0:00

Hey guys, this is another special

0:02

edition collaboration between The Game Podcast

0:04

and $100M Offers. Today

0:07

we're going to break down the pricing and commodity

0:09

problem. This is the number one issue that most businesses have

0:11

and why they can't make enough profit. The

0:14

starving crowd problem, which is that

0:16

they're selling to people who don't

0:18

have enough pain, who are hard to find, who

0:20

are in markets that are not growing, and there's an easy

0:22

fix for that and I'll walk you through the process. And

0:26

the third chapter we'll go over today is charge

0:28

what it's worth. This is probably one of the

0:30

biggest unlocks for the majority of people who have listened to the book

0:33

and the many messages and reviews that I

0:35

have read of it. These

0:37

upcoming chapters are heavy hitting and I hope

0:39

you enjoy them.

0:43

Section 2. Pricing. How

0:46

to charge lots of money for stuff. Chapter 3. Pricing.

0:49

The commodity problem. Think different. Steve

0:52

Jobs. Grow or die

0:54

is a core tenet at our companies. We

0:56

believe every person, every company, and every organism

0:59

is either growing or dying. Maintenance

1:01

is a myth. What this means is, if

1:04

your company isn't growing, it's dying. This

1:06

is a sobering reality for many of us. I

1:09

learned the hard way and my business suffered for

1:11

a long time because of it. Let me explain. The

1:14

market is continuously growing. The

1:17

stock market grows at 9% per year. If

1:19

we aren't growing at 9% per year, we are

1:21

falling behind. Maintenance in the most

1:24

generic sense would be 9% per year

1:26

growth, year over year. Furthermore,

1:28

if you are in a growing marketplace, then you might

1:30

have to grow at 20-30% per year just

1:33

to keep up or risk falling behind. So

1:35

you can see how maintenance is a myth. So

1:38

then what does it take to grow? Thankfully,

1:41

just 3 simple things. Get

1:44

more customers. Increase

1:46

their average purchase value. Get

1:49

them to buy more times. That's it. Sure,

1:51

there are lots of ways to acquire customers and zillions

1:54

of ways to increase order value and purchase frequency,

1:56

but simply put, that's it. Those

1:58

are the only 3 ways to grow. Example,

2:01

if I sell 10 clients a month and a client is worth $1,000

2:03

to me over their lifetime

2:05

through average cart value times number of average

2:07

purchases,

2:09

then my business will cap at $10,000 per month,

2:12

AKA 10 times $1,000.

2:15

10 new clients per month times $1,000 lifetime value equals $10,000

2:18

per month in max revenue.

2:21

If you want to grow, you've either got to sell more

2:23

clients every month

2:25

while maintaining suitable margins

2:27

or have them be worth more by increasing the profit

2:29

per purchase or number of times they buy.

2:31

That's it. Author note, only

2:34

two ways to grow.

2:35

To simplify this concept even more,

2:37

there are really only two ways to grow, get more customers

2:40

and increase each customer's value. Increasing

2:42

each customer's value has two sub buckets. One,

2:45

increasing profit per purchase. Two, increasing

2:47

the number of times they buy.

2:49

For the purpose of this book, I highlight both of those

2:52

sub buckets as individual growth paths.

2:54

I did this because I think it will be easier to understand

2:56

the money models that will come in volume three. All

2:59

three, getting more customers, increasing

3:01

their average purchase value and getting them to buy more

3:04

are repeated themes in this book.

3:05

But if you seek simplicity,

3:07

both increasing average purchase value and increasing

3:09

the number of times a customer buys results in one outcome,

3:11

increasing each customer's value. Business

3:14

terms. Before going any further and

3:17

to better flesh out the concepts that will follow, we

3:19

should take a second to define and better understand

3:21

some key business concepts. When

3:23

I stood in that Las Vegas penthouse in my Beast Mode

3:25

t-shirt, I was clueless about such terms. Let

3:28

me help you be better than, well, me.

3:31

Gross profit. The revenue minus

3:33

the direct cost of servicing an additional customer.

3:37

If I sell lotion for $10 and it cost me $2,

3:40

my gross profit is $8 or 80%.

3:43

If I sell agency services for $1,000 per month and

3:45

it cost me $100 per month in labor to run

3:48

that client's advertising, then my gross profit is $900

3:50

or 90%.

3:52

Note, this is not net profit.

3:55

Net profit is what's left over after all

3:57

expenses are paid,

3:59

not just the direct.

3:59

cost of fulfillment.

4:02

Lifetime value.

4:03

The gross profit accrued over the entire

4:06

lifetime of a customer.

4:07

This is gross profit multiplied by the number

4:09

of purchases an average customer will make over

4:12

their lifetime.

4:13

Using the example above,

4:15

if the average customer stays 5 months and

4:17

they pay $1000 per month while it costs

4:19

me $100 per month to fulfill,

4:21

then their lifetime value is $4500.

4:24

Here's the breakdown.

4:26

You know, equals $1000

4:28

per month times 90% gross

4:30

margin times 5 months

4:32

equals $4500 lifetime

4:35

value or LTV. Note that the indirect

4:38

costs like admin, software, rent,

4:40

etc. are not included in LTV.

4:42

Note you will find different definitions

4:44

for lifetime value depending on the source.

4:47

The biggest difference is that some sources only count

4:49

total revenue while others focus on

4:51

gross profit over the lifespan. I

4:53

focus on gross profit. You may also

4:56

see me refer to this as LTGP

4:58

or Lifetime Gross Profit in other texts just

5:00

for clarity's sake. Value

5:03

Driven vs. Price Driven Purchases.

5:05

This book was intended to be a textbook for any business

5:08

that wants to grow. I spent and

5:10

continue to spend

5:11

hundreds of hours on calls and in-person meetings

5:13

consulting entrepreneurs on crafting their offers.

5:16

I've seen the ones that take off

5:18

into the stratosphere and those that fizzle. Having

5:21

a GrantSlam offer makes it almost impossible to lose.

5:24

But why? What gives it such an impact?

5:26

In short,

5:27

having a GrantSlam offer helps with all three of

5:29

the requirements for growth.

5:31

Getting more customers, getting them to pay more,

5:33

and getting them to do so more times.

5:35

How? You ask. It allows

5:38

you to differentiate yourself from the marketplace. In

5:40

other words, it allows you to sell your product based on value,

5:43

not on price.

5:45

Commoditized equals Price Driven

5:47

Purchases aka Erased to the

5:49

Bottom.

5:50

Commoditized equals a Value Driven Purchase

5:53

aka Selling a Category of 1 with

5:55

no comparison.

5:56

Yes, Market Matters which I'll expound on

5:58

in the next chapter.

5:59

Commodity, as I define it, is a product

6:02

available from many places. For that reason,

6:04

it's prone to purchases based on price instead

6:06

of value. If all products are equal, then

6:08

the cheapest one is the most valuable by default.

6:11

In other words, if a prospect compares your product

6:13

to another and thinks, these are pretty much the same,

6:16

I'll buy the cheaper one,

6:17

then they commoditize you.

6:18

How embarrassing. But

6:20

really, it's one of the worst experiences a value-driven

6:22

entrepreneur can have. This is a

6:24

massive problem for the entrepreneur because commodities

6:27

are valued at the point of market efficiency. This

6:29

means that the marketplace drives the price point down

6:31

through competition until the margins are just enough

6:34

to keep the lights on, just enough to become a slave

6:36

to their business. The business makes just enough

6:39

to justify the owner waiting anxiously for

6:41

things to turn around.

6:42

And by the time that lie is realized,

6:44

they are in too deep to pivot, at least until

6:47

now. A grand slam offer solves this

6:49

problem. But

6:50

what does a grand slam offer do?

6:52

Alright, let's start by defining a grand slam offer.

