I've been marketing for 13 years I built and sold nine companies I sold my last company for $ 46.2 million to American Pacific group I've also written two books on marketing that have sold over a million copies here's 13 years of marketing advice that will make you more money piece of advice number one start with low prices or even gasp free the reason that I say that is because if you start there then you can go up it's very difficult to come down and in the beginning you want to get flow through the system and
so it's totally fine to start it free and then start bumping up from there and so I'll give you three quick examples and then I'll show you how to do this tactically so when I started my first ever business it was a online personal training business since this 13 plus years ago and when I started I didn't know anything and I was so afraid to charge people money to begin with and so but I did want them to pay something because I wanted them to be invested because otherwise people don't follow through with their workouts
or their nutrition plans Etc and so I said hey just donate to the charity of your choice whatever charity you want to in exchange I will then train you for 12 weeks and so people would uh donate I think it was $500 or $1,000 was their choice to a charity of their selection and by doing that I actually got my first 13 or so customers just by making posts and dming people that I knew and it didn't feel weird because I was like hey I'm doing this kind of nonprofit thing I want to help you
out if you want to lose weight and you can feel good about it and it's a write- off and so we were like oh this is pretty cool but the thing is is like that was the first time I ever did it and then from there I said huh would you guys be willing to pay me now after we finish this 12 weeks and a lot of them were like sure I was like yeah I'm the charity now uh so after I did a good job they were willing to do that and refer me customers
the next business that I did this with was gym launch when I actually started uh flying out to other gyms so I used to do turnarounds and I did that for two plus years so I'd fly out to a gym set up all the pricing do the marketing all that stuff and I did it all for free and I did it that way because I didn't know how I could sell those gym owners and what I the deal that I made was I only make money if I make sales and I'll front the cash for
the marketing so like they took zero risk on and I would do everything including pay for my hotel My Flights my my my food my rental car everything and but being able to do that it allowed me to get way more yeses quickly test out the system in 30 plus markets that I had which then eventually led me to licensing that system to 5,000 Plus locations and that was the company that I that I sold to APG the third uh time that I did this was when I started my software company Allen and so when
I started the company I was like I need to get some case studies I need some testimonials I need some I need some stories to show successes right and so I think a lot of people in the beginning think this is only a beginner thing but even if you're a big business business owner when you start out a new product or a new division um starting with free customers just makes a lot of sense and it's for four reasons one is that free customers become customers you become paying after the period as long as you
do a good job so it makes money in one way the second way it makes you money is that they'll also refer your customers because if you do a great job they'll just send you other people and that can be contingent on why you do it for free for them the third is that they'll leave you testimonials and reviews so those reviews and those testimonials also you advertise and you can get more customers from them and then finally when whenever you do stuff for free I do it in exchange for feedback I say hey tell
me what I could do to make this better and again it's not saying like tell me all the ways I suck it's just saying tell me how I can make this better tell me how I could make it worth it for you to want to stay and continue to pay and ideally the easy test of knowing whether or not this works is that they actually stay and pay afterwards and so it's the easiest way to get going on any new product and I think so many people start trying to sell stuff too soon without enough
proof and in the beginning you suck that's why it's a new product you're new Division and so I'd rather not ruin my reputation say I'm giving away for free give the reason is I'm brand new at this thing or I'm trying this new thing out and that way I'll get a little bit of Grace and then that way I can make the thing better in iterative process much faster with way more people because I'm giving away for free or at cost and then once I get those massive success stories that they feel like they owe
me because I've done a great job then I can Market those and go at full price so here's how you actually do this tactically going from starting at low prices to moving all the way to where you want to be which is high prices with big premiums right and so what I'd say is after you have your first test case study batch so call it 10 or 20 people depending on the size of your product or your services after that every five I just go up by 20% and so let's say okay I started at
zero and I have a marketing agency I might say okay the first the next five I'm going to do for a th000 bucks right and then from there I might say okay the next five I'm going to do for 1,200 bucks the next five I'm going to do for 1,500 bucks and you just keep going up by 20% until the conversion rate times the price goes down so that way you can just calculate the total amount of money made off of X number of sales calls and by doing that you'll be able to see okay
here's the sweet spot where I sell the most amount of units at The Highest Potential price so my company gym launch that I sold for $46 million that company you know at its peak before I was selling it we were taking home over a million dollars a month in personal income but that's what a lot of people think happened the whole time but it wasn't like that the actual very first business that I started in Fitness I actually gave away my services for free I actually did it as a nonprofit for Chari so that I
could get clients in the door and test out whether my stuff actually worked and that I could deliver services and when you're having the conversation with those first few people whether you're doing it for free or you're going to do it for a big discount you say hey I plan on going to this price point but I'm willing to do it for free in exchange for X which is usually a feedback feedback for me and a public testimony if you're comfortable doing it and by having those two things then one you guarantee that you get
the feedback which is the thing you need most but you also can get the testimon that you can leverage and then finally you can also tack on a referral if you want to again I'd say the testimony and the referral should be contingent on you doing a good job and you say hey if I do a good job would you be willing to do these two things if they say yes then you're good to go the fourth one which is do they actually want to buy at full price later which will be the real test
of how good you were and I think the bottom line here is that when you start out you're not that good and even if your ego is like kind of convincing you that you are good which I think is silly just even imagine two years from now that you're going to be much better than you are now well that guy is probably way more experienced so give that guy a running start by starting free now and then building momentum into it and I have this saying that I I repeat all the time in my team
which is create flow monetize flow then add friction and so it's like you have to run water through the machine you have to get flow into the system to see where it's going to break so that you know what real actually looks like rather than just trying to get rich on Excel the second is the framework that I use for scaling advertising or scaling Marketing in any Niche more better new when you're starting out more is almost always the answer and so I remember when I was uh thinking about getting into content I uh I
paid someone who had made you know a lot more content had a much bigger brand and I said hey um what should I be doing I like what should I do to make my content better and he's like dude he's like you don't need make your content better he's like you're just not making anything and so what he did was he pulled up his profile on LinkedIn and he pulled up my profile on LinkedIn he was like I posted five times a day you haven't even posted and then you pulled up Instagram and he pulled
at my Instagram and he's like I posted two times a day you posted once a week I was like man he's like okay let's pull up YouTube and then my YouTube and he just went platform by platform and he showed that he was doing 3x 5x 10x the volume that I was and he was like dude you just got to do more and that was just like like I felt embarrassed because I just paid all this money to have someone just look at me and just say do more but hopefully I can save you the
money and just tell you you probably need to do more and the interesting thing about this is that I later on had um like at the point now when we had maybe this is be a year ago I had fiveish million subscribers across all platforms I had a friend of mine who's a billionaire who wanted to start getting into personal branding and he said hey man can you check out my Instagram and see what's you know going on and why why we're not growing as fast as I want to and so I said well before
I look at it I was like how many posts a week are you making across all platforms he's like oh got that nailed he's like I'm posting once a day and I was like dude I was like we post 50 plus times a day and he was like got it he just was like you don't need to say anymore I understand because he had had enough experience in other Realms to know that like oh all of the things in volume that that that work in sales that work in customer success that work in product in
terms iterations the same Concepts apply to advertising and marketing like you just need to do a lot in order to figure out what works so that you can do better later now what's interesting about this is that this also applies on the paid side so I remember there was a chiropractor chiropractor agency that approached me they were doing about 2 million bucks a year and he was like hey man I think I've saturated Facebook and I was like and this is when it was Facebook not meta and I was like what do you mean he's
like I just think I've saturated the chiropractor Niche and I was like this is a 10 billion doll year industry and you feel like your $2 million per year agency has saturated Facebook I like how many I was like do you know of any of chiropractor agencies that exist he's like yeah there's loads it's like you know there's hundreds of them I was like okay so explain to me why every sale that is keeping all of them in business is somehow not sales that you should be making he was like got it I was like
right you're spending 40 Grand a month when in aggregate all the agencies that are selling to chiropractors are probably spending 4 million a month and so all of the spend that those businesses are able to make in your Market is your opportunity is if you can outcompete them you can provide better service you can have longer LTV means you can spend more to acquire the customer than they can and then you can eventually price them out of the marketplace because fundamentally paid ads is actually an auction for attention and so people bid against each other
for ad space and so if you can out bid your competition you can have ethical Monopoly by literally bidding more than everyone else while still making money and that's the crazy thing and that's what fundamentally what you want to build in terms of the mous trrap of your businesses how can I make more money from every customer than anyone else does so that I can spend more than anyone else can to acquire them and so I had a I had a portfolio company uh CEO who's a good marketer you know come up to me and
he was like hey man I think we really need to scale our ads and I was like I agree um and I was like well how many how many pieces of creative are you putting out you know per week and he's like oh um well I just record once a month I was like okay fine then how many ads are you making per session he was like uh we do about 15 so we do about 15 new ads per month and I just kind of looked at him I was like dude when I was trying
to go from your size to five times your size I was making 35 a week and like nowadays we make way more than that in terms of content and in terms of the ads that we do like because I make ads for school and then I inform the ads across our portfolio and so the big saying that I have that's like plastered on the wall that actually applies to sales and marketing is volume volume negates luck like if you don't want to rely on luck and rely on one of those 10 ads or five ads
