All language subtitles for [English] $100M Money Models - Alex Hormozi [DownSub.com]

100 million Dollar Money models

the training on how to make money

we are going to be covering

all of this stuff in the next few hours together

you'll also notice

that some of these things correspond

with the chapters of the book

100 Million Dollar Money Models

you'll also know that some of these things are not

included in the book

and that is because some of these things are extras

they are Easter eggs they're my gift to you

for actually making it over to the internet

where you can watch with your eyeballs

and listen with your earballs

I will have things that are additional to the book

chapters that go in a little bit more depth

because with a book you have to be super

super constrained in terms of attention

with videos they can be a little bit more engaging

and so I cover a little few more examples

few different examples

and add in some chapters that I ended up cutting out

in the final version so enjoy

with that being said let's get in context context

context the purpose

so why does this book exist

the hundred million Dollar offers

books answered the first question

what do I sell because if you have nothing to sell

there's nothing you can do

now from there once you have something to sell

you need somebody to sell it to

because you still can't get money

unless you have a person who gives you that money great

100 million dollar leads answer that question

which is how to get strangers to want to buy your stuff

which the subtitle of that is advertising

and the core 4 and lead getters

and all the things we go into in that book

so why does money models exist

well money models exist between both of these books

which is how to monetize if you have something to sell

and then you have people to sell it to

then you have the okay

well how do I get them to give me money

how do I get them to buy more stuff from me

how do I actually make a profit from this

and how do I profitably advertise

in order to let even more people know

all of those questions were answered in this book

and to give you a little bit of backstory on this

really quickly I wrote this book first

and it was because

this was my cookbook for making money

this was all the tricks that I knew

about making a business make more money

but then I was like okay

I can't wait to release this thing and then I realized

oh shoot unless they know how to advertise

they're not gonna

be able to use any of the stuff in this book

so I was like okay

I gotta start writing this book

on leads and advertising and

as I was writing this book on leads and advertising

I was like oh crap

if they don't have anything to advertise

they're not gonna be able to use this book

so then I had to write leads

so ended up having to write two books

in order to get to this third book in the trilogy

which I'm excited to share with you now

so why do I write these books

this is a little Isaac Newton

if I have seen further than others

it is by standing upon the shoulders of giants

and so

my goal is to pass as much on to you as I possibly can

and hopefully make you lots and lots of money

and maybe someday you hit me up and say hey

can you invest in my company

and I'll be happy to do that otherwise just make money

I'm gonna die

so are you and at least we can share some stuff alright

big picture we're all here

because other people in the past

documented what they did for generations

we may not remember the names

but we do pass on the learnings

and so that's kind of my goal here

and so education is the greatest legacy of all

that's why I make all the stuff that I make alright

and so consider the alternative

you live a life amassing education and then you die

and then everyone has to relearn what you Learned

everyone suffers what you suffered

what a waste of a life and so I do this while I grow

because I don't want

to forget the little details at the end of my life

cause some people like

oh I'm gonna document at the end it's like

well you're gonna forget all the details by then

and so I try and make as much stuff as I can

as I go up

bread crumbs if you will

simple skills are easy to teach

complex skills often include some type of mentor

or apprentice

relationship for years to transfer knowledge

so think about like deal making

surgery scientist

those are things that usually are complex skills

but it's more so that there's just

bundled terms that have many skills underneath of them

and so it's more that

people have a harder time quantifying it

uh than it is that there are complex versus simple

but the thing is

is that there's not very many apprenticeships

for business this is the problem right

and so my books

and my trainings are my attempt to mimic apprenticeship

at scale so here's the problem this book solves

most advertising isn't profitable

aka people lose money getting customers

and so let me explain how this works

let's say you make $1,000 in profit per customer

over the lifetime so

this would be a lifetime

gross profit of a thousand bucks

and it cost you $100 to get a customer that's cack

cost to acquire a customer cack

so L t G P is 1,000 kacks 100 L t G P to kack

which is a ratio is 10 to 1

which means for every dollar you put in

you get $10 back out

now you should make that trade every time

but

what if you make the thousand dollars

in a bulk payment 12 months later

well shoot

so that means you put a hundred dollars out today

and then you do all this work

and then you get paid a year later

ugh well you should still make the trade

but you're gonna have a lot of cash flow problems right

so you have your negative hundred day one or month zero

and then you're still losing money

all this time delivering to the customer

and then finally they pay at the end

it could be equally said that

let's say if we had a 10 year LTV

and someone paid you $100 a year for

you know eight dollars and thirty three cents a month

for the next 10 years

you should totally make that deal

you're still not gonna have any money

even be profitable until month 13

you would either have to burn your own savings

which sucks you'd have to burn other people's savings

through debt and equity meaning

you sell portions of your business

in order to get more cash

you do fund raising right

or you raise some sort of loan from a bank

so that they can basically fund your business

while you wait to get this money back from customers

which sucks and it's hard and I get it

because I've been there

but the good news is there is a better way

which is door three uh

make more than $100 in profit in the first 30 days

for this particular instance

and so this book is door three

so

if the problem is that most advertising is profitable

the solution is something I call client finance

acquisition or customer finance acquisition

CFA is sometimes what I refer to it as

and the point of that is to make money faster

this enters the element of speed into the conversation

not just how much you spend

how much you make back but how fast you make it back

because how fast you make it back

can be the thing that unlocks

all the growth in your business

or tanks your business overnight

so customer finance acquisition

or client finance acquisition

CFA is a process in which gross profit

generated from a single client

within the first 30 days

is greater than the cost of acquiring that customer

so where gross profit the extra cash that you make

from somebody coming into your business

from one customer in the first month

is more than the cost of getting that customer

now

if you're listening or following along from the book

this isn't in the book

and the reason for that is that every single

of my proofreaders

as soon as I start getting into math

they're like

I don't know if people get sections from the book

but they are here because it's important

so

the purpose of this is to accomplish customer finance

acquisition so here's a quick story for you

so let me tell you how this all started

so this is me when I signed my first lease

at $5,000 a month

that's me not knowing what I was doing

and this is where I slept

and that's my really fancy equipment

that I was able to afford

and so

I heard about this thing called Facebook Marketing

and things started going well

this is actually a picture I sent to my dad

after the first week of having my gym

to show how many memberships

I actually was very proud of this

which is kind of silly now that I look at it

it's like I had like whatever 18 memberships

but I was super proud of this

I had hustled all day to get that and so the thing is

is that thing started to grow and so that was good

this was our my one year there's my little

my little dinky streamers

cause that's what I could afford at the time um

but things were going well

like all my clients showed up

which is kind of sweet um

and we grew over to 9+ employees

so that was cool um

and I started to feel like I had it figured out

I was like I'm a businessman

and then of course

Facebook slaps me and they 5 x my cost per lead

and so what was once a money

you know torrential Hurricane or downpour

turned into the Sahara Desert

or whatever desert this is uh

and all I could think about was you know

having to call my dad say

I'm gonna be I'm a failure

this is actually didn't work

I didn't really know what I was doing

and that would have sucked right

and so all I could think about was

how can I afford to pay for more leads right

like the business worked everything was fine

it's just my cost for lead went up

and so

I needed something that was immediate cash up front

so I could pay off my credit card Bill

for the ads spent without going into debt

and so I want to highlight one key point right now

is that two types of business owners

about the things that

are out of their control of yours

if CPM's the cost per impression goes up on a platform

you can either afford the impressions or you can't

and you can beg borrow

and steal and wish that the impression cost goes down

it's not gonna change anything right

of course you can make better ads

make better hooks things like that

but fundamentally my lead cost went up

so you can either go out of business

or you can try and figure out a way to make more money

per customer and so that's what we did alright

and so this is what happens

so I'm traveling home for the holidays

and I've got this layover somewhere

and I see a guy from college in the same waiting area

and I was like oh don't shoot

I was like hey what's up dude

so we start chatting and it turned out

that he started a supplement business

I was like oh okay

kind of interesting and so I was like hey

so how do you make

how much do you make a month from your sub company

he's like well I got two locations

one does about 80,000 a month

the other is 130,000 a month and I was like a month

it's like selling supplements

and

a guy can make an extra 80,000 a month

selling supplement without any members

I got a gym he has no gym

I've got a gym with members

he doesn't have members I was like

I can definitely sell 20 grand a month with my members

just to cover my costs

and so

I put in order for supplements to resell at my gym

and at first of course

no one bought until one day I was able to make a sale

and then from that day going forward

I began selling $200 per person in supplements

so about a hundred bucks in profit

and that hundred dollars

offset my cost of getting a new member in the door

and so I used to have to spend

money to get the person in the door

and then sell them stuff and then wait to get

you know recruit membership cost etcetera

but here with the supplements

I could sell them supplements up front

and I made my cost to get the customer back

alright

so I was able to start spending way more money on ads

again because it paid for my advertising

and so it made all the new members and the cash

they paid free which is sweet

and so the moral is that I made another offer

and when I made another offer

I made more money and so the outcome was

I was able to get paid to get new customers

and I'll say that again

I was able to get paid to get new customers

so most people pay to get customers

I was getting paid to grow

and so my gyms grew

and so over time

I continue to get better and better at recombining

the way I charged and structured my client journey

to make more money than my competitors

and so I went from making like 4 to 5 to 1

to making 31 and up

so like every dollar I put in I would get $30

$40 back on my marketing and I'll show you how I did it

alright so

I eventually took that multi step money model

and licensed everything about it to 5000+ locations

and that's what became gymlaunch

and the average return on ad spend

in the first 30 days across all

those gyms all right

not including memberships to this day is 4 to 1

and that's up front that doesn't include memberships

so that's a not a true LTV to cap ratio

I'm saying that's the up front cash

they collect in the first 30 days from customers

they still have the whole membership on the back

and so that's what I'm gonna break down for you

in this training alright

