:12:42.400 And so if you can pick something that you have some relevant industry experience or tangential 219 00:12:42.400 --> 00:12:47.440 experience through people you know, real quick guys, if you can think about how you found 220 00:12:47.440 --> 00:12:51.920 this podcast, somebody probably tweeted it, told you about it, shared it on Instagram 221 00:12:51.920 --> 00:12:53.320 or something like that. 222 00:12:53.320 --> 00:12:55.760 The only way this grows is through word of mouth. 223 00:12:55.760 --> 00:12:59.000 And so I don't run ads, I don't do sponsorships, I don't sell anything. 224 00:12:59.000 --> 00:13:02.440 My only ask is that you continue to pay it for it, do whoever showed you or however 225 00:13:02.440 --> 00:13:05.320 you found out about this podcast that you do the exact same thing. 226 00:13:05.320 --> 00:13:09.000 So if it was a review, if it was a post, if you do that, it would mean the world to me 227 00:13:09.000 --> 00:13:13.480 and you'll throw some good karma out there for another entrepreneur. 228 00:13:13.480 --> 00:13:16.720 And so fundamentally, the idea is that we always want to pick the people that we feel like 229 00:13:16.720 --> 00:13:19.480 we can serve the most and create the most value for. 230 00:13:19.480 --> 00:13:21.720 So if you were like, I don't know, I have three different backgrounds. 231 00:13:21.720 --> 00:13:25.480 It's like, okay, well, of those three different people, which of those subsets do you think 232 00:13:25.480 --> 00:13:27.160 you could help the most? 233 00:13:27.160 --> 00:13:30.560 That's the person you should help because if you can help that person the most, it means 234 00:13:30.560 --> 00:13:33.360 that you can charge the most and ultimately make the most money. 235 00:13:33.360 --> 00:13:35.720 And if you're worried about like, wouldn't that mean I'm only going to be able to serve 236 00:13:35.720 --> 00:13:37.120 a very narrow customer? 237 00:13:37.120 --> 00:13:38.120 That's right. 238 00:13:38.120 --> 00:13:40.360 And that's the point because you're not going to try and compete with the biggest companies 239 00:13:40.360 --> 00:13:44.120 in the world who already have all the operational infrastructure to crush you. 240 00:13:44.120 --> 00:13:46.360 You're just going to say, I'm not going to beat them at everything. 241 00:13:46.360 --> 00:13:49.960 I'm just going to take strategy, limited resources, unlimited opportunities. 242 00:13:49.960 --> 00:13:53.200 I'm going to go laser focused on this one person and I think that I could beat the best 243 00:13:53.200 --> 00:13:56.120 company in the world at this tiny slice. 244 00:13:56.120 --> 00:13:57.800 And then piece by piece, you'll expand that. 245 00:13:57.800 --> 00:14:01.040 But for right now, if you're starting out, you focus on that slice and you learn that 246 00:14:01.040 --> 00:14:02.840 slice like the back of your hand. 247 00:14:02.840 --> 00:14:04.480 That's how you can win. 248 00:14:04.480 --> 00:14:07.280 And once you start serving those customers, guess what? 249 00:14:07.280 --> 00:14:12.080 You can run this process and then find the 80, 20 in those customers. 250 00:14:12.080 --> 00:14:15.920 So here's what happened after we implemented this process at Jim Watch. 251 00:14:15.920 --> 00:14:18.000 So we surveyed our customers. 252 00:14:18.000 --> 00:14:21.520 We sorted for the ones that had the most money, had spent the most money with us, and then 253 00:14:21.520 --> 00:14:22.960 we saw what they all had in common. 254 00:14:22.960 --> 00:14:24.320 That steps one through three. 255 00:14:24.320 --> 00:14:25.800 Step four was execution. 256 00:14:25.800 --> 00:14:27.640 And so this is what we found. 257 00:14:27.640 --> 00:14:31.040 From a demographic standpoint, our customers were right leaning in conservative, which is 258 00:14:31.040 --> 00:14:33.040 pretty common for small business owners. 