$100M CEO explains: How to CREATE a $100,000,000 product..[leaked training]

Summary

• In my twenties, I was making an astonishing $1.2 million per month in dividends, which shocked even myself.
• People generally want you to do well, but not better than them, which can change as you become successful.
• Only you truly want yourself to be rich, so you're the one responsible for your success, and actions count more than character.
• Money solves only money problems, and after that, you're left with non-monetary issues, so having more money isn't a fix-all solution.
• As you reach higher levels of success, you become the smallest member in a new club; there's always another level.
• Don't get caught in the allure of a passive, laptop lifestyle; work should be something you desire to do, not avoid.
• The concept of freedom is less about having time and more about having options; enjoying your work means you've arrived.
• Focus on creating offers as they are the fastest route to material success in business.
• To improve a business's success, I look at their offer stack, the sequence of offers presented to customers.
• Overcome the commodity problem by targeting the right customer avatar, setting premium prices, and using the value equation.
• Transform your offer to provide immense value, ensuring it's clear why customers should opt for your higher-priced option.
• When crafting offers, employ scarcity, urgency, bonuses, guarantees, and unique naming to enhance its appeal.
• If ads or sales aren't converting, the core issue is often the offer itself – it's important to get that right.
• Rapidly change your business's earnings by adjusting the offer; the right offer can yield exponential increases in returns.
• Targeting the right market involves serving those desperate for your solution, who can afford it, are easy to target, and belong to a growing market.
• Niching down allows you to productize your service, master it, provide high value, and reduce operational drag.
• Pick a starving crowd; make sure your market deeply needs and values your offer – it's crucial to choose a growing, accessible market.
• Charge what your service is truly worth, and understand that high prices can actually mean better customer commitment and results.
• Higher prices can create a virtuous cycle increasing perceived value, customer satisfaction, and revenue.
• Utilize the value equation: maximize dream outcome and likelihood of achieving it; minimize the time delay and effort/sacrifice required from the customer.
• Offer additional resources and education for free to empower others with the knowledge for success.
• If in the e-learning or brick-and-mortar space and aiming to scale, consider collaborating with investors experienced in that growth phase.

Video

How To Take Action

To start using these insights in our business or personal growth, I would suggest focusing on the key areas where changes really pump up success. Let's make offers that are irresistible and target the customers who desperately need what we've got.

Here's a step-by-step to make it work:

1. Identify Your Starving Crowd: Find the market that is hungry for your solution, can afford it, and is growing. This is where your offers will hit home hard and make the biggest impact.

2. Craft Your Offer: Look at your offer stack—the sequence of stuff you offer—and make sure each one is strong. Make your main offer so good that customers feel silly saying no. Use scarcity (like a limited number), urgency (a time limit), bonuses (extra goodies), guarantees (like a money-back promise), and unique names to make it sparkle.

3. Fix Your Price: Charge what your offer is truly worth. Remember, more money can mean customers are more committed and get better results. Plus, you can use that cash to make your business even better.

4. Maximize Value Equation: Always think about giving the best dream outcome, making sure it's likely they'll get what they're after, cutting the wait time, and reducing the effort they need to put in.

5. Avoid Being Common: Make sure your offer to customers stands out. No one should look at your deal and think they can get the same thing somewhere else cheaper.

6. Adjust as You Learn: If things aren't selling, look right back at that offer. That's often where the problem is hiding. Change things until you see better results.

7. Get Back into the Grind: Love your work and dive in. The real freedom in success comes from having options, not just lounging around.

8. Free Knowledge: Share what you know. Offer free education and resources to help others. This also shows you're about more than just making a buck.

9. Seek Growth: If you're aiming to grow big, like e-learning or physical stores, think about teaming up with investors who know that game.

Keep it simple and start with whatever takes the least money and time. Implement one thing at a time, and you'll be on your way to great success.

Quotes by Alex Hormozi

"Everyone wants you to do well, just not better than them"

– Alex Hormozi

"Money only solves money problems"

– Alex Hormozi

"Work is colorblind, success only cares about the work that is done"

– Alex Hormozi

"You don't actually arrive ever, you just enter a new club as the smallest member"

– Alex Hormozi

"We need as a community to make work cool again"