which is exactly how to do that at any business

which is build a money model

that allows you to never use your own money

to get customers again alright

that means that you're no longer constrained

by how much capital you have

who you know what your bank lending terms are

it's just about what you can design

in terms of how you build your money model

so that you can use other people's money

not banks

but your other customers money to finance your growth

so that was my quick story alright

and we have given you context now we begin how business

how businesses make money

how businesses make money starting with No. 1

LTP has to be greater than CAC duh

but let's get into it oh look

I did write this duh haha

so you've got to make more money

over the lifespan of the customer

than it cost you to get them obviously

cause otherwise

you're spending money to get people who

give you less money than it cost you to get them

which is not a good recipe for making money

so cool thing No. 1 glad we covered that No. 2

let me give you this a real example to make this

make this real for you so this is a real thing for me

so I had a meals company for a year or two um

and foreshadowing things went wrong

so we had a hundred dollar cap

which means it cost me 100 dollars to get a customer

and we had 500 dollars of lifetime revenue

I'm highlighting this lifetime revenue and I was like

and so my team comes to me and says hey

we're gonna be rich

every hundred dollars we put in we get $500 back

let's spend more money and I was like

hold on one second and so not so fast I was like okay

well what are our gross margins on these meals

and so the gross margins were 20%

so and our lifetime revenue was 1 65 * 3

meaning people would pay for $165 a week for the meals

and they would pay for three weeks okay

so the 30 day gross profit was uh was um sorry

this is per month excuse me uh

so 1 65 times 20% is $33

so now

my lifetime gross profit was 500 times 20% was $100

so wait a second so you're saying I'm spending 100

making $33 back in the first month

and spending a hundred

and making a hundred dollars back

lifetime but then we have like

all these humans

that we have to do all this other stuff with as well

well that's not gonna work very well

and so it didn't and so I told them to not do that

that's also why I'm not in the meals business anymore

um now if you're like hey

why didn't you work to figure it out

it was the fourth business

I started while I was still CEO

and Layla and I had one of these conversations

she's like pick and I was like legit

and so I ended up shutting down that

cause I had a co packer

so it wasn't like I had a huge amount of um

staff or something that I had to lay off

or anything like that

I was repurposing my supplement company

staff to deal with all the meal stuff

here's a fun fact for you

80% of our customer complaints came from meals

20% from supplements

and 95% of my profits came from supplements

and 5% came from meals and I was like

I think if I were giving me advice

I would advise me to stop doing this and so I did

so let me give you some benchmarks though

so you have an idea cause you're like OK

got it so LTB lt let's just say GP not PG

so it's not a PG thirteen movie

lifetime

gross profit to cack ratio should be over 3 to 1

which means you

should be able to make more than three times

what it cost you to get a customer

in gross profit not revenue

gross profit back to you as a business owner alright

at minimum

in order to have a profitable business at minimum

this is not like that's the goal

this is the by all means if you're below this

you're absolutely screwed at 3

you're still not like in great you know

in a great position ideally it's much higher OK

here's the example gone better

so in order for this hack to work for this business

I would have to make 15 dollars

not five hundred dollars in lifetime gross profit

in order for this to make sense

so I had to be way higher in order for this to work

and it wasn't okay so

that's just to give you an idea

of what kind of adjustments that I would have to make

in order to make that business work

which I was like

I don't know if I can conceivably do that

which ultimately LED to me deciding not to

which then leads us to the only three numbers

that matters and this is what you need to write down

this is what you need to think with alright

now this is not in the book and you're like

wait a second

how are you not talking about this in the book

it's cause no one can do math

so you're here and you can do math

so if you're looking closely

you may notice that there's three numbers

that make the biggest difference here alright

so number one is cack which is the cost to our customer

the second is the fact that I talk about this

30 day thing like why am I talking about 30 days

and the third is gross profit

which those three metrics triangulate acquisition

meaning getting new customers

cack is how much it costs

GP is to make a profit

and short PPD means payback period

how long it takes you to make that money back

how long it takes you to make your cost back

so ideally you get have low cap

which means you have cheap customers

you have high GP who pay you lots of money

and then short payback period

which means really fast outcome is more money faster

alright

and that's pretty much the training in this book

alright like that's what this is all about

so that's that's what we accomplished

the rest of this is all about how okay

so boom those are the three numbers that matter

and let's get into the first one

a little bit more detail

cause some of you guys are like

Kack sounds like something my cat threw up understood

that's the next one

so cost to acquire customer aka cack

let's dive in cost to acquire customer again

so let's start with definition all right

cost of acquiring a customer

all the cost required to sell a new customer

so that's the advertising dollars

the payroll to a media buyer creative team

software that you

that the team uses to make advertising and sales

commissions salaries

the managers of those teams

everything that it cost you

so a lot of people and if you want

you can delineate how much does it cost

if you use paid ads for example

how much it cost us in media spend

versus how much is our

sometimes people will call it fully loaded CAC uh

you can have both those numbers separated out

which I think is wise

it's kind of like media cap versus fully loaded uh

but at the very basic

now that only really applies to paid media

if you acquire customers via outbound

payroll is gonna be the majority of your cap

if you use uh

content to get customers as your primary acquisition

uh method

then it's just gonna be the cost of the payroll

for the team that does all the distribution of content

and editing and what not

but most companies especially if you're bigger

are gonna have multiple different versions of that

which is why you just look at everything

and you look at how many customers you got

you divide it out and you're like

that's our cost per customer

so if we're trying to get unlimited customers

we better be sure we know what our own costs

uh to make sure that we can actually pay for it

so that we can get unlimited new customers alright

so let's calculate it together

so if you use outrage as your primary way of getting

customers

then you use let's say $200 a month in email software

and you pay someone $3,000 a month to do cold email

prospecting for you then emails become appointments

that turn into eight sales per month

and so then you pay your salesperson $100 per sale

so then what's Kack alright

this is like a chat GPT prompt word problem

but fundamentally

this is what it looks like for you as a business owner

so this is how we this is how we calculate it

so the total cost for 8 sales

means that you have a 3,000 dollar emailer

plus a 200 dollar software

plus 800 bucks in commissions

which is 8 sales times 100 dollars equals 4 grand

all right

so now we divide that by the number of new customers

which is $4,000 divided by eight new customers

equals 500 bucks per sale

so cack is $500 in this outreach example

so let's say that you have a content business

so let's do this one

so you have to pay two people on your media team

that you pay $5,000 a month each

and they help you make

edit and distribute content across all platforms right

so that content then turn into inbound messages

and then options on your site

and then those leads turn into 10 new customers

and you pay $100 in commission per sale alright

so what's cap so

the reason I'm giving you all those stats

is so that you can plug your own stats in

and then figure this out for yourself

so if my media payroll is 5 k times 2

it's $10,000 a month there

my commissions is 10 sales times 100 is 1,000

so all in

I got 10 grand plus 1 grand is eleven thousand dollars

so my cost to a car customer will say is $11,000

divided by 10 customers equals 11 dollars

so my CAX 11 bucks now if some of you are like wait

I have sales payroll in there too then add it in

if there's something that you don't have here

cut it out but fundamentally

it's just all the money you spend to get new customers

divided by how many customers you got cool

and I'll do one quick one on paid ads

so you spend $4,000 a month on a media buyer

you spend 20 grand in buying ads

the actual media itself

you spend a thousand bucks commissions per sale

so this is probably a higher ticket sale

and you spend $1,000 on software

and tracking and following up the leads that come in

to get 10 new customers so what's cracked

so media 4K media spend 20K software

1K commissions 10 times one 10,000

so all in we spend $35,000 divided by 10 customers

thirty five hundred dollars per customer is our cack

that's how this works

by the way one of the best ways to improve any metric

is to start measuring it

so how to improve it in this whole training

I talk about lots of different things that cover

and check off different boxes here

but fundamentally if you had nothing else

and you just want to

need to have a cheat sheet for this

it would be you make better offers

that gets you higher response rates

and if you make better offers

you're also going to convert a higher percentage people

more people are going to take the next step uh

if you have better offers in general

your CPM's are also gonna go down because people like

oh this is a better offer great uh

you'll have cheaper labor

so you won't this is not necessarily related

but you could have cheaper labor as a way to improve

cack like if you had

if you paid your sales guys less

or you paid the outbound team less

whatever it is like that could decrease your cack

and you could have cheaper software

because that is also a cost

but I would say if I had to measure

which of these is gonna be the biggest levers

it's gonna be these three and I would

I rarely go and dip into these ones

to be very candid with you

because you have such an order of magnitude changes

you can make up here

that sometimes this stuff becomes irrelevant

you lose morale for no real no real benefit alright

so we talk about these two primarily for this book

so the two most powerful words in advertising are free

and new use them

and so for us if our objective is to lower

cap to the greatest degree possible

we wanna get as many sales as possible

for as little advertising dollars as possible

and so that means

we wanna

convert the highest percentage of our audience

and so

note that this is expanded content from the book

alright that I just think is worth knowing alright

so in hundred million dollar leads

I talk about the value of giving something

away for free some people don't want to do that

but let me explain why

I think it's probably a good idea

especially if you're starting out alright

so Dan Ariely again none of this is in the book

I had to cut this out

so Dan Ariely who's a famous behavioral economist

psychologist whatever some science dude alright

so he ran this thing called the Hershey Kiss test

and he would give away Hershey kisses for free

or he'd give them away for a penny

Wanna guess the difference in take rates

on a college campus

nine times more people

took the free Hershey kiss versus the one penny kiss

and he called this the penny gap

nine times more

for those of you who have this like

keening and hawing of like

I don't wanna give stuff away for free

okay don't

I think it dilutes my brand

OK

there's a difference between giving products

away for free and giving value away for free

and you have to understand the difference

and I I have always subscribed to the chick fil a

model of this

which is either it's free or it's full price

never discounted so if we mess something up

your sandwich and your whole meal's on us

but otherwise it's premium and it's full price

but it's one or the other there is no in between

and so if we want to make let's say your B to B

you make content that's free

you make lead magnets that are free

you provide value you make software tools

you give them away for free

these are all things if it's free versus $1

like

you're gonna get shitty customers if you do it like