259 00:14:33.040 --> 00:14:36.800 They were married, they were male, and they were 25 to 45. 260 00:14:36.800 --> 00:14:39.200 And they were mostly US based. 261 00:14:39.200 --> 00:14:42.920 Business wise, the best Jim owners that we worked with had assigned lease. 262 00:14:42.920 --> 00:14:44.440 They had at least one employee. 263 00:14:44.440 --> 00:14:48.360 They were doing at least $10,000 a month when they came to us, and they had at least 264 00:14:48.360 --> 00:14:49.760 30 customers. 265 00:14:49.760 --> 00:14:52.640 So those are the business statistics that we saw that they all had in common. 266 00:14:52.640 --> 00:14:55.640 You'll note that I said there was a lot more questions that we asked. 267 00:14:55.640 --> 00:14:56.640 That's right. 268 00:14:56.640 --> 00:14:59.320 But not all of those were in common, which means not all of them were important. 269 00:14:59.320 --> 00:15:00.320 And that's okay. 270 00:15:00.320 --> 00:15:03.720 You ask a lot more questions than you may ultimately use, because the whole point is to narrow it 271 00:15:03.720 --> 00:15:06.000 down to the fewest commonalities. 272 00:15:06.000 --> 00:15:09.600 Their aspirations were to have a million dollar Jim, not work so much inside of the 273 00:15:09.600 --> 00:15:13.360 Jim, stop teaching sessions and open more locations. 274 00:15:13.360 --> 00:15:16.680 And the reasons that they bought was that they didn't have enough leads. 275 00:15:16.680 --> 00:15:18.120 They had a bad location. 276 00:15:18.120 --> 00:15:22.360 They weren't making enough money, and they couldn't find good employees. 277 00:15:22.360 --> 00:15:24.480 And so here's where got really interesting. 278 00:15:24.480 --> 00:15:27.960 The last piece that they all had in common was that they had each consumed. 279 00:15:27.960 --> 00:15:32.920 It was 78% of them had consumed at least two long form pieces of content prior to making 280 00:15:32.920 --> 00:15:34.320 a purchase. 281 00:15:34.320 --> 00:15:37.360 This is really important, because when we get to the last step of reverse engineering 282 00:15:37.360 --> 00:15:40.840 the sales process, we're going to force that to happen. 283 00:15:40.840 --> 00:15:44.080 So in step four, I said execution, there's two things that change. 284 00:15:44.080 --> 00:15:49.240 One is how you talk to your audience, which is your new, more refined avatar, and second 285 00:15:49.240 --> 00:15:51.680 how you reverse engineer the sales process. 286 00:15:51.680 --> 00:15:55.120 So the first thing we did was all of our messaging changed and all of our marketing. 287 00:15:55.120 --> 00:15:58.760 We stopped talking about aspiring gym owners, trainers, fitness professionals, whatever. 288 00:15:58.760 --> 00:16:03.440 And we got laser focused on gym owners that had assigned lease for doing $10,000 a month 289 00:16:03.440 --> 00:16:07.000 or more, had at least one employee and 30 minimum customers. 290 00:16:07.000 --> 00:16:10.960 All of a sudden, and when we talk about is if you're this person, and what do they want? 291 00:16:10.960 --> 00:16:11.960 Aspirations. 292 00:16:11.960 --> 00:16:12.960 They wanted a million dollar Jim. 293 00:16:12.960 --> 00:16:14.280 What are the reasons that they bought? 294 00:16:14.280 --> 00:16:18.200 If you want to stop suffering from not having enough leads from not knowing where to get 295 00:16:18.200 --> 00:16:22.160 your next employees and from not making enough at the end of the month, right? 296 00:16:22.160 --> 00:16:26.920 So they outlined where they are, what they want, and the things they're struggling with. 297 00:16:26.920 --> 00:16:30.680 And so we changed all of that into our marketing messaging and said it very clearly on every 298 00:16:30.680 --> 00:16:34.540 step of our process, our ad set it, the video set it, the creative set it, the landing 299 00:16:34.540 --> 00:16:38.680 pages set it, the application set it, the phone team set it, everybody set it all the 300 00:16:38.680 --> 00:16:39.680 way across the company. 