1 Hour of Alex Hormozi on Offers

0:00gross margins. So, gross margins are wildly misunderstood, which is interesting. Um, if you are if you are a business owner, you you have to learn the language of business. All right? It is it is for sure. There there are different languages, but there's there's not a huge amount of words that you have to know. You might need to know like a hundred terms. And think about this as like you were studying for a test, right? Like learning a 100 terms, not that hard to understand. And it almost all of them are relationships between two things. That's what almost all of these terms are. So what is gross margin? It's one word that's a relationship between two things. How much you charge and how much it costs you to deliver the thing. And the difference between those things is your gross margin. To be clear, that's not your net profit margin, which is a different ratio, right? Between two, not necessarily ratio, but the difference between two different numbers, right?

0:49But your gross margins are very important because it is what dictates everything else in the business. So what do I mean by that? If you like your net margins cannot exceed your gross margins. Think about that for a moment. If you have if you're like, man, I'd love to run a 50% net margin business. That's an amazing goal and I love that goal for you. If your gross margins are 50%, that means that you can have literally no other cost besides the thing you sell in the entire business.

1:16You can't have any cost of acquiring customers. You can't have any fixed overhead. You can't have any employees that are not specifically in delivery. You can't have any admin, any help. Of course, now the likelihood of of you getting to a 50% margin when you have 50% gross margins is basically zero. And so this is why and and traditionally small business owners will undercharge because they sell out of their own wallet, right? And they sell out of their own wallet in two different ways.

1:40They sell out of their own wallet because they don't have that much money and so they feel bad charging other people when they don't have much money because they're like, "Man, I get what it's like to struggle." And I think there's nothing wrong with that. is just understand the business is not going to grow and you're not going to help more people. The other reason they sell to their own wallet is that they believe that the service they deliver is not that valuable because they know how to do it. So to quote the joker, right? My father always told me when you're good at something, never do it for free, right? And so the idea is that like you I like if you're good at fixing cars, right, you're like well it comes naturally. It's not that hard. You got to know where the, you know, it's like it's what we do is really straightforward to you. To you. But to a customer, we have to sell off the value of what their life would be like if they didn't have this problem solved. That is what we have to charge off of. And when we charge off of those prices, then we create more opportunity for gross margin. Now, here's why this is so important. Let me give you a math example that will blow your minds. And I always, you know, everyone everyone gets a harp applications when I say math. So, let's just say a money example. Okay.

2:48So, let's give you a money example that'll get you really happy. All right. So, let's say that I've got some service that I that I deliver, okay? And it costs me a hundred bucks a month. Okay? That's what it cost me in services and whatever. All right? So, if I want to have 80% gross margins, which I said these are rules of thumb. My rule of thumb for services is at least 80. Okay? So, I want to show you two different scenarios here. So, at 80% at 80% this $100 I have to have $500 has to be my price. Okay. At 70% and I have a $100 cost. Oh god, can someone do the math on this one?

3:35Hold on. Um, God, I got to do this backwards. Let's see. There's a there's a C. Who can do this math for me? 350ish. Thanks, Leo. [laughter] Yes, this is live. Obviously, I think it's a little higher than that.

3:57Is it 400 350? Is it now? Now, now it's all [ __ ] up. Who's Who can do this math for me? All right, I gotta do this. All right. 100 equals.7. Julian, you were premed. Do it for me. or I'll tell you what [laughter] I'll tell you what 90% looks like [laughter] equals $1,000. [laughter] All right, where is it? Where where we at? Why you jackasses keep asking? Thank you. Gross salons.

4:34Is it 350? Is that it? We should We should know this. I feel like as a collective community we should be able to figure out when uh 30% okay so it should be 100 divided by.3 is what it should be so 100 divided by.3 right is 333 thank you so that would mean that 233 should be 70%. Um, so 233 divided by 333, correct? Thank you. Okay, so 333.

5:06Okay, so look at how big of a difference this is, right, between these between these numbers. Um, really significant, right? Like very materially different. And so the reason, and I'm sure somebody will correct this in post, but fundamentally look at how like when people are like, "Oh, well my my margins are at 60%, so I'm close to 80." It's like, bro, we're not even like, you're in a different stratosphere. Okay, so let's take this to the natural end.

5:32If you have a business, let's say that runs 20% margins at net margins at the end of the year, what you can pay yourself, right? If we say, hey, is there a way you think we could go from 70% to 90%. Well, that that sounds like it's not that big of a deal. But when you go from 70 to 90, what happens to the actual margin? You double. You make way more money. And sometimes it means a lot more than that because sometimes the incremental margin is all margin whereas every dollar of revenue up to that point covered cost, right? And so what is our we make $233 here, right? We make $400 here and we make $900 here per customer.

6:13Big difference, right? And so when people hear these numbers, because these numbers look similar, they think that these are going to be very similar and they are not. And so this is why I'm so adamant that 80% is my minimum. I target like that's my baseline. And then from like I will not get into a business with less than 80% gross margins. I won't do it because I know that I then have to run everything else off of this 80. Right?

6:38So if I want to have a 50% net margin business, I only have 30% left. I got 30% to cover everything else. I got to cover rent. I got to cover admin. I got to cover insurance. I got to cover um I got to cover uh marketing. I cover sales. I got to cover everything else with just this 30% so I can have 50% left over. Is this is this ringing? Is this ringing with you guys? Is this making sense? Even if it's a service based business, bro, this is for service- based businesses, not DN Australia. This is for service- based businesses.

7:14And this may this is why like so ideally I like to have I mean again this is minimum and I know this is going to blow your minds here like I like one of the first things we did when we fixed gyms is we made sure the pricing was at least 80% gross margins. That's a service business. Now some of you are like well there that's not possible. Of course it's possible. It's not possible when you sell a commodity.

7:43If a customer can look at your thing and somebody down the street's thing and say, "These are about the same. I'll buy the cheaper one." You sell a commoditized service just like you can sell a commoditized product. And so you might have salt and salt and you got FSG salt and whatever, you know, pink Himalayan. It's salt, right? And so how do we make these two things different? We have to brand. It's pink Himalayan versus just normal salt, right? And they charge a premium for that. And so you have to figure out how to reconfigure.

8:11If only there were a book written about how to make an offer that's decommoditized so that you could achieve 80% or higher gross margins. That would be amazing, wouldn't it? And for those of you who don't know, I wrote a book on this. It's called $100 million offers. 27,000 five star reviews. You should read it. But I I want to draw this because this like if you're trying to figure out what's wrong with your business, it's usually because your margins are off. You're mispriced. But again, sometimes this is this is the this is the fundamental mathematical problem with the business. But this might really be the symptom of the fact that you have a commoditized offer. A B you have a sales process that doesn't function properly, right? Um, and so that's the that's the big idea. So if you want to run a high margin business, then you have to run exceptionally high gross margins for whatever it is that you sell. Okay, cool. That math was tough, wasn't it? All right, so let's do rule number eight. Rule of thumb number eight, if you will. Uh, 30-day cash collected. So, this is a this is an add-on to the the the 30-day payback period. So, what is the exact amount of money that I want to have collected within that 30 days? It's going to be COG. So, the cost of delivering cost of goods sold. I'll just write out cost of goods sold. Now, the goods sold can be services too to be clear. So it's cost of goods sold, how much it costs you for the stuff plus cost of getting customer.

