Transcription
I talked to a room full of business owners for eight hours about how to make more money. Here's one of the best moments about how to improve your offer. So there's something called, in the software, called willingness to pay, which is like, what's the thing that gets people to want to buy? And so they plotted everything across this chart in terms of the features, like what are the things in the, like the offer that had the highest willingness to pay, that people valued the most. So you want to be in this box over here, and the four things that they found were exclusive, one access—just so we have buckets to think about this through—exclusive content, exclusive events, and the way they ran this research study, they had a newsletter, which to me is content, but I'm assuming that this is basically, this is probably video that was written. And so those are the four biggest things I had willingness to pay.
And so they also looked at like exclusive merch, discounts that were associated with the community. They looked at priority support; like they had a number of different things that they looked at, but the thing that had the four that had the highest willingness to pay were these four things. So these are the things that people value the most within the context of recurring community. If I were to build a community, these were the things that I would include. Some of you may not want to do this, but when I, um, started Gym Launch, one of the things that we were able to get a huge boost in conversions was my sales guys were able to say, like, "You can talk to Alex every day." And so I hopped on a daily call every single day. And so they knew that, and so I would hop on Zoom for 60 minutes, same format every time. I was like, "Hey, here's how you ask a question; put the questions in the chat; this is the format. If you don't follow the format, I'm not going to answer the question." Rather than hearing everyone's life story, I could just be like, "What's your revenue? What's your, you know, how many new members a month? What's the main constraint that you're dealing with? And like, what have you tried so far?" And so by getting that, at least in that context, I was able to just really quickly hammer—I'd be able to answer 100-plus questions in an hour. And even if I couldn't get to someone's question, the likelihood that their question was one of those questions was fairly high. And so what ended up happening is like a lot of people ended up just like eating lunch with Alex because I did, in the middle of the day, because at the time for gym owners, the middle of the day is the, the time when they have the most time—like the peaks are morning and afternoon. And so I, I would agree that if you increase call frequency, you will have more people, and it makes it very sexy from a selling—it's like, "You can talk to me every day."
So if we're, if we're looking at this from a buckets perspective, this is one of those, uh, things that we can add to improve any offer you have, and it'll be more and more powerful the higher the frequency, and obviously the lower the headcount, but if we're looking at very high-volume communities, then it'll just be frequencies; it's the only thing that we can really control for. Okay, so these are a lot of different ideas that we can do. Oh, go ahead. We have a team that is trained and, and really fit, and they offer calls instead of you. How do you get people to want to get on a call with your team? Because we have that, and when it's me, everybody's coming. When the team, you mean, uh, like group calls with the team? Group calls with the team, but it's qualified coaches; they have, have been in there for over a year, right, and they interact with the members on a daily basis. If you can answer the questions better than they can, then it means that they need to be better. Like if someone comes to me and says, "Hey, Alex, how do you run GDN Display Network?" I'm like, "I don't know; ask [someone else]." I don't click anything; I, I barely, I don't even have my logins for my bank account; I have no idea. Like, you, you know what I'm saying? Like, you're, you're still very good at that; not to say you should be bad at it, but it's more like, how do I get them to be more in the day-to-day so that they can answer? Because customers are bloodhounds for value, and so like if they're going to you, it's because you're providing more value than your team is—like that's the big, the big principle, you know, like. So I don't think there's like a, a quick-hit tactic; it's like the only way they will go is either if you just remove yourself entirely and they're the only people they can have access to, or because, I mean, I, I did this; I had, I had my daily call, and eventually I went from five days a week to four days a week to three days a week to two days a week to one day a week, and I would replace them with other people. Now at a certain point, the, the, the call, uh, attendance, it, I mean, it went probably in half, but then it stayed there, and especially because the frequency they could interact with me was much lower. Like it took 12 months for me to completely remove myself. So it's not like, all right, so I'm not doing daily calls anymore; coffee is with Hamed, you know, like it, like it, it won't work. Yeah, it's, it's very slow, and then heavy on edification, and then also coaching them on how to, I mean, like on presentation skills; it's like literally teaching them how to present. And if, have you ever, have you ever had like sales teams with phone sales and things like that? Okay, well, it's a lot like training, scripting, and so it's like, well, this person asked this question and you said this; let's play it, and you do, game—like this is Ops, but like play it, pause, now say it this way. Okay, great; say it again. Great; change your tone like this; say it again. Okay, next time someone asks this question, what do you say? Like that kind of drilling, but that's what it takes to, to get yourself out of it, and most people aren't willing to do that, which is why most things aren't sellable.