– Alex Hormozi

Full Transcript

i was able to take home more in a year than the ceo of mcdonald's ikea ford motorola and yahoo combined as a kid in his 20s you guys want to hear something totally insane like completely out there wild i was able to take home more in a year than the ceo of mcdonald's ikea ford motorola and yahoo combined as a kid in his 20s that equated to 1.2 million dollars per month in dividends for nearly the last half decade honestly no one is more surprised than i am about that and so me expressing this fact early on in this presentation in some people will create envy um it'll create anger in other people it'll create skepticism in most and confusion in old folks and hopefully it should inspire a select few and so if that was you then you are the people that i'm making this presentation for all right because i know exactly where you're at um because i have been there and i'll walk you through that so i was um i was talking at an event not that long ago and they had like levels to entrepreneurship and level seven was what they called me which was like the highest level which is kind of silly for me because i you'll see in a second why just a couple observations for everyone uh kind of like from outside looking in that may be valuable for you the first one is that everyone wants you to do well just not better than them and i think that's something that we can all recognize like some of you probably have experienced that other you will experience that if you have people rooting for you as an underdog sometimes that will change as you become more successful second accept that no one actually wants you to be rich except for you and so it's only going to be up to you to get there and the nice thing about success habits and wealth and business is that even if you don't deserve it in terms of your character etc if you still do the actions success does not care so success is colorblind success only cares about the work that is done third point that i've kind of found in my in my time money only solves money problems and then you were left with problems that money can't solve and so i know a lot of you um maybe maybe in a situation where like another you know more money feels like it will solve all your problems and i can tell you um it won't it'll just solve the ones that money can solve you'll realize which is uh point four is that you don't actually arrive ever uh you just enter a new club as the smallest member and so in the building that i live in it's almost exclusively eight nine and ten figure entrepreneurs so eight is ten million nine is 100 million and ten is a billion the guy who lives directly above me so literally the unit directly above me he actually owns the entire building and last year he did 3.8 billion in sales top line he took home 930 million dollars in income and so all that ends up happening is you you just get into a new new club as the smallest member there's just levels to the game and um i'll just leave you with this one last thing for those of you uh who see what i see on the internet world and the instagram flexes is that everyone talks about the laptop lifestyle having a business that spits out cash flow for you passive income blah blah blah this last year i did almost nothing work wise and our businesses generate a tremendous amount of cash flow i can tell you that i was very miserable i think that we need as a community to make work cool again because we kind of i see it all over the place especially in the entrepreneurial scene of demonizing the grind demonizing uh the hustle demonizing putting the hours in and saying that like if your business requires you that it's not a real business and i think that it's a load of bs because after having now exited the business uh multiple businesses now i can tell you it's not fun and i feel like what my my end result of this entire process for me is that i sought out freedom thinking that freedom and i didn't i had all my time when what i should have been pursuing was options and so if you enjoy the work you do you have arrived and so i can tell you right now and what i'm doing in 2022 is basically repositioning myself to get back 100 into the grind because i choose to and so anyways i wanted to just give you guys that because i know a lot of people are in different different places but i just wanted to share some things that i wish i had heard earlier on so who wants to hear about some stuff that can shortcut your path to material success so you can ponder the purpose of achieving it to begin with let's rock and roll all right so here's a quick framework that i have for making offers all right and the reason that we're going to focus on offers is because i believe that they are the fastest shortcut to material success in a business if i'm going to take a business over i'm going to take a a chunk of a business as an investor the first thing i'm going to do is look at the offer stack which is what are the things what are the sequence of offers we're going to make to the customers and prospects over their journey with the business now there's a lot of things that i cover in the book and i like i said earlier i could have covered every single one of them but instead i'm going to cover four main ones okay so these are the main things that i look at in the business and some of the issues that most business owners deal with one is the commodity problem so the goal is to de-commoditize it the second is making sure that we're actually targeting the right avatar who we think is going to be able to generate us the most long-term lifetime revenue all right the third is that we're going to make sure that we can charge a premium price for the the services and products that we sell and then fourth i'm going to cover the value equation all right because it's probably the biggest takeaway of the book and it is probably it is the concept that the book is based around all right scarcity urgency bonuses guarantees and naming are all things that will enhance the effectiveness of your offer um and i'll i'll tell you at the end some some easy resources that i can i can give you guys for those all right cool so we're gonna cover these four and so let's rock and roll so here's the problem right now if your ads are not converting well so clicks and opt-ins uh and or your sales team has trouble scaling so it means it takes too long to ramp up new new reps um then adjusting your offer is usually the issue it's usually the core problem that most people don't see all right and so to catch fish you need bait or an offer all right an offer is the starting port of providing them in exchange for their money that is what an offer is the reason i define it because it's good to have shared terminology an offer is going to be the number one driver of success of any campaign and i'll prove it to you in a second all right so what does it actually do it will allow you to sell in a vacuum or a category of one and forces customers to make a values-based decision instead of a price-based decision all right i'm gonna say that again it will force your customers if done successfully to make a values-based decision instead of a price based decision all right if someone makes a price-based decision means they hold up two things they say these are close enough i will make a decision based on the price and i will choose the cheaper one because these two are comparable if i make a values based decision i say this is the only thing i have nothing else i can compare it to and therefore i must accept the price that is being charged if i deem the value sufficient all right and so the goal is to decommoditize the offer that we are selling so that we can sell in a category of one and you can do this in any type of business that you have and so when you do this successfully you will increase the click-through rates on your offers on any platform you're doing whether it's cold outbound whether it's whether it's cold emails whether it's ads