9:39Okay, so if we have the cost of getting the customer and the cost of whatever we got them back, we want both those things together. We want whatever we collect to be greater We want the gross profit or the cash we collect in that first 30 days to be greater than this plus this.

10:06The reason this is so magical is that once this occurs, customer comes in, you acquire that customer and then you have to deliver on that customer. And then that customer pays you back all of that cost and then what can you do? Go get you another customer. That is why it's so magical. And so that is what the whole point of this 30-day cash collective thing is. We want to pull it forward. Cool.

10:32Great. Now, manufacturing study with Zoro. No. Manufacturing, you're going to have different margins because you have cost of goods sold and that's going to be a little different. Um I would to be fair, I would still prefer to have a business that has 80% gross margins. But with services, for human services, um I I have that as my rule of thumb is that I always want 80% or higher gross margins. Okay. Okay. So, you're doing 60k, 20k profit. You probably just need to have one centralized salesperson who does the ascensions. Uh, and you need to do Are you trying to sell them at the end?

11:00>> Yeah. It doesn't work. You have to sell them halfway through. >> People don't People don't sign up again when they're done. >> You tried that, but it doesn't seem to help. >> It's the offer. >> So, basically, at the halfway point, you say, uh, you've done a lot of progress. What I want to do is a rollover upsell, which is what I just did, right? So, I took your ticket and credit towards the next thing. So you say you pay two $2,000 whatever to get this period of time. I'm going to credit the $2,000. We can either credit it towards 12 or we can credit towards six. So right now your option is you can pay me another $2,000 to get to get six months or another $4,000 to get 12. You just give an either or if you choose today. Yeah.

11:35And then you let them credit the whole thing that they paid towards that. That way it's like you just got your whole first, you know, 12 weeks free >> because you're crediting it towards the thing. And >> how do I know if my offer is starting to suck? Uh, the offer part I'm less concerned about. I mean, I'm assuming if you if you follow my stuff, you have some bonuses. You have a guarantee. It's probably conditional. If you don't hit the goal, we'll keep working with you till you do, right? So, you already have the main components. I'll bet you this is a sales problem and a sales process issue. So, halfway point, you'd want to go PIFF on either side. So, paid in full on either side. Roll over credit using the upfront thing towards 6 or 12. You either solve the problem of I'm going to coach the trainers on how to sell and I'm going to incentivize them to want to sell because they're going to get a percentage of the contract and hopefully they have some teeth in them. And if you're like they're all hopeless cases, they all hate sales. They don't want to do it. Then you bring in the saleserson.

12:25And sometimes I like in the short term the highest use of your time might be you taking those calls. It's like, hey, I'm the owner. I want to make sure you're having a good experience. Talk to me about what's happened so far. I want to make sure that we can tweak things. I just want you to have an awesome time. Great. Well, it sounds like things are going awesome. So, >> [laughter] >> Let's keep the party going. And that's kind of the that's the positioning. Let's keep the party going because fundamentally when you go through that sale, you're like, "Okay, Erica, you know, you wanted to lose, you know, 30 lb. Great. When you're at 30 lbs, do you think you're done forever?" And they're going to be like, "Well, no." And it's like, "Right." So then to me, this has already accomplished the goal, which is that you've learned that this isn't going to be a quick fix. This will be a lifestyle change. And so if you're in this, I'm in this with you, and I want to match that support by giving you everything you've paid me so far towards you staying on. How's that sound? Great.

13:10two options. And if they say no, then you downell to continuity on the back. Either way, you get them to say yes. >> So, let's say someone's listening to this and they're thinking, "All right, cool. I know I like I've read Alex B. He he's telling me I've got I've got a seller thing. I don't I don't know what to sell. I don't know if I have any skills. I don't I don't I don't know what I could possibly offer to the world. >> How do we how do we break that down?" >> Yeah, this is actually a topic that I um I cover more in the leads book that's coming out soon. Uh soon, relative terms, 6 monthsish. Um, [laughter] everybody knows something. All right?

13:40And so the idea is what do you have like everyone has unique depth of knowledge in certain areas because you've been alive and your eyes and ears have taken inputs period. Right? And so I like to think of of people starting like so if you look at are you familiar with Y Combinator? >> Yeah. >> Why? Yeah. So yeah. >> Yeah. So Y Combinator is one of the most successful you know uh I don't know if they're technically VC. they're, you know, seed capital startup um investors in Silicon Valley and they have a very standard deal structure and they have criteria for what they look for in companies and one of the most important criteria that they look for is past experience. And so they're okay with somebody who's super young, etc. But they want to they want you to have experience in the industry because there's just so much ignorance debt that you have to pay down if you literally know nothing about an industry. Like there's just so much like if your dad was a mechanic, you know so much about cars, just by osmosis of being around a mechanic for 18 years. And so I like to think past jobs you've held, you will know stuff about that industry. Um the jobs of your parents are things that you will know about that industry. And then you've got personal interests. And so I think that if I had to put those into three buckets, it's like parent stuff, past jobs of self, and current interests. And so it's like of those three things, which of those three buckets do you think you could help someone do a thing better? And so the idea is you want to sell the most valuable thing, right? And so the most valuable thing is what is the problem that I can help somebody else solve that I could charge the most money for? Or in reverse that could make them the most money. Um, and then I will be able to charge a percentage of the money that I'm able to make somebody else in this thing. Now that's in a B2B setting. in a B toC setting it would be how valuable do people perceive uh the problem that they have as right whether it's like I can teach music tons of people want to be able to learn how to and if you're better you know cuz you've had a side interest in that awesome maybe you have a side interest because you're really good at editing the songs well there's tons of musicians who would love who hate that part and would love to have that so it's like we all know how to do stuff and all we have to do is package the thing that we're doing and I think the big problem is that people expect that they're going to have a perfect business but if you look at the track record of all of I can't think of an entrepreneur besides Jeff Bezos who's a freak of nature whose first business becomes the most valuable business in the world is most people have a a graveyard of failures behind them. And so the idea is you start not with the intent of saying this is going to be the one thing I'm going to do for the rest of my life which is the fallacy that employees have uh that whatever they pick is going to be the thing they're going to do for the rest of their lives.