301 00:16:39.680 --> 00:16:44.240 So everyone could understand exactly who we served, and most importantly, again, who 302 00:16:44.240 --> 00:16:47.160 we don't, which is everyone who's not that. 303 00:16:47.160 --> 00:16:50.640 So once we found out that the trigger or the thing that they also had in common from a 304 00:16:50.640 --> 00:16:56.680 buying perspective is that 78% of them had at least consumed too long form pieces of content, 305 00:16:56.680 --> 00:17:00.280 we then said, okay, the people who spend the most money with us and stay with us the 306 00:17:00.280 --> 00:17:02.960 longest, the ones who are the most pre-sold on coming to us. 307 00:17:02.960 --> 00:17:06.400 All right, well then let's force that to happen. 308 00:17:06.400 --> 00:17:10.640 And so what we did was he injected multiple long form pieces of content into the sales 309 00:17:10.640 --> 00:17:16.000 process itself, so we'd force everybody to consume too long form pieces of content to 310 00:17:16.000 --> 00:17:20.240 make them just like the people who spend the most money and stayed the longest. 311 00:17:20.240 --> 00:17:24.120 On top of that, we started outputting more content specific to the struggles that they 312 00:17:24.120 --> 00:17:25.600 said in the surveys. 313 00:17:25.600 --> 00:17:28.800 So each of those pain points, we started making much more content around solving each of 314 00:17:28.800 --> 00:17:30.120 those things. 315 00:17:30.120 --> 00:17:35.320 And then to go even higher or deeper on this, what we did was we created an all time greatest 316 00:17:35.320 --> 00:17:41.600 hits list or excel sheet of the content that was the reasons that people cited as the 317 00:17:41.600 --> 00:17:43.360 reasons they chose to buy. 318 00:17:43.360 --> 00:17:46.760 And so my sales team had a list of every single piece of content. 319 00:17:46.760 --> 00:17:51.080 There was the ones that they said were decision maker pieces of content or milestone content. 320 00:17:51.080 --> 00:17:55.360 And then they had that sort of buy, you know, the headline of the thing, the link, and then 321 00:17:55.360 --> 00:17:56.360 the reason. 322 00:17:56.360 --> 00:18:00.000 And so when they got on a call, when we would inject the too long form pieces of content, 323 00:18:00.000 --> 00:18:03.280 they'd be the ones that were relevant to the problems that they wanted to solve. 324 00:18:03.280 --> 00:18:08.520 And so that gave my sales team a sales or value cheat sheet that they could give to customers 325 00:18:08.520 --> 00:18:13.000 or prospective customers to consume so that we could be even more laser targeted in the 326 00:18:13.000 --> 00:18:17.960 problems that were solving value in advance before asking for money and showing our expertise 327 00:18:17.960 --> 00:18:20.320 that we really knew how to solve their problems. 328 00:18:20.320 --> 00:18:25.480 And by doing that, we forced every prospect to go through the ideal buying prospect of 329 00:18:25.480 --> 00:18:27.240 our best prospects. 330 00:18:27.240 --> 00:18:32.800 And so we therefore transformed or manufactured the best customers out of the raw material 331 00:18:32.800 --> 00:18:33.800 of prospects. 332 00:18:33.800 --> 00:18:36.400 So it's both from selecting better people with our messaging. 333 00:18:36.400 --> 00:18:38.440 So we got attracted to the right people. 334 00:18:38.440 --> 00:18:43.800 And then with that raw material, we manufactured them into the ideal person who's closable and 335 00:18:43.800 --> 00:18:46.560 pays the most and stays the longest. 