that you make to be amazing you just make more ads and I I can't tell you the amount of times that it just reset the bar and that's what I'm hoping to do with this video is like the amount of volume that the people who are ahead of you are doing is is not 2x or 3x more it's often times 100x more right even the the 35 time uh 4 I think 140 pieces the guy was making 15 it was 9x the volume of what he was doing right and some of you guys are making
five ads a month or one ad a month and thinking that that's somehow going to be sufficient to get to your goals and nowadays and I'll explain later in this help my whole ad creation process but just the big headline is that in the very beginning you just need to do a lot more than you think you do the second is once you've done more then at what point do you start shifting to better and the way that you can figure that out is when the return on effort for better exceeds one incremental unit of
more meaning if I've got one sales guy if I add a second sales guy then I think I have a high degree of certainty that I can probably double my sales by doing that but when you have 10 sales guys adding one more sales guys is the same level of effort as adding going from 1 to two going from 10 to 11 but it's only a 10% increase and so if I can increase the overall throughput of my entire team by 20% or 25% by tweaking some sharp rate stuff or doing a headline split test
or or changing ctas on my ads then those are things that would make me more money money per unit of effort and so in the beginning you usually just need to blow as much volume through there as possible that's the create flow monetize flow then net friction the the optimization steps really only matter when you have flow going through and so you do more first and then once you're big enough better becomes a better return on effort but once you then go through the better steps then you usually have to go back to okay how
do we do 10 times more than we are now how do we go from 10 sales guys to 100 sales guys and that's the thinking that you have to go through in order to start scaling in terms of orders of magnitude and when you have so much volume you're able to iterate so much faster like even us recently we started making uh more content on YouTube and we already noticed as a team we were like oh this is awesome we're learning so much faster again with like we're literally putting out four five videos a week
instead of one video a week and so we're learning about headlines and thumbnails and there's less pressure per video because we're like cool learn that let's move on to the next one and so it allows you to just iterate so much faster without getting your ego and your emotions you know tied into it here's how I do it is I ask the question what would stop me from 10 Xing the business right now and if the answer is nothing then we 10x the business now most times there is something that would break like what would
break first and so as soon as we identify what is the first thing that would break if we 2x 5x 10x we then isolate that thing put all of our Focus towards fixing it and then we do the increase in volume and that is how we continue to DEC constrain until we go to the next bottleneck and then DEC constrain that and then grow into the next bottleneck because we have a fundamental belief that all businesses will continue to grow until their point of constraint and then they will grow no further so you identify the
constraint relieve the constraint and allow it to grow again growth occurs as an after effect of the inputs you put into the system now once you've done as much as you can more and you've done it as well as you can better when you can't do any more any better you start and trying something new and the thing that the reason that I have new last is because the cost of change of doing something new is guaranteed but the return on something new is not and so I like to say that is a big warning
for the fact that the vast majority of entrepreneurs want to spend 80% of their time on doing new stuff when really they should spend 90% of their time doing more and better of what is already working for them the only time you do new stuff is when nothing is working so when you're starting as an entrepreneur everything's new and you keep trying and keep trying until something works once it works you have to unlearn the whole experimentation idea and then you have to go great I need to do as much as I possibly can and
do it as well as I possibly can and so it's a different mindset that you have to get into but that's how you start scaling now what point do you start doing something new well if you've already said okay I can't I can't do more for a very clear reason or there's a big cost like sometimes there's a huge incremental cost past a certain barrier you're like okay I think we really are you know let's say you're a local a local gym all right if you're a local gym and you're spending call it $10,000 a
month on ads you're reaching every single person in your radius multiple times a week and so that's on one platform and so you're like okay in order for me to scale this it's not really about doing more or even doing that better it's like I've saturated the crap out of the eyeballs here well that's when doing something new will yield a higher return you get a better return on effort and so that's where're like okay maybe I'm going to start doing an outbound or I'll start doing the paid ads but just on another Channel I'll
start running YouTube ads I'll start running Google search ads I'll start running um I'll start running display ads I'll start I'll start doing Direct Mail pieces I'll start radio at like there's a number of things you could do in terms of other channels but they would be new and so this is the thought process that I have when I approach that which is if you could double the sales of your company and it would take a year would you do it but you had to wait a year before they doubled most people would say yes
if I said you had to invest call it half a Year's profits in order to getting your business to double would you do it yes that'd probably be a really good return on return on investment if you put half years profits and you double the business you're getting a 200% return that's awesome right and so the thing is is that people start something new and they spend one month of AD spend and they say H it didn't work I lost money why like I'm going to stop but the reality is that it's going to take
you 3 months 6 months sometimes 12 months to get the that return to actually pay off and what I Mark is progress not the dollar so it's like okay first are we getting clicks okay we're getting clicks okay are we getting optins okay we're getting optins are the optins we're getting the right type of people that we're looking for okay yes or if they're not then we start tweaking the messaging we start tweaking the funnel until we get the right people okay now we have the right people who are opting in great now can we
can we get them on the phone can we get them in person can we get them to show up to some sort of conversion event some sales event that we can then try and sell them something right and so you keep walking walking the dollar over the bridge until eventually it comes to the other side but that takes money and that takes time and that takes learning but it's a return on investment because if you do double your lead flow in a year one it doubles the business two it more than doubles the value of
the business because now you have two different ways to get customers and so it makes the business more stable because if one of them goes down then you still have the other one and so you have a more stable business that's also bigger Market advice number three how to do better and so this is double clicking into the better concept because this is especially for the bigger business owners so if you're at a few million dollars a year to tens of millions dollars a year like this is really going to start paying massive dividend so
number one is optimize front to back when it comes to marketing so that's the 8020 so David oovi said famously after you've ridden your headline you spent 80 cents of your advertising dollar so he knew that 80% of people aren't going to do anything past read the headline and so he'd put 80% of his effort towards those first few words and the Really experienced marketers who are watching this are like nodding their heads right now the first 5 Seconds the headline the packaging in my history of the 13 years that I've been doing this has
only increased I haven't even gotten to a sweet spot they just continue to become more and more important in my mind because it's the frame through which everyone contextualizes what they're about to consume so one it increases the likely they consume it two it introduces the frame that they consume the advertisement or the promotion through and like we now have such great data even across on the content side that like if we have two different thumbnails you can literally see the average view duration go up by two or three minutes sometimes simply by changing the
thumb that people click before they watch the video it's wild and so how people the frame that people consume the content in has a massive impact on how effective it is now I'll tell you a quick story to show you just how how important this is so a friend of mine um Dean had this massive advertising campaign and uh he had written a new book and he went on a Larry King live and so he wanted to use the Larry King interview to uh advertise the book and so he shot the whole interview and he
basically wanted uh Larry King to introduce him in a cool way to make him you know sound cool of course you know and like he would laugh if I was if I'm telling the story now um and so he knew that the ad was killer and so he ran it 250 Grand and nothing came back and he was like what's going on like I know this I know this ad's a killer like what's happening so he went back through his old history of ads and he looked at the top performing ads he'd ever done and
as soon as he started watching he realized that he missed the hook that the hook was wrong and so he flew Larry King back out they he paid him again they set up a whole new set again just to re-record the first 30 seconds and so they re-recorded the first first 30 seconds with the hourlong interview and then reran the infomercial and did 100 million in sales and so when I heard that story I was like this is why that the first 5 Seconds the headline The Hook is so important and that's what I spend
now a disproportion of my time on and people are listening to this and you guys are nodding along but you're not you're still not getting it because it's not real for you and it took me forever to figure this out when we make ads and I'll get in my ad creation process later um you have like I I I do 10 times the effort on the first 5 Seconds 10 times actually 10 times so if I have an hour I would I would spend 55 minutes on the first 5 seconds and then five minutes on
everything that's after that like that's the proportion of how much time I'm spending on just getting that first part right I'll give you a Content example of this so I was invited to this uh content creator thing um with all the you know top guys probably 10 guys there uh the lowest guy in the room was me and the next l guy was at like 10 million plus subscribers only on YouTube so they just had me there cuz for entertainment who knows um and and I remember one of the guys had about 15 million subscribers
and he was pissed that this other content creator had basically copied his video and and the copied video had done better than his like three times more it got like 30 million views and he got like 10 million views and the main guy there who had several hundred million uh subscribers across all his channels was like let's pop it in let's let's roast it and so they press play on on the video and 5 Seconds in he stops the video he's like dude you didn't confirm the thumb he's like the headline and the first five
seconds weren't confirmed and he was like I don't need to see anymore and he just walked out of the room and so this guy had spent weeks you know making this thing obsessing about every detail of it he had a 20 Page Plus brief on how he was making this video and he missed the first 5 seconds and that was the guy who had the multiple hundred million uh subscribers was like that's it and he just walked out and got lunch and so when I saw that I was like wow like it just reinfor fored
how important this was and recently just at a micro level one of our portfolio companies this is an 8 fig plus business um we simply changed the headline on the landing page like we did nothing else we kep same ads just changed the headline we increased booking rate by 62% now here's what's crazy is the optin rate remained the same but simply because of the frame of the promise in the headline 62% more people chose to book calls for that business and so it just shows you that how you frame what people are then going