OK

cool and for everyone who does wanna listen

let's keep going

so we start for free because if they don't want it

it's because they 1 don't want it

and so

that means you just change what you're giving away

or how you describe it

so you mean that the things wrong

or how you describe the things wrong

the second reason

somebody doesn't want your free thing

is because they don't believe you

so they it's too good to be true

so I'll give you a story about this

so there was a famous marketer who used to

he used to on the side teach marketing classes

and he talks about believability

and so he would always run this test once a year

where he'd run an ad that says

give me $100

and I will give you a thousand dollars back

call this number and no one would call

and the main reason was no one believed it

it was too good to be true now to be fair

people are dumber now and so maybe it would work now

but when he would run these tests

we'd have to something you know uh

we'd have to run something uh

maybe but like the point hopefully remains all right

the next is

I've seen this split test work

more times than I care for

but if you advertise

something that can help you make an extra $5,000

a month

versus something that helps you make an extra $500

a month this one gets more options

and so you're like

how could a lower result get more people to want it

and it's because more people believe it

kind of interesting

the last reason that people don't want your free thing

is cause it's the wrong people seeing it

so it's like if if I'm getting a free gym membership

that's offered in Ohio

I'm never in Ohio

so I don't really care and so if you're selling

you know fur coats to you know Arizonans in the summer

probably not the right market even if it's like hey

it's free

it's like I'm just never gonna wear it right now

there's intrinsic value to fur coats

but you get the idea alright

and so big 3 is that I like testing this

because if you give stuff away for free

then you know that if people don't want it

you change what it is or how you describe it

they don't believe you can give it to them

or show it to the wrong people

all of these things are great feedback for us

so here are the pros of free

is that you will get more leads for free

and you will get lower cost leads

when you market or advertise with free

here are the cons of free

is that the volume can be a double edged sword

if you're not prepared for it

so if you use some of the stuff in this book

and this training

you're gonna get way more leads than ever

ever used to and so

what'll happen is

you'll get way more people reaching out

and if you don't have the manpower

or the time to reach out to all these leads

it's wasteful

and so what you then do is you can add friction

so you give something for free and then add friction

and so then you can add qualifications

which could be like types of questions

the number of steps in a process

the targeting you do is also another form of friction

you can force them to consume stuff

prior to taking another step

you can increase add length

these are all things that you can do

to increase friction alright

so if you're looking at this

and you're like writing this down

like

these are the steps that you can do to add friction

to any advertising process

and so for me

I don't want to make my ads or my offers worse

I wanna make them better and then add more friction

because fundamentally the idea is like

I wanna get as many people who want this thing

to raise their hand and then put my filters in place

so that only the people with money who are qualified

come through but I want the strongest magnet

to get as many people as possible

to take that first step and then the filter

to cut out as many of the people who I don't want in

that

I got as extra eyeballs or extra clicks for my big

amazing sexy thing

and so the other con of free is that sometimes

you have people who have no intention of buying right

this is the uh the free brings broke people myth

let me see if I actually dive into this deeper OK

I don't so I'll tell you right now

so here's the free brings broke people myth

we tested this

so we have a tremendous amount of data on this concept

um but in gyms

as you might imagine cause I came from the gym world uh

we'd have gym owners saying

I don't wanna give away free service

they'd be like

it undervalues my brand blah blah blah blah blah

whatever OK

so what we did was we ran a test and we said

10 locations run not free

so we're not gonna use free in the advertising

and then you 10 locations use free in the advertising

everything else stays the same

guess what happened

the non free guys closed fewer sales than the free guys

but here's the real kicker

the close rate

between the non free people and the free people was

the same the best sales guys could close

people who came in for free

and the best sales guys could close

people who came in for not

for free and the shitty sales people

couldn't sell anybody who came in for not free

and the shitty sales people couldn't sell anybody

who came in for free so

the only thing that changed between these two things

was the cost of the lead

and so these guys were paying way less per lead

so they made more sales

but the average close rate was the same

we tested this on 20 locations

across different markets so and

and I had to do this every so often

because it would rise up in the community like

we shouldn't be giving away free stuff

I'd be like dude you can do whatever you want

I like to do math and so if the math works

do it if you don't want that fine

do it your way but don't also want a different outcome

so that is the free brings both people myth

is that rich people also like free stuff

and if it's what they want

they'll take a first step

because if you remove risk for me

I'll take a no risk I'll take a I'll take a flyer

I'll take a look

but then if you make a follow up offer foreshadowing uh

I might also buy right and so the closing percentage

the only difference was the lead cost

between those locations

alright so

the bottom line is that

if I had only one offer to make

to convert or my family would be killed

it would be a free offer

and I'd rather wade through crappy leads first

and then figure out how to add friction

rather than look at an empty inbox

and an empty calendar

waiting for my next client to show up

think about this for one more moment

one of my big sayings that I've repeated internally

in terms of advertising is create flow

then monetize then add friction so you create flow

which means give the big sexy thing away

the monetize is

make sure that you're getting the right people on

so you can sell them

now if it's not as efficient as you want

that's the third step that's the optimization

that's the add friction but even inefficiently

we're getting money cool

now we plug the filters in

now we optimize so create flow

monetize add friction

those are the three steps I follow and so the thing is

is you can't optimize an empty inbox

you can't optimize an empty calendar

you can't optimize a funnel that gets no clicks

and so you want to start with the flow first

alright

next point in terms of how to improve CAC is okay

so discounts and free

so these are more or less the same thing

I'm gonna use these interchangeably

throughout the book uh

they really just exist on a continuum

and so 100% discount is free

99% discount is a discount

but fundamentally

it's just a continuum that this exists on

and so all the constructs I use in this book

if it says free you can do it for $1 if it says $1

you can do it for $19 it works the same all right

fundamentally

you get something for less than it's worth

and the arbitrage between its value

and what you get for it is the reason

someone engages my little

my little tip here is

if you have something where it costs a lot of money

for you as a business owner

for somebody to miss an appointment

so let's say you're a dentist or a lawyer

or you're a chiropractor

and it's your time that's being kind of given away

and you charge a lot per hour

whatever then you can have

it might be more advantageous for you to do discounts

because then you can get a card on file

which then makes sure that the people show up

you can charge no show fees

things like that and so if you have too many

like you can solve it in two ways you make it free

you have the first appointment with someone

who's an underling whose time doesn't cost as much

and then from there

you book the one with you option A or option B

you charge some little mini discount thing

so you can get a card

so you can charge enough show to make sure people shop

both work

alright so here's how I use discounts

I don't

I think the idea of a moderate discount is stupid

so the idea of like 10% off or 20% off I think is dumb

I want insane discounts because 10% off doesn't

get someone who would otherwise not opt in

to now opt in it doesn't change behavior

and so the only purpose of freer discount

is to change behavior

is to get people who would not have taken an action

to then take an action as a result

of the freer discount or the

the arbitrage of value all right

and so for me if I'm gonna do discounts

I want 50% or higher

for something that people already know the value of

for it to be effective now

the objective here is to get

people who wouldn't otherwise respond to do so alright

and if you're not giving away 20% off the top

for the same number of people

cause that just means you just lose money

the same number of people reply at 10 or 20% off

you're just losing a ton of profit and so don't worry

I will show you how to do it without giving out

away the farm alright

like you're like wait how am I gonna give it fits

relax that's what this whole thing's about alright

so there's four ways to display discounts

number one is that you can say the percentage off

alright

so let's say it's 87% off the first visit alright

that would be let's say it's a

it's 13 bucks for my hundred dollar first visit

it would be 87% off okay

fine the next way would be the absolute amount off

so it'd be $87 off now in the example here

it's $181 off the first week normally 2 10 fine

that would be 87% all right

but it's a different way of displaying it

and you're like why is he telling me this

because you test these

so if you have your hundred dollar thing

you run 87% off you run $87 off

you then run the relative equivalent off

meaning what is that savings of value worth

all right so like save a steak dinner uh

or less than going out to lunch

it's saying this you wanna you wanna frame it

now a different way of thinking about this

is called a portion off

which um I usually bucket into this

which be like if I had

let's say a hundred dollar a month subscription uh

and the thing was 12 months

so 12 dollars if I if I wanna give 25% off again

we're we're breaking rules here

but uh

if I wanna give 25% off which should be three months

four months off uh

then that would mean that I could say okay

this is $800 I could say it's four months free

I could say it's 25% off

I could say that you get $400 off

those are all different ways of describing the exact

same thing I could also say finally

it's $800

and above that I would have 12 dollars crossed off

which is simply displaying the discounted price

next to the retail value

these are all different ways that you can display

a discount

and so since this book is about monetizing traffic

you need to know the different guns

you've got the different weapons

you've got the bullets in the chamber

that you can use as an advertiser to rotate through

to get one more people to respond

but also to keep the advertising fresh

so like if one month you run four months free

and then next month you run $400 off

and then next month you run $800 crossed off 12

the market feels like you're changing your offer every

month but that way internally for you

everything is the exact same

but it creates freshness in terms of the advertising

so how different do all those feel

they are all the same thing

just presented different ways

and that's why we do this

so this is a little pro tip that I will give you

you probably can't read this

I'll just tell you what it says um

which is that in order for a price off

or a simply discounted price to work

the market has to have an understanding

of what the price of that commodity

or what that service is

and so if I say that I'm I'm selling

you know an adjustment for a chiropractor for $29

that is effective

because people know it costs more than that

they might not know how much more

but they just know that it's more

that's cheap for that thing

if I say 20 dollar teeth whitening at a dentist

that's gonna get a lot of people who are super

interested

cause people know it's way more than 20 dollars

I could probably say hundred dollar teeth whitening

and people would still say

that's a great deal right

because there's an idea now

if you have an intangible product or a

a product that no one else sells

or it's a digital product or you're like a

a creator and you wanna launch something