whether it's earned media whether it's to your list it doesn't matter where you're presenting the actual offer where those that offer sits with eyeballs wherever the eyeballs are if you make a decommodized offer that is value based rather than price driven you will increase the number of clicks that you get you'll increase the percentage of those clicks that convert and you'll increase the price at which those people purchase all right and so the simple translation for that for those who are or hopefully not bored out of your mind with the the concept or with the the marketing jargon is you get more leads you get more sales at higher prices and each of those multiply so if you get two extra leads 2x the conversion on those leads which is now a 4x and then you can increase your price by 2x that is an 8x increase in business that is why the offer is so important and so strong so i'm going to give you guys a real life example so the b2c weight loss right now is 99 a month if we're going to try and sell that all right for 99 a month i could not do it all right i failed miserably and so what i had to do when i was trying to i couldn't even give this away for free we transformed this offer into a free six week challenge by doing that what ended up happening is we changed a not even break-even offer to getting 30 to one returns 30-1 returns on our advertising all right the second example i want to give you i'm going to walk you through this one live together is a 1500 per month retainer offer uh one of our software companies that we sold called allen we dealt with a lot of brick-and-mortar agencies so people who would sell to chiropractors people who would sell to whatever right a lot of times they had an issue where they were getting commoditized right everyone had more or less the same offer and so they would say hey pay me every month and either you get results or you don't get results and the average agency who was there would get about point five to one return on their ad spend in their first 30 days so if they spend a thousand bucks they would make 500 on average and then the next month they would make a thousand and so forth right so they kind of broke even or lost a little in the front end and then they continued on the back end but what we were able to do is actually 22x the increase on average of the return on ad spend by simply changing the offer is that cool so right now if you could 22x the difference that you got and it did the same thing on the first one same thing on the second we're talking 20x 30x increase the return on ad spend would that be cool for you guys this is what happened before with the agency offer okay if you look here i have this chart and this is these are the actual numbers so when the guys were spending 10 dollars a month they reached 300 000 people the response rate was point zero zero zero one three right the number of appointments that booked was 40. the show rate was 75 appointments showed 30 you know closing percentage was 16 percent fullness was five price was a thousand bucks right so they'd make five thousand dollars off ten thousand these were the real numbers okay now when we introduced the new grand slam offer and the new offer that we gave them was pay us one time and we will work all of your leads for you and then you only pay us a gun after this first payment after someone shows up so only pay us when someone shows up after you sign up with us that's it you pay me once today i set everything up and then from that point going forward you never have to pay me again unless someone walks in your so check out the difference here so the advertising spend was equivalent between you know day one it says ten thousand ten thousand right impressions are the same because you know ads still cost the same amount but here's what's crazy two and a half x increase in response rate okay two and a half x but that's just step one now the changing result is we got from forty appointments to a hundred appointments for that ten thousand dollars of ad spend show rate was the same nothing changed there but now we have 75 people showed up rather than 30. and here's the next crazy part is that rather than closing 16 which is what they were doing with their commoditized offer at a lower price they were now closing 37 that's 2.3 x all right so more people were now buying more okay and so now i look at the difference in appointments closed you have five points closed versus 28 that's the result and here's what's even crazier they were closing sixteen percent of the thousand dollar price point but with the new offer the grand slam offer they were closing that at four times the price four times the price and so this was the end result for that same ten thousand dollars in ad spend went used to get them five clients at five thousand dollars a month and there's their five thousand dollars instead now they got 28 customers at 4 000 up front with a continuity program that had what i call an implied guarantee which i won't be able to get into today but basically any kind of performance offer that you can make is always an implied guarantee and so they would make a hundred and twelve thousand dollars simply by changing the offer which is a 22.4x increase in cash collected upfront and that doesn't even include the lifetime value on the back end so you guys getting how powerful this is the difference between 0.5 and 11.2 they didn't even change the creative they just changed the offer they didn't change their funnels they didn't change their nurture sequences they changed any of that stuff they just changed what they were offering to the marketplace all right so right now can you think about in your business how if you could change that core thing how different the outcomes could be cool does everyone feel good about that in terms of understanding why this is so important and why the goal should to not be a commodity but actually sell in a category of one with an offer that's so good that people feel stupid saying no does that make sense that is why this is so important because otherwise you're gonna be price compared you're gonna you're gonna have lower conversions you're gonna have lower people show up you're gonna be able to only sell at low prices and you're ultimately just gonna be like everybody else and everybody else is broke so don't be like them so step number two is make sure that we find the right market all right so um this is kind of an interesting concept so i was at a uh and if the picture is blurry it's because my picture's actually blurry and i couldn't find a sharp one um so i went to this mastermind and in the room the the entire group was doing actually was 600 million in top line revenue so the highest guy was doing 250 million smallest guy was doing seven second smallest guy at the time was doing 35 all right and everybody else was in between and so i was sitting there and you know i was watching these guys do their presentations and i just i was left with this feeling where i was like are these guys making more money i was like i couldn't get it like i i was just like i was losing my mind trying to figure this out right and then it dawned on me after i was just like going on these blocks i was like they're just going after better markets that's all like that was it like it wasn't they were better at sales wasn't there better at marketing it wasn't like they were better at fulfillment i was like i know that we're nailing these things because when i was talking to them i didn't feel like they i lacked something it was just because they're going after the right market all right and so there you go it's almost like i made this presentation and that was the conclusion right they pick better markets and so what i want to do is because this is probably the number one question i get from people who are newer in the entrepreneurial space um and so here's the quick answer that i give most people if you're trying to figure out who you're going to