to consume has a massive impact on how much value and How likely they are to take the next step so here's how you do it in terms of optimizing 8020 front to back so number one is assume that they have no idea who you are what you do how it works they're in a rush and they have a third grade education all right so clear beats clever deletion beats explanation and so what you want to do is you want to try and make it as short as humanly possible and then once you have it as
short as possible put into a third grade reading calcul later look at the grade level and keep editing it down until it's third grade because the thing is is you're not going to attract Dumber people you're going to make accessible to everyone a smart person needs to use less brain power to to understand simple language and it makes it understandable to everyone else and as a reminder 30% of people can barely read and so this is like relying on them to have this skill it's like you want to meet them where they're at and there
are some very rich people who can barely read and so it has nothing to do with intelligence has everything to do with how they're educated which has which may have no no connection with their purchasing power okay and tactically what I'll do is I probably I'd make about 50 hooks every time I start recording ads so I have 50 hooks that I've written down that I think are awesome and then I have three to five meat pieces of an advertisement and then I do one to three ctas meaning call to actions at the end and
so that means I have way more on the front end in terms of effort compared to the one the 3 to five and the 1 to three that I do on the back and that's because I know that that's where all of the effort needs to go cuz that's where all the returns are and here's the here's the difference and this is why I say from you optimize advertising specifically from front to back because it's very rare that you're going to be able to double or triple or quadruple the amount of throughput you get uh
in a funnel by optimizing the back end if you have a you know a 30 you know call it a call a 50% show up rate okay if you get it to 75% that's massive but it's a 50% jump and that would be a massive increase in show rate if you did that but I can absolutely get ctrs from 1% to 4% by just optimizing the hell out of the front end and then that's a 4X increase that's four times the throughput that goes through the entire funnel and so I put my effort there because
you can achieve 100% 200% 300% increases on the front end oras it's much more difficult on the back end now for sure you want to optimize those things but if I'm going to allocate my effort I want to get the biggest bang for buck so when you're making your hooks I called a call out so I'm reading page 136 from my book a call out is whatever you do to get the attention of your audience call outs go from hypers specific to get one person's attention to not at all specific to get everyone's attention so
let me explain if someone drops a a tray of dishes in a party everyone looks if a child yells mom then the mom's look if someone says your name only you look but again they all get attention and so I try to make my call outs as specific as possible to get the right people but broad enough to get as many of them as I can so pay close attention to advertisers use call outs especially the ones targeting your audience and so what I'll do is I'll look at all the ads from other competitors who
are targeting that same audience as me and the ads that are running a very long time I know that that call is working well and so I will write down all the call outs that I see and then I will write out the words that I know my customers go by and I'll either start with a problem that I think that they're struggling from or a question that I think that I know that they'll say yes to or I'll simply State moms in Nevada homeowners in Clark County right very clearly calling out this is for
you and that's exactly what you want the person to say when they read the headline or hear the call out this is for me and the more specific you get often times you'll be surprised you think that going as broad as you can is going to increase the number of optins but when you get really specific about the type of customer you're really trying to attract you will often find that they're like oh I wouldn't have responded to the broad thing but this one's just for me and you get more people in terms of qualified
leads in the door by being more specific piece of advice number four LTV to CAC is the only thing that matters and if I had only one metric that I could find out about a business if I only had one that I could pick it would be the LTV to CAC ratio and let me tell you quick story that kind of drive this home so uh a friend of mine owns a bow manufacturing business and they do you know 23 million bucks a year so relatively large business established and he was like hey uh we're
trying to get into PID ads now they had all these distribution relationship but they want to open up this new channel and he says hey you're the you know you're the marketing guy right so can you you know what would you do here and so as I was explaining the the process that I that the strategy I want to outline for him he was like well what's the Benchmark I should be looking at in terms of leads and I was like dude The Benchmark is irrelevant it everything just comes back from what's gross profit so
it's like okay so what's the average gross profit on a bow I'm making this up say it's $500 okay so if we get leads for call it 20 bucks and we know that we can get one in five leads to buy a bow then it means it cost us our CAC is $100 and our gross profit from selling each bow is $500 so it cost us $100 to make $500 a gross profit 5 to one awesome and so fundamentally is $20 a good lead cost well yeah he's getting 5 to1 if it was at $10
uh then he you'd be getting 10 to one and that's assuming the same ratios and so it just depends on what percentage of customers you convert and at what price point you're converting them at CA to LTV or CAC to LT GP so I use ltp to be more specific lifetime value is just the amount of gross profit you make from a customer over the lifetime of them being a customer of your business CAC is the cost to require a customer which is the all-in cost including sales marketing software everything to get someone to give
you money and so the cact TV ratio is simply how much money it costs you to make more money it's the foundational economic unit of any business and so making sure that you know how much money it costs you to make money that fundamentally feels like a very important metric in order to scale the business and over time as long as you don't have uh some big Capital expenses in terms of scaling your business that fundamental return that you get will reflect the compounding growth of the business provided you don't have other constraints to growth
so for example if I have meals that I sell for $10 and it cost me $9 to package and ship them and deliver for them then I have $1 of gross profit per meal and so if someone buys 10 meals for me I'm not making $100 I'm making $10 in gross profit and if the average person buys call it five weeks of meals then I would make $50 in lifetime gross profit and so the only way that I would want to be able to acquire customers is that the cost to acquire customer in this example
I'd want to have probably at $15 or less because you can't do it at even because then there's no money left over to do everything else in the business and so the rule of thumb is that you want have at least 3 to one on LTV to CAC but again LTV is not lifetime Revenue it's lifetime gross profit right and that's what people I think a lot of times mess up is they don't even know what their gross profit is and then they spend blindly so I'll tell you a fun one so if you've seen
Starbucks advertise now a lot of them they just use their storefronts as they're advertising at this point but they make about $14,000 in LTV per customer and so they can spend absurd amounts of money to get customers in the door like even if it cost them $500 they're still making 28 to1 on the money they put in and that is why that company's been able to scale to the Moon in terms of the number of locations and so I will say that the all the money that I've made in my life that has been the
crazy money has come from crazy LTV to CAC ratios and so the smallest ratios that I've made crazy money on is 30 to1 all the way up to 100 to1 to 200 to1 returns in some of the businesses I have and so those those windows don't stay forever and when you do have one of those you just want to dump as much money into that machine as you possibly can because a lot of wealth is made in very short punctuated periods and then sustained by long periods of Maintenance where you're getting 5 to1 8 to1
10: one those are fine numbers but most of the time when you're at 10 to1 as soon as you start scaling it it might drop to 5 to1 and so I actually end up seeing the bigger the ratio is at the beginning the more indication it is that I can scale profitably because if I'm let's say spending you know $1,000 a day and I can get 100 to1 then I know that I'm probably going to be able to get to $100,000 a day and get five to one right and so that's the idea is like
how can I how can I scale this up and I care about absolute return not relative return but the CAC to LTV ratio gives me an indication how much room I have to blow this thing out of the water the easiest way to calculate what your lifetime gross profit is is look at all the customers that you sold over the last year look at gross profit and if you don't know what gross profit is it's just the cost of good so basically the price you charge minus the cost of goods sold which is whether it's
if it's Services then it's the labor that used to provide the service if it's a widget then it's the cost of the widget and the shipping associated with it so the cost of good sold minus the revenue and that left over is the gross profit and so you say okay I had 100 customers this year I made this total amount of gross profit this year you divide that amount of gross profit by the total of number of customers that'll give you a broad brush stroke of what you make per customer now that'll always underestimate it
especially if you have a recurring Revenue business because they're going to hopefully have some people who buy again and again over time but I would always rather be on the safer side and underestimate my lifetime gross profit or time value rather than overestimate and potentially lose money if I want to then take that number and say okay well what am I willing to spend per customer then at most you want to have a third of that number but for me specifically I want to make sure that whatever I collect in the first 30 days I
want to make sure that I collect that back from customers so if I'm s let's say I sell something for 10 bucks a month people stay for 10 months and there's 100% gross margins to make this simple so I make a 100 bucks in gross profit I want to see if I can find a way to make $10 back or get my CAC back in that first 30 days and so sometimes it means having a one-time upcharge up front so they can offset the cost of acquisition so then the remainder of the customer relationship can
be profitable and if these Concepts about scaling like LTV toac are interesting to you we just opened up a new workshops division at acquisition. comom for companies that were not invested in if you like us and my team to help you personalize kind of applying this stuff to your business you can go to acquisition. comom click the scale button and you can see if your business qualifies otherwise back to the video piece of advice number five my ad creation process so I've been running ads for 13 years and I'm saying when I say running ads
I mean like I've been making ads or directly influencing ads that have been run across my portfolio or companies that I directly owned or founded for 13 straight years and so I have this process pretty nailed and I haven't really ever gotten too far away from it partially because I like it a lot um and I've gotten just pretty good at it and so this is how I do it so number one is that at all times I'm collecting data what I mean by that is like if see ads on Instagram I see ads on
YouTube like I have no Premium Accounts on any platform because I want to hear the ads I want to hear the hooks I want to hear what they're doing to draw attention and I like using that stuff because I'm also a business owner so the people who advertise to me are the people that are going to try and hook my attention and so I can still use that stuff to get to my avatar and so if you are your avatar the ads count double for you and so I I I screenshot I record the stuff
that I find interesting and I add it into one folder then when I get to my ad creation process which is I do once a week I then sit down down first thing in the morning and I do these the same day I record so that's just a piece of advice that that has worked well for me like cramming for the test I cram for my ad sessions because then everything's top of Mind as I go into the day and so I pull up all my swipe files of all the things that I want like