if you then say it's this price off of this price

there's not a lot of value because the

the arbitrage is is arbitrary

so you made it up and so there's no

there's no pegged kind of marketplace price

for the thing that you're selling

and so in those instances

that's where percentages off of retail

things like that

work a little bit better than just saying like

seventeen dollar you know

course it's like

well that

that might be expensive for some people

and cheap for other people

but for a teeth whitening thing

everyone knows it's cheap

and that's why

if you are gonna put that one price on there

you wanna do it this is like

me differentiating for what business owner

this works for to be clear

alright

so here are the pros of discounts

so we talked about the pros of free stuff

here are the pros of discounts so uh

one is that they're compliant for cheap leads

meaning you don't have to ever worry about like

anybody saying that you did a bait and switch

or anything like that

so if you charge people for stuff

then there's there's really nothing to say about it

alright

number two is that you can actually collect some money

which is decent right

I mean some money is better than no money okay

um people do come expecting to spend some money

so this to be fair this is my belief on this

I believe that the reason that the discounted

people come in and buy more

is because sales people believe that

I don't believe it actually has any difference

because when we talked about the free versus not free

the close rates were the same

so I think it's more that sales

people feel more convicted

but when I look at the data

it doesn't make much of a difference

because I could equally say

these people were just looking for cheap stuff

works the same way it just depends on what narrative

you want to tell the salesperson um

these work and this is probably the most important one

these work exceptionally well as two step sales

here's why

if you get someone's card before they come in

then when you when they come in

you can then make the up sell and say

do you want to use the card you have on file

and so the key is that you have the card

more than what you charge them for

so it's like you almost want to charge them for

the cheapest possible thing

to make sure the card works

so that when they come in

you can have a seamless upsell

into the really expensive thing

and so that's what creates the

upsells that are smooth as butter

point five now here's the cons of discounts

if you don't do it right you're giving away

you don't ever give away the core service

at a discount you give away a break

broken off piece of the core service

or something extra that you

create and then create a huge discount on it alright

and so you don't give away core offers that has

or stuff that has hard cost

unless you like really know what you're doing um

you splinter out the thing

now I talk about this at length

in the hundred million Dollar offers course

I'm not gonna break it down now

but basically

lots of different components to your offer

you have lots of different features

you take one feature off

you say this feature is 99% off now great

that's where the discount is

and then you sell the rest of it alright

and so whatever you break off

it has to be something that's well understood

or it's not gonna work alright

that's kind of the thing I was talking about earlier

people have to have an understanding of it um

the cons are you got the bargain operators right

people who you know complain about this

but really they they're already you know

they're already customers

they're easier to upsell though

than someone who's cold so yeah

alright so the objective is that attraction offers

are the first step in the four prongs

because if you don't have interest

you don't have anything right

and so customer finance acquisition requires demand

and a big difference between cack and GP

having low cost

or free front ends is a strong way to do it

so lots of demand

free big front ends drives more in alright

so these things are going to be interchangeable

throughout the remainder of these trainings

so if you see 19 dollar chiropractor visit

it can be just as much a free chiropractor visit

the whole thing will work but if you're like

you insist on doing this fine

do that if you insist on doing this fine

do that it does not matter

all the money models that I will show

you can have free or discount interchange

and they will both work

kaboom

these are the ways that you can improve your cack

so with that being said

cack is covered now we go into gross profit

gross profit alright let's rock in

so this is the second of the three metrics

that we look at to triangulate acquisition

we started with CAC you have to have cheap customers

we talked about different ways to improve it

free your discount

different ways to display discounts uh

but now we're gonna talk about gross profit okay

so we're gonna find what it is

why it's important examples

calculating and improving it alright

let's rock so gross profit

the difference between the price

and the cost of goods sold

so cost of goods or cogs

is what it cost you to deliver the thing alright

so if it cost me $9 to deliver meals

and I sell it for 10 then I got $1 in gross profit

alright very straight forward

now here's why this is important

so the problem is that most businesses

think they need cheaper leads

when in reality

they need to make more money per customer

and so my observation is that the cack

this is this is me like high level

cause I see lots of businesses

cack between competitors is often fairly similar

so a lot of people are you know

obsessing about how they're like

you know

they want to improve their ads and things like that

and sometimes you do need to do that

but

the ranges are actually much tighter than you think

so you might see somebody who's you know

acquiring customers at twenty five hundred dollars

somebody

and somebody else in the marketplace might be 30

five hundred dollars

rarely would you see somebody at like $6,000

unless they're like just getting into the market

but the cap for specific avatars

is usually pretty tight in terms of ranges

when I see many businesses in the same industry

now that may surprise you

but that just like kind of is what it is

but the difference between how much money these

these companies make

is often how much customers are worth

now

that is where the huge discrepancy between businesses

exists

so

this is the difference between the whales

and the minnows is how much they make per customer

gross profit alright

so let me tell you a quick story

so I did a consulting day

years and years and years ago

this might have been the first five I've ever done

my whole life um

and a guy was in the same space as me and you're like

wait Alex

why would you help somebody who's a quote competitor

I don't see the world that way

so guy came in and he was selling

the same number of units per month as me

all right same number of units per month as me

but I was making 56 times more profit than he was

that means 56 years of him making

the amount of money that he made

is what I made every year

and so he was making $300,000 a year in profit

and I was making 17 million a year in profit

same number of units sold per month

and so

the major difference is how much we made per customer

and so gross profit is the arms race of business

because the thing is

is the person who makes the most money

can spend the most money

this is how you get an ethical monopoly

so like you don't have a monopoly from okay

I'm uh I'm you know

I'm somehow protecting any

like no one else can do business

you're saying you're welcome to do business

but I'm gonna outspend you on all advertising channels

so for you to get your word out

you're gonna have to outbid me

but because I created a better business model

I can outspend you in the auction of attention

this is a Dan quote

he who can spend the most to acquire a customer wins

this is my version of the quote

which is what I of course I like my version uh

he who makes his customer worth more to his business

than to his competition wins

I think about this in terms of what can I do

so rather than thinking oh

I can spend I love Dan to be very clear um

you can spend the most

it's like it's what do I do in order to spend the most

what I do is I make my customer more valuable

the outcome of that input is that I can now spend more

so these are really just two parts of the same quote

if this is the precursor to this one

if that makes sense alright

so that's why this is important

so let me give an example

so I remember when I uh

I was uh at at at Smoothie King

I was a blender tender

and my buddy was reading this article

in the back of the store probably goofing off

when we probably shouldn't have been uh

and he was like dude check this out

this guy bought a 50,000 dollar burger

and we looked at it and it was like made of gold

and whatever crazy

Wall Street person bought a

fifty thousand dollar burger right

and and I was thinking about that

and I remember the article said something like

he was making 50 million dollars a year

or something like that in income

and so what I ended up doing was

I started looking at what it cost him in hours

versus what it cost me in hours

for the burger that I bought earlier that day

and so then

I realized that my 13 dollar burger was the same to me

as this Wall Street guy's 50,000 dollar burger

that

it was actually the same level of inconsequential cost

for him as it was for me

and arguably

this was more expensive for me than it was for him

just a normal burger and so that

that concept basically

is the reverse of the realization that

you can only go down to zero

but you can go infinitely high

when it comes to lifetime value

and so like you can only drive down so far

right on on the on the cost side

but in terms of how much you can make

that's where you can be as creative as you want

in terms to continue to increase the lifetime growth

profit per customer and so

you can make something as insane

as paying $50,000 for a burger

or kack actually still be relatively cheap for you

if you know how to increase the value of the customer

and so think of the burgers as the commodity

which is traffic

think of our income as the lifetime gross profit

if I were competing with this guy

he would be able to outspend me 30

7 hundred times over and in the auction of attention

he would outbid me every time

and our goal is to do the same to our competitors

alright so you need to look at both sides

getting customers for less

but also making them worth more alright

and before we improve it

we gotta know how to calculate it

so here's gross profit how we calculate it

so here's a product example

so if I sell a widget for $100

it cost me 20 bucks to manufacture it

and ship the widget to the end customer alright

so my gross profit is 100 where is it 100 - 20

80 bucks

this is what's left over this is my gross profit okay

here's a service example

let's say I deliver services monthly

and I have one account representative per 10 customers

if my clients pay me $3,000 per month each

and my reps cost me $6,000 per month

we can then figure out the gross profit margin okay

so the rep salary is $6,000

the clients per rep is ten

the cost per client means it's $600 per client

remember we make $6,000 divided by 10 clients

$600 per client

gross profit alright is now three thousand dollars

what they pay us minus my cost per client

which means 24 dollars left over

the reason I'm going through this is that

many of you guys watching this are service based

businesses and don't know your costs

these are your costs

so my gross margins are 24 divided by $3,000

which is 80% rule of thumb from Alex

if you run a service based business local

brick and mortar or national

you want at least an 80% gross profit margin

now that that may sound crazy to you

but it is very unlikely that you will scale in service

unless you have 80 or higher

so not just a that means that if it cost you 100

you gotta sell it for 500

now you might think

cause if you're a newer business owner

you're like no

I that's that seems unreasonable

that's your gross profit not your net profit

you still have rent

you've got you've got your fixed admin cost

you've got insurance you've got utilities

you've got break fix that happens within your business

you've got all these other costs

that go into doing business

you're not running 80% net margins

you're just saying

this is now all the money I have left over to run

the rest I still got to spend advertising dollars

like there's all this money that I still got to spend

and so if you're if you're at 80

you might be running a 30% net margin business right

so just to give you context on this okay

and so the pro tip is that gross margin equals

gross profit times 100% so if you ever hear me say

gross profit versus gross margin uh

it's just this is a percentage

this is an absolute that's all it is

so gross profit is the absolute uh

gross margin is the percentage that's all it is okay

so if I say it's 80 bucks in gross profit

it's 80% gross margins I just I