serve right in your earlier on in your journey the way to pick that person is select the after you can provide the most values period so if you have like two or three people you're trying to decide between pick the guy you can provide the most value to that's the game number two the medium answer you want to make sure that you pick a single avatar so that you can productize your service and provide that value with low operational drag so let me give you an example so if you were to help one chiropractor do something right and generate leads or whatever then you would probably it would take you a lot of work to get that first guy going right but if you had 100 chiropractors your 100th chiropractor you probably have a lot of that stuff pre-built and pre-made right which means the amount of time and effort that it would take you to do that hundredth one is very low and on top of that through that hundred iterations you probably get better and better and better and so here's what happens the value that you provide actually increases and the cost to you actually decreases which means there's a big discrepancy between what that person is now getting and how much it costs you and we call that profit which is the point right and so the reason that we niche down when we're picking our markets is so that we can ultimately make more money and i don't have this uh example in the presentation but right now if i were to say hey guys i have a time management product right and uh if i if i was selling it and you go to barnes and nobles wherever you probably find it for 19 bucks right it's just time energy cool now if i were to say hey same product but now it's time management for sales people can you all of a sudden imagine that product being like a 99 product like oh okay i could imagine that being a 99 product all right now let's niche down a little further and say well of the people that could you know make the most money with time sales people definitely will will make more money with save time but what about outbound sales people we can make it even more specific and talk about their pain points etc and so we now make it an outbound sales rep time management course or book right and now this is probably like can you imagine that it's more probably more like a 500 product right so you're an outbound sales rep time management for outbound sales reps ah so what if we ditch down even further we said um outbound power tools and gardening sales reps time management all of a sudden this product goes from 500 to a 2000 product right now here's what's crazy about this the product remains virtually unchanged the only thing we did is we defined who the avatar was and we got narrower and narrower and narrower and so right now if you're thinking like the goal is that that prospect when they read your persuasion they read your copy the goal is not for them for for them to understand what you are writing the goal is for them to feel understood and that is the goal of great persuasion is that they feel understood that's the point and so the better we can articulate their problems and their reality to them the more they will be willing to purchase our product right and the more what we want them to feel is this is just for me and that's the goal right and so when we're picking that market right let's go back to our presentation this is my live speech answer which is what you guys are gonna get so i give you the quick answer which is provide go go pick the guy you can provide the most value to the medium answer is zero in on that niche and go really hard on it so that you can eventually productize your service and decrease your operational drag but here's my live speech answer all right so right now let's pretend we're in class right and there's a marketing professor that's um that's in front of the in front of in front of in front of us right and he says everybody here has now been gifted a hot dog stand and you are now forced to be in the hot dog stand business if you had one competitive advantage for your hot dog stand what would it be well tell you in this uh and i think this may actually be a real story so i'm not sure and so in the classroom all these people started starting shouting out all those things right you know better ingredients all my stuff right and after everyone died down he said the secret is that you want to starve and cry because when the football game lets out at three o'clock in the afternoon and everyone's starving and drunk you want to be the guy on the hot dog stand in the corner and you could have the worst hot dogs that were wildly overpriced and you would still sell out because when you have a starving crowd when the supply demand curve is in your favor it's hard to not make money and not make lots of it okay and so when we're looking at the market these are the four attributes that i look for when i'm looking to pursue a market okay you can write these down number one is i want them to not just desire but be in desperate need of the solution that i have all right i don't want people who are merely aroused i want people who are ravenous for a solution number two they must have the ability to purchase the product that i want at the price that i want to charge number three they must be easy to target if i can't target them i can't put my offer in front of them i'll ultimately not be able to reach them and sell and then number four i want to make sure that it's growing market all right so let's dive in so one of the sayings that i have in my sales team is the pain is the pitch right and like i said earlier the point of good writing is for the reader to understand the point of good persuasion is for the prospect to feel understood all right and so the goal here is that we want them to feel understood in the copy which is why niching down is so important right it's very difficult to make someone feel unique and singled out if you're talking to the masses right which is why it's so amazing that some of these mass market brands that do exist but most of them start small and then continue to scale in adjacent markets all right so we want to make sure that they're in desperate need number two so a friend of mine had a really good process for improving people's resumes so they could get more job interviews like he had a really dialed in process and he looked at these four things and he was like well this is i think this will absolutely crush and as you guys might even imagine is improving people's resumes so they can get more interviews it actually tanked and the reason was the p it was a growing market it was easy to find the unemployed people they were in desperate pain but they had no money right and so he had a really hard time charging the amount that he wanted for the service that he had right and so we got to make sure that whatever market you're zeroing in on they can afford you right and the thing is is there is a market out there that is in desperate need of a solution that you have find them right and they will pay you what you're worth life's too short to deal with people who don't appreciate you all right so number three this one is very tactical right but if you're trying to sell to you know rich doctors and your ads or your offers are only being displayed to nurses it's going to fall on deaf ears no matter how good the offer is no matter how good your funnels are no matter how good your sales team is and how great the product is you're just not reaching it right and so if your people are not aggregated somewhere in associations groups lists channels etc then just don't pick it because at the end of the day like business is hard enough on its own you might as well just make the things have as many tailwinds behind you as you possibly can because the thing is it's ultimately our choice right whatever business or marketplace we choose to get into it's our choice so i might as well pick one that's going to be easy to work on this is a little bit of a tactical point