16:09When in reality it's I just have to do a thing that I'm good enough at that I can learn the game. And the thing is once you start taking steps the the next step becomes illuminated. you trying to think a 100 steps into the future when you have no context is is irrelevant because chaos is going to break your plan anyways and so do what you know exchange I like service businesses to start because they are the in my opinion the lowest risk to start because you're just it's just your time right

16:34>> so service businesses meaning >> do stuff for money >> like mowing the lawn or cleaning windows or >> service clean houses like whatever like all of those are just service businesses right and they're fine and a lot of people think they need to have some novel idea to start a business when I mean the best in my opinion if you're if you're getting into it the best way to start a business is just look at what everyone else is doing and just try and do it better like I mean and there's obvious holes like if you've if you've gone to if you've gotten your dry cleaning it's like can I do this in half the time as this guy if I do the lawn care what are the things people hate about lawn care ah they leave the the the trimmings are around the edges they're all all shitty the person doesn't speak English that well like well cool then I've got advantages right so it's like what are things that I already know how to do or I have past experience in what things because I have past experience I know that other people struggle with that sucks about this thing and then I will solve that specific problem and it could also be a problem that other people solve too. You just try and do a little bit better like it's it's just not rocket science. You know what I mean? And then you exchange you start selling your time for money.

17:33So yes, you're still trading time for dollars. You don't need to re read Rich Dad Poor Dad just yet, right? You're still trading time for dollars, right? But the point is that you're you're you're trading that time for money in order to learn, not to earn. you need to earn in order to pay your pay your rent, eat, etc. But the the major thing you're doing is you're paying down ignorance debt. So the vast majority of your income is coming in the terms of in in the form of education rather than earning. Let's imagine that you're in the absolute biggest red ocean, right?

18:00Red ocean being it's super populated, there's blood in the water, right? Do you think the business advice niche is populated? Do you think there's a lot of red ocean in business advice? Yeah, probably. Right. And so, should I have not gotten into this? The bloodier the water, it means the more fish are there. And so, where there's the fiercest competition, there's also often times the biggest rewards. Now, that being said, how do we merge this concept with the idea of you should niche down? Wait, Alex, I thought you wrote a book that said, "Hey, the riches are in the niches." Right? So, how do we merge these two ideas? Let me explain because I get questions about this.

18:47In the beginning, you want to artificially constrain the pond that you're going after so that you can compete in a place where the sharks aren't swimming. Okay? So, you want to be the biggest guy in a puddle. That's what you want to do. Biggest guy in a puddle. And then you say, "You know what? I'm gonna go from a puddle to a pond because I think I'm I'm too big for this puddle. And so you grow and then you go to the pond. And then once you go from the pond, you say, you know what?

19:14I'm gonna go to a lake. Now I'm in a lake because I'm an even bigger fishy. Right now I'm in a lake. And then eventually you get to the point where you say, you know what, I think that I'm big enough to go into open class, open market, and fight in the ocean. Now, if we were to look at this trajectory, I started as a trainer and I talked about nutrition and stuff and then I talked about gym stuff and then I started talking about business stuff.

19:51So, you're going to have evolutions where you can get big enough for a pond that you can move on from the pond to the lake and the lake to the ocean. It's just that it's directly correlated with your skill and your experience. And so, the reason that the the riches are in the niches is that when you're there, number one, you're competing against fewer people. And so, the upside is capped typically. Now, it's usually capped at way higher than you think it is, but it is capped to a degree. And that's okay. But as a result, because we are niched down, we're able to charge niche prices which give us more profit, more pricing power because there's fewer people. There's fewer things to compare you against, right? And so there does come a time where you can go uh move the market, right? Move your market rather um to go after a different segment or a broader segment. So let me walk walk through what you can how to think through this evolution for a business.

20:45So let's say that your current business is this little dot here. Okay, there are five directions that we can move with this dot. We can go. So let's imagine this is a you've got a triangle of a marketplace. Okay, so this is where you this is where you inhabit. You can go up market. All right. So for example, um in my gym launch days, I could instead of serving single location fragmented gym owners, I could go to franchisers, right? multilocation owners and franchisers. So I have oneoff gyms here. Now the next direction, so this is direction number one I can do. Direction number two is I can go down market which would be that I could go after trainers.

21:29There's way more trainers. They have way less buying power, but there's a lot of them. There's fewer franchisers than there are gyms and there's fewer uh and there's fewer gyms than there are trainers. Pyramid, right? So that's the second thing we can do. The next thing we can do is we can go adjacent. So instead of gyms, I say, you know what? I think I can help Cyros. That's what I think I'm going to do. I'm going to take my systems and we go into chiropractors. That' be an adjacent market. I could also go broader, right?

22:01Which would mean that I would look it this way, which means instead of gyms, maybe I talk about health and wellness in general. And so that means that I could go after Cyros, med spas, anybody, you know, weight loss clinics. Oops. All of these things are now broader.

22:24Or I can go narrower. So instead of gyms, I say I'm only going to work with spin studios. I'm only going to work with dancing studios. So this is our fifth. This is our fourth. This is our third. So that gives you five directions that you can go in to change the direction of the market that you choose to play in. Now I outlined this and what's interesting is that most people who are especially smaller business owners have never even defined this to begin with and they pretty much just accept people's money as long as they have a pulse and a credit card. There's obviously two requirements. Well, let's say pulse is optional. As long as they have a credit card. Kidding. um that that uh that they accept. But the thing is is that like you want to get really really clear on this um because if you don't your customers will be confused because they won't know what you're really about.

23:17>> Hey Alex, my name is Alex and I sell people to be high ticket closers. >> Okay. >> So our price is 2K. Our CA right now is 4 to1. >> Yeah. But you're selling over the phone. >> Yes. Uh BSL setter closer. >> Yeah. Yeah. I think you're mispriced. Typically phone sales products start at around $3,000. Uh if you're doing it like an automated sales machine, like you just have a straight VSSL to a check out page is usually where you'll be in that sub2,000 range. And so you're right on that cusp where it probably makes more sense to be selling like a 5 or a 6K. And instead of selling the course, ask the question like, what would I need to add to this thing to make it worth $6,000 or $8,000?

23:56because you're already getting the people who want that help and you're giving them something that's moderately valuable. Let's be real, 27% of them are going to make a login. Uh and so if we want them to actually like succeed, then basically adding in more perceived likelihood of achievement. So lower the risk for them by adding the pieces that they will struggle the most with. And then once you have statistics or data on how successful they are, then you want to include that in your VSSL and your marketing. So you want to track how well they do and then you can state the facts and tell the truth that you actually have a good product and then people can make an informed decision about how good the product is based on what has happened so far to people just like them.

24:39>> How can I track that information? You know, like >> how do you track it? >> Yes, they like the experience. >> You don't need to track their experience much at all. You need to track the outcome that you promise because you're selling them something, right? I'm assuming you're selling them some opportunity of getting a job as a closer, correct? >> Yes. >> Right. And so it's what percentage of people get placed, what's the average pay that they get? Uh like those are probably the things that they care about. And so it's like what's the average success? What's the outcome of that success? That gives me a blended rate on risk. So, if I'm buying and I know that 80% of people get a $100,000 job remotely, I would be very excited to spend $2,000. I wouldn't give a [ __ ] if it was $10,000 if that was actually what was happening. And so, a lot of you guys can probably increase how much you pay by increasing the perceived likelihood of achievement by simply making the product better.