So these are access from a content perspective. Did anyone have any, like, uh, and like features, products that were like kind of zesty or had some, you know, zing to it that, that you found people were like, "This is the reason I bought." Kenneth, what's the most popular part of your offer? Uh, the bonuses. Uh, so like those fast—on of like things that can fast and do something that like the faster that they can something done, the quicker they want to get in. So like I'm fast results, or fast results. Yeah, so, um, I do credit right, so like helping people clean their credit. I don't do it for them anymore, but I give them my hacks to be able to get it done fast, and most of the time it's a long process; it takes months sometimes, but some of the things that I've learned to be a get stuck from even a day or two days. So that results to become real faster is what makes you go buy, right? As soon as I say that, you say the exact number of days. Uh, yeah, so like one of my things is to get something removed in tuning for 72 hours, and once I say that, you don't even care about the rest of the stuff; like, I'm getting that, you know, and that's one my bonus today from a bonus, uh, perspective. Because I literally just finished the third book on this, um, something that I've given a lot of thought to is that people don't buy because of the aggregate value; they buy because one thing is worth it to them. And so rather than trying to make this list that adds up to this thing, it's more about how do I have as many very legitimate value things that on their own are worth an excess of the price? And so trying to think about my bonuses for anything that way. So how do I make this—just every single bonus has to earn its weight; that it has to be worth more than the price, and that'll force you to also get a little bit more consolidated on the bonuses, um, and really just focus on the sexiest stuff. And usually for different avatars, if you have like different psychographics of people who are coming into your business, like I'm sure there's some people who have like really bad credit from a long time, and some people just had like, they had a medical bill or something, and something happened, right? And so having specific bonuses that are going to speak—that in and of themselves for that one avatar is worth it. I want to have like the punchiest, most distilled—every one of these, if you read it, you, you'd want to buy for this alone. It's like taking mental rent; it's like every one of them has to pay rent to be there because they only need one reason to buy. I think just asking yourself what is, what is something that if I removed everything else, if I just offered this one thing, people would still buy? And then using that as the litmus test for every one of the bonuses that you add, and then I think it will force you to think of better things that you can do to make your overall offer more valuable. And I would also think about that through the different lenses of the avatars: the guy who has a medical emergency, the guy who has 10 years, the person who got in a bad divorce—like each of them—for that person, this one thing alone is worth it. You valuable—like what's your experience when you just like, he SE something last night about them? Yeah, I've been running two in-real-life events every month recently, and, um, interestingly, chers actually went up, which is so surprising, but it makes sense because look, I do it in real-life event; I bring the boys out to like a big park; we wrestle in the mud, and then we all dress up and go to like this business mastermind. Did you let anyone come—anyone who was inside? Yeah, we were thinking about now make locking it behind a 12-month first. Yeah, I mean, that would have been my, my first thing is like just move it, so then it's like this big thing, because then it goes from, "I'm missing out on this thing," to, "I can't wait till I get this thing." And I think like, I think that, that alone would probably solve it. As a second little tidbit for anybody else who does events, whenever you do events, you want to also announce the next one. Upsells happen at the point of greatest need, not the, not the point of greatest satisfaction; it's a big misnomer. Sometimes they happen at the same time; oftentimes they don't. So like if I give you a steak dinner and then you eat your steak dinner and then I say, "Hey, do you want a steak?" You're like, "No," because the timing's wrong. And so we want to, we want to offer them the steak when they're starving, not when they've just eaten. And so they, like after an event, they've just had like this massive feast, and so they're like, "I'm good for a while; like I'm, I got, I got my value." And so it's like, "Oh, let me open-loop the fact that there's going to be another thing that's coming, and it's even better than this thing. If you think you like this, wait until dessert," right? And you just, you just keep pushing it out. We learned this because I, my, my churn spiked at one of these massive events; I spent like two million bucks on the event, just make it this like wild, crazy thing; everyone's like, "This was awesome; thank you so much!" Like, and I was like, "What?" But churn going into the event went down, so it's like, "Okay, how do I get that to stay?" It's like, "Oh, you just always have one that they know that they can come to," and then I think put it past the 12 months, and you'll be golden. All right, so events—I'm going to put two bullets here: number one is, uh, have next planned, and then lock after six to 12 oops months. Make it something people earn—from a value perspective—of something else to add as a bonus, like conferences, events, things like that tend to have real price tags associated with them. And if you're charging $7, you're like, "Well, normally I would charge $99 for this two-day virtual event," or something; you get that, and again, you can, you can put it later on so that they, they, they lean into, to staying for it.