but this is just through my experience of dealing with lots of companies and having owned and scaled lots of companies it's much easier to deal with ones that are easy to target all right and so here's the fourth one this probably one of my favorite stories so warren buffett was doing an interview and he was talking about uh his best friend at columbia and so this is before he was warren buffett he was just a nerdy kid who liked finance at this point right and he said there was a young gentleman who he admired a lot who he thought was you know incredibly sharp tremendous work ethic high integrity um and he was somebody that he was proud to be associated with and ultimately when they graduated columbia they split they split ways right one person went into steel and then he obviously went into his partnership that eventually became a triathlon right and what's interesting is he said when he looks back on his life one of the most important lessons that happened is that that individual that man that friend of his he said he achieved some material success he said but nothing you know nothing really remarkable and he said that that lesson from that man was singular in its importance because what it taught him was it is far more important what boat you are in rather than how hard you row it is far more important what vote you are in rather than how hard you row and so a lot of you a lot of us as entrepreneurs we pick these huge challenges that and we're just rowing and growing and growing and trying to outpace the current that's going in the other direction and so there's an old vc saying uh that's a venture capital saying where it's great entrepreneur in bad market market wins bad entrepreneur in great market market wins right and so the point is is that the market matters more than anything when people actually are investing in businesses they actually look they're like what markets do i want to get exposed to because they know that even if we're mediocre and the market quadruples then we will quadruple even if we're average and so we might as well have the tailwind and i'll tell you one final story about this so a good friend of mine lloyd um really sharp entrepreneur he had a software company and uh it grew and then all of a sudden it started stagnating right and this is probably like six or seven years ago and he's and and for six or seven years i saw him really struggle right to grow the business and he was uh he was in the newspaper business right and so he was selling an ad product to newspapers and one time we're having dinner he's like dude i just don't know what's going on he's like you know my offer is a revshare model like it's they only get you know i only get paid if they get if they make money uh you know we've got a great outbound team we got a great sales team like i just i don't know what the problem is and i'm looking at him from across the table and i was like you serious he was like yeah i was like dude you're selling newspapers they're dying they're losing 25 per year compounding 25 newspapers about a business every year and they have for the last eight years and so that's how big the market was that's how much the market was shrinking annually compounded against him and this is probably of the four factors the biggest one that we have to look at when we're trying to pick our market is we might as well pick the right boat one that has a tide that's behind it with a heavy you know with a good wind going in the right direction because no matter what this is gonna be hard we might as well have one that's going in the right direction so those are the four components to picking the right market is that useful for you guys in terms of making sure that you're niching down picking people who have have pain have purchasing power are easy to find and are growing all right we want a market that is growing there's more of them every year right if you're getting into sil you know silver sneakers and retirement homes there are 10 000 people retiring a day and there's not nearly 10 000 units of retirement homes available right which means that that's probably going to be something that if you're in that space you're going to make a lot of money simply because of supply demand we'd rather have those chips stacked in our favor so i want to play a money game and this is not in the book so you guys pay attention to this one this is actually my favorite money games of all time okay so let's say that this is your business you can see the stats on the left there and hopefully it's clear for you um let's say that you have a business that gets 30 new clients a month let's say your churn meaning the percentage of customers that leave every month where active is 33 that means that the average customer stays for three months okay let's say the price of your service whatever it is a hundred dollars a month i'm using simple math here okay and so that would mean that your total number of clients that you can actively manage is 100 because every time you sign up 30 30 more leave and it's just around and around and it maintains at 100. all right well let's see your net margins are 20 so that would mean that your revenue is 10 000 dollars a month and your profit is 2 000 all right is everyone with me so far everyone good with this okay so let's say we rub we rub a magic water bottle right and this magic water bottle is a very specific niche water bottle because this niche water water bottle creates a niched genie okay and so the little niche genie comes out of the the the bottle and says i am a business jin you're like oh wow this guy's intense right he says i can double one aspect of your business and you must pick which of the three you wish me to double right so this is a very niche genie very particular about his about his wish selection but you know we're like hey i'll take a wish if i can get one right and so these are the three doors that he offers us okay choice number one is that he says i can double the number of new customers that you get every month so that 30 number turns to 60 new customers a month so i can do that that's option one option two i can double the price of your products or services and everything else stays the same that's option two say okay cool option three i can double the number of purchases per customer which means that people go from staying for three months to staying for six months okay so our turn gets cut in half which of the wishes would you wish for from our business genie fyi no matter what you're going to make more money because we got a business genius we kind of lucked out there right so if you were to double the number of new customers what would happen is everything would double so you'd go from 10 10 uh 10 000 a month to 20 a month your profit would go and your you know margin stays the same twenty percent so now you go from two thousand dollars a month to four thousand dollars a month in profit right twenty percent twenty thousand is four grand from twenty percent of ten thousand which is two grand all right so two grand goes to four grand you've now doubled your profit that was door number one door number three if you double the number of purchases you actually make a little bit more than twice the profit and here's why if you now are acquiring the same number of customers right but they're staying twice as long right on your on your recurring basis but the margin stays the same the difference is that the the cost of acquisition that you are now saving and not you'll get the same top-line revenue as as version one because that customer is now worth twice as much to you but you only have to spend this this amount of amount of money that it costs you to acquire that same 30. right so now you're you're still spending the same amount you're still acquiring 30 customers but now they're worth twice as much right and so by doing that you actually make a little bit more than twice the profit door one is the quote worst door the second runner-up