25:29That make sense? >> Thank you. >> Hey, and it's normal to start with lower pricing in the beginning. You also have lower CAC in the beginning, too. So, that's also normal. Like whenever you launch a new product, you're like, "We're going to kill it." And it's because you always have the cheap, you know, the very easy customers that are 6-in putts. They already know you, they like you or whatever, they follow you for a little bit, and so they just hop over the buy line. It's very easy. But when the guys over there, there's a lot more work that has to get get put into it. And so I'm a big advocate of have low CAC, have a low price, get the early results with, you know, halfway point results. Like I told you guys yesterday, it was like it's going to be 65. I'm pricing it at 45 now. And as soon as I have like a full year or close to full year data, I'll bump it because I already know that like I want to make sure that just my price to value discrepancy is wild. The first people who took a shot when I had zero, I was like, "Hey, this is going to go way up."

26:17But I just need really good data. So just crush it for me, please. Please do what I tell you to do. Uh don't start another business. Uh [laughter] um and so does that make sense thematically? Yes. Okay. We help uh home service businesses stuck between 100k and their first million a year to reach their first million a year with a three-step client acquisition formula called TNT. But before that for five years uh we were a was so website as a service. Um we sold 2.1 million over the last year. Net profit is like 950K. Um we would like to reach 500k a month collected for Quebec market and have less complexity. Um okay situation here.

26:57So we have like 700 active client on the whole old system which was a was uh $200 a month thing. It was super cool but super frustrating. The team was started started to feel like robots. So we got emotional and we're like okay let's move to high ticket. So that's what happened four months ago. Uh we started high ticket. We're like woo cash flow is here now. Um but the thing is I realized yesterday actually that my LTV to CAC is now

27:24>> very low. Um because my clients are home service businesses. I'm in Quebec. We can only run ads for like four months for them because there's uh there's snow everywhere for like seven six, seven months a year. >> The other thing is once the ads work, they stop the ads. >> Yeah. >> Because they are limited by capacity. Um so what's stopping me to grow? >> What do you want to do with this business? Uh what we want to do actually is um well we want to

27:52>> because the first business sounded like a great business >> right I know >> the thing is we wanted to create a real transformation and I think that was >> can I tell you a secret >> very small business owners will never build a stable business because they are not stable >> has nothing to do with you >> okay >> and this took me a very long time figure out and I kept trying to bang my head against the wall being like, "How do I fix churn? How do I fix retention?"

28:22>> Like, uh, Shopify has best-in-class retention for VSNB, so very small business owners, proumers, if you will, and they keep 50% per year, >> right? >> That's bestin-class, hundred billion dollar company. And so, I have only seen one model work with small business owners, and it's ultra- low priced. And you build the entire business around uh having high gross margins, but low prices, >> right? So the west. >> Yes.

28:48>> That was a good thing >> because I feel like I'm trying to push a high. The >> only thing that happened is you just got impatient. >> Yeah. >> You had 700 customers paying you $200 a month. You're making 140 a month. Probably good margins. >> Yeah. >> It was nice. >> And you were like, >> Right. And so I think honestly like >> you know the best thing that would have happened would have been that you didn't take the last four months and build this other thing and you would have just kept doubling down and taken all that extra energy and said >> what were you doing in sales per month with the W I just like saying W. the west we were uh on boarding like 40 to 50 new clients a month.

29:18>> What's churn? >> Um it was we were keeping like 85% of people year after year. >> Good business, >> right? The thing is >> super high gross margins 85% annual revenue retention. >> When we started high ticket, we're like whoa cash flow is insane now like on month one >> but then maybe not later. >> H that's interesting. >> Interesting. >> Yeah. Yeah. Yeah.

29:49>> Pick. >> Um, well, yeah, the was for sure. [laughter] >> Sorry. I think it Yeah, that's for sure. The was and way better equity there, too. Yeah. Don't know why it would change. >> All right. People were feeling like it's [laughter] people were feeling like robots and there was no real transformation. But I think I need to go over that and treat it like it's a business and it's not like an emotional in person thing, right?

30:21>> Well, you're certainly not making transformations now. They leave in four months. >> Yeah. >> So here's okay. So instead of thinking about transformations, just think so. Elon has this really good frame around this. He said either we can help a very small amount of people, a ton, or we can help a lot of people a little bit. and he has taken the perspective to helping a lot of people a little bit. And so I think with this business like they have demonstrated with their dollars that they value what you give them. They don't cancel it. They like it.

30:50>> When you give them the other thing you think >> you're selling you're selling out of your own wallet. >> You're saying I wouldn't want this. I would want this. And then you're saying they're not like me. >> Duh. >> And we can still like sell the high ticket to the nuggets in the west. >> Yeah. That would be the thing. >> You know what would be even cooler? >> Not doing that. >> Okay. Not even.

31:12>> No. Like it. Hear me out. So, so no, this is this is like uh I I will I will keep the entertainment for for entertainment purposes, but um I want you to I want you to really think about this. So, okay, there's going to be I didn't explain one of these other frameworks, but crash course. So with every one of the implementations that you do, you have limited resources, time, effort, money, right? And so strategy is prioritization. It means how do we take these limited resources and allocate them against unlimited options. And so if you're not sure, it's because you're not doing the job of the entrepreneur.

31:50There is always only one thing that is the most important in the business. And if you can't decide, that's on you. Okay? >> And so you have the stuff, you've got your team, you've got your money, you got whatever. And so instead of being like, man, uh, we should start this ascension thing, because you probably have really good L to be to CAC on this other business, the WAS business. >> Oh, yeah. Yeah, this one. Yeah. >> Yeah. Yeah. Yeah. >> Right. And so instead of saying, hey, let's start this whole other business, right? Because it's a totally different service, totally different price point, whatever. Right. Just say like, what if we took all of that energy of starting this other business, and just said, how do we get to 200 customers a month?

32:24>> True. >> Yeah. >> That would quadruple the business. >> Yeah. And if you did that, you'd be at $500,000 a month in six months. >> That's right. >> And it would be really good. $500,000 a month. >> Amazing. >> That helps. >> Cool. >> Thank you. >> No. >> For what type of >> accounting firms? >> Accounting firms. Okay. Got it. Got it. Got it. So, you get the accounting firm small businesses. >> Got it. Okay. >> Qualify them to make sure that they need the services and then we put them on the calendar.

32:49>> That sounds great. The thing is, >> okay, >> the accountants, >> right, >> I feel like they don't see the value because they hate selling. But even though I teach them how to do a pricing plan and I teach them how to sell, >> they are. >> This is interesting because of the accounting thing mostly because I've spent a lot of time looking at accounting firms. It's just a space I'm interested in. There's huge multiples. It's super sticky. I deal with a lot of businesses. It would make sense, right?

33:15I I think maybe the reason is not the reason you think it is. So for accounting experts specifically, they're supply constrained more than demand constraint most of them. So like a lot of times it's like they're not seeing the value in it because they're not really starving cuz they're supply constraint. The issue in accounting is that they need more accountants. Getting customers is typically not that hard because it's sticky as [ __ ] >> right? So you guys could fill them up and then they're like, "Oh, we can't handle anymore."