I clarify this because if you've ever like

read stuff and like wait a second is this different

it's just a different way of measuring the same thing

that's all it is alright cool so big picture

this is what the business was

this is the example I gave visually

this is the correct visual

alright

and you can note that gross profit is not net profit

alright this is the cost limited to the

that with the business

incurs directly from delivering the thing

so if you had an administrative assistant

and you sell cups for $10

they cost you $2

we wouldn't factor in your administrative assistant

into the $8 of gross profit

it's off

the gross profit that we eventually pay for everything

else in the business to create our net profit

aka what's left over at the end of the month alright

so your rent doesn't go into your gross profit

your admin cost don't go into your gross profit

your utilities don't go into your gross profit

it's just the cost of okay

if I sold another one of these

if I sold another customer what are the variable cost

what are the cost that go up per unit sold

if your rent doesn't go up per unit sold

if your admin cost doesn't go up per unit sold

then it is not factored into gross profit

but if my hard cost of cups

if I sell another cup

I still have to incur that cost if I

if I have a if I have to sell another client

then a certain portion of my resources

of client delivery

is gonna get allocated to that next client

now some people like wait

but I have to pay my person either way

not really I mean

you do up to 20 and then you have to hire another one

and so you just have to fractionalize it

in terms of your thinking

so it may feel fixed

but it's not you just have to you have chunkier um

start stops more than it's a fixed cost

if that makes sense when it comes to calculating this

so you're like okay

got it I have mine and mine sucks

so what do I do to improve it

so improving gross profit

there's a lot of ways to increase gross profits um

but without altering price or cost structure

the three easiest to remember are more better new

alright which is sell more of the stuff

so more quantity or duration of the thing

so get them to buy in bulk or buy again tomorrow

sell a better quality version of the thing

so that would be like

a regular burger versus an organic burger

or a large group versus personal training

better version of the thing or sell a new thing

so you fries and a Coke

which then you can supersize on quantity and quality

as on top of that

that's the that's the quick and dirty

we're gonna get into lots of different versions

of this alright so that is gross profit

we talked about the three things for acquisition

so we've got cost you a car customer

how much it costs us gross profit

what we make for what it costs us

and now we go to payback period

which is how fast this all happens so if you see PDD

just payback period or payback period

I'll probably say it out loud

cause I don't Wanna confuse you alright

so we got the definition why it's important

examples and then how to improve it

let's start with definition so payback period

how long it takes until gross profit is greater than

cack

in other words how long does it take to break even

the shorter it is

the easier it is to scale your advertising

so if I break even in a day

versus breaking even in 5 years

it's a lot easier for me to scale right

cause I get my dollar back tomorrow

then I can spend it again

some people call this a cash conversion cycle

I probably won't say that again

but just in case you hear it

that's what that means alright

so that's the definition here's the importance alright

so problem No. 1 businesses take too long

to break even on getting new customers

and so they have to manage cash flow

by making a marketing budget

I think this is silly

we solve that problem problem No. 2

is that businesses feel guilty

making multiple offers in a row

because they think that they bother people

they are wrong the people who feel this way are poorer

than they should be

and that's exactly how buyers buy by the way

is that there's short windows of time

that they go super hyper buying cycle

and then they go dormant again

and so

if you do not take advantage of this hyper buying cycle

when someone makes a new decision

or starts a new lifestyle

or make creates a new identity for themselves

you will miss out

and another business who is intelligent

who makes more money than you will profit

so here's a story you probably haven't heard from me

so a friend of mine

business owner decides to lose weight and uh

remembers that they like riding bikes

and goes online to buy a bike

all right now

this is what happens after she immediately buys a bike

she enters a hyperactive buying mode

she then buys a helmet she buys shoes

she buys pants she buys gloves she buys water bottle

she buy she signs up for a race

you get the idea all within a day or two

now if you were that first bike shop owner

and you were like well

I don't want to offer a helmet

I don't want to offer shoes

I don't wanna offer I don't wanna seem pushy

she wants to buy them she signed up for a race

she's going she's going to buy them

it's just whether she's gonna buy them from you

or the guy down the street

and there's a very big difference between hard selling

and letting a customer know

the offers you have available

you're making offers available to them and if you have

think about it this way if someone has a problem

and you have the ability to solve it

it's my opinion that ethically

you should let them know you can solve it

and what it would cost them for you to do it for them

you make them aware if they say no

no problem fine but at least tell them

make the offer because you sell

0% of people who don't know you have something to sell

you are making offers

they can choose to take them or not

and if you believe in what you solve

solves a problem then solve more problems yes is cool

no also knock also also not cool yes also cool alright

so that's the important

so let's do a quick example so payback periods

so if it cost you $160 to acquire a customer hack

and you sell a widget for $100 a month

that cost you 20 bucks gross profit

so $80 what's your payback period

we make

$100 from the the person who buys their first month

our gross profit is 80 cause we have to have 20 bucks

that are off for cost of goods

so that means that I spent one 60

but I made 100 back

but I had another cost of 20 for my cost of goods

so I have 80 dollars left over sorry

let uh I'm down 80 month one alright

so let's look at month two month two

I didn't have my cost to acquire the customer

I still have my cost to deliver

I make my hundred minus my 20 cost to deliver

I have another 80 so now I'm at zero okay

so month two is my break even month

so what's my payback period

two months also to be really clear here

if it cost you 160 bucks to acquire a customer

some people are like

it takes me one and a half months to break even here

because they see $100 in revenue

they say oh it's one and a half months

you have to take out your cost of goods

in the payback period if it cost me $9 in meals

and I sell it 10 bucks for the meal

I make a dollar I can't say oh

you know they paid me 20 bucks it cost me 20

I break even in two months

you have to do it off gross profit alright

so here's how to improve it

you can make them more better or new offers

and here's the key part in the first 30 days

and the key part is to it to do it at the right moment

the reason that somebody will not take an upsell

from you is

cause you did it the wrong way

or at the wrong time

or you described it poorly or to the wrong person right

and so let me give you the supplement sale example

this is just a zone in on timing

presenting it at the right time

so I say this

because some of you might have an amazing up

sell offer you just

you're just presenting it not when the problem uh

exists

alright or creates itself

so I tried to sell supplements

after people bought services from me

and it didn't work now

I can give you a whole bunch of theories around that

someone comes in saying they want to lose weight

and I say awesome

let's get you signed up

and then right then after they signed up I say oh

by the way

buy these supplements and you might think wait

isn't that a hyper buying cycle

it's my belief

that the person scratched their itch of weight loss

the moment I sold them the service package

and now I'm like trying to reopen a closed wound

kind of it's like wait

I thought I just solved that problem right

so what I figured out was I would say hey

come in for a nutrition orientation

and then 48 hours later

they come in for nutrition orientations

and then I would walk through their food

and so with the food then I would say

oh you're not eating these things

you should probably add this stuff in

I created a new problem

which I could then solve with supplements

and so the thing is

is that you wanna be able to offer it at the right time

you sell at the point of greatest deprivation

not at the point of greatest satisfaction

oh really like

advance people know what I just said

beginners please hear that again

you sell at the point of greatest deprivation

at the point of greatest pain

not at the point of greatest satisfaction

if I just had a big steak dinner and then you say

do you want another steak

you might have amazing steak

I don't need any more steak

I'm satisfied

and a lot of you guys are trying to make your upsell

offer after

I already ate a steak

now I might have a dessert stomach that's open

but my steak stomach is full

so we create deprivation

we make offers at the moment of deprivation

if somebody's really thirsty in the desert

after you give them the cup of water

they don't want the second cup

as much as they wanted the first one

so the timing matters so

these are the times that I think through

when I tend to incorporate upsells

and this is important for decreasing payback period

so one is right immediately after the first sale

sometimes this works great

so to be clear

if I'm selling if if that new if I solved one problem

that then naturally creates the next problem

immediately upselling works

if you have to create another

kind of problem in someone's head

or guide them through awareness

then that's where you have what I call the next step

so the version I just gave you with the orientation

the nutrition orientation

that's like great that's the next step in the process

so this is usually a 24 48

72 hour difference between first sale and next step

the next time period where I think about selling

a customer up selling is after they have a big win

this is a milestone someone says

you know

they have some big success now you're like wait

I thought you said you sell

the point of greatest deprivation yes

so if they have a big success

then it means we fully solved one problem

which typically means a fully formed new problem

also opened so great

you got to $10,000 a month

you probably have all these tax problems now

and you probably need employees to help you

take all this time

because now that you're working all the time

and you're making this money

you probably don't have time you have money

but not time

so let me solve the next problem for you right

and so you

can all there's always if you're a good entrepreneur

you're always solving problems

and fully solve problems always create more problems

after they have a big win

then I like to think about the halfway point

this is just me historically

seeing that people at a halfway point

tend to be very open to upselling

and finally

I call this the last chance now if you're like

wait a second at the end of a

of a period with a customer is the last chance

not when I should upsell yeah

if you haven't up sold them here

so so many of you guys are trying to make your up sell

at the end of the first thing

you've already lost them like this is your last shot

you missed all of the other times

that you're supposed to sell them

and notice

four out of the five are before the halfway point

so you're losing out so I can almost guarantee well

I'll say this way I have never not had this work

so I can't guarantee it but I've never not had it work

which is if this is when you're upselling people

or attempting to upselling

because I already know you're probably failing at it

if you move it forward in the sales process

in my opinion you have an incomplete buying cycle

so I don't want to reopen something

I want to just ride the one I'm already on it's like

hey you're halfway through let's keep the party going

hey you're doing great

let's let's keep it going

let's let's add this other piece of service on

hey let's

let's get you there faster right

let's let's decrease your risk around this

let me just get you more support

whatever it is right

we wanna keep the party going

I don't wanna finish my service package

and then have to be like okay

now that you've completed our first

you know service of work

let's talk about working together again

it's like ah

I'm good with what you gave me before

you know I'm pretty happy with that