or the first runner-up rather is doubling the number of purchases or decreasing turn in half and as you can imagine the best choice was choice two which is doubling the price of your product or service and here's why this is so crazy so i'm gonna walk you through this i'm gonna use my hands all right so if we were at ten thousand dollars a month with a 20 margin that means we're making two thousand now all of a sudden we doubled our price now we're at twenty thousand dollars a month but we changed nothing about what we were selling and providing which means that additional ten thousand dollars a month is pure profit which means we took our our profit from two thousand dollars a month to twelve thousand dollars a month which means we six x our income six x people talk about making 20 increases this is a 600 increase that my friends is the power of price which i wanted to use that story to introduce the pricing section which is why it's called charge what it's worth and right now many of you are under charging and ultimately under providing value because you are not charging the right amount of money all right so i'm going to give you a few frameworks that have served me well here so this one is called the price to value discrepancy the goal of any business is to have a price right what means it charge you uh you know a dollar for something i want you to get ten dollars worth of value right which is why you want to continue to do business because every time you give me a dollar if you get ten dollars of perceived value back you're going to want to do that trade as much you know as many times as you possibly can right right so many of you would probably pay more than you currently do for your netflix subscription you might pay 20 a month if they raised it and be okay with it they might pay 30 a month but the amount of access they leave there is the customer surplus all right so you can see there there's the value and the price and we always want to make sure that the price is below the value here's what happens with most businesses though most businesses charge their uh their price is actually above their value which is why they never get repeat customers because their product is right if you charge at your value someone will purchase they won't be negative they won't be positive they'll be moved right and so there's two real options here we can either increase that discrepancy by lowering our price so let's say our value is fixed right if we lower our price we have a discrepancy right the other option is to raise our value right and i can tell you one of those is going to make you a lot more money all right and i'm sure you already know which one it is which is increasing your value all right so this is what most people do and why you should charge so much that it hurts most business owners are not competing on price or value in fact they're not actually competing on anything at all their pricing process typically looks something like this and this may be some of your guys uh process you look at the marketplace you see without what everyone else is offering you take the average you go slightly below to remain competitive provide what the competition's offering with a little bit more and then end up with a value proposition of a little more for a little less it's a losing proposition you're not going to win that way and so what i want to do is introduce you to a very different framework to think through this all right and this is called the virtuous versus vicious cycle of price all right so this is what happens when you raise your prices all right so if you have any type of business where someone is required to do something right like onyx business right you guys are required to do something uh in order to succeed right we have to work now if we raise our prices this is what happens if you raise your price you increase the emotional investment of the person if you pay ten thousand dollars for a book versus a dollar for a book what do you think the likelihood is that you're going to read and finish the book if you pay 10 000 for very high so same book because we increased the price we increased the likely the person actually does it which if we're saying that we're trying to help people then it is ethically our prerogative to get them as emotionally invested as possible which means we should use one of the tools we have in our availability which is price the second is that if you buy a ten thousand dollar book versus a one dollar book what is your perceived value you will probably believe that the value is going to be far superior even if you change nothing i'll give you a quick story on this so right now uh they did a uh they did a research study with this where they had um tasters drink wine all right and so they gave them three wines they had a cheap wine a mid-tier wine and a high tier wine and they told them the price and everything um on the bottles and they had them try them and they had them rank them right and they could see the prices and so unsurprisingly they rank the best one the best the middle one the middle and the cheapest one the the worst right but here was what's crazy all three bottles had the exact same one so in a very real way price confers value to the product or service that you provide the reason the louis vuitton perch purse means more to you is partially because it is so expensive because it costs us so much time and effort to save the money to make the purchase it partially gets it it imprints that value onto the product so why not use that to our advantage and especially if we're going to make a lot more money doing it the third piece is that if someone's more emotionally invested and they perceive it as more valuable they're going to get better results if the price is higher right the demandingness of the customer and some of you guys will probably know this have you guys noticed that your cheapest customers are the worst people and the ones who pay you the most are the easiest to deal with right so when you raise your price you get more of the good people and fewer of the bad people right hey 50 a month you should be on call for me 24 hours a day you're like i don't know if i like you more than my wife and then finally and this is one of the key points that drives me uh drives the decision home for me is that the revenue for fulfillment per customer so if you triple you know the profit that you make on a sale then you have three times the amount of resources compared to your competitor to provide the value that you promised and ultimately in doing that you actually provide a better product and so that is why this is called a virtuous cycle because the more you increase price the more you increase their emotional investment the more you increase their perceived value of the product that you're giving the better results they get the less demanding they are which is the less operational drag you have to deal with and ultimately the better product that you'll be able to fill because you can keep your promises because you have profit left over all right and since people care less they they value it less they get worse results they're more demanding and you have even less resources left over to hire amazing people to give an amazing experience because there's so little profit left over right that would be a vicious cycle and then for you as the business owner so that was just from the client's perspective but for you as a business owner if you increase your price you increase your profit if you increase your price you increase your perceived value of self because who here would rather sell a hundred thousand dollar thing than a ten thousand it's a ten dollar thing right your own perceived value of what i am worth because of the value i know i can provide goes up all right and your perception of impact because i'll be honest with you like this can get hard but if you're not reminded constantly on a daily basis of the good you are doing the