33:43>> Technically, >> that that's one of the biggest reasons why they quit us, >> right? You're right. The second is not seeing the value, not seeing results. Soon to have your 30day >> Yeah. >> Seriously, we're going to implement that. >> Oh, yeah. For sure. >> Cuz it's like kind of tough cuz they don't want to spend on ads. They want us to do everything organic because they're used to referrals, right? >> Yeah, of course. >> And then I'm like, well, send us the referrals. We'll do the new lead nurturing for you. We'll put them in the calendar. You close the deal. My most successful clients are doing that. Is there any reason that I and I don't I would never normally recommend this, but I'm just asking any re I'm sure you tried at one point to start closing the deals for them, right?

34:20>> We've never had to close the deals for our clients ever. Thinking about placing closers, which are pre-trained to close, would you charge? >> So, I like to think about it as like what's the lowest amount that you'll that you'll take a a paying customer for if I get them for you for free. And so, they'll just tell you a number and then I'll just charge whatever the [ __ ] I want. I mean, you want

34:46>> and you can and if you really want to speed up cash flow too, >> uh, and one of my favorite ways of doing this, especially in this type of model, is you charge more for onboarding. >> So, it's like you could say, "Hey, uh, you're going to do a tax assessment as the first thing, but you're going to let me sell that for you're going to do that for free. That's the deal." And then you could sell that for 10 grand, and then you can give them the customer for free. And then you can make 10 grand on every deal. So they would have to pay us a fee up front.

35:12>> No, you collect it from the customer. They would do the delivery. >> So you sell the you sell the onetime thing. They do the delivery and they convert them in the back end. >> Oh my gosh. >> We can sell a tax plan every hour. >> You can sell with a calculator. >> And we have the calculator. >> Yeah, exactly. So >> you got to read read the mosy minute. You just said that. >> Yeah, I did. [laughter] Yeah, that's on my free email.

35:38Yeah, my shit's so good. Basically, and that that came from it was an accounting firm, but when you're when you're thinking about affiliates, it goes for everybody. He's like, I the best affiliate models are this is basically a reverse affiliate deal. So, I was talking to an accounting firm and he was like, "How do I get affiliates?" And I was like, "You need to peel off a piece of what you do." And instead, because people, everybody was like, "Man, I really want to start an affiliate channel." And I'm like, "All right, well, what's your affiliate deal?" And they're like, "We give 20% back to anybody who sends us a customer." And I'm like, everybody here does that and no one refers business to each other because no one cares about 20% of whatever it is that you have. And so it's like you have to make a grand slam offer for the affiliate. And so the grand slam offer for the affiliate, the ones that I've seen work best are full integrations. Meaning I will do a service for you that you can sell with your thing and charge whatever you want for it, but then I will do the delivery, but I will get a free customer. And so then the cost per lead per qualified lead is the cost of delivery. And so if my hard cost of delivering a tax whatever, right, let's call let's say it's $200. It's like, well, would you pay $200 to have a qualified customer that you just did work for on your calendar? Well, hell yeah, I would. So don't care. Like, don't worry about the fact that I sold it for 10 grand. You have a $200 cost. That's your cost. And then they're going to buy whatever else.

36:52And wouldn't you want a customer that paid $10,000? They'd be a way more qualified lead than somebody who's paid zero. So you should thank me for the fact that I sell for 10 grand. I mean, it's easy to sell 10 grand packages when you're saving so much. >> Yeah, totally. >> 25. >> What do you mean by making offers? >> So, uh, offers are the terms of exchange. So, I right before I started my first gym, I went to this weekend workshop to learn how to market. And get this, this 2013, it was on Facebook ads. And so I got lucky. So I learned how to run Facebook ads in 2013, two weeks before I started my gym. This is when you're getting penny clicks and you could put a girl with a bikini and say, "Weight loss, click here." And it would run. And so at this thing, I hadn't opened my gym yet.

37:44And the guy was like a gym marketing dude. And he said, "Do you want to know the secret to sales?" Because he could see I was way over my head. All the other guys there were gym owners except for me. And I was like, "Yeah." Because I'd never at that point had never sold anything. I didn't even know the word sales was a thing. That's how out of it what I was. And so he pulled me over the side and he asked me that question. I like pulled my notebook out to like learn the secret to sales as though it was one line and it kind of was. He said, "Make people an offer they'd be they'd feel stupid saying no to."

38:12And I like wrote it down and I highlighted it and that actually became like a core concept that we do in every business in every business that we have which is like how can we make this offer better? How can we make it more valuable? And that was why defining value was such a key thing because people like provide more value, make valuable content. I'm like, what does this mean? And so we boiled down value into four variables. Um, and then there's things that enhance value. But like core variables and then things that enhance it. So like one is like what is the overall dream outcome of the the customer. And so a difference in justosition is like for guys if I say I can help you make more money versus I can help you lose weight, most guys would pay more for the thing that will give them more relative status. And so in that way between two types two categories of outcomes this one will be more valuable. Okay cool. Now within everything and let's call it weight loss because that's an easy one everyone can understand within weight loss every other thing between a $5 ebook and a $50,000 liposuction surgery. The difference in those prices are the other value variables. And so the second variable is perceived like achievement which is if I buy this thing how likely do I think I will get the outcome? And so if I have a surgeon that's going to do this liposuction, for example, and it's the first surgery they've done out of medical school, and there's another surgeon that has done 10,000 and has 10,000 five stars, which one would I be more likely to go to? The 10,000 fivestar surgery, even if it actually takes that guy less time to do it. How unfair. But my perceived likely of getting what I want is significantly higher. So it's actually the equal opposite of risk. Those are the things that we try and enhance in the offers.

39:47We try and have a very compelling dream outcome. try and make it very likely that they're going to succeed and give there's lots of elements that make someone feel like it's likely they'll succeed. On the bottom half of the equation, so it's a fraction. There's two on the top, two on the bottom, you have time delay between when they buy and when they get. So if someone were able to click a button on a website and immediately look at their stomach and have a six-pack, that would be incredibly valuable, [laughter] right? On the flip side, if it takes them two years in order to get that, it's significantly less valuable. And so for that same reason, you have to arm wrestle someone to get them to buy a personal training package. You have to spend an hour and a half to get them to buy a 20 pack of trading training sessions. Whereas women walk into the doctor's office to do liposuction and drop 20 times that amount of money because the time delay is nothing. You get on the table, you wake up and you're thin. Right?