336 00:18:46.560 --> 00:18:51.640 And as a side note, I want to be very clear, the valuable content, the long form pieces 337 00:18:51.640 --> 00:18:54.600 of content we provided them were not disguised sales pitches. 338 00:18:54.600 --> 00:18:59.000 They were literally just valuable content that truly solved the problem. 339 00:18:59.000 --> 00:19:01.360 It was demonstration of expertise. 340 00:19:01.360 --> 00:19:06.160 But as what we were doing, a lot of times people try and sell too hard when oftentimes 341 00:19:06.160 --> 00:19:09.640 sales, if you have to sell really hard, it's the result of poor branding. 342 00:19:09.640 --> 00:19:12.760 It means that you don't have enough goodwill, you haven't provided enough value in advance. 343 00:19:12.760 --> 00:19:16.440 And so the easiest thing to sell more is provide more value before you ask. 344 00:19:16.440 --> 00:19:20.160 And this way you can manufacture that goodwill with a process. 345 00:19:20.160 --> 00:19:23.600 So I'm going to give you a comparison between the difference of what happened with our metrics 346 00:19:23.600 --> 00:19:27.400 compared to another business that was in the same spaces as us that hadn't gone through 347 00:19:27.400 --> 00:19:28.920 this process. 348 00:19:28.920 --> 00:19:33.920 So while back I was approached to buy an equity stake in a company that was similar in the 349 00:19:33.920 --> 00:19:37.720 same spaces as us, because they thought that it would be a strategic purchase for us, 350 00:19:37.720 --> 00:19:41.080 they would benefit from our brand, we would benefit from some things from them, et cetera. 351 00:19:41.080 --> 00:19:44.240 And so in the diligence process, I get to look at all their numbers. 352 00:19:44.240 --> 00:19:45.840 And this is what's crazy. 353 00:19:45.840 --> 00:19:50.480 Once we dove into the numbers, it turned out that they were selling the exact same amount 354 00:19:50.480 --> 00:19:54.280 of customers per month as us, same number of customers. 355 00:19:54.280 --> 00:19:57.920 But he was making 70 times less profit than me. 356 00:19:58.240 --> 00:20:01.480 Yes, 70 times less, 70. 357 00:20:01.480 --> 00:20:03.240 And spoiler, it wasn't because we were brilliant. 358 00:20:03.240 --> 00:20:07.600 It's because selling to the right people works and compounds unto itself. 359 00:20:07.600 --> 00:20:11.360 Because not only do you actually have a lower cost of acquisition oftentimes, 360 00:20:11.360 --> 00:20:15.520 because you're more specific in your messaging, your sales process becomes more choreographed 361 00:20:15.520 --> 00:20:17.640 to the needs of that specific type of customer. 362 00:20:17.640 --> 00:20:22.720 So you get them in, more laser targeted, you convert them at higher percentages. 363 00:20:22.720 --> 00:20:27.000 And once they're in, all of your onboarding, all of your fulfillment is far more perfectly 364 00:20:27.000 --> 00:20:32.360 tailored to their specific situation rather than having to be far more general and create 365 00:20:32.360 --> 00:20:36.800 less value because you can't be a specific or tailored with recommendations for the business 366 00:20:36.800 --> 00:20:39.040 or for the services you provide. 367 00:20:39.040 --> 00:20:42.920 So the big difference was they accepted anyone with a pulse and a credit card. 368 00:20:42.920 --> 00:20:48.520 And as a result, their customer success team was always flooded with complaints and churn 369 00:20:48.520 --> 00:20:51.920 and people left as fast as they came, which is part of the reason they wanted me to buy 370 00:20:51.920 --> 00:20:54.080 in to try and help them fix this. 371 00:20:54.080 --> 00:20:57.560 And to a certain degree, because they were more generalized, it kind of forced this. 372 00:20:57.560 --> 00:21:01.800 And so people try and solve all of these other problems in the business rather than thinking, 373 00:21:01.800 --> 00:21:03.960 what is the most strategic thing I can do? 374 00:21:03.960 --> 00:21:07.920 Maybe I should stop serving all the people who suck and who drain all the resources from 375 00:21:07.920 --> 00:21:12.200 us and actually make very tailored solutions to the best customers. 