6:54

It's an offer you present to the marketplace that cannot

6:57

be compared to any other product or service

6:59

available, combining an attractive promotion,

7:01

an unmatchable value proposition, a

7:04

premium price, and an unbeatable guarantee

7:06

with a money model, aka payment terms, that

7:09

allows you to get paid to get new customers,

7:11

forever removing the cash constraint on business

7:14

growth. In other words, it allows

7:16

you to sell in a category of one, or

7:18

to apply another great phrase, to sell in a vacuum.

7:21

The resulting purchasing decision for the prospect

7:23

is now between your product and nothing.

7:26

So you can sell at whatever price you get the prospect to

7:28

perceive, not in comparison to anything

7:30

else. As a result,

7:32

it gets you more customers, at higher ticket

7:35

prices, for less money.

7:37

If you like fancy marketing terms, it breaks down to this.

7:39

Increase response rates, think

7:42

clicks. Increase conversions,

7:45

think sales. Premium

7:47

prices, think charging a lot of money.

7:51

Having a grand slam offer increases your response

7:53

rates to advertisements, aka more people

7:55

will click or take action on an advertisement

7:57

they see containing a grand slam offer.

7:59

You pay the same amount for eyeballs,

8:01

but one, more people respond, two,

8:04

more of those responses buy, and three,

8:06

they buy for higher prices, your business grows.

8:09

I've struck gold on my fair share of offers.

8:11

Not because I've got some superpower, but because I've

8:13

just done this a lot of times and failed even more.

8:16

I've sorted through the crop that chronically fails and

8:18

pocketed all the stuff that reproducibly succeeds

8:21

and put it into this book.

8:23

Here's the key takeaway from all this.

8:25

A business does the same work in both

8:27

cases with a commoditized offer or

8:30

a grand slam offer.

8:31

The fulfillment is the same.

8:32

But if one business uses a grand slam offer

8:35

and another uses a commodity offer,

8:37

the grand slam offer makes that business appear

8:40

as if it had a totally different product.

8:42

And that means a value driven

8:44

versus price driven purchase.

8:46

If you have a commodity offer, you will compete

8:48

on price,

8:49

having a price driven purchase versus a value

8:52

driven purchase.

8:53

Your grand slam offer, however, forces

8:55

a prospect to stop

8:56

and think differently to assess the value

8:59

of your differentiated product.

9:01

Doing this establishes you as your own category,

9:03

which means it's too difficult to compare prices, which

9:05

means you recalibrate the prospect's

9:08

value meter.

9:09

Real life grand slam offer money math

9:11

before and after. Quick backstory. One

9:14

of our companies is a software that advertising

9:16

agencies use to work leads for their customers. Using

9:19

this software, agencies transform their offer from a

9:21

commoditized offer of lead generation services

9:23

to a grand slam offer of pay for performance.

9:26

Let me show you the multiplicative effect it

9:28

has on revenue for business. While rounded

9:30

for illustration's sake, the values I will share with

9:32

you are based on real numbers, a

9:34

lead generation agency selling services to brick

9:36

and mortar businesses experience.

9:40

Old commoditized way, price driven,

9:42

raised to the bottom.

9:44

Commoditized offer, $1,000

9:46

down,

9:46

then $1,000 per month retainer for agency services.

9:50

I will read through the chart

9:52

that is displayed.

9:55

Advertising spend, $10,000.

9:58

Impressions reach, $300,000.

10:00

Response rate, 0.0013. Appointments

10:03

booked, 40.

10:04

Show rate, 75%.

10:07

Appointment showed, 30. Closing

10:10

percentage, 16%. Appointments

10:12

closed, five.

10:13

Price, $1,000.

10:15

Total, $5,000. ROAS,

10:18

or Return on Advertising Spend, 0.5

10:20

to one.

10:21

Here's the breakdown.

10:22

At 0.5 to one Return on Advertising Spend, you

10:24

lose money getting customers. But in 30 days,

10:27

those five customers will pay another $1,000 each, bringing

10:30

you $10,000 in total and breaking even.

10:33

The next month, the $5,000 that comes in will

10:35

be your first profitable month. And each month

10:37

thereafter will be profitable, assuming they all stay.

10:40

This is an example of a commoditized service,

10:43

normal agency work.

10:44

There's a million of them and they all look the same.

10:47

Commoditized businesses and offers have a harder

10:49

time getting responses from ads because all their

10:51

marketing looks the same as everyone else's.

10:53

Note, it all looks the same because they're

10:56

all making the same offer. You pay us to work,

10:58

we do work, maybe you get results from that

11:00

work, maybe you don't.

11:02

It's reasonable, but easily duplicated and

11:04

subject to commoditization.

11:06

This commoditization creates a price-driven

11:08

purchase.

11:09

You are forced to be priced competitively to

11:11

get clients and to stay that way

11:13

to keep them.

11:14

If the client sees a cheaper version of the same thing,

11:17

then the value discrepancy will cause them to swap providers.

11:20

This is a dilemma. Lose this client,

11:22

the rest of your clients, and potential clients or

11:25

stay competitive. Your margins become

11:27

so thin, they vanish.

11:29

Furthermore, it's hard to get prospects to

11:31

say yes and keep them saying less

11:33

unless you're hypervigilant about clients commoditizing

11:36

your business by staying, again, competitive.

11:38

And that's the problem with the old commoditized way.

11:41

They're able to compare.

11:42

Unless you switch to a grand slam offer, your prices

11:45

will keep getting beat down.

11:46

The business eventually dies or the entrepreneur throws

11:48

in the towel, no bueno.

11:50

We wanna make an offer that's so different

11:52

that you can skip the awkward explanation of why your

11:54

product's different from everyone else's which

11:57

if they have to ask, then they are probably too ignorant to understand the explanation

11:59

anyway.

12:00

and instead just have the offer do that work

12:02

for you.

12:03

That's the Grand Slam offer away. Let's

12:05

dive in to see the contrast in sales numbers. New

12:08

Grand Slam offer away, differentiated,

12:10

incomparable, value-driven.

12:12

Grand Slam offer.

12:14

Pay one time, no recurring fee, no

12:16

retainer,

12:17

just cover the ad spend.

12:19

I'll generate the leads and work your leads for you

12:21

and only pay me if people show up.

12:23

And I'll guarantee you 20 people in your first

12:25

month or you get your next month free. I'll also

12:27

provide all the best practices from all their businesses

12:29

just like yours.

12:31

Daily sales coaching for your staff, tested

12:33

scripts, tested price points and offers to swipe

12:35

and deploy,

12:36

sales recordings and everything else you need to

12:38

sell and fulfill your customers. I'll give you the entire

12:40

playbook for insert industry absolutely

12:43

free just for becoming a client. So

12:45

in a nutshell, I'm feeding people into your business, showing

12:47

you

12:48

exactly how to sell them so that you get

12:50

the highest prices which means that you make the most money possible.

12:53

Sound fair enough?

12:54

It's clear that these are drastically different offers,

12:57

but so what? What is the money? Let's compare

12:59

both in the chart below. Advertising spend, $10,000,

13:01

same as before. Impressions

13:04

reached, 300,000, same as before.

13:06

Response rate, 0.0033, 2.5 times the response rate

13:09

because

13:12

you have a more appealing offer so more people respond.

13:15

Appointments booked, 40

13:16

becomes 100.

13:18

Show rate, 75% stays the same.

13:21

Appoint showed, 30 goes

13:22

to 75 and that's just a result

13:25

of

13:26

numbers slowing down the funnel.

13:27

Closing percentage goes from 16% to 37%.

13:31

2.3 times the closing

13:33

because there's more value so more people buy.

13:36

Appointments closed, goes from five to 28. That's

13:39

just a result of the higher closing percentage.

13:41

Price goes from $1,000 to start to $39.97 just

13:45

four times the price because we're charging a one-time

13:47

fee versus recurring.