40:36Then the last the last variable is uh effort and sacrifice, which is two sides of the same coin. So effort are the things that you have to start doing that you don't want to do as a result of this purchase. Waking up early, getting sore, like in the workout example, eating foods you hate. [laughter] On the flip side, the sacrifice are the things that you have to give up that you don't want to give up as a result of this purchase. And so that might be sleeping in, eating the foods you enjoy, margarita Mondays, whatever. And so when we look at these variables, each of them has a has a has a evil twin, right? So you've got perceived like achievement, which is the positive, and then you've got risk, which is the negative. You've got uh time delay, which is the negative version. You've got speed, which is the positive version. You've got effort and sacrifice. You've got ease, right? And so when we're trying to make an offer, we try and think through each of these elements of value and think how can we maximize the upside, make it super super likely they're going to hit it. Paint the vision that they have it. And then on the bottom side, minimize the time delay between when they buy and when they get and how much they have to do. Because in a perfect world, the the moment someone says, "I want that thing, that beautiful dream outcome," they'd be virtually guaranteed they would get it, it would happen immediately. and it would be effortless. And I think that is the perfect ideal that we look at in terms of value. And as entrepreneurs, we innovate our way to just keep trying to chisel towards that perfect ideal outcome that we'll never actually get to. The other variables are like scarcity. If I have one Gatorade bottle left on planet Earth, it's significantly more valuable. I didn't change anything about the bottle itself, but it's significantly more valuable than if there's unlimited Gatorades, right?

42:00Urgency is if Gatorade, no matter how many Gatorades there were on planet Earth, I'll give a different example. If JK Rowling uh decides that uh she's no longer going to sell Harry Potter digital copies ever again as of tomorrow, there will be a lot of sales of the digital copy, even though there's unlimited units. Scarcity is a function of units. Urgent is a function of time. And so scarcity and urgency add to the value by enhancing those other four variables. There's more, but like those are the core things that we look at in terms of when we're trying to make an offer uh for a business. And so that becomes very relevant when we're trying to increase price uh for a business that we take on. So I'll give you an example.

42:40We had a PR company that we invested in that was a generic PR company for like small business owners and they had really high churn but they had a really good sales engine. I was like okay like there's something here but like I think we need a tweet. I just really like the founder. 85% of their customers were small business owners and turned out in like three or four months. 15% of their customers bought the most expensive package and stayed like forever.

43:05And I was like, "Hey, crazy idea. What if we only served these customers and they were people who wanted to get fundraising?" Very different than the traditional like dry cleaning store, plumber, or whatever. And so we redid the entire business model around finding only that niche. We only cold called, cold emailed people who were in that very narrow window. we're able to 10x our prices because we and we got higher response rates to emails than we did before because now we were targeting and speaking very specifically to an avatar and now we could provide so much more value to that specific person. And so that's the maybe if Ka Caleb were to answer the from a business perspective like solving that equation is probably the thing that I enjoy the most because it is how I feel like I've unlocked the most value in a business which is like what are all the what are all the good things this business has what are all the things it can do okay is there a way that we can rearrange it for a specific customer that will make significantly that will make what we do significantly more valuable to them and then that's what we try and repack package. And when we do that, that's often times when we can like with gym launch for me, I had the knowledge of how to help people lose weight, have the the nutrition plans, I knew how to sell, I knew how to market, but it was only when I like rearranged the variables that I went from making a few million dollars a year in topline revenue and basically no profit to millions and millions and millions of dollars a year in topline and bottom line profit simply by rearranging the variables. And that was just so ingrained in me that from that point going forward, I was like, I just have to make things that are so good that people will feel stupid saying no. And if we can't get enough people to say yes, we need to make the offer better.

44:45And to me, that's been like the single thing that it affects all aspects of the business. It's the highest leverage thing I think you can do in the business, which is why it was the first book because answering the question, what do I sell is the first book. The second book, leads, is to whom do I sell it? I got to get leads, right? And that's the second book. But that affects pricing. It affects profit, affects marketing, it affects sales, affects delivery. Like getting the offer affects everything. And it's one of the hardest things to change because it affects everything. But it also has the most ability to unlock incredible wealth or value in a business.

45:16>> How do you make your offer unbeatable then? [laughter] >> Um >> or it's unfair. >> Yeah. If people feel stupid saying no, um there's there's four elements of value as I've kind of defined in the book, the $100 million uh offers book. So you have the dream outcome, right? Okay, which is like what is what am I actually going to give this person? Every product is a dream outcome. Every service is a dream outcome, which is like what's the thing that they want to have happen? Okay, cool. So, that's going to be our baseline in terms of value. Like, if I'm going to help somebody make an extra million dollar a year or $10 million a year, that's going to be a baseline. But, there's still going to be a discount that's applied to that. And there's basically three factors that apply to that discount.

45:48Number one is how fast is it going to happen? Number two is how much effort is it going to take on behalf of the customer? And then number three is how likely is it to occur? And so fundamentally, those are the elements of value that are either multipliers or detractors of what you can ultimately charge a customer for whatever it is that you sell. So how do I make it fast? How to make it easy? And how to make it risk- free. And so within each of those components, like part of the way of making it risk-f free to them is if I have 10,000 other people I've done this for, it's much less risky, right? That's proof, right? You could also do that with covenants and terms. You could either do it based on performance that shifts more the risk to you. You could also just give guarantees and satisfaction. You get guarantees that are conditional based on things that they do. Those are all elements of things you can do to decrease risk which you can uh reverse into price. And so said differently, I could say, "Hey, um I'll charge you $5,000 to do this thing." And if someone says, "Uh, well, no." It's like, "Okay, well, I'll do it for $3,000, but I won't give you a satisfaction guarantee." And then what you'll find happen is they're like, "Oh, well, I'll do it for 5,000 with the guarantee." So people resell themselves on a higher price if you take away a component that's valuable. So that's that's the risk one. From a speed perspective, I would say that the more I've studied like human behavior, sales, persuasion, marketing, the more I really lean into speed. Like if you want to enter any new marketplace, just look at what everyone else is doing and see if you can do it in half the time. And there's just so much value in speed.

47:06Like humans are so immediate reward focused. Like almost every business can offer a speed version. So it's like you're a YouTube thumbnail agency and you say, "Cool, I'll get you thumbnails in a week normally." It's like, oh, if you want for 50% more, I'll get them to you in 24 hours and for and for 300% I'll get to them to you in the next 60 minutes. The same cost to you. It's the same work, but you just give someone priority access and it's all margin. >> So, it's like you can always play with speed as another variable of value. And then the uh the third element has two pieces to it, which is ease. Like, how does it have two elements? Well, one is what are the bad things that I I hate doing that I get to not do as a result of buying, right? All the stuff I don't like, you're going to take away. Great.

47:45But I also want to make sure that I don't prevent someone from doing the things they do enjoy doing, right? And so I give a classic example of like if you sign up at a gym, uh, all of a sudden you have to start doing things you don't want to do, but you also have to stop drinking margaritas, you have to stop taco Tuesday, you have to stop having cupcakes and stop having your McFlurryries. So it's like you have to give up stuff you like and you have to do stuff you hate, which is why it's such a hard sale. >> So do you study psychology in order to be a more effective salesperson?

48:09>> I wouldn't say I study psychology. Um I would say I just look at data of business because I the the the one advantage that I have is I have a a huge amount of data that I sit on top of between the companies that we invest in, the companies that uh come use our services on the advisory division um and the companies that well companies we own and the companies we invest in. And so it's like I get to see a lot of different data and so when we make changes into a sales process or a change in terms of an offer um I could see the improvements in conversion rates. And so, uh, that's where a lot of my like thesis have come from.