376 00:21:12.200 --> 00:21:13.440 And so that's ultimately what we did. 377 00:21:13.440 --> 00:21:16.960 If you think about it from a percentage standpoint, we were only serving a very, very small percentage 378 00:21:16.960 --> 00:21:18.760 of the entire fitness industry. 379 00:21:18.760 --> 00:21:20.640 Because that means that we couldn't serve any trainers. 380 00:21:20.640 --> 00:21:24.160 We couldn't serve any people who wanted to do fitness as a profession or wanted to go 381 00:21:24.160 --> 00:21:25.160 online. 382 00:21:25.160 --> 00:21:26.160 We didn't do any of that stuff. 383 00:21:26.160 --> 00:21:28.680 And we didn't even serve all specific types of gyms. 384 00:21:28.680 --> 00:21:33.880 We actually even found out more detailed over time that we served micro gym owners and 385 00:21:33.880 --> 00:21:35.960 we served health club owners. 386 00:21:35.960 --> 00:21:38.680 Those are the two segments that we serve very, very well. 387 00:21:38.680 --> 00:21:42.520 Everyone, like bar studios, less so, cycling, less so. 388 00:21:42.520 --> 00:21:44.400 And it wasn't because our model didn't work. 389 00:21:44.400 --> 00:21:46.240 It was actually psychographic. 390 00:21:46.240 --> 00:21:50.200 People who were yoga e-people don't usually vibe with me, right? 391 00:21:50.200 --> 00:21:54.400 And my style of doing things, and it didn't work with our style of doing business. 392 00:21:54.400 --> 00:21:57.720 Not the mechanics of the business, but it was just they didn't vibe with our culture. 393 00:21:57.720 --> 00:22:00.520 And so there are multiple layers, the demographics, you also have psychographics. 394 00:22:00.520 --> 00:22:02.360 That's where the political leaning, things like that. 395 00:22:02.360 --> 00:22:07.520 Those are things that affect who buys and what your messaging comes out as. 396 00:22:07.520 --> 00:22:11.360 So as a result, we ignored everyone that wasn't our perfect customers. 397 00:22:11.360 --> 00:22:17.520 And we were rewarded with higher gross margins, premium pricing, longer retention rates, 398 00:22:17.520 --> 00:22:20.480 more referrals, more repeat business. 399 00:22:20.480 --> 00:22:24.600 And the crazy thing about this is that my business and this other guy's business were serving 400 00:22:24.600 --> 00:22:27.480 the same market, but a different avatar. 401 00:22:27.480 --> 00:22:30.200 And as a result, got monstrously different results. 402 00:22:30.200 --> 00:22:32.400 This stuff matters. 403 00:22:32.400 --> 00:22:36.200 And many competitors tried to copy everything that we were doing. 404 00:22:36.200 --> 00:22:39.560 They tried to copy our ads, they tried to copy our landing pages, they tried to copy 405 00:22:39.560 --> 00:22:43.840 our sales process, but the problem was they wouldn't commit. 406 00:22:43.840 --> 00:22:45.880 They would panic and they would cut out steps. 407 00:22:45.880 --> 00:22:49.520 They would cut out filters, they would cut out qualifiers in order to make the short buck. 408 00:22:49.520 --> 00:22:51.480 They wouldn't hold the line. 409 00:22:51.480 --> 00:22:54.920 And most times, they paid very dearly for it because they wouldn't make as much money. 