my inspiration from the second thing that I pull up is all my historical best performing ads so I look back one years two years three years sometimes at all my best ads and I drink those back in and I watch the first 10 seconds watch the first 30 seconds you see okay how was I capturing what was the angle what was the hook here and then I start the actual hook creation process now 40 of my 50 hooks that I'm going to write out are going to be stuff that is tried and true I'm not
going to try and reinvent the wheel we've already spent zillions and zillions of dollars I know that these hooks these entrances work well now 20% the last 10 is where I get to use all my inspiration and other ideas to try and experiment on but most people flip this they try and do a little bit of the stuff that worked and then they have lots of new ideas I'm telling you I've done this a long time it's way more efficient to just do more of what worked and then leave a little bit of experimentation so
that if some of those things stop working over time you have this fresh batch that you've been trying out that then can become the control that you try and beat so siding back to the 8020 concept of you put 80% of your effort into the hooks and 80% of your effort goes into stuff that's tried and true and 20% for the things that are new all right so I make about 50 hooks so 80% of that is 40 Hooks and 20% of that is 10 hooks so 40 out of my 50 hooks I do for
things that I already know have worked in the past 10 hooks I save for my new creative ideas is and so that's for the inspiration stuff that I see or anything that I come to that cram session that I want to get out from there I then have my three to five angles that I'm going to write that's going to be educational or some sort of value uh that I'm going to deliver or some sort of belief that I want to break or some sort of list or steps or stories that I want to tell
as the core me to the ad some sort of proof I want to demonstrate and then finally just a quick CTA in terms of call to action but the majority of my effort is all on the 50 or so hooks that I'm going to write 40 of which being recycled versions of things I already know work and 10 being new and this sounds boring and it is boring but it's also what works and believe me I have tried to change this process a lot of times like this works let's say that you have your a
mega winner and these happen and this is where you get this is the this is power law like that top 5% makes 95% of your income like you we run all these ads to figure out which is the one ad that can sing and just crank and print money and so what I do is I I use something that I call the collidoscope process I've never heard anyone El sell it so I'm owning that title all right and so the cloudex process this is how you do it is that let's say you've got a winning
ad so I had an ad at gym launch that actually uh the now president kale made when he was a customer um of him in front of his gym the gym being full and his wife's next to him and he's like you know 6 months ago I was working a full-time job in order to pay rent at this gym and my wife was pregnant and we had a and I had a two-month-old and I had no idea how I was going to make ends meet and then here we are 6 months later the gym is
full it's completely outsourced and I've already got an offer for $2 $150,000 on the gym if you've ever been worried like take the jump just follow the process it works right it very simple ad but it murdered it absolutely crushed and so rather than say wow okay well that was nice let's try and do that let's try and get somebody else to see that we took that we squeeze the living life out of it and so here's 10 things that I did to get more out of that ad so one is I changed the color
of the backgrounds if I can do that right or backdrops is there a way that we can record that ad with a different background or a different background color like if you have a green screen second is are there different props that we can introduce that at all right so can we show stuff can we can we show visuals or we can show physical props three can we just reenact it just say hey kale can you just do it again just literally do the same ad different T-shirt If you want same exact thing just do
it again and if you're the one making the ads you just do your best performing ad again you can four reorder it so we took the ad that was already the original winner and we just re rechanged the order up of the ad and it still converted the next thing we added visual filters so think black and white think sepia think High contrast low contrast these are all different things that made the ad look different than it was but it still delivered the same message the next one is visual effects right V effects like dudads
and and whizbangs and things like that that you can add again make it look different the next is changing fonts and captions so it's like if we had a font style that was one way we just change the way the font style looks another is that you can change the pacing or the speed of the video itself you can actually do it at 1.2 or 1.5 and have it go through or slow it down at portions you can add music to it um there's another one right you can also also use the same hook which
is like we knew the hook from that first ad obviously crushed and then just say hey re-record it again we'll use the same hook and use a different back right and so all of those are different ways that will take a winner and then 10x or 100x how much that winner gets us and I'm telling you if you if you take one thing from this video from advertising squeeze the living how out of the winners so Market advice number six is that there is only four ways that you can let other people know about your
stuff and so think about this like a four box you've got one to one conversations and one to many which is broadcasts right those are the two styles of communic either communicate to a group of people or one person individually and you're either talking to people who know who you are or you're talking to strangers and so if you cross that you've got four ways you've got one to one to people who know you one to one to strangers one to many to people who know you one to many to strangers and if you look
at that in terms of what that is in advertising it means this is warm Outreach cold Outreach making content which is one to many to people you know and then running ads which is one to many to strangers and so there's the only four things that you can do to advertise to let people know about your stuff and basically if not spending your day doing one of those core four things you are not advertising you are not marketing your business and so sometimes it gets you have to get it to that simple when you look
at how many hours per day am I spending letting people know about my stuff most people spend zero zero zero per day letting people know about their stuff and then for some reason they're curious as to why their business isn't growing well no one knows you exist I was at a conference I was at jimc con recently and I asked the audience who here wants to grow their gym faster everybody raised their hand and I said okay and these are all small businesses so these are most of the guys here are doing I would say
$500,000 a year to $3 million a year so these aren't massive businesses these are normal you know one location three location five location uh owner operators of service-based you know training businesses and I said okay who here is spending the first four hours of their day promoting their business either doing cold Outreach making content or running ads who is spending the first four hours every day on that literally no one in the audience had their hand raised and I was like this is why you're small like this is it like it was mind-blowing to me
that that was what it was and so if you're if you're making less than call it a million maybe $3 million a year like all of your effort the the first four hours of your day which if you have to wake up early awesome if you have to stay up late to do it awesome I don't care but you need four hours that you're dedicating because you got to you got to do the job of promoting and then you got to run your business but if you're just running your business you're never going to get
ahead so if you want it to grow you got to force it to grow you have to force people to find out about your stuff and you do that through advertising I recommend this so violently because small businesses need to do more and in the beginning they just don't get enough leads so fundamentally like most businesses if you just had more leads you would make more money now realistically and I'll get to some of the some of the specifics on this is that in order to get more leads you need to be able to do
so profitably which then comes back down to the business and building the business back to front we advertise front to back we build the business back to front and I'll get to lots of details on that in a second but big picture you just need to get especially when you're starting out you're at 500 a million you know Less Than 3 million and those are big numbers so I don't I don't mean that to demean it but I want you to build massive Enterprises that make huge impact you have to get more flow through the
system so that you can learn how to improve the product so that you can build a better back end and then you basically you promote and you stay at that level of promotion until you tweak this and nail it then you go back and scale it and so one of our sayings internally is nail it then scale it so nail the back end you do enough promotion to get flow in right then you monetize then you create friction that's when you tweak the hell out of it and then you can go back and say hey
turns out we can spend five times more to get customers then you scale so I'll give you my quick back of napkins scaling framework for this so when you're at 0 to six figures you sell one product to one avatar on one channel that's it no shiny object no multiple channels no trying to scale yourself out of it you're just selling one product to one Avatar on one channel when you go from six to seven figures you scale you sell one product to one avatar on one channel consistently because in the beginning you're super volatile
right you're not you're making a sale this week not next week then this week again or then next month whatever it's super volatile when you get to Seven Figures it's more consistent you just you you get it to be reliable so when you go from Seven figures to eight figures you go one Avatar one channel two products that means you have an upsell you sell something else and then you do that consistently right that's what gets you to eight figures that's what gets you to 10 million bucks a year and if you want to go
to you know multiple eight figures then you start going two channels one Avatar two products consistently and so over time this is how I've seen I've just seen this pattern now can you find somebody who disobeys this pattern sure ag1 has one product one Avatar a zillion channels right so yes there are ways to break this rule but when I look at by and large the vast majority of businesses they follow this structure and they mess up along the way until they follow the next step and you'll notice that scaling up to eight figures and
even sometimes a little beyond that you're still only focused on one Avatar and I'm going to talk about this in a lot of depth in one of the later advice points because it's super important and this may be one of the bigger unlocks you could have in the business Market advice number seven State the facts and tell the truth this is probably one of the most repeated phrases besides volume negates luck that I have internally to my business and so I remember when I was at that same little Meetup with uh the super creators and
I was I was talking to the guy who had the the most you know subscribers there and I was like yeah you know like we don't really like this whole clickbait title thing and he looked at me with disgust he was like you absolutely make clickbait titles he said you just back it up with truth he's like so it's crazy click baity he's like but it also happens to be true and I remember when he said that to me I was like that's that's real and it's funny because that was a concept that I have
in terms of uh paid ads but I hadn't thought about it in terms of content and so it's so interesting how some of these principles just apply across across domains but like sometimes you have to relearn the same lessons which I hate doing but I did it anyways and so the problem is that most businesses don't track results and it's because if you don't track you don't care now they don't track partially because if they it's kind of like ignorance like they know they don't deliver good results and so if they track it then they'll
have facts and truth that they will be proven that they're delivering bad results but the first step is tracking it because once you start tracking it you can improve it and measurement as intervention is actually a scientifically proven method to lose weight to improve sales to improve anything you want you can literally simply tracking it not trying to do anything else but simply tracking your weight simply tracking your close rate simply tracking your ad performance will improve it because you're just putting attention on it and so if you don't track you don't care now once