13:49

The total collected upfront goes from $5,000 to $112,000.

13:54

That's 22.4 times the cash

13:57

upfront collected

13:58

and the ROAS goes from 0.5 to $1,000.

13:59

to 11.2 to one,

14:02

which means you're getting paid to get new customers.

14:05

Breakdown. You spend the same amount

14:07

of money out for the same eyeballs. Then you get two and a

14:09

half times more people to respond to your advertisement because

14:11

it's a more compelling offer.

14:13

From there, you close 2.5 times as many

14:15

people because the offer is so much more compelling.

14:17

From there, you're able to charge four times higher prices

14:19

up front.

14:20

The end result is 2.5 times 2.5 times four equals 22.4

14:23

times more cash collected up front.

14:26

Yes, you just spent $10,000

14:29

to make $112,000. You

14:31

just made money getting new customers.

14:34

Comparison. Remember the old way?

14:36

The way you lost half the ad spend up front?

14:38

With the new way, you're making more money

14:41

and getting more customers. This

14:43

means that your cost to acquire a customer is

14:45

so cheap relative to how much you make that

14:47

your limiting factor becomes your ability to do the work you

14:50

already love doing. Cash flow and

14:52

acquire customers is no longer your bottleneck because

14:54

it's 22.4 times more profitable

14:56

than the old model. Yep, you read that

14:58

right.

14:59

This is the part in the action movie where you walk away

15:01

from an explosion in slow motion. This is the

15:03

exact grand slam offer we used with our software

15:06

business that serves agencies. The numbers can become

15:08

wild fast. I know, 22.4X

15:09

better sounds unreasonable, but

15:12

that's the point.

15:13

If you play the same game everyone else does, you'll

15:15

get the same results everyone else does. Mediocre.

15:18

You hit singles and doubles, keep the lights on, but never get

15:20

ahead.

15:21

Or remember the opening passage of this book

15:23

that when you align all the pieces, you can nod

15:25

it out of the park so well that you win for

15:27

good. In my first 18 months in

15:29

business,

15:30

we went from 500,000 a year to $28 million a year off

15:34

of less than $1 million in ad spend.

15:37

So when I say 20 to one, 50 to one, 100 to 100 returns, I

15:40

mean it. When you get this right, the results are

15:42

well, unbelievable.

15:45

Summary points. This chapter illustrated the

15:47

basic problem with commoditization and how grand slam

15:49

offers solve that.

15:50

This gets you out of the pricing war and into a category

15:53

of one. The next chapter will focus on

15:55

finding the correct market to apply our pricing strategies

15:57

to.

15:58

It's one of the most important things to get right.

16:00

A grand slam offer given to the wrong audience will

16:02

fall on deaf ears.

16:03

We want to avoid that at all costs.

16:05

We must detour from pricing for a moment

16:08

to learn what to look for in a market.

16:10

It's an essential box to check before continuing on

16:12

our journey.

16:14

Free Gift Number 1

16:15

Bonus Tutorial

16:16

Start here. If you want a deeper dive, go

16:18

to acquisition.com forward slash training forward

16:20

slash offers and watch the first video in the free course,

16:23

Starring Yours Truly, about how I differentiate offers

16:25

in businesses I consult with

16:27

and get them charging premium prices.

16:29

I also created some free SOPs and cheat codes

16:31

that you can download for free so you can implement faster.

16:34

Enjoy.

16:37

Pricing Chapter 4

16:38

Finding the Right Market

16:40

A Starving Crowd

16:41

The seed that fell on good soil represents

16:43

those who truly hear and understand God's

16:46

word

16:46

and produce a harvest of 30, 60, or even 100

16:49

times as much as has been planted.

16:52

Matthew 13.23 NLT

16:55

A marketing professor asked his students, if you were going

16:57

to open up a hot dog stand and you could only have one

16:59

advantage over your competitors,

17:01

which would it be?

17:03

Location, quality, low prices, best

17:05

taste.

17:06

The students kept going until eventually they had run out

17:08

of answers. They looked at each other waiting

17:11

for their professor to speak.

17:12

The room finally fell quiet. Their professor

17:14

smiled and replied,

17:16

a starving crowd. You could

17:18

have the worst hot dogs, terrible prices, and be in a terrible

17:20

location, but if you're the only hot dog stand in town

17:23

and the local college football game breaks out, you're

17:25

going to sell out.

17:26

That's the value of a starving crowd.

17:28

At the end of the day, if there's a ton of demand for a solution,

17:31

you can be mediocre at business, have a terrible

17:33

offer, and have no ability to persuade people, and

17:36

you can still make money.

17:37

An example of this was the toilet paper shortage at

17:39

the beginning of COVID-19.

17:41

There was no offer, the pricing was atrocious, and

17:43

there was no compelling sales pitch.

17:45

But because the crowd was so big and so

17:47

starving,

17:48

rolls of toilet paper were going for $100 or

17:50

more. That's the value of a starving crowd.

17:53

Selling Newspapers A good friend of mine, Lloyd,

17:55

owned a software business that served newspapers

17:57

for almost a decade. They set up digital ads for the newspaper.

17:59

services on newspaper websites with a few clicks

18:02

and instantly helped them sell a whole new ad product.

18:05

He only charged them a percentage of revenue he added.

18:07

So if they made nothing, neither did he.

18:10

It was pure gain for the papers and a great offer.

18:13

But despite having a great offer and

18:15

natural sales ability, his business began to

18:17

decline.

18:18

Being a high achieving entrepreneur, he tried

18:20

all different angles to solve the problem,

18:22

but nothing worked.

18:23

He couldn't figure out what the issue was.

18:25

It was hard for me to see him struggle with this because

18:27

I think Lloyd is much smarter than I am. And

18:29

the answer seemed obvious to me, but watching

18:31

him go through this has been a lesson that I have taken

18:33

with me for life.

18:35

Before I reveal it, what do you think the problem

18:37

was? Product, offer, marketing

18:40

and sales, his team. Let's break it

18:42

down. It wasn't his product. That

18:45

was great.

18:45

It wasn't his offer.

18:47

He had a zero risk rev share model.

18:49

It wasn't his sales skills. He was a natural

18:51

salesman.

18:52

So then what was the problem?

18:54

He was selling to newspapers.

18:56

His market was shrinking by 25%. Every

18:58

single year he had looked at all the angles

19:01

except for the most obvious one. Finally, after

19:03

years of fighting an uphill battle in his market, he

19:06

realized his market was the source of his problems and decided

19:08

to downsize his company.

19:10

Don't worry. This story has a second half.

19:13

To illustrate the power of a market, as soon as COVID

19:15

hit, Lloyd pivoted. He started

19:18

an automated mask manufacturing company.

19:20

With new technology, he brought the cost per mass

19:22

down below what people could buy them for from China.

19:25

Within five months, he was doing millions

19:27

per month.

19:28

Same entrepreneur, different market.

19:30

He applied his same skillset to a business

19:33

he had zero experience in

19:34

and was able to win.

19:36

That's the power of picking the right market.

19:39

I give you that story as a cautionary tale.

19:41

Your market matters. Lloyd is a very

19:43

smart human. He's obviously very

19:46

capable, but we can all be blinded as entrepreneurs

19:48

because we don't like to give up.

19:50

We are so accustomed to solving impossible problems

19:52

that we will keep ramming our heads into the wall.

19:55

We hate quitting,

19:56

but the reality is that everyone is affected by their market.

19:59

right market.

20:01

What to look for.

20:03

There is a market in desperate need of your abilities.

20:05

You need to find it.

20:07

And when you do, you will capitalize, all

20:10

while wondering what took you so long.

20:12

Don't be romantic by your audience. Serve the

20:14

people who can pay you what you're worth. And remember

20:16

that picking a market like anything is always

20:18

our choice. So choose wisely.

