Seems like this guy fell off the map. Haven’t heard much from him, but this info was principles-based so it’s still fresh.
Lesson #1: Understanding the Lifetime value of every lead, prospect, and every single client or customer that comes into your biz
LTV underpins the success of your entire business
Without a DEEP understanding of it and unless you’re prepared to exploit that LTV and make it your ally, you’re never going to grow your business into it’s fullest potential.
LTV = Lifetime value—total value of that customer to your business, btw.
Once you know your LTV, you’ll know the MAX you can spend to break even or profit.
Says most entrepreneurs look at marketing as an expense (that’s wrong).
Why would you set a limit on the #1 driver of profitability in your business?
It’s the #1 driver of profitability in your business. Why would you limit it? Especially if you have tracking set up properly, so it’s easier to determine what’s working and to shut off what isn’t working. Sometimes that is the difference between positive and negative ROI, simply knowing what’s working and what’s not.
“There should never be a single dollar that isn’t accountable and where you can’t see a direct clear measurable transparent ROI from that dollar spent”
If you can’t say my X marketing dollars are giving me Y return…you shouldn’t do it. Says marketing should be a profit center, not an expense.
When you spend $ on marketing, how much does it cost to get a new customer? Then…what is the LTV of that customer? If there is a positive differential between the 2, that’s a great foundation.
To be able to be top dog in your market…you have to be able to spend the most to acquire a customer/client
A smart marketer’s mindset
“This is what a customer costs, this is what I can afford to spend on a customer.”
And then finds a channel that will let him acquire that customer at a profit
Example: He was selling a product, and since he knew his LTV, he gave 200%+ commission on the $20 item he was selling. Then he went to the affiliates and said “X is paying you 50%. Some more generous ppl are paying you 100% commission. I’m offering you 200% commission and it’s yours to keep no matter what.”
Now all the industry affiliates started to promote his product. His metrics were that about 1 in 10 bought a $5000 coaching program. So losing $20 on the front end didn’t mean crap. Competitors saw what we was doing but thought he was losing money by offering 200%. What they didn’t see was the well-oiled back-end.
1. Knowing the total amount that every customer from every traffic source is worth to you is VITAL. (Customer value per channel)
2. Know what you can spend to acquire a customer. (Typically, your cost per acquisition / cost per lead)
3. Make sure that number in #2 is higher than your competition
Another example: Sold teaching resources on eBay. Competition was selling for ~$2-$3. Dropped his prices to 0.99 to undercut them. Then he offered a $97 upsell to customers where they could buy everything in his shop, one-time payment. ~20% bought upsell. So his immediate transaction value went from 0.99 to ~$20. Competitors went out of business trying to copy him because they didn’t know he had a good backend even though he was losing money on the front.
Don’t look at what something costs (in isolation)…look at the value that you get from the entire transaction
Stop trying to “pay less” and focus on: How many sales came in? What was the cost per sale? What’s the gross profit – overhead?
Lesson #2: You can increase your LTV
Increasing LTV = more growth for your company (one of the easiest ways to grow your company)
“Google Ads / Facebook are too expensive” = that person doesn’t know their LTV (got a high client value and don’t know / don’t see it) or they have a crappy LTV and it needs to be increased
How you Increase LTV 101
- How do we contribute more value to our clients?
- How can we better our clients lives through the products/services we offer?
- What is it that our customers need that we’re not providing them currently?
The more ways you can find to give your customers an advantage they don’t currently have
For instance: could offer a downsell (in your funnel) to a competitor/friend of yours for a referral fee.
Example: Offer a “lite” version of what you offer, etc. Make your downsell offer from the mindset of “Well they said NO to my initial offer, but how can I still give them what they want and need”
ID and leverage the hidden opportunities in your business
If you double how much you MAKE PER LEAD, now you can double how much you spend to ACQUIRE that lead. This opens up new advertising/marketing channels that were previously too costly.
If your lead cost rises over time (you are tracking this aren’t you?), and your LTV isn’t increasing…you’re going to financially drown trying to acquire customers. To swim safely and at ease, constantly try to improve your LTV.