you do start tracking it you can start doing things to actually improve it Beyond just measurement as intervention and so when you do that loan and behold your stats get better and then you can State the facts and tell the truth and have that truth be wildly compelling and so Real Talk part of the reason that Jim launch to this day has still not been beaten or dethroned as the the the largest company in that space is because we still have better stats and better results than anyone else does the average gym who goes through
12 months of gym launch makes over a 100 plus thousand a year an added profit by using the systems we have that's just what it is and so like if someone if it makes sense for somebody to Triple their money then they make the they make the the purchase right it's it's I like to take a lot of emotion out of the sale like if this makes sense for you if this return makes sense for you then do it if it doesn't make sense then don't do it now the risk they take on is what
about the bottom 20% and so the nice thing is that we track that so the bottom 20% averaged $40,000 in additional Revenue so they basically broke even and so it's like that's the bottom and so like if if if that's you then it's like yeah you worked and you basically broke even that kind of sucks now I'm not talking about the top 20% because this gu had 500,000 plus per year but the thing is is that if you track the stats then you can promote the stats and you can do so truthfully they go from
unsubstantiated claims to substantiated claims like one of the things that I'm most proud of in school uh school.com which is the platform for people who are trying to start their businesses this video is mostly for people who already own a business but if you're trying to start a business um 3.44% of people who finish their first month make their first dollar online like I'm super proud of that and we just rolled out this massive new thing um to basically make it even easier even faster to do it right now we have 35% more people actually
succeeding there so I think we're going to be at a little bit over 40% now um so I'm super stoked about that but like unless you measure like if you don't track you don't care here's the Tactical steps collect data first so you implement a data step where you collect data from people day one day 30 day 60 day 90 at the end of the program or whatever your implementation is you track data throughout number two is you keep improving things until the data becomes compelling and number three is how do you actually present that
data so there's four variables that matters when you're presenting the data number one is the percentage of people whether that's the median the average or the percentage overall of people that's number one who two achieve X outcome three in ytime or after X attempts and four under Z conditions and so it's like we get x% of gyms so it was whatever is the average average gym so right average gym owner makes an extra $100,000 per year in profit so that's the outcome after their first 12 months in gym Lords or Gym Legacy which is the
the program that we have at gy launch right and so those are the conditions right and so it covers all four of those so when you're making these you want to you want hit all four of those things when you're explaining the data publicly and I will say that the fewer conditions you have the more compelling it is because for example if I said uh the average gym who spends $10,000 a month and has 10 employees and uh has two two methods of acquisition and a large group training and a small group training achieves that
like by the time I even get that you're like whatever right and so you want to you want to strip away and really like I would rather have a fewer condition statement that has lower results me personally than a higher result one with more conditions marketing advice number eight say what only you can say show what only you can show and this is one of the other isms that I have internal to my business and so if you're the only triple black belt in Ohio for Mu Thai then say that you're the only triple black
belt in Ohio for Mu Thai right this is talking about the things that you have done rather than telling people what to do it's how I versus how to and so my my concept for making amazing ads and making amazing content is two steps do epic stuff talk about what you did and so you can out outcome people or you can outwork them so it starts with the outworking and then the outworking creates the out outcoming and the out outcoming is a much shorter headline but the outworking them still works right I can start by
saying hey I uh I I wrote These two books writing two books would be an outworking thing like anyone could do it there's no outcome but hey I wrote These two books but then if the books are good then I get the outcome which is that we sold over a million copies they're still number one and number two in marketing to this day multiple years later and so the idea is that first you do the work and then you get the outcome but most people want to say epic stuff having done none of it and
so you can get past the Judgment of other people because you're not saying hey you have to do anything I'm saying this is what I did and so the idea is that everybody wants a return on their time all right and I remember hearing this first concept from arak who's a a YouTuber and he said dude I made this thing where I went on 100 dates in uh basically I did an entire season of The Bachelor but I did it in 16 minutes he's like what a steal and he said that to me I was
like man such an interesting concept like he just took something that was really long and made it really short and he crammed it in there so value per second was super high and I'll just give you this one is that it's not about seconds of value it's value per second that's what matters like everybody has access to infinite information so you just saying I'm going to give you more stuff is not helpful what you want to do is curate it and pack it and distill it and crystallize all the value in as tight a package
as unly possible so that their value per second skyrockets and you can do that by saying hey I spent 10 hours editing you know uh you know I spent I spent 20 hours making a summary of This Book and you can read the whole thing in 10 minutes that's why summaries still always work right because people want to get a deal on their time if they get the same result for a fraction of the time it's always a good deal by the way if you ever want to sell to rich people just promise the same
result in half the time for twice the price and even if you think about video overall it's like well I spent 13 years doing all this stuff and I'm trying to compress those lessons into whatever amount of time this video is certainly less than 13 years and so this is a great deal for the right person for the right business owner who's actually trying to scale so how do you actually do this so if I had an marketing agency showing what only I can show I want to demonstrate and so I do say hey I'm
going to get you leads what I want to do is get on a sales call and I'm going to play with a live lead that I got for one of my companies one of my clients sounds like and I'd be like hey listen to this call it's a minute long do you think you could how could you take 50 of these a month wow so much more compelling than say I'll just get you 50 leads they're actually getting a a fractionalized version they're getting a taste of what it looks like to be in the future
right they're experiencing the result vicariously through the other person and fundamentally that's what a good testimonial does is they they put themselves in the shoes of the person who got the result and then they account they they put a discount on that and say okay how How likely is that for me and that's what I'm willing to pay now if it were guaranteed then all money-making opportunities would be worth it because hey if you spend $1,000 to make $100,000 a year by buying this course then everyone would buy it if they knew for sure it
would happen that' be an amazing deal the problem is that people apply a discount to it because of how unlikely it is for them and so we want to increase that likelihood by showing them rather than telling them right and so agency example that was that one the software example that I have is this is why demos are so effective right you want to see this hey you have a a video clipping software great do you have a video on you cool send it to me we're on the phone great I'm going to pull this
video up this is what we do to put the captions on and and shorten and find those moments click click click click click okay so normally how long does that take you well it takes me this long well watch me do it click click click wow would that make your life easier yes cool boom they go in right you're demonstrating in advance and I'll give you a final one when I was at my gym in Huntington Beach my first location I ever had I remember this I had a door to door sales guy who came
up all right and this guy was a clear S pro he was really good um and he sold me cleaning productss he really did like it's it's probably the only door to- door thing I've ever bought and it was just cuz it was such good it was such a good sale and he had it down it's so tight I think he was in and out in like 13 minutes like it was stupid and so he just said hey I've got this stuff it'll take care of any stain that you've got on this floor and I
had Turf and so I had gum that had got in the turf it was really black and like gone in there and so he just took that thing and he poured it on the gum and he just got on his hands and knees he scrubbed it and it actually came out and the gum was actually impossible to get out and I was like wow like he I didn't have to think will this work for me he just did it in front of me on a stain I actually had he's like cool looks like you got
20 other stains if this is worth it it's 100 bucks for this stuff so I paid a 100 bucks for some cleaning supplies but it was totally worth it right and I ended up using that stuff for actually Years cuz I had to you sold my huge gallons of it right um and so again it's whenever you can and don't say oh this doesn't work for my business try and imagine how can I make this work for my business show them what what they will experience and do it in a way that no one else
can do it and so for example me I the reason I say like do epic stuff and then talk about it is that you continue to live life every day and so things continue to happen and so you can use the things that happen that you're doing as the content that you're making and the content will always be shorter in the amount of time it took for the thing to happen and so we have a portfolio of companies and so I share case studies on this channel of like hey here's how we added 40 sales
guys here's how we you know increased you know we cut cut refunds by 2/3 here's how we XYZ it's because we're doing stuff and then we just talk about what we did and so the key Point Step One is do stuff and then step two talk about it everyone else is stuck in the step where they don't want to they want to figure out what to talk about but it's because they haven't done anything if you do stuff you have more than enough to talk about marketing truth number nine how and when to expand your
Market there's five ways now big picture the vast majority of people need to do way more with their current market so just to give you context on this I had a guy who came out to a workshop and he said hey I uh I'm a coach who coach coaches right I was like all right fine and he said I'm spending you know I'm making two million bucks a year it's a really saturated space so I think should I go broader to General business and I was like dude how many coaches coaching coaches exist he was
like zillion and I was like dude I think you just need to get better because if you were the best coach of coaching coaches then you would be able to take all of the market share that all of those guys have and it would come to you right Winner Takes all if you're the best and so just to give you an example and this is the one I gave him I said gym launch everyone knows there a gym company but you don't know how Niche it really is so one we didn't work with personal trainers
number two we didn't work we do now but we didn't for the first four or five years work with big box facilities so large you know facilities where you pay you know $10 to 70 bucks a month to have access to those the pool the rocketball thing the cardio area the weights basketball whatever we we didn't work with them at all I call this facility leasing we didn't use those we didn't work with yoga we didn't work with spin we didn't work with Pilates we literally only worked with micro gyms that did before and afters
