You Need Better Customers
Summary
- I was selling the same number of units as another guy, but we were making 70 times more profit.
- His customers were worth $5,000 each, while my customers were worth $42,000 each.
- Both of us had similar costs to acquire customers, so the main difference was customer value.
- He ran general ads saying, "If you're in fitness and want to make money, come to me."
- My ads were specific: you must be a gym owner, have a signed lease, at least one employee, and at least 30 gym members.
- We figured out these criteria by analyzing our top 20% of customers and identifying common traits.
- We then used these qualifications in every part of our marketing funnel.
- In our ads, we made it clear who the offer was for and who it wasn't for.
- If you want to attract better customers, you must be willing to turn away worse customers.
Video
How To Take Action
Action Plan for Small Businesses, Entrepreneurs, and Personal Growth Enthusiasts
Analyze and Identify Your Top Customers
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Examine Your Current Customer Base: Take a close look at your customers. Identify the top 20% who bring in the most value. Write down all their common traits.
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Define Your Ideal Customer: Based on the common traits of your top 20% customers, make a clear profile of your ideal customer. Include specifics like business size, required resources, or any other characteristics that stand out.
Refine Your Marketing Strategy
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Create Specific Ads: Develop ads that clearly state the qualifications for your ideal customer. Be very specific about who your product or service is for.
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Be Clear About Who It’s Not For: In your ads, explicitly mention who should not apply. This helps in filtering out less valuable customers early in the process.
Implement Across the Funnel
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Qualify Leads Early: Use the criteria from your ideal customer profile throughout your marketing funnel. This should include ad copy, landing pages, and initial consultations.
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Maintain Consistency: Ensure your sales team, website, and all promotional materials consistently communicate the qualifications and disqualifications.
Stay Focused
- Resist the Temptation to Accept Everyone: Understand that turning away customers who don’t fit your ideal profile will allow you to focus on those who bring the most value.
Implementing these strategies can dramatically increase your customer value with minimal additional costs. By being specific and strategic about who your ideal customer is, you can significantly boost your profitability.
Quotes by Alex Hormozi
"The thing is, is that he just ran ads about like hey if you're in Fitness and you want to make money come to me"
– Alex Hormozi
"We looked at all of our customers found the top 20% said what do these people have in common and then we made that the qualification"
– Alex Hormozi
"We said this is who it's for this is who it's not for"
– Alex Hormozi
"If you're a trainer if you just want to make money online if you want to do all these things this is not for you"
– Alex Hormozi
"If you want to attract better customers you have to be able and willing to turn away worse customers"
– Alex Hormozi
Full Transcript
so he was selling the same number of people as I was but we're making 70 times more profit than he was and his cost to acquire customer was about the same as mine selling about the same number of units but the main difference is that his customers were worth $5,000 and my customers were worth $42,000 and so the thing is is that he just ran ads about like hey if you're in Fitness and you want to make money come to me and my ads were you have to be a gym owner you have to have a signed lease you have to have at least one employee and you have to have at least 30 members at your gym and the way that we figured that out was that we looked at all of our customers found the top 20% said what do these people have in common and then we made that the qualification and then that ran through every part of the funnel so that was in the ads we said this is who it's for this is who it's not for if you're a trainer if you just want to make money online if you want to do all these things this is not for you if you want to attract better customers you have to be able and willing to turn away worse customers