48:41>> Are you ever surprised by the data or is most of it kind of just confirming your intuition >> all the time? I get surprised all the time. >> What's been like one of the biggest surprises about this data? >> Yeah, we had a we had a company um that uh sells B2B services and I had this guest that um based on uh basically we could collect the data of the size of the revenue of the companies that were basically leads that were coming in the funnel. And so I wanted to shut off the bottom third of the leads because they were the lowest revenue leads and just have the team focus on the top two/3s.

49:12And so I was like, "Hey, just pull pull the sales data because I'm going to bet that all the conversions happening on the top end." And the conversion rate was actually evenly spread. And so um I was like, "Huh?" Like almost to the percentage point. I was like, "That is not what I would have expected." And again, that could be unique to that specific business. I would still posit that in general more qualified customers buy on average more and spend more money just in this particular business and maybe that means that that business is mispriced which would be a different problem but given that data I was like huh that's interesting we have people who are 10 times the size buying at the same rate as people who are onetenth the size wild and it's way more of a stretch for these people than it is for these people so maybe we're missing our message

49:49>> did you ever find out why have you dug into that and gotten to the bottom >> I it's it's a great question because like I I try it's really hard to say why because like I think A lot of people like to use because because it's very compelling. Um, but I just try and stick with like this is the data that I have within this given context and in this situation it worked and I know there are principles like things that are fast will sell better than things that are slow. Things that are easy will sell better than things that are hard. Things that are risk-f free will sell better than things that are not risky. Like I can take that to the bank. So like I try and think like what are the few principles that will always uh be true and then the rest is application.

50:25>> So here's my rule of thumb for upsells. taking into account that 20% of customers have far more spending power than the ones below. Now remember, we had $2 here and the next level had 28. So it's 14 times more wealth between just the bottom 50 and the next 40. But just using the pto principle in terms of how we can apply this to pricing. Like you not understanding this is why your business is not making as much profit as you want. All right. So, my rule of thumb is that for every new tier is that you want to 5 to 10x your price and expect 20% of people to take it.

51:02Okay, so here's how it works. So, let's say that you sell 10 customers. Okay, so you sell 10 customers. Let's do it again. Okay. Now, if you have eight of these customers at $10 per month, and you've got two of them at $50 per month, how much am I making on these guys? I'm making $80 per month in total on the bottom 80. And then I'm making $100 per month on my top 20% or my top two. And so by serving these two customers differently, we doubled the revenue of the business, which by the way again is my rule of thumb. I want each tier to bring me another double, like another full amount of revenue. Otherwise, I'm like, I don't know if it's worth creating the actual extra constraint of operations, right? But here's where it gets even nastier. Let's say that this covers the majority of our overhead.

52:08That means that this extra $100 might contribute 10 to one compared to this to our bottom line. And so sometimes when you make a move like this, if you were here and you had $80 and you were living your life on this 80, right? It's like, well, maybe your your your cost is 70 and you're taking 10 home. If you add this $100 in and maybe the cost on this is 20, you've got 80 left over. We 5x the profit. So let's say our profit before this was 10 a month.

52:35And then we added this in and we had $80 a month in profit from this 100. All right, look at the difference in profit. We go from 10 to 90 just by adding this tier. And so the reason your business is not making as money and you're not making as much money as you want is because you're not priced appropriately for the people who actually have the money to give you. And so to maximize revenue, you can think of it with four tiers of pricing. And to be clear, you don't need to serve everyone.

53:06And the first product you have may not be your base tier. All right? So, you might start here. I don't know yet. I don't know your business. But this is what you can walk through in terms of thinking through the pricing for your products and services. So, let's assume that we have a,000 customers. All right. So, on our on our our base tier, all right, so this is the lowest $10 per month. And let's say we've got 800 customers at this level. Okay. Now, our second tier, we might have it $100 per month. So 10 times that price with 20% taking it. All right. So that means we're going to get somewhere in the neighborhood of 200ish people who would qualify for this tier. Okay? And then next year we still have to follow our rule 5 to 10x. So that means we're going to be at 500 to a,000 a month for this next year. Just to keep it simple, I'm going just do 10x because it's nice and clean. All right. And so here we're going to have maybe around 40. Now you're like, "Wait, I have to wait a thousand customers." This would be 160. I'll redo the math. So you can see it. All right. Now, our next year might be again 5 to 10 times this.

54:08And so we might be somewhere in this 5 to $10,000 a month. All right. And so times around eight people. Okay. And so if you're looking at this, you're like, "Holy cow, that's uh those are very big differences in price." Yes. But so they they reflect how different the spending power that exists within customers is. All right? And so the main takeaway from this and is that if you're going to have an upsell, a very small percentage people are going to take it. And so you have to make it worth it. And so people will have these I'll go 100 and 129.

54:44It's like it's the same pitch. It's the same price. The willingness to pay for that customer is the same. Let me show you how I've actually translated this into my own business. All right. Well, this and you can ignore the actual numbers of customers, but what do we have here? Ah, we have school. And then at $100 a month, what else do we have? We have school. This is our hobby plan. This is our pro plan. And so for me, the next number is $5,000, which is L1. And what's the next number after that?

55:19$35,000. Huh. almost like it's between five to 10 times the price, which is L2. And then what do we have after that? We have something that's $135,000. So that's four times the price, right? And this is L3. And what do I have underneath of that? No money because it's a portfolio company. And so the thing is is it may take some time to build out this entire thing. I didn't start with school. I started building, you know, uh, you know, our brand. Uh this is to be clear just our advisory practice um that we have at acquisition.com.

55:53And so I'm just saying like knowing this doesn't mean you need to do all of this at once. It takes years and it does take operational chops to pull this off, right? You want to add tiers one at a time. My tip though is to start as high up as you can on this ladder for a few reasons, right? Earlier the branding from top down versus bottom up is much stronger. Like Honda making a better car is tough versus Rolls-Royce making a Rolls-Royce light. it would be an easier play for them from brand position. The next reason is that I prefer to start with the unscalable. Why? Because it's easier to operationalize it serving these people because one, they actually, believe it or not, as a percentage of net worth, this is actually lower than what this is for somebody who's poor.

56:31Right? If you have uh $10 million, uh a hundred grand is 1% of what you've got. If you've got $1,000, a hundred bucks is 10% of what you got. And so for you, you will actually be more demanding for that 10 that 10% or that $100 reasonably so than somebody who's giving 1%. But from a business perspective, the hundred bucks versus the hundred grand, it's a gigantic difference. So you have an easier customer to deal with that has lower demandingness. But it requires, and to be clear, to get that $100 to equal 100,000 is you got to get a thousand of those people. So the one customer for 100,000 easier than serving a thousand at 100 as somebody who used to sell $100 gym memberships for sure. And if we were to look at this from a profit contribution perspective like what is actually dropping to the bottom line it would look like this.

57:23All the profit is here just like all the wealth is at the top. So you have to do more and charge more for it to people who can afford it. And the amount you do for a few people is almost always worth it. So Craig, welcome to Proposi. >> Oh, Alex, >> what's up, dude? $18,000. $18,000 a month, right? That's where we're at.