of weight loss and Transformations they had to do Fitness and weights or some combination of those that was it that's a niche of a niche of a niche and that business still cranks out 30 plus million dollars a year all right and so the idea here is that you want like the market if you are the best is still massive you just need to solve the thing that matters most which is being the best now if you have solved being the best there's five ways that you can expand and so I'll tell you what we
did because Jim launch has expanded I told you now we do do big box but there's five ways you can expand one I think about it like a pyramid so let's say you're in the middle you can go up Market meaning you go to higher value customers so for us that would be health clubs the big boxes like our I was talking about multilocation owners or franchise ORS those would be going up Market more valuable but fewer of them like the pyramid on the other hand you can go down Market I could go after personal
trainers I didn't go after them we don't go after them but if I wanted to that would be a move that I could make I would have to sell a lot more volume at a lower price and build the infrastructure to support that kind of volume I could go adjacent which would be okay I've got gyms I'll do chiropractors I'll do or I've got gyms and I can do weight loss uh clinics right or Med spas or something like that so something that's adjacent that serves a similar Avatar but a slightly different business model that
would be adjacent and the fifth way you can do it is that you actually go narrower so that was the fourth way so the fourth way is you can go narrower which is say Okay instead of all gyms or just micro gyms that service uh before and afters I say I only do you know uh ones that do weights or I only do ones that only do cardio right or I only do boot camps or I only do semi-private like I Niche down even more the alternative is that you go broader and I say anyone
that's in health and wellness and so those are the five ways that you can spend you can go up Market you can go down Market you can go Jason Mark you can go narrow or you can go broad now despite me saying these five ways of expanding and everyone gets their juices you know their jollies off by thinking about how they're going to expand most time I'm going to start with that original story which is that you can make 10 20 $50 million a year just serving one very specific Avatar and the vast majority of
businesses this is including portfolio companies that we purchased I would say I would say more than half the portfolio companies we've purchased we did this exercise and we made the Avatar narrower we got more specific not broader I learned this process from Vista private equity so if you don't know who they are they're hundred billion plus private Equity one of the most successful private Equity of all time they focus on software companies and I talked to their head of pricing and packaging and he gave me this one line and it changed my life and he
said you want to know how we get the crazy returns that we do and I was like yeah obviously I want to know what you guys do now obviously they do lots of things but the one thing that he pulled out he said we just know the company that we're buying customers better than they do and so we get we go into the data room so whenever you do an acquisition there's something called a data room you put all the data for your business in there so people can analyze it and make a decision about
whether they want to invest and so we go into the data room and we analyze all their customers and we say okay we order them by who pays the most and who's worth the most and we say this is the 20% that does 80% of the revenue and what they do is they look at what channels those people come in on what offers what marketing those customers do and they basically stop doing the rest of the 80% and then they expand that 20% to be 100% of the business and so by doing that they can
have the same siiz business but 5x the revenue and arguably even more on the profit and so just power law the the prto principle 802 and they just apply it to the customers and so right now this is how you do it for you is you look at all the customers you have up to this point you look at the top 20% and you say okay what do these people all have in common and so I like to think about this in terms of psychographics what do they think Geographics what do they live demographics what
do they look like and then I would say like actions like what have they done or what did they do to get this result and so when I look at each of those frames I try and eliminate as many variables as I can so I get to two or three variables that that Clump all the best customers together and then I make that in my marketing and I tell my sales team we only sell these people going forward because I know that these people are worth five times more 10 times more and then guess what's
able to happen we run ads for those people and then our LTV skyrockets so we can spend more to Aire customers and this is what allows you to scale by going narrower and so the problem is that most business owners can't say no to fast money and so they never get the big money and so I had two companies that came out for a workshop uh that we had and um one they're both agencies it was a very simple example so one was a generalist agency they just did anybody who knocked on the door they
would they would take their money the other one just did Professional Services so that's Legal Financial Insurance like those types of services and the the generalist guys I said okay you have this big list of customers I'm sure that there's a Subs segment of those customers that you do exceptionally well with they're like oh my God we crush it for it people and I was like okay cool so what percent of your customers are those they're like 8% I was like but are they more profitable about percentage he's like oh by a mile they're by
far the most profitable I was like okay so if your entire business and they were really string in terms of infrastructure they're like super stressed out you could see it I was like if your whole business was just those do you think you would like that business and he was like oh my God that would be a breeze and I was like well then we can build that business and so that means that from here on out you only sell those people and over time the slight the percentage of the pie that's those customers is
going continue to increase until eventually you can cut the customers that are not your main thing and then in a year or two years you've completely transformed your business to something that's been productized you get really efficient you get even better at it because you only serve those customers you get better at acquiring them get better servicing them you get higher margins and you actually like your life and so the same happened with the second agency where I said what are the customers you have and they're like actually we're really good at specifically family law
attorneys so like divorce attorneys and they had all these other things I was like but divorce attorneys you're really good with they like yeah I was like then just sell divorce attorneys and because the thing is if you just sell divorce attorneys it's a multi-billion dollar pre- industry like there's no reason you can't do $100 million a year or $200 million a year just selling those people and the same with the it so the idea is like people start taking on more avatars because they think that's what's necessary to grow but and I've said this
before but but better creates bigger bigger creates bloat and so if the goal is to get bigger you want to focus not on getting bigger but on getting better and then getting bigger occurs growth occurs as a result growth is not a goal growth is an outcome of inputs and so I'm telling you like it took me a very long time to understand this so I'm I'm trying to get like every entrepreneur has this ego goal of like I want to hit this a month and I hit that a month and I hit that a
month but the thing is just that you don't want to make the income the goal if you do it gets really hard to get out of that game because sometimes you take the wrong steps you artificially inflate revenue and then you increase cost to sustain that Revenue but it was the wrong strategic move and but then you can't go backwards you stay in the cycle forever you don't want to do that you have to think okay how do I make the core thing that I do better because fundamentally If This Were twice as good as
it is now would I be bigger yes because your customers would demand it you get far more leverage by doing the same thing a 100 times than doing a 100 things one time and so the vast majority of businesses especially when they're starting out are doing a 100 things one time rather than the same thing 100 times and you get a hell a lot better when you do something on the 100th time and so that means that you drive up your operational efficiency you drive up your gross profit you get better at your acquisition because
your marketing messaging your sales scripting the results that you can promise all those things get better and now you're competing in a smaller pond so you can dominate everyone but when people think small pond they think that somehow that means that they're not going to make a lot of money like I said gym lunch makes a lot of money and it's in a very very very very very narrow Niche and so you just got to be more specific most times and break the limiting beliefs you have around the idea that like okay well I just
need to go from you know I've saturated chiropractors right I've I've saturated this with $2 million a year in revenue of course not right every single other business that exists that serves your customer the fact that they're allowed to be alive and breathe shows you how much opportunity you have if you were better than them number 10 provide value now everybody talks about providing valueable what does that even mean all right so in in this book I talk about something called the value equation it's probably the most cited chapter in this whole book but I
break down what are the elements of value and so there are four number one is the dream outcome which is what does somebody actually want so if I were to offer like uh Daniel who's behind the camera right now I said hey you can get in shape or I can make you a million dollars right making money for most men is more valuable than getting in better shape and so the relative opportunity or the relative outcome will dictate how much money you can charge that's why in general B2B offers are higher ticket now there are
also fewer people who buy making money than people who buy consumer products so you have about on10th so 9% of people are business owners uh so you have a much smaller Market that being said does this the size of the market really matter based on the thing I just said probably not but again number one is dream outcome that's what differentiates now let's say you have got two products that offer the same solution so let's say the the the the weight loss example or the getting shape example if I have a PDF for that and
I've got a lipos suction both of them promise the same thing which is that you're going to get in better shape you're going to lose weight okay well then why is Lio suching so much more expensive than a PDF that I could buy on the internet for 20 bucks they both promise the same outcome well there's three other variables so variable number one is the perceived likely of achievement or the risk associated with the purchase so risk would be the negative perceived likely of achievement is the positive and so we want to increase the perceived
likelihood as much as possible so if we had that Lio section and we've got one surgeon who's his first day out of medical school and we got another surgeon who is done 10,000 surgeries which of these guys can price higher well obviously you'd want to take the 10,000 one even though it's the same procedure and the same outcome the perceived likelihood of you actually getting what you want the risk associated is lower and so you're willing to pay more for that guy because he has more experience the third variable of this is time delay the
equal opposite of that is speed how quickly between when someone buys and when they get the promise that you now if you do lipos section it's like great you make the purchase then you go to sleep and you wake up and you're thin very very condensed which is why it has a lot of value right whereas if you have to do all this eating and this exercising and not drinking and changing your diet and all this waking up early and being sore all this like there's a lot of there's a lot of there's a lot
of delay there in terms of how much time and effort it's time specifically it's going to take to get the Alem you want So the faster it is the more valuable it is and then finally you have effort and sacrifice or equal opposite ease how easy can you make it and so if you're trying to think about this in in in simple terms it's how risk-free can I make it how easy can I make it how fast can I make it and is the thing that that I'm promising the outcome that I'm promising something they