410 00:22:54.920 --> 00:22:57.480 And as a result, they could never outcompete us. 411 00:22:57.480 --> 00:23:01.800 And as a tangent, in my experience, every time I've cut out qualification steps, my volume 412 00:23:01.800 --> 00:23:04.480 has gone up, but my quality has gone down. 413 00:23:04.480 --> 00:23:08.160 And then what ends up ultimately happening is that I make actually less dollars per unit 414 00:23:08.160 --> 00:23:10.320 of advertising or promotion that we put in. 415 00:23:10.320 --> 00:23:16.040 So even if I get half the calls booked for X amount of effort of outbound dials of content 416 00:23:16.040 --> 00:23:22.360 of whatever, my actual throughput on sales, even if I had more calls with higher quantity, 417 00:23:22.360 --> 00:23:26.800 the net net sales would drop every time you remove filters. 418 00:23:26.800 --> 00:23:30.120 One of the other things that we did as a result of this was that we actually kind of merged 419 00:23:30.120 --> 00:23:32.960 marketing and sales in kind of an acquisition department. 420 00:23:32.960 --> 00:23:36.880 And we did that because when we just had it marketing, they would focus on getting more, 421 00:23:36.880 --> 00:23:37.880 right? 422 00:23:37.920 --> 00:23:40.400 But they still wanted more, but they also wanted better. 423 00:23:40.400 --> 00:23:44.800 And so it was always this constant battle, but when we kind of put the departments together, 424 00:23:44.800 --> 00:23:49.280 it was much more about, OK, how much are we spending, how many sales are we making? 425 00:23:49.280 --> 00:23:52.560 And so we wouldn't obsess about having way more opt-ins because the marketing people would 426 00:23:52.560 --> 00:23:55.680 look at the same metrics as the salespeople, which is how many deals do we close? 427 00:23:55.680 --> 00:23:58.440 And so by putting them together to line all the teams. 428 00:23:58.440 --> 00:24:03.040 And now, we use the optimal amount of steps to generate the most sales. 429 00:24:03.040 --> 00:24:06.380 And so the amount of people who tried to copy what we're doing, and then panic because 430 00:24:06.380 --> 00:24:10.620 couldn't get the volume and they remove a step, they thought they were being clever. 431 00:24:10.620 --> 00:24:11.700 We tried that. 432 00:24:11.700 --> 00:24:12.860 It doesn't work. 433 00:24:12.860 --> 00:24:15.780 The amount of steps that we had in the process is the exact amount of steps to get the highest 434 00:24:15.780 --> 00:24:18.780 return on the impence of time effort and money. 435 00:24:18.780 --> 00:24:25.300 For example, I would rather pay $5,000 to acquire a $45,000 customer than pay $1,000 to acquire 436 00:24:25.300 --> 00:24:27.300 a $5,000 customer. 437 00:24:27.300 --> 00:24:32.060 That's a trade that is easy for me to say in very hard for other people to replicate. 438 00:24:32.060 --> 00:24:34.820 Once they see their ads been go up a little bit or their number of average attempts go 439 00:24:34.820 --> 00:24:36.260 up, they lower the bar. 440 00:24:36.260 --> 00:24:37.260 They lower the bar. 441 00:24:37.260 --> 00:24:40.740 They take the quick money and they can never get that compounding machine going because 442 00:24:40.740 --> 00:24:44.260 they always still sacrifice and then they create more problems on the back end. 443 00:24:44.260 --> 00:24:46.660 They can never get the momentum of the business going. 444 00:24:46.660 --> 00:24:50.580 Knowing your ideal customer journey forces patients. 445 00:24:50.580 --> 00:24:54.580 You begin to see the business holistically rather than as a widget to be sold to as many 446 00:24:54.580 --> 00:24:56.500 people as humanly possible. 447 00:24:56.500 --> 00:24:59.220 The latter is how new beyond entrepreneurs think. 448 00:24:59.220 --> 00:25:01.420 Don't think like that. 449 00:25:01.420 --> 00:25:04.780 To give some context because I've looked at acquiring a lot of businesses in the gym 450 00:25:04.780 --> 00:25:09.500 and fitness industry, the average LTV or lifetime value that most competitors in that 451 00:25:09.500 --> 00:25:15.620 space gain is about $6,000 to $8,000 per customer in a B2B SMB market, so small business 452 00:25:15.620 --> 00:25:17.100 owner market. 453 00:25:17.100 --> 00:25:20.100 Our lifetime value is north of $45,000. 