As an aside, and probably an obvious point, but I might as well make it—you can also sell stuff at those events; just thr out there. Fine line though is you don't want to be spamming too much. So if you have speakers, you don't let them sell at all. No, no, no, no, no, no, no, no—like no—like no one sells at your event but you. And if you're going to sell, one of the things I think, I think people make a mistake of is these people already like you; you don't need to have a very long pitch; you just need to present the offer and be like, "Hey, by the way, I've had, you know, number of you guys been talking about this stuff; talk you 15 minutes if you want." Do it before launch or do it before, like, do it before a talking period so that if you have sales guys or whatever, they can help sign people up. Having looked at data across our portfolio companies at run events, um, one really interesting thing has come out, which is that if you can segment the audience of the people who are attending based on revenue and income—I used to think about like what percentage of the audience am I converting, and now I just don't care at all; it's just of qualified people in the room, who am I converting? Like you can absolutely go into a room and close 80% if everyone's qualified. And so a lot of those events from an upsell perspective are going to be about who's in the room. Anyone even do a newsletter here? Well, people value it; that would be like posts in the community. Yeah, I would post and then, and then, uh, send email to everyone. I think an easy one is to get your successful students and interview them; it's like a testimonial and content and motivation. I think a lot of you guys were saying how do you get your people motivated; hearing of people that are like them winning is the best. One of the other things that, um, to talking about like what makes a company sellable—these success interviews. So, uh, we do this thing in our portfolio companies called lifecycle ads, so there's a lot of different ad types that you can do that are outside of your face, and one of my favorite ones is lifecycle ads; you'll see some from school soon, um, but basically these success interviews, if you're smart about it, you actually walk them through an epiphany bridge. And so what that means is I'll just draw it: so you've got internal, external, and then before, during, and after. Like I've looked at a zillion testimonial templates, but that's the one that I've been able to teach, and my team can do it, which is: what was life like before internally before you saw this, did this; what were the external stats that other people would observe about you before you decide to do this thing; what made you like, what made you actually take the next step externally? And then internally, what were the things that you were most concerned about? And this is like the key question, and I'll explain why in a second, but someone's like, "Yeah, I, I, uh, you know, I, I was struggling; I, you, you know, my, my wife didn't respect me anymore cuz I couldn't make money," and then external stuff—"I was making $33,000 a month; I was behind on payments; I almost lost our house; I had to downgrade our car"—external stuff. And so then, you know, I saw an ad from Alex, whatever, and it kind of caught my eye, and we're like, "Well, what were your biggest concerns?" "Well, I didn't know if it was legit." Um, "Well, then what made you decide to do it anyways?" "Well, I saw all the other people that had, you know, had testimonials, and they looked like gyms like mine, and actually found somebody on the page that had almost the exact same model as me, and I was like, 'Okay, well, if I work for that guy, maybe I'll give it a shot.'" And this is why it's so key in the decision-making process because you're literally talking to the prospect from a prospect, not you, walking through them making a decision about why they laid their fears and their concerns and took the next step anyways. And then you're on the interview now, and you say, "Okay, well, what's life like now externally and internally?" "Well, now I had, I was able to get back the car; I upgraded; we moved to a better neighborhood; my kids can go to a better school, and I feel better about myself," blah, blah, blah, right? And so this is one part of the lifecycle, and so, um, you can condense that into a 60- or 90-second ad with just the highlight points, and it also becomes an ad. And so when you're running these interviews, it's content, its bonuses, and its ads. Let me hit a couple, uh, of these; I think I can probably just round them out pretty quickly. Attracting the right people comes down to what bonuses you're promoting and what promises go with them. And so like most times people like, "I want to get richer people," but when someone poor comes on the phone, I still take their money. If you want to attract better customers, you have to be able and willing to turn away worse customers. All right, I'm going to tell a three-minute story, but that way you'll remember it. Um, I did a consulting day years ago with a guy who is in my space, in the gym space, many years ago, and he had the same sales velocity as me, so he was selling the same number of people as I was, but we were making 70 times more profit than he