impact you're making the customers that you have that are seeing amazing results and success from whatever experience or transformation you provide if you don't have that you're going to be lost eventually you're going to burn out but if you do have that because you raised your price and you had profit to give and reinvest in the business and create amazing experiences then you'll feel better about it right your service level will go up and then finally and this is a key one if you have a sales team or if you're the sales team because of the emotional investment perceived value results uh and and the amount of extra profit you left over for the experience that you want to build you will be convicted that you can fulfill the promises that you make and the number one thing that converts prospects into customers is their belief that you will actually be able to help them and that belief starts with you because at the end of the day sales is a transfer of conviction from you to them through a bridge of trust right that is the point that is how it works and so if you don't have the conviction to start with even if you have the trust you'll never be able to transfer it because you don't actually have the conviction yourself and so when we think in this way we realize that raising our prices having increased profits is not only a good thing to do wise but also the ethical thing to do if you want to provide your customers with the true result that you promise them all right and so the goal here which i wrote here on the right is to be so much higher that a consumer thinks to themselves this is so much more expensive there must be something entirely different going on here and it forces them to pull you out of that commoditized category into a category one so they consider you on your own and your own merits of the offer itself and then make a values-based decision you guys digging this is this cool interesting sweet okay that was framework number three which is charging what it's worth i'm doing okay on time so i'll we're going in the into the fourth fourth fourth quarter okay which is the value equation and this is the concept that this book is really um centered around all right which is this value equation so i'll tell you a quick story so um i i did this uh i did this presentation um this was a two-day event that we held and this is actually a fulfillment event this is not a sales event um for for my company and so every single picture every single head that you see in this in this room paid 42 000 to be there and if you're keeping track from home and you're trying to count 42 000 start at the bottom and uh go to the left um there's 700 people all right it's a very big room it's very deep and um i remember the morning after i felt kind of hung over because i'd been speaking for two straight days and my dad called me up and he sounded really concerned so i like rolled out of bed and i was like hold on i like put a hoodie and start walking the hallway he was like hey i thought i thought that event that you had was only for your highest level kites and i was like yeah it was he's like no i mean the 42 000 people and i was like yeah it was he was like you had so many people there how could how could you have them all pay 42 000 to be there he's like do they do they know you're charging them that much money this is my dad right and i was like yeah they're aware that i'm charging i'm not magically siphoning money from their bank accounts like they're aware he's like i mean i hope what you're selling is worth it it's my father my own father sells me this right and so you know as much as that might have stung in the moment right um i realized that it was just a lack of understanding he didn't get how value worked and so i said well let me walk you through an example i said if right now because he he is a small business and i said hey if if i were able to increase your top line revenue by 239 000 a year would you pay me 42 grand he's like well it depends he said what would i have to do and i was like well uh you'd have to work 15 hours a week more to to do the system he was like okay he said how do i how like like do i know is it guaranteed like how do i know that that's what i'm gonna get and i was like that's just the average which means half of people do better than if you think you're above average then you do more than that he's like okay um and how long would it take for me to for me to get that result and i was like 11 months on average and he was like so it would take me 11 months that's the um and i was like yeah he's like yeah then i would pay 42 000 a year for that and i was like exactly and that's why they do too and so ultimately that is a premium price experience that i have lived through all right so that's 700 people at our highest level in our gym word business which is a licensing business we paid that as 28 million a year just from the highest level okay and the reason that that is important is that you can absolutely charge a very large amount of money if you can provide value for an access of that who here would pay you know forty thousand dollars to make an extra two hundred and forty thousand dollars on average would you guys do that if those are the terms yes and that is why these people do too and so if you want to raise your prices you must ultimately raise your value and the reason i part of the reason i wrote this book was because i hear the term value thrown around in the entrepreneurial community all day long provide value give value blah blah blah right but no one actually defines what the term means so this is my best effort at defining it so there's four variables to the value equation all right and so it's a fraction you've got a numerator and a denominator you guys can remember from grade school all right the numerators the top denominators the bottom all right and so if you're trying to make a bigger value or bigger number here the goal is to maximize the top and minimize the bottom right right so let's go through the first one the first one here is oops there we go dream outcome all right so the dream outcome is simply to demonstrate that the person must desperately desire what it is you are selling sometimes you guys are selling things that no one actually wants which is why no one buys the dream outcome doesn't even match right you're trying to sell you know automation to doctors or something like they don't care whatever right you don't actually want to be selling ice to eskimos because they're like i got plenty of ice and i don't value it right so as much as that saying is cute it's also not very business that right and so dream outcome is uh is number one and so the reason that this is so important is that if let's say for men for example most men get more status from having money than being you know thin right and so if i were to survey guys would you rather be a millionaire would you rather be thin most guys would choose millionaire right right and so that means that as a category overall men will value money more than their appearances which is why you know you see i won't even get into this more than that but hopefully you should understand that which is why the entire category of making making people make more money return on investment et cetera has higher price tags in general okay and that is what differentiates so if you have two different things one is helps guys make more money and the other one helps them lose weight the one that helps guys make more money in general will be priced higher now what happens if you have two products that are in the same category and one sells for fifty thousand and one sells for five dollars well the reason that you have the other uh that you have that price discrepancy due to two things in the same dream outcome is the other three variables right how come liposuction is fifty thousand dollars and a weight loss ebook is five bucks even though the dream outcome of weight loss is the same right