this is cool

alright

so there's the five times I think about selling now

again make more better new offers the first 30 days

these are the five so

immediately

in the same conversation or conversion event

next step is 24 to 72 hours

first big win

this means you focus on getting them fast wins

so that you then create new problems

that you can then solve halfway point um

this is just I just

I'm telling you it just it just has worked

so I'll just throw it out there

I give you some scientific whatever thing

but I just know it works

and then last chance is the exit interview right

and uh

this is only useful for payback periods

if it's within the first 30 days

but pretty much all of these ones uh

apply most of the times within the first 30

days the customer coming in

these are some easy ways to do this

you can have somebody pay first and last month today

or you can add an initiation fee

an onboarding fee an enrollment fee

or an activation fee or make up whatever fee you want

you too can have this power uh

you just you just add that on

so if I wanted to improve that one I had earlier

if I didn't want to wait two months I would say great

we pay first and last that's how we've always done it

and then I could offset

now notice the fee is all gross profit

so now I'm actually up 80 on my first transaction

and now I've got half the cost to get a new customer

already back in my pocket

before I even have the next payment

30 days later

so every two customers buys me another one

before even having to wait for the recurring to hit

alright and this is how you really scale

this is just one structure

there's a gazillion that I'm gonna show you alright

so we went from two months to one and a half alright

within 30 days alright so that's how you improve it

and that is about shortening payback period

making money faster

so we just triangulated the cost required customers

uh gross profit and payback period

that is what creates client finest acquisition

and I want to unleash the three levels of advertising

this is also not in the book for you

alright so client finest acquisition or CFA

the three levels of advertising

so this is how I would describe

three levels of advertising for you

as a business owner so let's start with level one

this is where lifetime

gross profit is greater than the cost of a car customer

this is the dollar level alright

so you've got to make more money than it cost you

to make it over the lifespan of the customer

ideally at least three times more

so what it cost you to make the money

how much money you make fundamentally that's it

if you don't have that then you don't have a business

so you need at least this to be

a business that can make money and grow

so level 2 is 30 day gross profit not lifetime

notice the big difference here is the time difference

this is forever and this is the first month

alright is greater than Kack

I'll explain why

the first month is so important in a second

alright so

we want to make more money than it costs

you to make it in 30 days

and so the result this is the key part

is that you never spend your own money to grow

and so why is 30 why is 30 days the number

because that's the amount of time that any business

can borrow money with zero interest

in the form of a credit card

or credit lines many businesses

banks

will even give you interest free credit lines for 30

sometimes 60 sometimes 90 days depending on

you know your relationship with the bank

how much money is whatever

but at least every business can get 30 day

interest free money

and so that means that

the way the financial system exists right now

at least in America

you can get money and not pay for it

as long as you pay it back in a month

which means that my objective for you

because I've always operated on

I've owned everything and I haven't sold equity

and I haven't taken on debt to grow all my businesses

and I've been able to grow them absurdly fast

relative to the marketplace

I'll just say it like that

and the way that we mental do it

is because I take the money that I have access to

and I can take as much as I possibly can

as long as I figure out a way to pay it back

in that first month

alright and so

you can use the credit card to get your customers

then pay the card back then reuse the money

recycle the cash and get another customer

alright

as long as your gross profit in the first 30 days

is greater than the cost to get them

you can never carry debt while growing your business

which is a sizable advantage

so this is what level 2 advertising would look like

so 30 days gross profit

so that means that like if I got that first customer

right if it cost me uh

one 60 to get the customer

and I got one 80 back in gross profit

then it's just all free

they're all it's just all free

that's how it works and so

note is that

if you have an XXX limit on your credit card

you'll always be limited by the amount of customers

that XXX number buys you before having to pay it back

and so this assumes that you don't reinvest

the excess profits after the 30 days on marketing

rather than putting it in your pocket okay

so once you unlock acquisition this way

typically

you will get limited by your operational constraints

before

you will get limited by your advertising constraints

you will not be able to handle the amount of customers

that you can bring in

and that's what's going to throttle down

your advertising

more than you can't get more customers

so that's level 2 is that now

your 30 day gross profit is greater than your cap

which means you're just getting free customers

now level 3 is where I like to live

which is that my 30 day gross profit

is greater than two times

the cost of getting a customer okay

so pay attention what happens here

so you make gross profit more than twice

Kack in the first 30 days

and the result is never being limited by money

at all remember

the first version of this is like

I'm limited by the amount of credit card that I can

have access to with this there are no limits

and this is the goal of everything

that I'm gonna basically go through

through the rest of this training with you alright

and so this way

one customer pays you back for the debt you have

but then also pays for the next customer

so you basically just repay your original spend

one time

and then you have enough money to buy another customer

and then that customer comes again

with two customers preloaded into it

and so then you pay itself back and then the next one

and then that is how you continue to multiply

and now you're using house money

to use a gambling term it's like you're not

you've already repaid yourself back on the first one

but you still have this extra cash

you buy the next day

he comes with two and now you're just doubling

and the thing is is

you're doubling your rate of acquisition by customer

not by month

which means this can happen daily

in terms of the doubling

all right

and this is the key to unlimited scale for advertising

you have to compound your advertising

and so this is what it would look like

if you just reinvested on a 30 day loop

instead of a daily loop this is just say like you buy

you know you

get them in today and you have two or three upsells

whatever it is within 30 days

and you get you get twice the cash back in that

in that 30 day period well

I got one customer this month using that cash

and next month I've got two

next month uh four next month eight or whatever it is

yeah I think that's eight

yes eight

the next one 16 would be you know all the way up there

alright more than I can visually display

and so this is what it actually looks like math wise

alright

so actually I think I removed this from the book too

but uh

within a year of reinvesting your advertising profit

this is key point is

if you have to reinvest the advertising profits

to getting new customers the advertising is obviously

no longer a bottleneck in your business

and this is what this book accomplishes

removing money as a limit for your growth

and so that's why I like

I write this because for every person

it's like I need money to make money

you need to have more skills

somebody who has fewer skills needs more money

so look at the math here month 1 to month twelve

one customer two customers four eight 12

this is just a two two multiplied out

and then this is and here's where it gets wild

this is new customers per month

this is total customers

so I'm ending the year with 4,000 customers

if you just make twice

what it cost you to acquire a customer

and gross profit in the first 30 days

and you'd reinvested

all of that into getting more customers

and so

you can end the year at 4000+ existing customers

with that framework

by the way

this is exactly what we're doing with school.com

is how we're going crazy growth right now

so make gross profit more than twice K within 30 days

this is where we wanna go and to be clear

to achieve this level of advertising

2 x is the minimum you can by all means get 3 x 5 x

10 x

you can get 10 customers loaded with every customer

the money just multiplies faster all right

and so I'll tell you this brief story

but if you wanna know what my return was

for gym launch in the first year

I had a 100 to 1 return in advertising yes

a hundred times

and so I spent a hundred grand and made 10 million

the limit to that business then and now was market size

and our operational capacity to scale service

not our ability to profitably acquire customers

and that's what I want for you

and that's what this book accomplishes

and that's what I've had in virtually every business

since my first gyms and the thing is

is that

I think most people move on from this part too soon

rather than saying like no

we have to make

it better until we can get this thing to work for free

then you move on

and the main reason was we had a better money model

level 3 check

so you were here for the money models training

we just finished the three levels of advertising

now we've been to talk about money models

so we just covered the three levels

let's rock into money models and offer stacks alright

so uh you will notice

throughout this whole training

that some of the things are a little bit different

from the book and that's done on purpose

because I like to think through things differently

in different mediums alright

cause I can say things here

that I couldn't normally say in the book

so we'll go definition

run a car story and the gym launch example alright

so a money model is a series of offers

that's it

the reason I had to start with the offers book

before talking about the money model book

is that an offer is one unit

a money model is sequencing these things

is putting them in a series of offers

deliberately to maximize gross profit collected

in the first 30 days so I will say this all together

a money model is a series of offers

a good money model

which is the objective of this book or this training

is a series of offers structured to minimize cack

how much it cost to get a customer

maximize gross profit

how much they pay you collected in the first 30 days

how fast they pay you that's the point

so I'll tell you a story

so I we've all seen a money model happening

some of you guys

just didn't know it was happening to you

so I remember this crazy example one time I

I was I was going

I think I was going to Colorado for some reason

went to Colorado I

you know I line up

I'm like on my phone

waiting in line for a couple minutes

and then they pull me up to the rental car counter

right and the lady was like hi there you know

very like chipper I just remember a big chipper anyways

and so she asked me a number of questions

as she's going through the rental car process

so she says hello sir

can I have your ID so I can look up your reservation

and so I'm barely looking for my phone I'm like yeah

here you go and so she you know

extends her hand smiling

and I've been waiting for a few minutes right

so I just wanted to get in my car so I hand my ID cool

so then and I'm at the counter

you can see like I'm kind of like leaning over and so

so does it look like we have the car that you reserved

are you okay with a tundra

it's red and so I was like yeah

sure that's fine whatever

and so I'm not really paying attention

and then she says okay

I've got you down for three days

would you like to have a late return

so you don't have to worry about late fees

or turn in time

you know if you're on

in a rush to get to your plane flight

so she asked her head kind of like with her head cocked

and I was like yeah

I guess that's fine flexibility is good

and so she was like okay

um great

so give me a second just putting that in

would you like to upgrade your insurance

to cover any bumps and scratches in the car

it covers any and all damage that occurs in the vehicle

during your stay

and so I was like no

I'm good I have no plans on drag racing right

it's ha ha ha and she's like okay

so just the minimum insurance then

and I said yeah

that's fine I barely looked up right

I'm just like going through this

I want to get the car and she's like

okay then I have your keys ready in a second