454 00:25:20.100 --> 00:25:25.940 Despite our LTV being only six to eight times higher, the subsequent margins are breathtakingly 455 00:25:25.940 --> 00:25:26.940 different. 456 00:25:26.940 --> 00:25:30.340 If you imagine the cost of fulfilling might be the same or maybe 50% higher but you can 457 00:25:30.340 --> 00:25:35.300 make six to eight times more money per customer, you make breathtaking amounts more. 458 00:25:35.300 --> 00:25:39.420 And so for a moment, I want you to imagine what eight times your price, if you ate extra 459 00:25:39.420 --> 00:25:42.220 price right now and you had the same amount of customers, how much more money would go 460 00:25:42.220 --> 00:25:43.420 to your bottom line. 461 00:25:43.420 --> 00:25:45.340 Just think about it for a second. 462 00:25:45.340 --> 00:25:46.820 Probably a lot. 463 00:25:46.820 --> 00:25:49.300 That's the difference and that's why it's worth it. 464 00:25:49.300 --> 00:25:53.900 Now, once you narrow down your focus, you will serve fewer customers in the short term. 465 00:25:53.900 --> 00:25:56.420 So you have to be prepared for that emotionally. 466 00:25:56.420 --> 00:25:59.780 So that may mean in the short term, a decrease in revenue. 467 00:25:59.780 --> 00:26:03.660 And as a side note, the fastest way to build a $10 million thing isn't always the fastest 468 00:26:03.660 --> 00:26:05.460 way to build a $100 million thing. 469 00:26:05.460 --> 00:26:08.300 Sometimes you got to take a step back before you can take 10 steps forward. 470 00:26:08.300 --> 00:26:13.180 But over the long haul, you will get more retention, more pricing power, more profitability, 471 00:26:13.180 --> 00:26:17.340 more repeat business, and ultimately sometimes even lower cost of acquisition once everything 472 00:26:17.340 --> 00:26:18.860 gets dialed. 473 00:26:18.860 --> 00:26:22.020 And unless you're planning on quitting this business long term, why wouldn't you start 474 00:26:22.020 --> 00:26:24.660 doing the best long term decisions today, right? 475 00:26:25.060 --> 00:26:27.260 So I'm going to give you a little tip about making a lot of money. 476 00:26:27.260 --> 00:26:30.140 You want to sell to people who don't stop buying. 477 00:26:30.140 --> 00:26:35.100 Fortunes are created when we sell stuff that people won't stop giving us money for. 478 00:26:35.100 --> 00:26:39.740 So our goal should be to either improve our products such that they don't stop buying 479 00:26:39.740 --> 00:26:45.100 or limit our avatar so we only serve the people who have those traits. 480 00:26:45.100 --> 00:26:47.100 Either solution works. 481 00:26:47.100 --> 00:26:51.820 Note, there's a reason that companies that serve enterprise or Fortune 500 or Fortune 482 00:26:51.820 --> 00:26:54.980 100 companies get the highest multiples when they sell. 483 00:26:54.980 --> 00:26:59.740 It's because those customers are the most valuable and they stay the longest and pay 484 00:26:59.740 --> 00:27:01.060 the most. 485 00:27:01.060 --> 00:27:04.300 Serving a better customer makes you a better business. 486 00:27:04.300 --> 00:27:07.780 So if four actions to take as a result of this, because if you watch something and you 487 00:27:07.780 --> 00:27:09.700 do not change your behavior, it means you learn nothing. 488 00:27:09.700 --> 00:27:11.260 So there's four things you do. 489 00:27:11.260 --> 00:27:14.260 Number one is that you survey your existing customers and you ask the questions and you 490 00:27:14.260 --> 00:27:16.260 can add more questions to that survey. 491 00:27:16.260 --> 00:27:19.580 Number two is that you force rank those customers based on who has paid you the most and 492 00:27:19.660 --> 00:27:21.940 stay the longest over time. 493 00:27:21.940 --> 00:27:23.940 Number three is you do a common factor analysis. 