actually want and so if you have all four of those you have something that people really want they have no risk of doing it it comes immediately and it's easy it's easy as pushing a button you've got an incredibly valuable thing and so when people say add value what you want to think about is what does my customer what does my avatar want to accomplish or what do they want to avoid so you've got towards good stuff and away from bad stuff and so you say okay I can help you avoid this bad stuff risk-free
faster and easier than otherwise and the dream outcome the good stuff same thing again is how can I help you get that good stuff faster easier and risk-free and so every time you make content or every time you make a PDF or every time you make a lead magnet whatever it is or you make content the whole goal should be to be useful the whole goal should be to provide value and you do that by helping them achieve their goal which hopefully with this video I'm helping you Market better your business by making it risk
you don't have to make the mistakes I did get to your goal faster and get there easier so the easiest way to think okay got it well how do I find the problems that people are suffering from so that I can make it faster easier and risk-free for them great question so one is any comments that you get in in response to content that creates more content this is the endless content wheel it's like you make content people have questions about the content you make content about the questions they have questions about those questions the
good thing is that problems never end and people never stop complaining and so as long as people stop complaining people have problems you're always going to have problems to solve which is one of the nice things about being an entrepreneur you like Humanity if if you told us hundreds of years ago that we'd have the internet in our hands and we'd have air conditioning and Wi-Fi and all this stuff we'd be like oh my God all of our problems are solved but we have more problems now than we did before because we're more aware of
the problems that that we didn't know existed before and so whenever you solve a problem you create another one it's the problem solution cycle that never ends and so one is you can look at that the other is you can look internal to your business which is what are the what are the things that people struggle with internal in terms of implementation for whatever the thing that you do is whether it's a product that you sell or a service that you sell there's some friction points along the way and you think okay what are the
friction points and how can I make it easier number 11 is a fairly well-known marketing saying give away the secrets sell the implementation the way that I think about this is make your free stuff better than their paid stuff and that's an easy ISM to say but the real real is like you actually have to think if I give away something for free I have to be willing to charge for it and if you were willing to charge $100 or $1,000 or $10,000 for the thing that you give away for free my God must that
be valuable yes and what that does is it increases the likelihood of conversion increases the likelihood the person consumes the thing and then buys the next product because what a lead magnet is or what content is it's a complete solution to a very narrow problem and that's fundamentally how I think about this a lot of people are very afraid of giving away value but you shouldn't be give away all the secrets give away all the things that you do and then if someone wants help with implementation they can call you up and this allows you
to provide value to the masses build your brand up and then they use results in advance as an approximation of the results they're going to get after they purchase all right and so even when you're Marketing in terms of making content I like to think of being okay with narrow Because deep is where the dollars are all right so let me tell you let me tell you a couple stories about this so there was a lady who I just recently met who was doing just $ million a year in profit profit from 5,800 followers on
Instagram she had no other platform she sourced 100% from Instagram and this blew my mind I mean like I say this stuff but having having that level like it was such an extreme example of tiny audience big money it it broke my beliefs even further than I already had them broken and when I looked at her page here's what's crazy it wasn't like she had crazy deep engagement either it was like the post you would get would get you know one five maybe 10 comments on a great post and she would get you know 10
likes 20 likes 30 likes if it was a crazy one but 100% of her content was about how registered dietitians can more accurately Bill Insurance to make more money it was a niche of a niche it was literally like registered dietitians who Bill insurance and how to Bill Insurance more effectively to make more per hour that was her offer and that's all she talks about her cheat sheets are on that and she talks about different Insurance uh companies and how to build each of them the codes that you go that you plug in like like
all this jargon I had no idea when I went to the page but for her Avatar I'll bet you that of the 5,800 people that follow her 5,700 of them were restor dietitians who were trying to find out what they needed to do to make more money by building insurance and so she was selling 5 to 10 uh little cheat sheets a day at like 99 bucks plus two to three High ticket people per week into her thing into her Association of reg dietitians that followed her process for billing and so I say this because
I've also learned this personally we used to make some wider content for about six months we did this we did this experiment we got the data back it turned out we got lots of views but we didn't get lots of business owners and so we switch back to hardcore business stuff which I love anyway so I'm very happy about the experiment and because of that all of our stats are up so we have more opt-ins more people buying books more people you know going to workshops whatever it is more people apply to the portfolio so
we can invest in their companies all of those stats were up despite the fact that the general views per video went down and again I'm here for the money not for the fame and so I encourage you if you can break your attachment to the ego metrics like the likes and the views and things like that and just focus on the bottom line just get really specific on the Avatar that you want to serve and make content only for them that's useful so I've got a buddy of mine who runs a multi9 figure Pere uh
marketing company and he makes content online he has a personal brand and he was like oh dude my personal brand makes no money he's like but and he goes Super in-depth tactical like stuff he's an SEO and so all of his stuff is like how how to make SEO content blog content things like that and his content gets like so few likes and engagement and he has like charts and graphs and all this data support all he does he's obviously really really good at this but the thing is is his lead quality that comes from
him he's like they're all Fortune 500 Fortune 100 CEOs Executives that are like hey you obviously know the stuff can we just hire you and that's exactly what he wants he wants he he makes it so complex he gives away everything and he says it he's like I give you could just follow all my stuff and do it most people are like man this is too much work and so they can I just hire you which is an exceptional way to get customers so here's how you do it in three easy steps one is you
just give away your best stuff give it all away if you have a low ticket thing that sells to lots of people and have a high tiet thing I would encourage you just give away the low ticket thing too you're probably not making that much money on it anyways and those customers are probably paying the butt so just give it to them and you can even show hey I used to charge for this I'm give it to you for free because I love you all right and by doing that you make an exceptional thing and
you put really heavy uh effort into followup and calls to action within the within the content itself all right so within the thing that you're giving away you have ctas and you follow up with your team to try and to send them in the next thing if they're qualified and I'll give you a pro tip on this when you want to make the CTA make it about personalization not about more instead of saying hey if you want more stuff like this go here say hey if you want me to help apply this stuff to your
business or apply this stuff to your body or this stuff to your life then let me know it's personalizing it because that is significantly more valuable than just more stuff and what's crazy is that a lot of people use the things they give away as an afterthought it's the last thing they think about but here's the crazy stat is that 99% of people who consume your free thing will never buy from you which means that your reputation is getting made by the 99% of people not the one 1% and so if you want to improve
your reputation in the marketplace make sure the stuff that you give away for free is awesome also make sure the stuff that you sell is awesome and if both those things sound like a four-letter word which is work welcome to business and so I talked earlier about going up Market or getting narrower on the Avatar that you want to serve a lot of people have down cells and I think over time I've gotten less and less into having down cells and more along the lines of like if we have a lower Avatar and we're downselling
10% of calls into this thing that's paid if 10% of people are buying something that's on10th the price cuz it's a downsell then it's going to change my Revenue by 1% I don't really care it's not even worth the headache I'd rather just give that away to hundreds of people for free because if the cost is free way more people will consume it and then get a higher percentage of people to buy my next thing and I allow my marketing messaging to attract the higher quality customers so this allows me to go up Market or
narrower and give away all the other stuff so I can create my more qualified customers the amount of businesses that I know that one that we've invested in or do that we've helped simply make way more money by just giving away the thing that was their big headache that was a low ticket thing just so that they could focus on serving the best customers most times you'll make money going up Market marketing advice number 12 all advertising works it's just a matter of efficiency I'm really I like I want to I want to drill this
down people so the amount of time I've said Facebook ads don't work for us Google ads don't work for us Tik Tok ads don't work for us Direct Mail doesn't work for us radio ads don't work for us content doesn't work for us Outreach doesn't work for us fundamentally if you have a qualified person on the other side and you make an offer to them that solves a key problem for them if you can get them on the phone you can make money period so if you can rephrase the problem is I don't know how
to make Facebook ads work for us I don't know how to make Tik Tok work for us I don't know how to make content work for us I don't know how to make Outreach work for us then that becomes a problem that you can solve now this is really important so I talked earlier about optimizing your advertising from front to back and that's true but when you optimize a business you optimize it from back to front and so the back the LTV how much you make per customer enables how much you can spend on the
front end and so you optimize the throughput on the front end obviously because that's where you can get the highest returns but the engine that you can spend on that depends on how much you make per customer and so you can either be really really really exceptional at lowering CAC or really really really good at increasing LTV and if you do both you have huge Arbitrage and that's where you make Stupid Money And so let's go through hypothetical let's say that you sold something that was a billion dollar thing okay if you had a billion
dollars in gross profit that you'd make from one sale you could reach a lot of people on Earth and just to give you context on this if I wanted to become a aess celebrity uh I've back calculated what I believe it cost to become an aess celebrity it was about $50 million and the way that I calculated that was I thought what person went from complete obscurant so no one knew who they were obscurity to omnipresence or some like that everybody knew and so the simplest example are people who were noname actors who become the
star of a big Marvel hit and so what I did was I said okay how many of these have I seen what was the movie budget now you have to divide that by the other characters in the show or the in the movie and between the big Blockbusters where we had you think about like uh The Hunger Games girl I can't remember her name right now but that girl like the marketing budget for those types of films you think okay with $50 million she went from no one knowing who she was to being famous and