do you want to prepay for your fuel

so you don't have to worry about filling it up

uh you just

you can return it on empty

and not have to worry about paying it

uh we fuel gas at 3

75 a gallon and I was like

well what's gas cost around here

she was she was like

three 50 and I was like 25 cents you know

per gallon yeah

sure that that checks out that that works

and so I was like

so an extra two hundred two dollars and fifty cents

I was like well that sounds reasonable

that's not that's not a big deal

I don't have to worry about it

so boom sign me up for it

I'll prepay the gas

and so she says Alrighty then well here's your ID

can you sign here for me great

there's your receipt on the back

I circled the parking space

just go around the corner and pass the restroom sign

uh go past the first three columns

and you'll see the J space on your left

your tundra should be about halfway down

enjoy your trip alright

and so mind you right

I take my thing I'm walking away right

and I look at my receipt

and I just paid 400 bucks for a three day rental

when I reserved online for $19 a day

and I was like I went from 19 bucks a day to $400

what had just happened a well engineered money model

and I remembered that moment and I was like

I need to write this down

this is the perfect example of what it looks like

to create a money model a series of offers

structured sequentially to monetize the customer

and provide as much value as humanly possible

so if you think through each of the upsells

she first upgraded my car from a Toyota

Yaris to a Toyota Tundra

by saying that my reservation wasn't there

now in my life

I've never had the car that I reserved actually fail

I don't know some of you guys said

I feel like

I've never actually had the car that I asked for there

so this is the classic Seinfeld joke

he's like oh no

I think you know how to take the reservation

but you don't know how to hold the reservation

and that's

that's kind that's the main part of the reservation

right and so we went from and just from that

I went from $19 a day to $69 a day right now

she solved my big guy in a car

in a small car problem by offering it

now did they probably have another Yaris like vehicle

probably she just made the offer and I said yes

second one she did was late check out

so this would be

would add a half day or one time fee to my reservation

now um

I think I shoot

I can't remember why I declined the offer

but the point is

is that they made this fee up to begin with

this is the main part of this

is that the idea of late check out only exists

because they decide that if you check out past

the time that they made up arbitrarily

is now late and so

what I want to really put into

your minds right now is that we are

I'm explaining the policies

but there's a game maker

who made the rules of the game

they created this fee

think about the like if you start rental cars

you don't immediately say oh

if someone comes back an hour later

I'm gonna charge them

you don't think we think that now

because that's how it's that's how it's always been

but it wasn't always like that

some guy figured it out

and then every other rental car started doing it

the next one was the insurance upgrade now

a lot of you guys saw me not take this

but I did take insurance I didn't even realize it

and I use this for everything after this point

and so she said do you want to upgrade your insurance

now implied in the language is that

I already have insurance by saying

do you want to upgrade your insurance

and so some customers will take the upgrade

which is fine

but the real sale is the minimum package she then said

oh would you just want the minimum then

you don't want anything else

do you those are implied sales

you want anything else besides the thing I just said

the minimum offer

meaning you have to get it because it's minimum

but the thing is

is that you don't have to buy it a lot of by the way

credit cards

already have rental car insurance built in

if you have Amex for example

and you do trips on Amex

they cover rental car insurance

and so this is pure profit for them

all right so pro tip for you

but the thing is and this is the pro

this is the really sexy thing

is that this is masterful naming

so if you have multiple packages

you can down sell your minimum package

knowing that 90% of people might take it

simply because you called it the minimum package

instead of saying hey

this is my shitty package

think about how different minimum is versus

a economy package right

minimum is like well okay

I have to get it right kind of interesting alright

so next one is prepaid gas

now this one was uh

sneaky in that the way it's positioned

to be very clear

you wanna make sure the customer understands things

alright now

this one particularly was one that I did the math

and I thought it was like okay

25 cents extra per gallon

that's a that's a fine deal

the way it actually works by the way

is you prepay the whole tank

so you buy a full tank

and I think the tundra had like whatever

25 gallons in it so

I actually end up paying $93 for a tank of gas

up front and so basically

whatever I don't use is profit for them

and so if I use half a tank

not only did they I did I charge 25 cents more

for the gallon

but the half tank I didn't use is just extra

it's extra profit for them

but the advantage is when you turn it in

you don't have to fill it up'cause so think about this

they create a fee to avoid a fee

because if you turn the

imagine I had a rental car company

I could say turn

turn the car with whatever amount of gas you have

and I fill the car back up

and that that could just be factored into my price

but instead or I could just say

we fill it up at this rate

whatever you don't fill up

we'll fill it up and we'll charge your card afterwards

that would be an easy way to do it

but instead they say we're gonna charge you more

we charge you $5 a gallon

or 50 or $10 a gallon

if you turn the car in with less than full gas

if you turn the car in with less than full gas

but then you prepay the whole tank

then you still bought the whole tank

to avoid paying the fee that they're then also

still going to fill the car back up again

again like I say

this so that you can understand the

the thought process that went into structuring

the sales process like

there's a reason

these guys do billions a month in sales

and for those of you who are like

man I don't like this

the rental car industry wouldn't exist

they actually run very thin margins

like there's there's you know

I mean

like it's not like they're they're raking it in here

there's people who crash the cars

there's a lot of other costs

that go into renting a car

and so for you you cannot shy away from capitalism

I mean if you want to be a business owner

you have to make a profit

in order to be able to scale your business

to help more people

and if they did not make this profit there

it would be a wild inconvenience for us

now Uber then exist later much later uh

that can sort of help

but still having rental car company there is nice okay

finally there's damages

that's an implicit up sale if you scratch the car

you gotta pay alright and then late return yet again

they invented the line then we had to pay for it okay

and so

these are all the offers that they offered to me

in that one conversation and so

for those of you who are afraid of making a second

and third and fourth and fifth offer

did it seem like she's like I was annoyed

not really and also

what is the price I have to pay as a business owner

what do I get

if the cost is that one out of 20 customers gets upset

one out of 20 people is just crazy period

if you deal with general

population for those business owners to do

I came from Gen Pop so I get it

there's just crazy people

and you don't want

not make offers to 19 out of 20 sane people

because of one crazy person

and so the cost would be

maybe you don't have a business

or you don't make a profit

or you have one out of 20 people who complain

to me

the trade is clear and I'm still gonna make the trade

and so

my goal is that you walk away by the end of this book

and training with eyes tuned to finding money models

alright and understanding what makes them work

and studying some of the biggest brands in the world

will become an endless learning experience for you

which is what I absolutely recommend

is look at their money models

if someone's been around 30 years in the same industry

they have figured it out look at what they do

and the cool thing is

you can take things from rental cars

and apply it to insurance

you can take things from here and apply it to

teeth whitening like it doesn't matter

you take this from here and turn it to plumbing

like they all

these models are more psychology

in terms of how they work

and get

and are persuasive than they are industry specific

so that's my rental car story so uh

gym launch just to give you an idea

when we went from $1,000 in

my bank account to $17 million in profit in 20 months

so remember December 2016

thousand dollars in my bank account 20 months later

$17 million in profit the only way that happens

is through having a money model

and it only scaled because insanely fast

because of our insane customer finance acquisition

so remember Level 2 was uh sorry

level 3 it should say Level 3 is two times Kack right

it should say Level 3 okay

so this these were our actual metrics

so people don't share this

this is these were the actual metrics

is that our 30 day gross profit was 6 k

our cack was 500

our 12 month gross profit was 48,000 cack

48,000 Kack so if I have an investment for you

and you pay me $500

and I pay you $48,000 back at the end of the year

is that a good investment

now what if I said

you can do it as many times as you want

you would put as much money into that machine

as you possibly could

now the real question is what's your budget

if I said I've got this ATM machine

you put $500 in and then $48,000 comes out

would you budget yourself

would you say hey

I'm only spending $5,000 a month on this

of course you wouldn't

that's why the idea of marketing budget is ridiculous

if you design a properly designed money model

you can out make the budget

and then the budget doesn't matter

the point is to spend as much as you possibly can

within KPI

KPI meaning key performance indicators

all right and so our 30 day GPT hack was 12 to 1

so within one month if I spent $500

I got $6,000 back in the first month

so I'm making money making money

and so this was these this is the actual

this was like the offer stack for Jim Lodge

so far as we had a free book Lead Magnet podcast

that was the front end alright

so

we got people into our world to see what we were about

then the second offer we had was a free strategy call

to apply the stuff that they Learned here

into their business so we'd say hey

and the way that we did this was uh

we said listen

leave your card at home we wanna help you out

and if it's a good fit we'll invite you to another call

that way was low pressure

I'd say leave your card don't worry about it

then we'd um

we do the second call and then we'd offer the

the 16,000 dollar thing

which is 16 thousand fill your gym intensive

so that was our premium offer

uh with very attractive payment terms

so they could put a thousand dollars down

and to pay a thousand dollars a week

which no one did and to this day to my knowledge

no one else ever has done

and the reason we could

do that is cause we actually made that money

and so most gyms couldn't afford the $16,000

most of them but we could make them more than $16,000

in their first month and then they would pay for it

so I just want to get as many people to say yes

cause I knew we could crush it for them

now offer 3 was a supplement

selling secrets course or training

this was free alright that was a cool whip about this

so it was free

all we had to do was get them to buy products

we'd give them the training for free

and then we would get them to sell the products

when I say get them to I just like

we explained how they would make more money

selling these products

and why they were specifically made for gyms

and so I had price

Protection that no other company would offer

they got to use basically

backdoor links for their customers

so that they were the good guys

rather than me being the good guy

so like

one of the things that I hated about other brands was

like I would sell at this price

but they would compete against me online

so I would get them the customer

and then the customer would switch to them

and I hated that and so as a gym owner

cause I'm like I'm paying for this cost

like I'm just transferring over to another brand

that feels bad and so what we did was we said

we're gonna be priced here online

you can offer this price in store

and then that way

people will always keep buying from you

so I made that advantage and obviously

we just made the economics work for us on the back end

and that's how this

the supplement company started the first month

doing 1.7 million a month

cause we actually solved a problem for gyms

they didn't have to carry inventory