right so that brings us to the second part of this equation all right which is perceive likelihood of achievement if i'm buying a five dollar e-book what do i really think my perceived likelihood is that i'm actually going to lose weight and look amazingly the guy in the company for five bucks for an e-book probably pretty low i might even not even read it right i might even have you check my email right now on the flip side if i pay 50 000 for liposuction what's the likelihood that i think it's actually gonna happen really freaking high right so let me give you a different version to illustrate this concept of how increasing the perceived likelihood of achievement actually increases the value you can charge all right this is the front end so let's say in that liposuction example you've got two doctors you can pick from you got a doctor who's fresh out of medical school he's never cut into a person you're gonna be his first patient and then the second doctor has done this procedure specifically for you ten thousand times for people just like you which guy are you gonna pick doctor two with ten thousand successful surgeries or doctor one with zero this guy not only that you would probably be way more willing to pay way more money for this guy even though the actual surgery dream outcome time under the knife would remain the same and that is because you we confer value based on our perception of the likelihood that the person is going to provide us the service that we have i had a different price point for my business when i had 100 testimonials versus 2 000. because that was the that was so very by the way if any of you guys ever have to raise your prices did you get better and better over time you said that was the 100 testimonial price because there was lower perceived likelihood of achievement now i've got 2 000. you know it's going to work the goal of the top is to increase it now most starter marketers only focus on the top half of the equation but when you look at the biggest businesses in the world they actually put all their attention on the bottom half which is actually where the competitive moat from operations occurs okay so the third variable here is time delay which is how long between when i purchase and when i get so if i were to click a button on the internet for a weight loss product and all of a sudden i pulled my shirt up and i had a six pack imagine how infinitely valuable that product would be and to give a different twist on the example imagine i had a marketing agency and i signed someone up and most are competing against saying oh it's going to take easier you're going to do all these things whereas the one that i just signed up for the agency that i created as soon as i sign the paper my phone rings the qualified appointment and say hey i just saw your ad imagine the difference in value the difference there even though that might have happened 60 days later in the second example is time delay fast beats free the easiest way to provide value in any marketplace is look what everyone else is doing and do it in half the time all right so that is an element and the third component of value the goal is to decrease it and then finally we have effort and sacrifice right and effort and sacrifice are two sides at the same point effort is things that you must now start doing that you do not want to do that you must do as a result of a purchase sacrifice are things that you now must stop doing that you like doing that you can no longer do as a result of a purchase so for example i'll use weight loss because we've been keeping it consistent um if if i have to start waking up earlier in the morning then that is effort if i have to endure being sore that is effort if i have to give up drinks with the girls on saturdays and margarita mondays then those are sacrifices right and so most and i like putting both of those in there because when you're writing copy it's good to think about both sides because you have to give up sleeping in but you have to start waking up early right so it just gives you two sides to think about it from a messaging perspective and so when we're creating a product the ultimately valuable product would be a product that i didn't have to do anything for that the moment i clicked purchase i knew it was going to work and it happened immediately and so think about the difference between let's say meditation right meditation is the dream outcome is to feel relaxed right perceive likely of achievement meh time delay might take us months of meditation actually get that kind of subjective well-being boost right and then the effort and sacrifice is i'm gonna have to sit cross-legged my legs go numb i have to feel like an idiot because i'm not staying focused um i have to do this for 30 minutes every single day to eventually yield the results which is why you know there's not a lot of huge meditation distances right flip side what if i gave you a pill called xanax you feel chill your perceived likelihood is 100 the time delay is 15 minutes the effort sacrifices you swallow some water and that is why you have a multi-billion dollar product these are just the rules of value all right and they don't care about who you are or what you sell these values sorry these pillars to create value can apply so if you can think about your own business and the offers you have how can i increase the dream outcome how can i increase the perceived likelihood of achievement how can i decrease the time delay for my prospects and decrease what they have to do in order to be successful does that make sense is that cool is that a cool process for envisioning value you can apply that framework because once you see it you really can't unsee it um and that's how i think through any of the products that we're ultimately going to sell on any of the companies that we own all right and so five six seven eight nine so scarcity how to build that into your offers urgency scarcity is a function of units urgency is a function of time people usually lock them together but they are different bonuses are one of the things you're going to offer in excess of your of your core offer what are the guarantees we're going to offer to reverse the risk there's four you have unconditional conditional implied and anti-guarantees all right there's lots of stuff that i wish i could talk to you more about in terms of creating offer um and so what i want to do is give you guys something cool all right at acquisition.com i have this entire course outlined this book is 99 cents you don't have to opt in for it so i'm not trying to build my list or anything like that i just want you guys to have this stuff so you can just win them i just want more people to win all right so if you if you want a deep dive on each of these it comes with uh checklists and swipe files and downloads it's all free you don't have to give me anything um and then if you like the digital version uh the kindle's 99 cents so hopefully anywhere you are in the world um no matter what the economic climate is you can scrounge up 99 cents uh to get the you know to get all the stuff all right so um it's all free my gift to you like i said books there and if you like any of this type of stuff i have a youtube channel you can follow me on um and i have an instagram all right so if you if you like this type of stuff um i hope you do and uh as a side note if you are a company that's an e-learning or brick-and-mortar chain looking to scale we invest in companies that are at one to ten ish million that are trying to get to 10 to 50 million and beyond so that's kind of what we do so appreciate you guys thank you uh for your attention i hope you feel like you got a good return on it and have at least a few frameworks that you can apply to increase the effectiveness of your offers and ultimately get more people to opt in more people to convert by percentage at higher prices and ultimately provide far more value than anyone else in your marketplace