was, and his cost to acquire a customer was about the same as mine, selling about the same number of units, but the main difference is that his customers were worth $5,000, and my customers were worth $442,000. And so the thing is is that he just ran ads about like, "Hey, if you're in fitness and you want to make money, come to me," and my ads were, "You have to be a gym owner; you have to have an assigned lease; you have to have at least one employee; and you have to have at least 30 members at your gym." And the way that we figured that out was that we looked at all of our customers, found the top 20%, said, "What do these people have in common?" And then we made that the qualification, and then that ran through every part of the funnel. So that was in the ads; we said, "This is who it's for; this is who it's not for. If you're a trainer, if you just want to make money online, if you want to do all these things, this is not for you." And then our people were like, "Thank God; I just wanted to have like a legit place where real gyms, real businesses are here who are dealing with employees and all that stuff." And so also to that same degree, if you have bonuses and you know that these beginners love that bonus, cross it off, because the people who are going to be the better avatars are going to have a very different set of things that will be valuable for that. And so it's a, it's a big strategic change; like your offer changes, your bonuses change, your marketing changes, your funnel changes; like you change the business entirely when you, when you decide to attract better customers, if you are serious about it; otherwise, it's just a complaint forever. Like for example, a really business, you know, busy business owner—to, um, to your point—they might not want calls, but they might love the fact that they can just DM or Slack or something like that—not Slack, but you know, like DM—to get access and have quick responses; that might be more valuable than even having calls. And if you're dealing with Founders, then it's like, "Founders" is very broad, but if it's like Tech Founders, then it's like, okay, well then that's—now we can get, we can get really juicy on this and make stuff that, that they would want. Like we also have our pitch deck that has already generated…
Over $100 million in fundraising, and you can just copy and paste your logo in, and then your benefit and selling points. That alone is worth more than the price of this thing for 5 years, so that's about attracting the right people. We covered what to add, so let's talk high-ticket versus low-ticket coexisting and versus transition.
As long as the price points aren't like too close, then I don't think you're going to have an issue of, uh, cannibalization. Like, and the right type of customer just wants to pay more to have more support, more implementation help, more, etc. Fundamentally, like I like to think of the clear line between the two as implementation versus stuff that's unlimited, has no marginal cost. That's how I would differentiate those things. Um, the things that are not immediately scalable are the things that you charge more for.
So you're doing a low-ticket; when do you, when should you even think about adding a higher-ticket thing? You have a lot more team, a lot more employees, you have more reputation risk. That goes like the amount that people are upset for for $7 a month is very different than $10,000. Just a very different level of upset if something doesn't deliver. Um, and I will hit on this scammer thing because we might as well hit it now. The big reason the information market has the reputation it does is not because of what they teach; it's because of what they promise.
We have workshops here; we don't do them for free because we incur costs in order to like put these on. We have caterers; we have all the stuff, right? No one's upset because I don't promise anything. I say I'll share the stuff that has worked well for me, and if it works for you, then great. You get in trouble when you say you will make $10,000 a month in 30 days, and they don't make $10,000 a month in 30 days. And the vast majority don't make $10,000 a month in 30 days. That's like, that is fun, like Dave Ramsey.
So like, let's zoom all the way out. Like the people that you want to look at from a brand perspective, Dave Ramsey is a guru; he sells courses, he sells events, he sells an app, and he sells coaching. Literally his four products; he sells media, technically to advertisers, but those are the four main products that he sells. How does he do it in a way that no one calls Dave Ramsey a scam? Because the promises that he makes are absolutely justifiable. If you save $2,000 a month, you will have $2,000 more dollars a month. No one's going to fight him on that. If you didn't save the money, you didn't save the money, right? Now that's part of the unique thing about his particular business is that everyone makes some amount of money, and he says if you spend less of it, you will have more left over. And if you listen to any of his stuff, he, he doesn't even, he doesn't even make claims; he just provides value. And then enough people, because when you're just providing value, you grow at such a faster rate that then people just want to, they just want more.