20:21

In order to sell anything, you need demand.

20:24

We're not trying to create demand. We're

20:26

trying to channel it.

20:27

It is a very important distinction.

20:29

If you don't have a market for your offer,

20:31

nothing that follows will work.

20:33

This entire book sits atop the assumption

20:35

that you have at least a quote normal market,

20:38

which I define as a market that is growing at the same

20:40

rate as the marketplace

20:41

and that has common unmet needs that fall into

20:44

one or three categories. Improved health, increased

20:46

wealth, or improved relationships.

20:48

For example, Lloyd could have gone

20:50

through this entire book

20:52

and nothing in here would have worked for him.

20:54

Why? Because you would be targeting newspapers,

20:56

a dying market. That being said, having

20:59

a great market is an advantage,

21:01

but you can be in a normal market that's growing at an

21:03

average rate and still make crazy money.

21:06

Every market I've been in has been a normal

21:08

market.

21:08

You just don't actually want to be selling ice to Eskimos.

21:12

Here are the basic tenets of what I look for in markets.

21:14

Let's run them before we return to the offer.

21:17

When picking markets, I look for four indicators.

21:19

One,

21:19

pain.

21:21

Two,

21:22

purchasing power. Three, easy

21:24

to target. Four, growing.

21:28

One, massive pain.

21:30

They must not want, but desperately need,

21:32

what I am offering. Pain

21:34

can be anything that frustrates people about their lives.

21:36

Being broke is painful.

21:38

A bad marriage is painful. Waiting in line

21:40

at the grocery store is painful.

21:41

Back pain, ugly smile pain, overweight pain.

21:44

Humans suffer a lot.

21:46

So for us entrepreneurs, endless opportunity

21:48

abounds.

21:49

The degree of pain will be proportional to the

21:51

price you will be able to charge. More on

21:53

this in the value equation chapter.

21:55

When they hear the solution to their pain and inversely

21:58

what their life would look like without this pain,

22:00

they should be drawn to your solution.

22:03

I've been saying that I use to train sales teams.

22:05

The pain is the pitch.

22:07

If you can articulate the pain a prospect

22:09

is feeling accurately, they

22:11

will almost always buy what you are offering.

22:14

A prospect must have a painful problem

22:16

for us to solve and charge money for our solution.

22:19

Pro tip. The point of good writing

22:21

is for the reader to understand.

22:23

The point of good persuasion is for the prospect

22:25

to feel understood.

22:27

Two. Purchasing power. A

22:30

friend of mine had a very good system for helping people

22:32

improve their resumes to get more job interviews.

22:35

He was great at it.

22:36

But try as he did, he could not get people

22:38

to pay for his services. Why?

22:40

Because they were all unemployed. This

22:42

again may seem obvious, but he thought,

22:44

these people are easy to target. They're in massive pain.

22:47

There are plenty of them, and it's constantly adding new people.

22:49

This is a great market.

22:51

He just forgot a crucial point.

22:53

Your audience needs to be able to afford the service

22:55

you're charging them for.

22:57

Make sure your targets have the money, or access

22:59

to the amount of money needed to buy your services

23:01

at the prices you require to make it worth your time.

23:05

Three. Easy to target.

23:07

Let's say you have a perfect market, but no way of finding

23:09

the people who comprise it. Well,

23:12

making a grand slam offer will be difficult. I

23:14

make my life easier by looking for easy to target

23:16

markets. Examples of this are avatars

23:19

that have associations they belong to, mailing

23:21

lists, social media groups, channels they

23:23

all watch, etc. If our potential

23:25

customers are gathered together somewhere, then we

23:28

can market to them.

23:29

If searching them out, however, is like finding needles

23:31

in a haystack, then it can be very difficult to get your

23:33

offer in front of any potentially interested eyes. This

23:36

point is tactical. It is reality, not

23:38

theoretical.

23:39

For instance, you may want to serve rich

23:41

doctors, but

23:42

if your ads are being displayed to nursing students,

23:45

your offer will fall on deaf ears, no matter

23:47

how good it is.

23:48

Main point.

23:49

You want to make sure you can target your ideal

23:51

audience easily. Clarifying point.

23:54

There is no issue wanting to serve rich doctors.

23:56

They are easy to find.

23:58

This is just illustrative that

23:59

your promotions must be served to the right audience.

24:03

Four, growing. Growing

24:05

markets are like a tailwind.

24:07

They make everything move forward faster.

24:09

Declining markets are like headwinds. They make

24:12

all efforts harder. This was Lloyd's example.

24:14

Newspapers had three of four makings of

24:17

a great market.

24:17

Lots of pain,

24:19

purchasing power, easy to target.

24:21

But they were shrinking, fast. No

24:23

matter how hard he tried, the entire marketplace

24:25

was fighting against him.

24:27

Business is hard enough and markets move quickly.

24:29

So you might as well find a good market to give you

24:31

a tailwind to make the process easier.

24:34

Making this real. Health,

24:36

wealth, relationships.

24:38

There are three main markets that will always exist.

24:41

Health, wealth, and relationships.

24:43

The reason that those will always exist is that

24:45

there will always be tremendous pain when you lack them.

24:48

There's always demand for solutions to these core

24:50

human pains.

24:51

The goal is to find a smaller subgroup within

24:53

those larger buckets that is growing, has

24:55

the buying power, and is easy to target. The

24:58

other three variables. So if I were a relationship

25:00

expert trying to find my avatar,

25:02

I'd rather focus on second half of

25:04

life relationship coaching for old timers

25:06

than helping college students in relationships. Why?

25:09

Because senior citizens who are alone are likely

25:11

suffering more pain

25:13

as they are near their deaths,

25:14

have more buying power, money, and

25:16

are easy to find, targeting.

25:18

Lastly, at the time of this writing, there are more people

25:20

turning 65 each year than turning 20.

25:23

AKA, growing.

25:25

That is the idea.

25:26

Think about what you were good at in regards to health,

25:28

wealth, and relationships.

25:30

Then think about who might value your service the most.

25:32

AKA is in the most pain,

25:35

has the buying power to pay what you want,

25:37

money, and can be found easily,

25:39

targeting.

25:40

As long as those three criteria are strong

25:43

and the market isn't shrinking, you'll be in good

25:45

shape. But how important your success

25:47

is finding a, quote, great market

25:49

versus a, quote, normal market versus a,

25:51

quote, bad market? The answer,

25:53

it actually depends. Let me explain.

25:56

Order of Importance,

25:58

three levers on success.

26:00

It's unlikely you're going to be in a dying market

26:02

like the newspaper example.

26:04

It's also unlikely you're going to be selling toilet

26:06

paper and COVID, a buying frenzy.

26:08

You'll likely be in a normal market, and that's totally

26:11

okay. There's a fortune to be made within normal

26:13

markets.

26:14

My single point here is that you can't be in a bad

26:16

market, or nothing will work.

26:18

That being said, here's the simplest illustration

26:20

of the order of importance between markets, offers, and persuasion

26:22

skills.

26:24

Starving crowd

26:25

is more important

26:27

than your offer strength, which is more important

26:29

than your persuasion skills. Let's

26:32

say you were to rate these elements on a scale of

26:34

great, normal, and bad. You could essentially move

26:36

down the line from left to right in order of importance.

26:39

A quote, great rating on a

26:41

higher order piece overpowers anything else

26:43

lower on the priority scale.

26:45

A quote, normal rating moves the buck to the

26:47

next part of the equation.

26:49

A quote, bad

26:50

stops the equation unless a grade from

26:52

a higher order component nullifies it.

26:55

Here are a few examples. Example

26:57

one,

26:57

even if you had a bad offer and are bad at

27:00

persuasion,

27:00

you're going to make money if you're in a great market.

