Which Should You Sell?

Summary

• A client had two offerings: a business coaching service for $15,000 and a hairstyling course for $2,000.
• The hairstyling course had an LV to CAC ratio of 30:1, while the business coaching service had a ratio of 12:1.
• The hairstyling course had a much larger market than the business coaching service.
• Focus on the product with the higher LV to CAC ratio and larger market, as it’s easier to sell and more profitable.
• Use the easier-to-sell product to acquire customers profitably.
• Once customers are acquired, shift focus to getting them to buy the higher-ticket item.

Video

How To Take Action

I suggest starting by identifying the product or service that has the highest LV (lifetime value) to CAC (customer acquisition cost) ratio and targets a larger market. This product, being easier to sell, will help you acquire customers more profitably. For instance, if you offer a low-cost service with a high LV to CAC ratio like the hairstyling course, prioritize this offering.

Action Steps:

1. Identify High LV to CAC Product:

   • Look at your existing product or service offerings.
   • Determine which one has the highest ratio of lifetime value to customer acquisition cost.
   • Assess the market size; choose the product that appeals to a larger group.

2. Use Easier-to-Sell Product to Acquire Customers:

   • Focus on marketing and selling the easier-to-sell product first.
   • Optimize your sales funnel to attract as many customers as possible for this product.
   • Keep costs low by using social media, word-of-mouth, and other cost-effective marketing strategies.

3. Plan for Customer Ascension:

• Once you have customers through the lower-cost offering, develop a strategy to upsell them to higher-ticket items.
• Create compelling value propositions for the higher-cost services or products.
• Maintain engagement with your customers through email marketing, special offers, and excellent customer service.

4. Track and Measure Results:
   • Regularly review the performance of your lower-cost product sales.
   • Measure customer engagement and upsell conversion rates.
   • Optimize your strategies based on these metrics to continue improving profitability.

By focusing on the easier-to-sell product with a higher LV to CAC ratio, you'll efficiently build a customer base, making it simpler to upsell and maximize revenue in the long haul.

Full Transcript

so she did hairstyle stuff and so she's like okay I can teach hairdressers how to do this particular type of cut so that was her low ticket thing and she's like or I've got this business coaching thing that's like $115,000 so one thing was 15 grand the other was two grand I just asked what's the LV to CAC ratio for each of these products and so for the 2K product it was uh 30 to1 and for her 15K product it was 12 to1 but this one was more money well we've got bigger LTV to C here so the only reason I wouldn't do this is if there's way fewer of these clients but there's way more hair stylists that just want to learn a new style than people who want business coaching I like okay so we have a way bigger market and a bigger discrepancy in LTB to CAC well let's just do as much as this as possible and then take this thing and put it behind so you acquire customers as profitably asly possible and then your focus goes on ascension if you have one thing that's really really easy to sell use that as the front end and then basically your focus as the entrepreneur is on the Ascension for those people who then become qualified to buy the the more expensive one