And so I think someone else was early asking questions like what is free versus what isn't in terms of, uh, content. Honestly, the same stuff, and that's why, and to be fair, I take that more as my free stuff should be just as good as my paid stuff, more than my paid stuff is is now junk because my free stuff is not good. Like I spend a year on a book that I give away every year, and I just want that to be so exceptional that it spreads on its own. And so I think if you think about how do I make my amazing free stuff just as good as my amazing paid stuff, at some point you just, you draw a line and you say if you want more of that, you can pay for it, and people will be like, well, I consumed all this, I want more, and they'll pay for it because this was worth more than the price of free, and it was worth more than the time they gave. Go for it.
Yeah, so my question I guess is more specific on not that it's difficult to satisfy customers; we have no issue with that. We have had not a single complaint from people calling us a scam, sure, from the program. The issue is because it's high-ticket, people want to look it up. People that didn't buy, that just went on the sales call, they're the ones that are posting this negativity a lot of times. You just, how to tell these people are crazy, but just by the way they write. But we've had a threat, yeah, but we've had a threat on RD Grow, for example, when people search it, show thought. And so it's like what do you do to combat that? Let me, let me zoom out for you. One, every single YouTube video that I post, people are like, he's just trying to sell his course. I don't even have a course for sale. So like, point one. Point two is that the only way that you combat that is being 10 times louder. So think about it as like a percentage of mind space that exists; they're this loud, if you're this loud, then they're 50% of the talking about you, so you drown it out; you shrink them into irrelevance. It's the only way you deal with it because you're not going to change humans. People who don't know you will make an assumption because you teach anything about making money that you automatically have these things that they've seen from other people who teach money, and so they will just make that association on their own, which by the way is what branding is. So like you're not like, as long as you do this stuff, that will happen. And so the question is what do you do about it? I don't think buying the Reddit thread is the the answer because another one will come up; it doesn't really matter; you just need to do this. WR, yeah, like zero attention. Like, and I'm only going to highlight this because you're here because this is important; the fact that like you flew here and like the most pressing question or one of the most pressing questions you had was this is them winning because all of that mind space could just go towards making more money, making the business better, making the product better. Like they get zero, like in general. Also, if someone like makes a big public blast or they do a hit piece, and I'm sure I will get one in the future at some point, I will never acknowledge it. Why would I? Why would I? Why would I tell my audience about this thing? Like that's, that's the biggest gift in the world. Now all these people are telling their audiences about you, and they're doing it for free. Okay, so that was, um, that was about attracting the, oh, this was this one, coexisting between the two and the when, uh, it's yeah, it's, it's an entirely different business if you want to do that. Like it will absolutely be, absolutely be an increase in in income.
The process is, is basically weaving it into the customer journey. So if you have your journey for the customer who comes in, they, you know, they get an event at month, you know, whatever three, and they've got their coffee with hems every day, d, d lots of coffee; this is awesome. We want to make sure that the communication that's going to them during this period of time, we want to have a point that's an activation point, which basically demonstrates that they're ready. You don't want to pitch everybody in the community because it, it's not for everybody, and everyone wouldn't benefit, and it just won't look good. But if someone has now reached a certain level, like they hit a 1,000 subscribers or whatever the metric is for you, say, hey, guess what, you won this, and then you have a call. And so that call, you provide value, and then you just ask them if they want to do next steps. It's just, and all you do in that call is say you're here, you want to get here, you will absolutely get there on your own; the question is whether you want to take it 5 years or you want to have it take 5 months. Yeah, go ahead. Um, I've got a good one in terms of when you know if you should offer a high-ticket because I think Hamel was kind of talking about this. Okay, yeah, that's the process.