27:03

If you're on the corner hawking hot dogs when the

27:05

bar closes up at 2am with mobs of starving

27:07

drunk folks, you're going to sell out of your hot dogs.

27:10

Example two, most of us,

27:12

if you were in a normal market and have a

27:14

grand slam offer, you can make tons of

27:16

money even if you're bad at persuasion.

27:18

This is most people reading this book.

27:20

That's why I wrote it.

27:22

To help you maximize your success by

27:24

learning to really build a grand slam offer.

27:27

Example three,

27:28

let's say you're in a normal market and have a normal

27:31

offer.

27:31

In order to be massively successful,

27:34

you would have to be exceptionally good

27:36

at persuasion.

27:37

Then and only then would you succeed

27:39

with your persuasive skills serving as the fulcrum

27:41

for your success. Heck,

27:43

many empires have been built by exceptional

27:45

persuaders.

27:46

It's just the hardest path to follow and requires

27:49

the most effort and learning.

27:50

Nailing your offer helps you shortcut this path

27:53

to success. Otherwise, you will just

27:55

have a normal business that takes exceptional skills

27:57

to be successful. Nothing wrong with that.

27:59

not what you signed up for.

28:03

Commit to the niche

28:04

I have a saying when coaching entrepreneurs on picking

28:06

their target market.

28:08

Don't make me niche-lap you.

28:10

Too often, a new entrepreneur half-heartedly

28:12

tries one offer in one market,

28:15

doesn't make a million dollars,

28:16

then mistakenly thinks this is a bad market.

28:19

Most time, that's not actually the case.

28:22

They just haven't found a grand slam offer yet to apply

28:24

to that market.

28:25

They think, I'll switch from helping dentists

28:27

to helping chiropractors. That's it. When

28:30

in reality, both of those are normal

28:32

markets and represent

28:33

billions of dollars of revenue.

28:35

Either would work, just not both. You

28:38

must pick one.

28:39

No one can serve two masters.

28:41

I have coined the term niche-slap to remind entrepreneurs

28:43

in my communities to commit once they pick.

28:46

All businesses and all markets have unpleasant

28:48

characteristics. The grass is never

28:51

greener once you get to the other side. If

28:53

you keep hopping from niche to niche, hoping that

28:55

the market will solve your problems, you deserve to be

28:57

niche-slapped.

28:58

You must stick with whatever you pick long enough to have

29:01

trial and error.

29:02

You will fail. In fact, you will fail

29:04

until you succeed. But

29:05

you will fail far longer if you keep changing

29:07

who you market to, because you must start

29:09

over from the beginning each time.

29:11

So pick, then commit.

29:15

Riches earn the niches. The other reason to commit

29:17

to the niche is because of how much more you will make.

29:19

Simply but, niching down will make you far more

29:22

money. Author note, when to

29:24

broaden. Advice for most people. For

29:26

most, if you are under $10 million per

29:28

year,

29:29

niching down will make you more money. After

29:31

that, it will depend on how narrow the niche is, or

29:33

what is called TAM, Total Addressable Market.

29:36

A business can only grow to meet the

29:38

total addressable market.

29:40

That being said, for most people, getting to $10 million

29:42

per year is already a 0.4% achievement.

29:44

Only 1 in 250 businesses achieve this.

29:47

So for 99.6% of readers below $10

29:50

million per year,

29:51

it's almost always easier to serve fewer clients

29:53

more narrowly.

29:54

If you want to go beyond that, you may, depending

29:56

on the size of your TAM, have to broaden your audience

29:59

by going up market.

29:59

down market or into an adjacent market

30:02

where your existing services can provide value.

30:04

For context,

30:06

many companies expanded to $30 million plus

30:08

per year serving a single niche.

30:10

Chiropractors, gyms, plumbers, solar, roofers,

30:12

salon owners, etc.

30:14

If you were at $1 million or $3 million per

30:16

year

30:16

thinking you have capped and must expand, you

30:19

are wrong. You just need to be better.

30:21

When I truly grasped how much more profit

30:24

I was leaving on the table,

30:25

it changed my life.

30:26

It was what took me from doing acquisition for

30:29

anyone

30:29

to teaching it to a specific avatar.

30:32

In my instance, I decided on a microgym

30:34

owner with 100 members, assigned lease,

30:37

at least one employee, and wanted to help clients

30:39

lose weight.

30:40

That's pretty specific compared to, quote, small

30:42

business owners or,

30:44

my favorite, quote, anyone who will pay me, which

30:46

is common. And I was very specific. In that

30:48

business, Gym Launch, we turned down and still

30:50

do anyone who is not the avatar.

30:53

That means no personal trainers, no online coaches, etc.

30:56

Could I have helped them? Of course I could have. I

30:58

mean, heck, the majority of our portfolio is comprised

31:00

of non-Gym companies. But in order to maintain

31:03

product focus and high converting messaging,

31:05

knowing exactly who the product was for was

31:08

a game changer.

31:09

It helped us know exactly who we were

31:11

speaking to at all times and exactly whose

31:13

problems we were solving. But simplicity and

31:15

ease may not be enough to sway you.

31:18

So let me illustrate why honing in on one

31:20

niche will make you more money.

31:21

Reason, you can literally charge 100 times

31:24

more for the exact same product.

31:26

Dan Kennedy was the first person to illustrate this

31:28

for me, and I will do my best to pass on the

31:31

torch to you in these pages.

31:33

Nitching product pricing example.

31:35

Product and then price.

31:38

Time management product.

31:39

Price, $19.

31:41

Time management for sales professionals. Price, $99.

31:46

Time management for outbound B2B sales.

31:49

Price, $499.

31:52

Time management for outbound B2B

31:54

power tools and gardening sales reps.

31:57

Price, $1,997.

31:59

Dan Kennedy taught me this and it changed my life

32:02

forever. Let's say you sold a

32:04

generic course on time management. Unless

32:06

you were some massive time management guru with a

32:08

compelling or unique story, it would be unlikely

32:10

it would turn into anything significant.

32:12

What do you think quote yet another end quote

32:15

time management course is valued at? $19?

32:17

$29? Sure. Nothing right home about. Let's just say $19

32:19

for illustration's sake.

32:24

Now we shall unleash the power of niche

32:26

pricing in various stages on your product.

32:28

So let's imagine you make the product more specific,

32:31

keeping the same principles and call it

32:33

time management for sales professionals.

32:35

All of a sudden, this course is for a more

32:37

specific type of person.

32:39

We could tie their increase to even one more

32:41

sale

32:42

or one more deal, and it would be worth more.

32:45

But there are a lot of salespeople, so this might be

32:47

a $99 product. Neat, but we can do better.

32:50

So let's go down another level of niching and call

32:52

our product time management for B2B outbound

32:55

sales reps. Following the same principles

32:57

of specificity,

32:58

now we know our salespeople probably have

33:00

very experienced deals and commissions.

33:03

A single deal would easily net this salesman $500

33:05

or more. So it would be easy to justify

33:08

a $499 price tag. This

33:10

is already a 25x increase in

33:12

price for almost an identical product.

33:14

I could stop here,

33:16

but I'm going one step further.

33:18

Let's just niche down one last level.

33:21

Time management for B2B outbound

33:23

power tools and gardening sales reps. Boom.

33:25

Think about it for a second.

33:27

If you were a power tools outbound sales rep,

33:29

you would think to yourself, this is made exactly

33:32

for me,

33:32

and would happily fork over maybe $1,000 or $2,000

33:36

for a time management program that could help you achieve

33:38

your goal. The actual pieces of the program

33:40

may be the same as the generic $19 course,

33:43

but since they have been applied

33:45

and the sales messaging could speak so

33:47

much to this avatar,

33:49

they will find it far more compelling and

33:51

get more value from it in a real way. This

33:54

concept applies to anything you decide to do.