This also gives you a moat against your competitors: they can’t do the expensive things you can, because you KNOW WHERE YOU BREAKEVEN and your LTV is higher, giving you more wiggle room for profit and experimentation in terms of how much you spend to attract and “WOW” a client/customer.
Lesson #3: Every month look for hidden assets in your business that can give you increased cash flow
Do it from the mindset of “How do I provide more value to my customers?”
Not doing this = leaving money on the table and NOT solving your customer or clients problem/desire
Example: Could be running a special sale (doesn’t have to be a discount, just an incentive for them to buy now rather than later….like offering a bonus)
If these promos are done on top of your customer acquisition efforts, then it can massively boost your business because:
One, your overhead has already been paid for, so any additional sales are nearly ALL profit minus the cost of goods sold
And two, since you are marketing to customers you’ve already acquired…you’re not paying any marketing costs.
Example inside the example: If your business runs on a 20% profit margin and you make $100k in sales/month for example, you only get $20k in profit/month. You’re keeping 1 buck for every 5 you make. But add additional promos to your list…now, for every $5 you make you KEEP nearly $5. Marketing to your existing list is disproportionately profitable.
So let’s say make $20k in profit, but run a promo to your list and make an extra $10k in profit that month and your cost of goods sold was $0. You made $30k that month, boosting profit by 50% and your sales by 10%. That’s the benefit of leveraging and seeking out the overlook opportunities every month in your business. It can feel like grunt work, but it’s nearly 100% profit that directly affects your bottom line.
Lesson #4
There are ways to grow your business even if you feel like you don’t have all of the resources. You should never feel restrained by a lack of capital, resources, or opportunities. There are always ways to grow your business, even if you feel resourceless. Don’t think, “Well I can’t do X because I don’t have Y” instead think “What can I do, with what I DO have?”
For instance: let’s say you need more sales people…someone out there is hungry for success and will jump at the opportunity to work FOR YOU on a 100% commissions-only basis where the commission is fairly large (say, 30%). You just share more of the upside with them, to make up for no salary. If you know your LTV, you can easily afford large commissions and even bonuses to those sales people. You’re essentially partnering with them, making them highly motivated to sell, and it costs you nothing.
Second example: you can barter your goods/services/endorsement for a good/service you need. You can trade tangibles (physical goods) or intangibles (your endorsement, a service, etc.)
In every situation, think: “What does this person want, and how can I give it to them in a way that benefits us both?”
Find people (gatekeeper) who have access to the people you want to contact/the distribution channel you want…and figure out what you value you can provide to the gatekeeper.
You aren’t getting what you need because you aren’t giving people a compelling enough reason to give it to you.
Example of: “Irresistible offer + no downside risk + understanding the concept of lifetime value”
Someone’s first biz was washing cars. First wash was free, subsequent ones they paid him for.
Lesson #5: Be prepared to overdeliver
Most people aren’t prepared to do more than what is necessary. Says he had an offer with 200% commission (could afford it because he knew his LTV), and hadn’t seen anyone else even TRY IT.
It’s more work, and it involves giving away a bigger piece of them pie (but he did it and made multiple 7 figures off of it)
Ways to Overdeliver
1. He’s paid 30% commission to entice the best salespeople to work for him, says he hasn’t seen anyone do this either.
2. Says he’d pay 50% commission if he can get someone to generate (for example) $1 mil with no risk, no effort, and no work from him. That’s $500k he wouldn’t have had otherwise.
3. Know someone who you want to access, find out what their favorite sports team is and ask them when they are free because you’d like to by them a ticket. This can work with any of their interests: buy them something related to that interest.
Long game = they’ll be more likely to reciprocate in the future.
4. Maybe approach your really good affiliates (top 1%, top 5%, top 20%) get them to recruit more affiliates into your program (which already has 200% commission) and offer to pay them an extra 10% or 15% which comes from their recruit’s affiliate cut (I.e. Two-tiered affiliate program)
Can potentially do this with customers/clients also
Look for intangible opportunities like the one above. For example, paying a copywriter or PPC manager on a pay per performance basis.
Misc Tip at the End He Gave
Compelling marketing greases the slide to the sale. You can do this in a variety of ways: pre-selling, handling objections before you even talk to them, positioning yourself, etc.