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I personally have made a lot more mistakes than I have, correct choices.

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Welcome to the game where we talk about how to get more customers, how to make more

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customers, how to keep them longer, and the many failures and lessons we have learned

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along the way. I hope you enjoy and subscribe. What's going on, everyone? I wanted to talk about

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one of the biggest mistakes of my entrepreneurial career. I'm going to try and talk about more

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of these because I think a lot of times we only hear about the wins and not about the losses.

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Most of us have been in the game a while, we'll tell you, you'll make way more, or I personally

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have made a lot more mistakes than I have, correct choices. Before I dive into that,

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the longer I've been in this, the more I've adopted a single belief that I've inherited from

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people smarter than me that make more money than me. Your mistakes will break you more than your

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wins will take you. What I mean by that is, I think it's true in business and in life and even

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in marriages and relationships and so many things, the downside, many times it's more important

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to mitigate downside risk than it is to try and maximize upside return. What I mean by that

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is a lot of times we as entrepreneurs get excited about the story about that one thing that

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changed and then the company doubled or whatever it is. But so many more times we get killed

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through our mistakes more than we get made through our wins. As I have, I feel like matured in

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the entrepreneurial role, I'm less interested in the big home runs and more interested in avoiding

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the mistakes that get the mistakes. I'll share this with you. This is one of the biggest mistakes

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I've ever made. At one point, it's probably a year or two ago, our company was struggling with

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churn and part of the reason that this is interesting is that I'll say this, I believed my company

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was struggling with churn. My company was not struggling with churn. I believed it and it was

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because I was extrapolating data from one industry to another and so I didn't know, right? And that's

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why expectations and proper benchmarking is important, right? But because of this, I was driving

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myself and my team crazy about trying to fix churn because it was driving me nuts, right? And in

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reality, it was fine. It was at or below market. But anyways, in this process, some of my team

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was, they were responsible for churn. Their bonuses and what they were being measured on was

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churn, lifetime value, right? And this is actually really fun that I even said that lifetime value and

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churn are very different, right? Because lifetime value is influenced by price. Churn is just

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what percentage of customers live, right? And so I will tell you what I did and I will tell you

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how much it cost me. So we decided we're going to do this crazy, great idea and provide more for less,

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while, right? And so we had this huge announcement. We're going to add this huge new, you know,

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this new, all these new services in for our clients and whatever they were, they were paying,

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we were going to just literally have them pay less. How stupid does that sound to you?

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But I, you know, the people in the front line who were being measured on churn were persistent

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and it was ultimately my call and trying to be an, an accommodating CEO, I, I said, okay. And so we

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snapped our fingers and we made the change. And it cost me $5 million a year of profit.

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Hey guys, love that you're listening to the podcast. If you ever want to have the video version

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of this, which usually has more facts, more visuals, more graphs, you know, drawn out stuff,

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sometimes it can help hit the brain centers in different ways. You can check my YouTube channel.

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It's absolutely free to check that out if that's what you are into. And if not, keep enjoying the show.

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And churn didn't change. $5 million a year in profit. And it didn't, and churn was unaffected.

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Unaffected. So the moral of the lesson that I learned from this failure was that many times

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lowering your price is pretty much never the solution ever. Like ever. Number one. Number two,

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you can raise your price because you feel like it. You can. Number two. Number three.

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Understand benchmarks and expectations before making these types of decisions. And I said this

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in a past podcast and I'm going to say it again here. Jeff Bezos has a thing about making decisions

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quickly, which is if I make a decision, I decide whether it's reversible or irreversible.

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If it's reversible, I just make it quickly and move forward. If it's irreversible, we take more time.

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And thinking about decisions like that allows you to move, you know, faster in an organization.

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This was an irreversible decision because I couldn't just lower it and be like, yeah, I just

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get you guys are back at, you know, higher price, my bad. And so it was just wild. It was such a

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terrible decision. It was such a bad decision. And thing is is that the price reduction so that

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you have a relative understanding of what the reduction was is we did a, I mean, it's crazy when

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I even say this out loud because it was so dumb. It was a 25% reduction in price. A 25% permanent

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discount. Imagine cutting your top line by 25% for most people that you're profit.

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And I was somehow so obsessed with trying to conquer turn and thinking that price was the thing.

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And it wasn't. It's like retaining employees. The price is usually never the thing, right? It's

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not like people don't stay for higher pay. They stay for other reasons. They for fulfillment.

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If they're feeling like they're growing, they stay if they feel like they're contributing. They

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stay if they're feeling they're making an impact. They stay if they enjoy their, who they work with,

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right? They don't necessarily, like people don't get happier when they get a pay increase.

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They have a momentary blip and then they return back to baseline. And so to the same degree,

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we didn't decrease turn at all. In fact, I even had some people complain. They were like, I can't

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believe you charged me what you were charging me before and they were upset about it.

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And so I share this story because I just want everyone to know the many many many many many

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mistakes I have made. That was the single greatest mistake I've made. It was the single greatest

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mistake that I have made. And so my hope is that if you are considering this, first off, don't do it.

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Let's tell you right now. Just don't do it. But if you are considering it, don't do it. Don't do it.

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But if you are considering it, I'm going to say don't do it again. But the next thing the point is

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I understand how much turn would have to be reduced in order for this to make it worth it.

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The answer is by so much that it wouldn't even make sense. And so that is just one of my

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more than one million dollar mistakes. So I will continue to tell you more mistakes that I've

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made that cost me more than a million dollars. But that one is a single greatest mistake I've made

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as an entrepreneur. So that is my scar of the day to share with you on my entrepreneurial journey.

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I hope you find value in it. And I hope it just prevents you from making the same mistake

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rather than I have no lesson. It's just I have no tactic for you. It's just if you can avoid

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that mistake, you will make so much more money by just not doing this terrible thing. If you

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don't get a DUI and get pregnant before 16, your life will likely turn out better than otherwise.

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Now so you can't. It's just you have way more likelihood of succeeding, right? And so if you don't

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just cut your prices for no reason, 25% of your top line, then you will likely make more. So that is

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my gift. That is my thing for the day. And I hope you have an amazing rest of your day. Bye!