33:56

You want to be the guy who services

33:59

this type of

33:59

of person or solves this type of problem,

34:02

and even more niched, I solve

34:04

this type of problem for this specific type

34:06

of person in this unique, counterintuitive

34:08

way that reverses their deepest fear. That's

34:12

why a fitness program for generic weight loss might be

34:14

priced only at $19, while a fitness

34:16

program designed and marketed only to shift nurses

34:18

might be priced at $1,997, even

34:21

though the core of the program is likely similar.

34:23

Eat less, move more.

34:25

End result, the market matters, your

34:27

niche matters, and if you can sell the same product

34:30

for 100 times the price, should you?

34:32

I'll let you decide.

34:33

Summary points.

34:34

The purpose of this chapter is to reinforce two things. First,

34:37

don't pick bad markets.

34:39

Normal markets are fine, great markets are great.

34:41

Second, once you pick, commit until

34:43

you figure it out. If you try 100 offers,

34:46

I promise you will succeed. Most

34:48

people never try anything. Others fail once,

34:50

then give up.

34:51

It takes resilience to succeed. Stop

34:53

personalizing. It's not about you.

34:55

If your offer doesn't work, it doesn't mean you suck.

34:58

It means your offer sucks. Big difference. You

35:00

only suck if you stop trying. So try again.

35:03

You'll never become world-class if you stop

35:05

after a failed attempt. If

35:07

you find a crazy good market,

35:09

ride it and ride it hard.

35:10

If you pair a grand slam offer with a crazy

35:12

market, you'll likely never need to work again. Seriously.

35:15

So have this skill set, the

35:17

ability to accurately assess markets by taking

35:19

into account pain, money, targeting, and growth

35:22

in your back pocket so that when lightning strikes, you

35:25

can make sure it strikes twice.

35:27

Having established how to nail a market,

35:29

let's get back to pricing. The first step to making

35:31

crazy money is charging premium prices.

35:34

Free gift number two.

35:35

Bonus tutorial. Winning markets.

35:37

If you want to know more about how I pick markets and

35:40

find niches that are profitable, go to acquisition.com

35:42

forward slash training forward slash offers.

35:45

Then watch winning markets for a short video

35:47

tutorial. I've also included a free checklist

35:49

to see how your market or niche measures

35:52

up. It's absolutely free. Enjoy.

35:57

Hey guys, hope you guys are enjoying the $100 million offer.

35:59

collaboration episode with

36:02

the game. You may not know this but we

36:04

have a physical copy available

36:06

on Amazon and a Kindle version and if you're like me

36:08

I get pretty ADD really easily and

36:11

I prefer to consume in multiple formats at the same

36:13

time. You remember it longer, it gets

36:15

stored multiple places in your brain, lots of science

36:17

stuff but either way it ultimately helps

36:20

you retain it and use it. So if

36:22

that's useful,

36:23

use it. If not, keep enjoying.

36:26

Chapter 5. Pricing. Charge what

36:28

it's worth.

36:29

Charge as high a price as you can say out loud

36:32

without cracking a smile.

36:34

Dan Kennedy.

36:36

January 2019.

36:38

All I could see was black.

36:40

My eyes felt glued shut.

36:42

I was awake but the fatigue in my temples

36:44

felt like a five pound weight was duct taped to my

36:46

skull,

36:47

dragging my eyelids back down.

36:49

I had to concentrate forcibly to open them. The

36:52

details of the dimly lit room beamed

36:54

in.

36:54

I rolled over to the edge of the hotel room bed,

36:57

feeling each and every muscle in my body as my

36:59

weight shifted. Hunched on my side,

37:01

I could see my clothes scattered on the floor.

37:04

I was so beat the night before that I didn't

37:06

even remember taking them off.

37:08

I had just finished a five day gauntlet of keynote

37:10

after keynote presentation. Two

37:12

days of presentations for our highest level clients

37:15

immediately followed by spending two days planning with

37:17

our entire company, 135

37:18

plus employees.

37:22

I had missed a FaceTime call from my father that day

37:24

before.

37:25

I didn't have anything on my agenda for the morning,

37:27

so I quickly got up, slid into a hoodie

37:30

and some sweats and walked into the hallway

37:32

to call him back.

37:34

After the initial pleasantries, he immediately dove

37:36

into why he was calling, parental concern.

37:38

I saw the picture you posted of all your clients,

37:41

he said, but in an unusually concerned

37:43

tone.

37:44

I thought the event was for all your highest paying clients.

37:46

I didn't know it was a big event.

37:47

It looked like you had a thousand people there.

37:50

Alone in the hallway and struggling to shake the heavy

37:52

weight of exhaustion still,

37:54

I tried to gauge where his concern was coming from

37:56

and what he was getting at.

37:58

I'd explain this to him already.

38:00

It was only for our highest level clients.

38:02

That wasn't all of our clients, I said.

38:04

Just the ones who pay $42,000 a year, our gym

38:06

lords, like I told you.

38:08

Every single person in that picture paid you $42,000.

38:11

He sounded almost frightened at the idea.

38:14

Yeah, wild, right?

38:15

My voice was hoarse from days of speaking and thousands

38:18

of 22nd conversations.

38:19

Is it legal what you're doing? He asked.

38:22

Wow,

38:23

that escalated quickly, I thought to myself.

38:25

Do they know you're paying you that much?

38:27

Yes, it's legal. And of course they

38:30

know.

38:30

It's not like I'm magically siphoning money.

38:33

That's a lot of money. I hope what you're giving

38:35

them is worth it. I

38:37

contemplated whether it was worth the effort to dive

38:39

into this or just ignore it. But knowing

38:41

this was going to be a thing, I took a deep

38:43

breath and began to explain. If I

38:45

made you $239,000 extra this year, would you pay me $42,000? I asked, using $239,000 because

38:53

it was the average increase in top line revenue of

38:55

a gym using our system for 11 months. For

38:58

sure, he said. I mean, if I knew

39:00

I was going to make that back,

39:02

but what would I have to do?

39:03

About 15 hours a week of work.

39:06

And how long would it take me to make

39:08

the $239,000? 11 months. And how much of the $42,000 would I have

39:14

to pay you up front?

39:15

Nothing. Just pay me as you start making money using

39:17

the system.

39:18

I watched it click. My dad got it.

39:20

Oh, he said. Well,

39:22

then yeah. I would do it.

39:24

And that's why they do it too.

39:26

Making shitloads of money breaks people's minds.

39:29

It literally stretches their minds so far past what

39:31

they can believe is possible. They assume you're

39:33

doing something wrong or illegal. They literally

39:35

can't even.

39:36

Why? Because they think to themselves, they

39:39

can't be that much smarter than me or work

39:41

that much harder than me. So how's it possible

39:43

for them to make a thousand times more than me enough

39:45

money that it would literally take 10 lifetimes

39:48

for me to make what they make in a year?

39:50

In the three years leading up to me writing this book,

39:53

I took home over $1.2 million per month

39:56

in profit

39:57

every single month.

39:58

That's more than the compensation.

39:59

for the CEOs of Ford, McDonald's,

40:02

Motorola,

40:03

Yahoo, combined,

40:05

every year, as a kid in his 20s.

40:08

It angers those who believe that life isn't fair.

40:11

It confuses others who cannot comprehend and

40:13

believe that there must have been a mistake.

40:15

And it inspires a select few who are bound for

40:17

greatness.

40:18

I hope that you are in the last category because that

40:20

is who I am writing this for. You can do

40:23

this. You just need to learn how and

40:25

I'm gonna show you. Price to value

40:27

discrepancy. Quote,

40:29

I hope what you're giving them is worth it, end quote.

40:32

Those words would probably sting for most, but

40:35

when my dad said them to me, I just knew he

40:37

didn't understand the value we were providing.