494 00:27:23.940 --> 00:27:25.300 This is the part where you use your brain. 495 00:27:25.300 --> 00:27:29.140 You got to look and see what do these people have in common, where they came from, how 496 00:27:29.140 --> 00:27:32.940 much they spent, how big they were, how long they were in business, number of partners, 497 00:27:32.940 --> 00:27:34.420 political leaning, whatever it is. 498 00:27:34.420 --> 00:27:40.100 You start to narrow these down and see how much of that 20% the top 20 ignore the 80, what 499 00:27:40.100 --> 00:27:41.340 they have in common. 500 00:27:41.340 --> 00:27:43.860 Then step four is to execute the two-par plan. 501 00:27:43.860 --> 00:27:45.580 One is the front end in terms of the messaging. 502 00:27:45.580 --> 00:27:50.220 You only talk those specifics and you cut out anyone who is not meeting those requirements. 503 00:27:50.220 --> 00:27:54.100 The moment you budge is the moment the strategy falls on itself. 504 00:27:54.100 --> 00:27:58.060 Second half is the buying process is that you reverse engineer what were the triggers 505 00:27:58.060 --> 00:28:02.020 that caused these people to buy in the top 20% and then you force all of these higher 506 00:28:02.020 --> 00:28:05.060 quality prospects to go through an identical process. 507 00:28:05.060 --> 00:28:08.860 Over the long haul, this will increase both the quality and the quantity of the lead flow 508 00:28:08.860 --> 00:28:12.780 that comes into your business and the duration of the time that people will stay and pay 509 00:28:12.860 --> 00:28:16.860 for you and the pricing power they are able to charge because in a real way, you do provide 510 00:28:16.860 --> 00:28:19.100 more value to them. 511 00:28:19.100 --> 00:28:22.940 Growing a business comes down to either selling more customers or making them worth more. 512 00:28:22.940 --> 00:28:25.540 This process accomplishes both. 513 00:28:25.540 --> 00:28:29.300 You get more clients because your marketing becomes far more tailored to the specific 514 00:28:29.300 --> 00:28:33.540 type of people that spend the most money and then by extension, the people that come 515 00:28:33.540 --> 00:28:36.860 into the business are now the people who are worth significantly more and so you have 516 00:28:36.860 --> 00:28:40.660 two multipliers on the business which is why we're making 70 times more profit, not 517 00:28:40.660 --> 00:28:44.180 just two or three times the profit that a competitor is selling the same amount of units 518 00:28:44.180 --> 00:28:46.660 as we were in the same space was. 519 00:28:46.660 --> 00:28:51.380 This may feel like cheating because it's so obvious, but here's the crazy part. 520 00:28:51.380 --> 00:28:55.900 No one does it because it's a four-letter word and it sounds like work. 521 00:28:55.900 --> 00:29:00.420 Getting this process right and doing this research will act as a force multiplier on everything 522 00:29:00.420 --> 00:29:03.780 else you do in the business in terms of the efficiency of your advertising and promotional 523 00:29:03.780 --> 00:29:07.700 efforts and the efficiency of your team and how much value you provide and all of that 524 00:29:07.700 --> 00:29:11.660 compounds onto itself into reinforcing your brand which hopefully is what you're trying 525 00:29:11.660 --> 00:29:13.060 to build. 526 00:29:13.060 --> 00:29:17.380 This is just one of the handful of processes that we do at acquisition.com for our portfolio 527 00:29:17.380 --> 00:29:21.660 companies which acts as a forcing factor for us to have three X increases in profit in 528 00:29:21.660 --> 00:29:26.300 12 months, 4.7 X increases in profits in 24 months of the portfolios that we have. 529 00:29:26.300 --> 00:29:29.380 Obviously there's a much bigger companies but just to give you a perspective like this 530 00:29:29.380 --> 00:29:30.980 works at all levels of business.