Um, so what I found when I was selling low-ticket first because that's how we got started was that a lot of my successful students wanted more; they kept coming to me and they like, how I've already hit the goal that this course was for, and I want, I've got more money, but I want more; I want to go to the next level, and you don't have anything like I want more. Like they were, they were like basically offering to pay me money for something more. And once there's enough of those happening, that's when you know that there's a need for a second level. Basically, does that make sense? Yeah, need, you need the demand. Yeah, definitely don't put it in until there's a you can see a clear need, cuz then all you do is when you see these people hit this level, a lot of them will ask for it, and then you can just message those particular people. That way you're not like smashing everyone in your community every day about your high-ticket thing; it's more just cherry-pick it, and you get the best people in without even really promoting it. Does that make sense? That's what I've found works well. You can engineer the activation point by telling them that as soon as they hit the objective metrics, they win an award. Like for us, we had a sword, so when a when Jim hit a million dollars a year, they would get a sword. And so we'd do the live event, like when we do the our events, we'd have an award ceremony, and everyone get knighted, whatever they get the sword, but whatever that, that number is for you, they're going to turn in a video, they're going to turn in substantiation; all of that becomes ads, by the way, the second way of getting ads from people. Um, and then you also can then just, they will just lean into you because they want the thing, and then you can then ascend. But I really, I will, I will reemphasize Sam's point that like you can, you can never do it too late; you absolutely can do it too early because like if you waited four years and you have this massive community, it'll just be better. Like the engine's still going to be the front end, like the, the community, the low-ticket on the front end is still going to be the main economic engine that drives the demand into the higher ticket. Did you guys see the guy who won the school games this month in March? So this guy's a high-ticket guy selling insurance stuff or whatever, and he sold a $110,000 thing that was his whole business; he came on school, and then he wanted to win the recordings from today. So, by the way, shout out, um, so and so. He just got on the phone with his normal customers, and instead of selling the 10K thing, he just, uh, sold them $1,000, like $999 for a year and put him into the school community and just got three of them on because he wanted to get the free recordings, but then the sales were so easy that he switched his model and sold 50 people into that in the in like 20-something days. And so, um, I, I mean, Sam and I've talked about this at length, but I think there, there is a movement that's, that's moving more from like, grass is always greener; there's tons of operational challenges that that exist with high-ticket, um, in general, and it also have to factoring profit, cuz yeah, I know in the info space you hear a lot of numbers throwing around was revenue, yeah, like million a month; it's everyone's goal, but I've met a many people that make million a month that actually profit less than Hamel. So like, CU, he has no ads, and he just employs his sibling, and he lives at, and the easiest way for Hamel to double is just to do affiliates. So like he could get to 400 grand a month, and I know a lot of people that make a mill a month don't make 400 grand a month profit, for sure, like 100. So always be more realistic about it. Like you hear these big numbers, but by the time you pay a sales team and ads, a lot of that money's gone.
If I could go back in time again, we talk about sellability of a business, um, gym launch was by far the most expensive player in the market. So ours was $4,000 a month, 43 technically, um, per month to gym owners who on average take home $30,000 a year. Tough, there was another guy actually in the UK, and I noticed this price point continued to reappear, but there were guys who were able to get like 36-month, 40 plus month LTVs selling more or less the same thing, not the same thing obviously, but like at like $800 to $1,200 a month. And so the what I realized from gym launch, and we've, you know, obviously we've since changed the pricing and whatnot, was that we had to price to people's worst month, cuz even though if we made on average, so the average gym for us added an extra $120,000 in profit per year just using the system that we had. And so for me, I was like, okay, well, net of us, it was 120, it was 160 with us, like if we didn't, if we were free, right? So we made a 160, net of us is 120 in extra profit. Now again, these guys are making 30, so I quadrupled their income, like pretty sexy offer, and we did that on average, but they would still cancel if they had a bad month. And so I saw that these other people were able to maintain customers because they had, they were above their worst month; they still could afford the thing. And so because of that, they knew that if it got one thing a year, it would pay for it, and they were willing to continue to pay at that price point. And so there's a wild difference between what someone will pay at their searing hot pain point versus what they will pay after they had a steak dinner. Like, do you still want to have some steak? Well, I might want to have some steak tomorrow, so maybe I'll be willing to pay, but significantly less, like that price point compared to the value is where people continue to pay; it's just, it's I was impatient because I wanted to make the money, but if I had known, like, but for context, if I had 6,000 gyms right now paying $1,000 a month, I'd be making 6 million a month, or that business be doing 6 million a month just on that side; we had the supplement side too. Um, and so that would have also been significantly more profitable. I think if you really do provide value, you might find that there's an amazing spot at like $700 a month that people just like, you, the thing is you'll be able to sell like n for selling will go up like 8X, right? And so that's where like that this is literally just a pricing graph, and then you just look at max units and LTV. By the way, for everybody, small group is the most profitable way to do it.