40:39

What I want to show you is how to create and communicate

40:41

value, AKA the worth it-ness of

40:43

an offer.

40:45

In order to understand how to make a compelling offer,

40:47

you must understand value.

40:49

The reason people buy anything is to get a

40:51

deal. They believe that what they are getting, value,

40:54

is worth more than what they are given in exchange

40:56

for it. Price.

40:57

The moment the value they receive dips below what

40:59

they are paying, they stop buying from you.

41:02

This price to value discrepancy is what you

41:04

need to avoid at all costs. After

41:06

all, as Warren Buffett said,

41:08

price is what you pay, value is what you get.

41:12

The simplest way to increase the gap between price

41:14

to value is by lowering the price.

41:16

It's also most of the time the wrong decision

41:19

for the business. Getting people to buy

41:21

is not the objective of a business. Making

41:23

money is.

41:24

And lowering price is a one-way road to

41:26

destruction for most. You can only go down

41:28

to zero, but you can go infinitely high

41:30

in the other direction.

41:32

So unless you have a revolutionary way of decreasing

41:34

your cost one-tenth compared to your competition,

41:37

don't compete on price.

41:39

As Dan Kennedy said,

41:40

there's no strategic benefit to being the second

41:42

cheapest in the marketplace, but there is

41:44

for being the most expensive. So

41:47

the goal of our grand slam offer will be to get

41:49

more people to say yes at a higher price

41:52

by increasing our value to price discrepancy

41:54

and in other words,

41:55

we will raise our price only after we

41:57

have sufficiently increased our value.

41:59

This will. they still get a great deal. Think

42:02

buying $100,000 worth of value for only $10,000. It's

42:06

money at a discount.

42:07

Free gift number three,

42:09

bonus tutorial and free downloads. Charge

42:11

what it's worth. If you want to know how I create

42:13

value discrepancies for B2B or B2C products,

42:15

go to acquisition.com forward slash training forward

42:17

slash offers course and then watch charge

42:20

what it's worth for a short video tutorial. My

42:22

goal is to gain your trust and deliver value in advance. As

42:24

such, it's absolutely free. Enjoy. Why you

42:26

should charge so much it hurts.

42:28

Most business owners are not competing

42:30

on price or value. In fact, they're not

42:32

actually competing on anything at all.

42:34

Their pricing process typically goes something like

42:36

this.

42:37

Step one, look at marketplace.

42:39

Step two, see what everyone else offers.

42:42

Step three, take the average.

42:44

Step four, go slightly below to

42:46

remain quote competitive, end quote.

42:48

Step five, provide what their competitors offer

42:51

with a little more.

42:53

Step six, end up with a value proposition of

42:55

more for less. And the big secret,

42:58

those competitors they're

42:59

copying are dead broke.

43:01

So why on earth copy them?

43:02

Pricing where the market is means you're pricing

43:05

for market efficiency. Over time,

43:07

in an efficient marketplace, more competitors

43:09

enter offering a little more for a little less until

43:12

eventually no one can provide any more for

43:14

any less.

43:15

At this point, a market reaches perfect efficiency

43:17

and the business owners participating make

43:19

just enough at the end of the month to keep going.

43:22

The bottom 10 to 20% of operators get washed

43:24

out or lose the will to fight.

43:25

Then fresh business owners enter with no idea

43:28

and repeat the process of their forefathers and around

43:30

and around they go.

43:31

In plain words, pricing this way means

43:34

you're providing a service at just above

43:36

what it costs for you to stay above water.

43:38

We are not trying to barely stay above water.

43:40

We are trying to make egregious amounts of

43:42

money that will have your relatives asking if

43:44

what you do is legal. Again, we are not

43:46

trying to get the most customers. We are trying to make

43:49

the most money.

43:50

That being said, since there is no strategic

43:52

benefit to being the second lowest priced

43:55

player in your marketplace, allow me

43:57

to give you a brief overview of why I see premium

43:59

pricing as.

43:59

not only a very smart business decision,

44:02

but a moral one. Furthermore,

44:04

it's the only choice that will allow you to truly

44:07

provide the most value, a unique and strong

44:09

position in the marketplace.

44:11

Let me introduce you to the virtuous cycle of price.

44:14

I've used this framework in most of the materials

44:16

I release because it needs to be consistently reinforced.

44:19

The forces of the marketplace will grate on your

44:21

belief system. You must stay strong and ignore

44:23

them.

44:24

Here is the basic premise of why you need to

44:26

charge a premium if you want to best serve your customers.

44:29

When you decrease your price, you decrease

44:32

your client's emotional investment since it didn't cost

44:34

that much. You decrease your client's

44:37

perceived value of your service since it can't be

44:39

that good if it's so cheap or priced the same as everyone

44:41

else. You decrease your client's results

44:43

because they do not value your service and are not invested.

44:46

You attract the worst clients who are never

44:48

satisfied until your service is free.

44:51

And you destroy any margin you have left to be able

44:53

to actually provide an exceptional experience, hire

44:55

the best people, invest in your people, pay for your

44:57

service, and pay for your clients, invest in growth,

45:00

invest in more locations or more scale, and

45:02

everything else you had hoped in the goal of helping more

45:04

people solve whatever problem it is that you solve.

45:07

In essence, your world sucks.

45:09

And to make matters worse, your service probably

45:12

sucks because you are squeezing blood from the proverbial

45:14

stone.

45:15

There's just not enough money left over to make something

45:17

exceptional. As a result, you fall in line

45:19

with the armies of average businesses that race to

45:21

the bottom. I've lived that life. It's terrible.

45:24

If you love your customers and your employees, please

45:26

stop shortchanging them when there is a better

45:29

way.

45:29

Here's the reverse. This is what happens

45:31

when you raise your prices.

45:33

When you raise your prices, you increase

45:35

your client's emotional investment, you increase

45:37

your client's perceived value of your service, you

45:39

increase your client's results because they value your service

45:42

and are invested,

45:43

you attract the best clients who are the easiest

45:45

to satisfy and actually cost less to fulfill,

45:48

and who are most likely to actually receive and

45:50

perceive the most relative value.

45:52

You multiply your margin because you have money

45:54

to invest in systems to create efficiency,

45:57

smart people, improve customer experience,

45:59

scale your business, and make sure you're and most importantly of

46:01

all, to keep watching the number in your personal bank

46:03

account go up, month after month, even

46:05

with reinvesting in your business. This allows

46:07

you to ultimately enjoy the process for the long haul

46:10

and help more people grow

46:11

rather than burning out

46:13

and shriveling into obscurity. To swing the argument

46:16

even further in favor of higher prices, here

46:18

are a few interesting concepts. When

46:20

you raise your price, you increase the value the

46:22

consumer receives without changing anything

46:24

else about your product. Wait, what?

46:27

Yes. Higher price

46:29

means higher value, literally.

46:32

In a blind taste test, researchers asked

46:34

consumers to rate three wines,

46:36

a low price wine, a medium price wine, and

46:38

an expensive wine. Throughout the study, the

46:40

participants rated the wines with the prices visible.

46:43

They rated them, unsurprisingly, in order

46:45

of their price with the most expensive being the best,

46:48

the second most expensive being the second best, and

46:50

the third cheapest option being rated as

46:52

a cheap wine. What the tasters didn't

46:55

know is that the researchers gave them the exact

46:57

same wine all three times. Yet, the

46:59

tasters reported a wide discrepancy between the

47:01

high priced wine and the cheap wine.

47:03

This has deep implications for the direct relationship between

47:05

value and price.

47:07

In essence, raising your prices can

47:09

directly enhance the value you provide.

47:11

What's more, the higher the price, the more alert

47:14

your product or service has. People want

47:16

to buy expensive things, they just need a reason.

47:18

And the goal isn't to just be slightly above

47:20

market price.