57:47>> 18K per month. Ad spend is zero. Okay. Got it. Industry is digital services. >> Got it. >> Yes. Yeah. >> And you're selling to e-commerce. >> Yes, we are. And >> Okay. get into e-commerce brands trying to um so basically business is about a year old um and we've kind of like my best friend is a really good web developer. We joined forces uh started like using his network to get clients.

58:14>> So we've done around $25,000 in the last uh 12 months. >> We're proud to say we've never had a client churn but we're kind of like a glorified tech support department. So like basically anyone with a credit card and a pulse. >> What's price point? >> Price point. Um we're basically billing early at the moment. I'm putting together like an offer funnel and everything. So don't do that. >> Yeah. It's like Okay. So what are you what are you billing right now on average?

58:41>> Um like £50 an hour say. So like $70 or so. Um >> right. It's just you and >> I'm trying to >> uh with one other full-time developer, a few freelancers and everything. So, we do offer like, you know, we do SEO, we do good web web development, PPC, um some CRO stuff. It's kind of like we need to really rein in on our ideal avatar. I kind of >> I feel a bit silly because you've already shown me what to do. Um I need to go move mountains, get a ton of leads, um get them get our ideal avatar, but um

59:13>> Well, you do need to change your offer opportunity to speak to you. So, >> you do need to change the offer. >> Yeah. Yeah. The offer sucks >> for sure. >> We need an offer. >> We don't. >> Dude, you're selling to people who are doing 30 to 100,000 a month, right? >> Uh yeah. Well, that that's the target audience. Some are a bit smaller, but yeah. >> Well, whatever. I mean, I don't know if you just heard I had uh who did I have on earlier? I had um Liz, I think Liz is doing $600,000 a month, doing many chat automation, and she's selling to e-commerce owners, doing $25,000 a month,

59:44>> and she's selling 6K a month, >> right? Yeah. You're selling like >> Yeah. >> $100 a month. >> Yeah. Under underpriced is uh you're wildly underpriced, but we have to tweak the offer and the pricing together. So, I would want to say like, can we say like uh we'll get we you know, we'll we'll replace 10% or 20% of your traffic with SEO within a year. Um and our services are, I don't know, starter $2,500, $3,500 a month just to like get going.

1:00:11>> Yeah. Yeah. I I have an offer I'm starting to pitch on cold outreach if I can run that by you. >> Okay. >> Uh yeah. So I mean basically SEO industry is like really commoditized by retainers. So I'm trying to just ramp up cold outreach and basically offer people like a free personalized audit as a lead lead magnet. So I'll show them where their competitors are ranking, where they're ranking, and what they're missing out on. Give them a personalized loom sort of showing them uh where how to improve. And then we're we're going to do like a 28 day sprint to basically fully optimize the website as much as we can. Try and get them as many wins as we can in the first 28 days.

1:00:45>> I wouldn't use the word audit >> with a guarantee. >> Yeah, I wouldn't use the word audit because I think that sounds boring and not fun. So I would say like look at like we will find you at least seven revenue opportunities that you can set up within the next 30 days for free. >> Gotcha. Okay. >> And then you walk them through it. Yeah. Way better. And you walk them through it. You say, "Hey, you can do this on your own. turn it over to, you know, a web company or we'll do it for you.

1:01:10>> Gotcha. Um, and I was thinking like a in terms of like a guarantee, I was thinking maybe like we refund sort of 25% of our cost, like our profit margin, something like that. >> Yeah, that's fine. >> Yeah, it's I'm trying to make it more compelling, but it's um I think SEO is a tricky industry to to sell right now. >> Yeah. I mean, the thing is it takes time for SEO to work.

1:01:35Yeah. Well, I mean, we we can do a lot in in like four weeks and and just show them like initial wins and trying because I'm trying to build the trust because, you know, everyone's got a million SEO guys in their in their inbox just like, "Hey, you know, >> can you can you do uh yeah, Herd, can you do can you like guarantee around rankings like we'll get you in the top 10 or the first page or something?" >> It is tricky because it's like we could do everything right. Google changes their algorithm and and you know, their their site goes down. So, I try and pitch it as like we're going to stack the odds in your favor, but yeah, it's it's hard to guarantee results. I guess we could guarantee page speed, but I mean that's not really the be all end all of a business.

1:02:13>> No. Can you do anything around just traffic, not necessarily ranks? >> Uh, I mean, potentially. Um, >> yeah. I mean, I like the seven revenue. Like, if I'm just keeping it simple, I think seven revenue opportunities. We're going to unlock these things. This is our price. You don't have to worry about guarantee or anything like that for now. >> Gotcha. Okay. So, so just like one time one time kind of lead magnet. Here you go. Uh and hopefully from there book a call maybe go into like the sprint.

1:02:44>> Yeah. I mean I would say like here's what it is. We can implement this in your business. Do you want to implement in your business? Great. And so if you want have you read the money models book? >> Yeah. Yeah. Yeah. >> Yeah. I would use a wave fee offer for you. >> Okay. So for everyone who's watching online, I'll I'll on this. So wave fee offer is the last offer I think in the continuity section. >> And so when you have a business that like takes time for someone to get started, you do an AB and you say, "Hey, um option one, uh you keep flexibility, right?" And so you say, "Hey, it's, you know, $25,000 and then it's $5,000 a month after that." or I'll wave the 25 and it's $5,000 a month, but you got to stick for a year because it takes time for the SEO to work. And the good news is that if we haven't made progress within the 90 days, you can get out.

1:03:35>> That that would be my like second out. >> Cool. Like that way, it's like you don't feel like you're like, but in 90 days, if we haven't >> like you know what what to insert here, but if we have an X within 90 days, then we'll let you out of the contract. So instead of the guarant the guarantee is that we can let you out of the contract >> without having to pay the wave fee exit. But if we hit our thing, Yeah. then you got to pay that to get out because that would have been the flexibility price. >> Okay. Gotcha. That that makes a lot of sense. I appreciate it. Yeah.

1:04:02>> Um, cool. >> All right. Um, and just to take a second, I just I always thought if we ever spoke, I just want to thank you for for everything that you and Tre Trevor have done and to drilling everything down into a way that we can all understand because uh, yeah, when it when it's like when I'm overwhelmed and I'm overthinking, it really helps so much to to be reminded it's input output equation at the end of the day. >> Well, I'm happy to hear it, man. >> Yeah, thank you, man. You're awesome. >> All right. All you >> All right. >> All right. See you

1:04:27>> for everyone online talking about page 153 inside the not offer, excuse me, money models book. All right. So, this is the last part of the continuity offers. That's the wave fee structure I was just talking about. Okay. If you like this video and you're a business owner who wants to break through your current revenue ceiling, I distilled every lesson from scaling 10 businesses past 10 million and three businesses past 100 million into a completely free scaling road map that I've used to go from 0 to 1, 0 to 10, and 0 to 100 plus. And so, you can click here and you can check it out. Again, absolutely free.

1:04:54And since you're a business owner, appreciate you. And uh enjoy.