so for $50 million you can reach so much of America and so I use this as hypothetical because if you had something that you sold for a billion dollars you could spend that and still make 20 to want and so the idea is yes we optimize our advertising from front to back we put our effort on the front but in terms of where our our our LTV comes from we work from back to front so that we can spend more on the front end a big problem in terms of efficiency is that often times if
you are if you do start running ads profitably for example you reach some sort of ceiling you're like hey we can't we can't get past $1,000 a day hey we can't get past $10,000 a day hey we can't get past $100,000 a day whatever it is right usually it's because the ads that you have aren't good enough to reach the next level of awareness so Eugene Schwarz in breakthrough advertising talked about they called five levels of awareness and so they go from unaware somebody has no idea who you are what the problem is or anything
they're just unaware the next level is problem aware that's where you see ads that are like having trouble sleeping at night do you have back pain when you lean over like things like that they ask open-end questions that make someone aware of the problem underneath of that is solutionware have you tried this before have you tried this before this is where someone knows the solutions that potentially exist then you have product aware which is them advert you advertising your own product like okay have you tried like my product before and let me talk you about
this and then finally you have most aware which is usually past in existing customers and so there's a five levels of awareness and so most times smaller advertisers beginner advertisers get returns marketing to most aware right if you email your list or you make a post or you send out message an email right those are three most aware people so you can make sales from that for almost no money one degree above that is like okay well other people in the market that's product where they're looking they're looking for something uh to solve a specific
problem right uh and they're aware of the options that are out there and you Market to them so you have to be a little bit better to Market to those people than to just your existing customers now if you go one level above that right solutionware is that they know that there are people who are solving this problem they don't know how they're solving the problem they know that there is a solution that exists and so you have to have another order of magnitude Improvement of your ads and the hooks to call out those people
and so most times the problem isn't that your Market isn't big enough it's that your ads aren't good enough and they're not specific enough to hit this next massive trunch of the audience and I say this with our largest company um in the portfolio is about $100 million a year and we spend millions of dollars a month in advertising and we go to the most unaware people we go to people who have no idea that uh you know this product or this problem exists we actually have to make them aware of the problem and then
we make them aware of the opportunity to solve it and then we have to make them aware of the problem we have to take them through all the stages of awareness in a very short period of time and that is comes from a very well-crafted ad and so I have this saying that I have internal which is that the size of the plane is directly correlated with the length of the runway the bigger the plane the longer the runway and so if you want to sell a very expensive thing or you want to to sell
a very cold person so the price and the the coldness or how aware the person is so the longest sale possible would be someone who's completely unaware for a very expensive thing right the shortest sale possible would be someone who's very aware for a very cheap thing and so the amount of Runway the amount of selling the amount of advertising that you have to do to get someone through these stages is directly proportional to those two things and if you're having trouble scaling it usually means that this is mismatched you're trying to you're you're sending
a warm message to a cold audience or you're getting people on the phone who aren't prepared to SP a huge amount of money they haven't been warmed up enough and so it's making sure that we're hitting each of these boxes for the audience that we're starting to Target and so as you go to a new trunch of let's say you go from solution Weare to problem Weare so it's it's a bigger area right and so think about these concentric circles like a pizza like the area of the pizza you know like a pizza that's this
big if you could take an inch off it's almost the same size as a as a 2-in pizza in the middle like the the diameter circumference whatever that is I probably failed geometry the point is is that um it just gets bigger and exponentially bigger as you go out and so this is a weird visual that I have for this but if you think about a watermelon slice and at the tip there's lots of seeds and as you go down there's fewer seeds but you still have to pay the same amount to reach all these
eyeballs to find the few seeds versus in the beginning when you have lots of seeds so your density of sales per thousand eyeballs goes down as you go to more unaware people because you're going to go to people who just simply don't care and never will care but you have to and this is where the LTV matters so much and the optimization matters so much but you still if you can be profitable in a larger trunch that's 10 or 100 times as big that's when you start really printing money right and so if you have
call it 20 to1 LTV to CAC in the beginning when you have lots of little seeds lots of density of potential buyers because it's really warm really problem Weare or really really solution or product Weare right like really high-end as you go down you might drop to 5 to one in the middle you might drop to 3 to one at scale but you're at a 100 times the spend and so in that case you're still making way more absolute return on the investment another way to think about this is like a golf of course and
so if you could only putt then you're going to only make 6in putts that's only the top Little Seeds of the watermelon but think about how much more area if you learned how to drive and you learned how to hit a three iron I'm not very good at golf you can obviously tell then you hit learn how to hit a wedge there's so many more shots that you can make if you have these other skills in Your Arsenal and so think about each of the levels of awareness as another club that you have to learn
how to hit so that you can get more balls in the hole from any part of the course marketing advice number 13 we need to be reminded more than we need to be taught and I think this is one that's going to break a lot of your beliefs and so I'm I want to really emphasize this one because it's important once you start making content once you start running ads and you start putting stuff out publicly you start advertising you're going to get to a point where you're like I feel like I've said everything that
I was going to say now remember you continue to live life every day you continue to do stuff and you can talk about what you did so that can break that but my mom said this to me once and I I always I always remembered it she said the news never changes just the names and I really thought about that it was like the there's always a rape there's a war there's a murder there's a car accident like the actual story doesn't change only the names and so if you think about that with content like
there is no new content like The Human Condition has not changed for thousands of years like the older the problem the older the solution and so we are making content and we're putting stuff out there and when I think about myself the things that I follow like I follow philosophy Pages because I I'm okay rereading epic titus' stuff like I read his stuff before and I read it in quote form again and when it comes up again like to be reminded I like to keep this stuff top of mind that's why I follow those pages
and many people follow your pages for that exact same reason is that the stuff you talk about is stuff that they want to keep top of mind they want to be reminded of that stuff and getting taught is much more difficult than being reminded but they're equally valuable because if it changes their behavior then you still did teach them again you just reminded them and what's crazy about this is that like the friend show right now if you've ever heard of it is being watched more now than it was a few years ago so reruns
like people watch reruns because there's Nostalgia or whatever reasons you want to pick to it but people are willing to rewatch the same thing because they know how it ends they know they liked it and so you can make the same thing again because also your audience who's new a year later hasn't seen that thing and so if you make something new to them even though it's quote old or reminder to your existing audience your existing audience doesn't mind their reminder and the new people never saw it to begin with and if you want to
have different ways of creating variety even around the same topics I would would encourage you instead of thinking of getting into Trend hacking and talking about the news talk about your news so it's about what are the new things that are happening now this is the do epic stuff talk about what you did and so this is where we tell new stories to explain the same concept because for that specific audience you'll reach a different type of person or different Avatar that still might be within your Market with a story about a mother and a
daughter versus a father and a son versus a military vet versus uh a small business owner right there are different avatars and you can tell the same story but it happens to a different name just like the news and people still watch the news every single day and then what we want is them to watch our news you can tell the same concept like the value equation the value equation I explained in my book I also have a course on my site that I explained the value equation in a different format so think about it
in terms of formats this is written I have an audio I've got videos that on my site that in a course format I'm mentioning it here now I have it on whiteboards that I've explained it I've applied it to Services I've applied it to education I've applied it to uh physical products I've applied it to software and so you can take the same idea and think how can I display it in new formats new mediums and new contexts and so when you have that and then you extrapolate on top the news of your life even
though you feel like it's saying the same thing the amount that it takes to create something novel is very small and so I'll tell you the story that I think will wrap this up it's the story of Henry Ford and so Henry Ford had uh in his office he had his marketing person right next to him so he walked past the marketing Department over and over and over again and this is back in the day when they like they didn't have computer screen so it was just like they had mockups and like big posters and
things like that for whatever their next ad campaign for a new Ford car was and so he walked past this guy's office for three months at the end of the three months he was like hey John when are we going to stop running this ad I'm so sick of it and John the marketing director looked at me he said we haven't even started running it yet and the thing is is that we get so much sicker of our own content before our audience even remembers your name and so the thing is is that we assume
that every person consumes every piece of content you ever put out we put out 50 plus pieces of content a day I'm grateful if somebody watches one a week right and so the idea here is that like you put out significantly more but we have this assumption that everyone's paying attention and no one is and so we put out tons of volume with the hope that we catch one person on that one day and you might have make I might have made four things about the value equation actually you can give me good feedback so
this will be good if you haven't heard about the value equation whatsoever in my content up to this point drop a comment because I want to I want to prove that this even though I've talked about it in a zillion formats some of you guys didn't even know how to book right um like people need to be reminded more than need to be taught and for those of you who don't know the mission acquisition. comom is to make real business education accessible for everyone and I spent the last four years plus making content and hopefully
giving away all the stuff you need to scale your business and I love getting the messages and the stories that we do but it would mean the world to me if you just shared this video with another business owner who that can hopefully compress 13 years into however long this video ends up being uh to save them all the scars and so they can just have the lessons thank you