47:21

The goal is to be so much higher that a

47:23

consumer thinks to themselves,

47:25

this is so much more expensive, there must

47:27

be something entirely different going on here.

47:30

That is how you create a category of one.

47:32

In this new perceived marketplace, you are

47:34

a monopoly and can make monopoly profits.

47:37

That is the point.

47:38

One final point I want to drive home.

47:40

If you offer a service where a customer must do

47:43

something in order to achieve the result,

47:45

or solve the problem you say you solve, they

47:47

must be invested.

47:48

The more invested they are, the more likely

47:51

they are to achieve the positive result.

47:53

Therefore, it follows that if you care about

47:55

your customers,

47:56

you should get them as invested as humanly possible.

47:58

Ideally, this means

47:59

pricing your services or product in such a

48:02

way that it stings a little when they buy.

48:04

That sting will force and focus

48:06

their attention and their investment in your product or

48:08

service. Those who pay the most pay

48:10

the most attention. And if your customers are more

48:13

adherent and follow through, and if they achieve

48:15

better results with your service than your competition,

48:17

then you are in a very real way providing more value

48:20

than anyone else. This is how you win.

48:22

But I know this isn't easy, and it shouldn't be.

48:25

Your product must deliver.

48:26

So many wish to shortcut the real work.

48:29

Do that and you will fail. In the real

48:31

world, to have the quote go nads to charge

48:33

big ticket prices, you must outwork yourself

48:35

doubt. You must be so confident in your delivery

48:38

because you have done it so many times that

48:40

you know that this person will succeed.

48:42

Experience is what gives you the conviction to ask

48:45

for someone's entire salary as payment.

48:47

You must believe so deeply in your solution

48:49

that when you look at yourself in the mirror at night alone,

48:52

your conviction remains unshakable.

48:54

So let me bring this section home with my personal experience.

48:57

My premium price experience.

48:59

In my first niche consulting business, Gym Launch,

49:01

I teach owners a better business

49:03

model. Before proxisizing my consulting

49:06

services, I flew out to 33 gyms in 18 months

49:08

to do full gym turnarounds.

49:11

We would fly out,

49:12

fix everything in gym, and relaunch it in 21 days.

49:15

We would average an increase in $42,000 in additional

49:17

sales in 21 days. It

49:20

was wild.

49:21

My fee was 100% of the revenue I

49:23

would bring in.

49:24

At our peak, we were turning around 8 gyms a month.

49:27

This quickly became a logistical nightmare.

49:29

After the wear and tear of living in motels month

49:32

after month after month, I thought to myself, there

49:34

has to be a better way to do this. One month,

49:36

there was a gym we were scheduled to go fly out to, but

49:39

I simply didn't want to do it. So I told them

49:41

we were going to cancel the engagement.

49:43

The gym owner practically threatened me

49:45

to help him.

49:46

So I said I would help him, but he

49:48

would have to do all the work.

49:49

But I would show him how.

49:50

Within 30 days, this gym made almost $44,000 in

49:53

new upfront cash collected,

49:55

which was 4 times their previous month.

49:57

As soon as I saw that my process could

49:59

be due.

49:59

from afar without me having to fly

50:02

people in, our business exploded. I

50:04

had found the missing link because my travel schedule

50:06

was no longer a constraint. We went

50:08

on to sell 4000 plus more gyms over

50:10

the next few years and counting

50:12

using a done with you rather than done

50:14

for you model. But

50:16

back to premium pricing.

50:18

When I entered the space, low price competitors

50:20

offered full service marketing solutions

50:23

for $500 per month with a single

50:25

high price competitor charging $5,000 for his product.

50:29

I wanted to be the premium price leader.

50:31

I wanted to be so expensive that it created

50:33

a lure around what we were doing. So

50:35

we came in at 3 times the highest price player and 32

50:38

times more than the lowest priced player.

50:40

A price of $16,000

50:41

for a 16 week done with you

50:44

intensive.

50:45

Then we upsold 35% of those people to a 3 year $42,000 per

50:48

year agreement for us to help them grow their gyms.

50:51

For context, the average gym owner makes $35,280 per year

50:53

in take home profits.

50:56

If that's the average, it means half make even less

50:59

than that.

50:59

So for many of them, they were committing to half

51:02

of their yearly salary or more to

51:04

buy our program.

51:05

And I was selling this to grown men as a kid

51:07

in his 20's telling them I was going to help

51:09

them make more money.

51:10

This was possible because my conviction was stronger

51:12

than their skepticism.

51:14

How? Based on a voluntary survey taken

51:16

at our last full company event with 158 gyms responding,

51:20

we found that a gym launch gym who has

51:22

been in our program for 11 months will experience

51:24

the following average improvements. Top

51:27

line revenue growth of $239,000 per year. Recurring revenue growth

51:32

of $160,000 a year. Bottom line growth, aka profit,

51:36

from $29.43 per month to $89.40 per month. That's

51:41

3.1x increase.

51:43

Average client growth of an additional 67 clients.

51:46

Churn, aka percentage of clients who leave

51:48

each month, drops from 10.7% before to 6.8%

51:53

Retail sales, an additional 4,400 per

51:56

month in retail sales

51:58

after they started working with us.

51:59

Prices on average went from $129 per month to $167 per

52:02

month

52:02

in average revenue per gym member.

52:06

Their survey just proved what I already knew.

52:09

I had complete conviction in our product. I knew

52:11

it worked. I had outworked my self-doubt.

52:14

Summary points. What should you take from this?

52:16

First and foremost, charge a premium. It will

52:19

allow you to do things no one else can to make your client successful.

52:22

We were able to charge a premium because we provided more

52:24

value than anyone else in the industry. In

52:26

a real way, we were charging only a

52:28

fraction of what our clients made using our system.

52:31

This is important.

52:33

Our clients still got a deal.

52:35

The gap between what they paid, price,

52:37

and what they got,

52:38

value, was massive.

52:40

As a result, the virtuous cycle continued

52:43

to spin.

52:44

We charged the most money. We provided

52:46

the most value. Our gyms remained the most

52:48

competitive, made the most money,

52:50

always had the latest and best acquisition systems,

52:52

and had the support to implement them at lightning speed.

52:55

We made many mistakes along the way, but our pricing

52:57

model was not one of them. It allowed me

52:59

the room to make big bets without losing the

53:01

farm. The truth is that 99% of

53:04

businesses need to raise their prices to grow,

53:06

not lower them.

53:07

Profit is oxygen.

53:09

It fuels the fire of growth.

53:11

You need that if you want to reach more people and make

53:13

a bigger impact. In order to charge

53:15

so much, though, you must learn to create tremendous

53:17

value.

53:18

Let's head there next.

53:21

Hey guys, hope you enjoyed the second episode

53:24

of $100 Million Offers. The follow-up

53:26

to this is that we have a course available on the site.

53:28

So if you're a visual learner, you like watching things,

53:30

I have a full slide deck, presentation, checklist,

53:33

documents, everything that goes along with this

53:35

book. It's absolutely free. All right, you don't even

53:37

have to give me your email. It's free. It's

53:40

on my site at acquisition.com forward slash training. Poke

53:42

around. There's other courses there that I think

53:44

you'll also enjoy. Next episode, we're

53:46

going to be going over probably the single most famous

53:49

chapter in the book, the value

53:51

equation. And I'll have a

53:53

special little secret surprise at the end

53:55

of that episode as well. I hope you guys

53:57

enjoy it as much as I enjoyed making it for

53:58

you.

54:04

Acquisition.com Volume 1 $100 million

54:07

offers how to make offers so good people

54:09

feel stupid saying no.

54:11

Written and performed by Alex Hermosi.

54:13

Copyright 2021 Acquisition.com

54:17

Audio Production Copyright 2021 Acquisition.com