we would do it we allowed them sell subscriptions

cause we'd deliver on it so

we solved all these problems that I wish I had

as a gym owner and made a company that would solve it

and so then the fourth thing we did was

we did a free feedback call

so this was basically saying okay

you know you're halfway through your eight weeks in

let's let's talk about you know

where you're at how much money did you make cool

so what we did was a free uh

free with commitment offer

which is something that we'll talk about in the

fourth section of this training

which is continuity offers

and so basically what we would say is hey

you have 16 weeks you're eight weeks in

say yes now and I'll give you all the

the stuff that you're gonna get

over the next three years

if you say yes today

and you'll just keep paying your existing thing

so you're just gonna get more for nothing

and then the end of the six weeks or so

end of the eight weeks uh

the next eight right 16 total eight halfway point

at the end of the next eight

it'll just revert into this cheaper

billing that you get for a longer period of time

and so they were currently paying $1,000 a week

they would say yes get more value

not pay more keep going

and at the end

it would fall down to a lower rate and all that

the objective of this bonus was

was to get them to agree to continuity on the back

specifically a higher level of continuity

cause we had a kind of built in continuity

which was super cheap

that was like I think 500 bucks a month

something like that

but what we wanted them to get to was the thirty

two hundred dollar a month level that uh

that the upsell um offered

so that's how we got so many people to say yes

and to be fair that's how we did it for years

no it doesn't have to be complicated

if anything simple scales

so you want to have as few offers as possible

that allow you to make the most gross

profit possible in the shortest amount of time

alright so

understanding how to do this

can change your business forever

so that is fundamentally examples of money models

and what a model money model is great

kaboom

now we talk about the 4

types of offers that create money models to begin with

four types of offers that create a money model

let's dive in

so number one is how we broke the gym industry

and then we'll go into the four prong money model

the four components the four types of offers that exist

all right so how we broke the gym industry

so I used to get gyms full

so what I just talked about earlier was my model

at gym launch but what created this

and the reason I'm telling you

the story is to show you how many different industries

this structure of creating a good money model works in

and so I used to open gyms at full capacity on day one

and so this is a video this was my first this video

this ad made me $10 million

so it was sick I was 26 and it was awesome

uh it is how you would imagine it sounds

um honestly

did feel like it was something I was doing was illegal

I found out later

it's completely legal to advertise and make money

it just sometimes the stars align

and so

what I would do is I would go into a neighborhood

and you know this one

I did 191 sign UPS in 19 days at 500 bucks a pop

and this is me holding up all the 500 dollar contracts

that I had sold like in the middle of nowhere alright

and so this is the old way that gyms worked

and the reason I'm I'm outlining this is

cause this might be how your business works

and in the gym industry

this is what all the gurus at the time were teaching

it was something that they called the LBO model

which has nothing to do with leverage buyouts

an LBO model in the gym world was a low barrier offer

alright so it's like trials

uh super discount things but the thing is

is I talked about earlier

having a discount thing as the front end

but then they didn't have anything else to sell

so the discount stuff works

but you gotta have the thing to sell

to make your money back

but this is how it used to work

so the old way that people did low barrier offers

was that they would run trials

so they'd run $19 months $21

21 days things like that and so right off the bat

if you had 10 people walking in the door

two would not buy

so now you got eight left who buy a trial

or buy the discount offer at 29 bucks

19 bucks $21 whatever now this guy doesn't convert

this guy doesn't convert

this guy doesn't convert this guy doesn't convert

this guy doesn't convert we get three

cause the industry average 35% of trials would convert

so not 35% of people who showed up

35% of people who started the trial

so being being generous on this one

three out of the eight continue on alright

so this is what the math looks like so 30 days later

our total gross profit is $600

our revenue per show up is $60

our revenue per trial is 75 okay

this is what we did

so we would get 10 people in the door

now we would know now we closed fewer off the bat

but we would sell the goal

so we get one person to take a 2 k package

the majority of the other ones to take

you know 500 dollar type program

and then somebody taking half that distance

of the 2,000 dollar person alright

so that's layer one

then we would upsell meals

because they're gonna want to have food

then we would upsell supplements

on average $85 of gross profit per person

not revenue gross profit

and then we'd get these two people to commit to a year

after their duration of their program

and then we'd get them to prepay for the year

with another discount on the back

and you could do all of this in 30 days

and so our total gross profit was 96 44

remember the old one 696

44

revenue per show $960 compared to 60 revenue per close

1928 in the first 28 days

this is how we broke the gym industry

when I say broke I really just mean fixed

we fixed the acquisition model

and so that's the math comparison

and so with the new way

my gyms could outspend gyms doing the old way 25 to 1

it wasn't even like coming to a

to a fist fight with a knife

it was coming to a fist fight with a B52 bomber

like we weren't even on the ground

we're just dropping bombs

like there's no there was no way to compete

and a lot of big franchises didn't

didn't catch up and basically went out of business

or became just like ghosts

like people just didn't renew and just kind of like

they fizzled out and faded

and so like this is also a message to the people who

who do lead industries

I was a young kid and I had this model

and the right move that they should have done

competitively

was take all my shit and immediately disseminate it

that would have been the right move

that's what Zuck did with Snapchat

and they had their stories

he just immediately like oop

I'm gonna take that distribute it immediately

but instead they postured against and were like

this guy doesn't know what he's doing

and then we ended up just destroying them

because the math is the math

like you cannot like that you didn't innovate it

but you can't execute on it

and so one thing that I also want to break

in terms of perspective here

is that as much as you may not like it

a business model is not patentable

it's not IP

an offer that you may create a great headline

a free six week challenge

not IP anyone can advertise an offer

and so it's a double edged sword

in terms of learning this power

because it is a speed game

because basically you wanna advertise the stuff

you wanna rip as much money out as you can

before the rest of the world catches up

and then guess what happens

when the rest of the world catches up

you do it again you innovate the model again

and so there's always gonna be followers

and there's always gonna be leaders

but the thing is

the leaders get to make 80% of the profits

because by the time everyone else catches up

we already pillaged the land using a more

you know

violent terminology you know

we we

we seeded and farmed the land and we reap the

the fruit of the the land that it gave us

whatever you get the idea

okay so uh

this was the this was the thing that broke it for them

so boom we had service

we sold the gold so we sold way higher ticket

instead of doing a 21 dollar thing

we sold uh nutrition and supplements

we sold continuity and then we did prepayment

so all four of these things we did in the first 30 days

and that's how we could drag the cash forward

alright and so if for some reason

someone didn't buy the first offer thing

we had a down sale flow we sold a goal

then we sell a smaller package

then we sell a free trial with penalty

then we sold a free trial with no commitment

and then we did a free orientation

and so what I mean is like

let's say somebody didn't want to do the free trial

so for example

these these people they didn't buy any service

but how do we get money out of them

we said hey no worries

why don't you just come for nutrition orientation

we just want to help you out for free

people come to nutrition orientation

not having signed up for the gym

and we'd sell them 300 bucks in supplements

so we still made money from nose

by selling them a different way to get to their goal

so that was the down sell flow for service

for supplements we would sell a full supplement bundle

then we'd sell a four pack uh with extras

so we'd add a couple pieces in

then we'd only downsell just to a four pack um

and then we'd have it on continuity then no continuity

then we do extras only

so we'd work our way down that whole thing

and then the meals flow same deal

we'd work our way from biggest all the way to smallest

and then continuity we go again

sell the goal smaller package and then month to month

and then finally

the prepayment is we prepay the whole package

prepay for a discount prepay the next month

and then we just get the commitment

just say fine you're in continuity now and all of this

if you're looking at the days

this is day 21 to 28 14 to 21

and these this is up front and this is within 48 hours

so all of these things are happening fast

alright so that is how we broke the gym industry

so now let's talk about all the things that I just did

but we're gonna chunk up

so you can apply it to any business alright

so there's attraction offers

upsell offers downsell offers

and continuity offers the objective of each of these

attraction offers is to liquidate

how much it costs you to get a customer

upsell offers are to maximize profit

downsell offers are to maximize conversion

continuity offers are a stabilized cash flow

in the business there are many ways to accomplish CFA

some businesses can do it with only one offer

some businesses get funding

so they don't need to break even to get customers

cause they have outside money that's injected

into their system

but for everyone else probably watching this

I will explain a model that I have seen emerge over

and over and over again

within the businesses that I built

so when I look at every single

amazing business that I've built

that's made a lot of money

they had these things pretty much in this sequence

and it doesn't happen all at once

it just often becomes something that you build towards

so to be very clear

I'm not saying you start with a fully fledged

money model

cause it will break your whole business in half

you wanna start with one

you start adding in layers like layers of paint

you just keep putting more and more layers on it

and so again you can build an amazing business

with just one or two of these things

and sometimes it's worth keeping it simple

and just doing that if you can scale with

I want to scale with as few offers as humanly possible

but I still want to maximize how much money I make

in the shortest period of time

so if I have to add more I will to enable me scaling

but I want to have as few as I can

because

I want to have as little operational drag as possible

alright

and so it has four prongs and four different vectors

and different offers that correspond to each objective

alright so this beautiful little image

took me a very long time to figure out alright

and so we have attraction offers

that bring people in the door

we have up sale offers

that typically happen immediately after that

get people to buy more stuff

we have down sale offers for people who

who don't say yes to either of these things

so we can still get conversions

then potentially up sale them later

and then we have continuity

offers on the back

which get them into a recurring cash flow

payment to the business and so

let's explain how they all work together

to make a symphony of CFA

alright so here we turn strangers into customers

get come spend more money lower cack is to get people

excuse me is to get people to say yes

when they would have said no

which is what you offer when they say no

and then continuity you keep people buying alright

which is meaning you get them to buy again

alright so those are the four prongs

and so like I said earlier

this is just showing it through that same model

the gym launch model so we attract

and we use the books and the lead magnets

and the podcast things like that

it's free then we sold them an upfront cash thing

uh so we generated upfront cash with the next sale

with the uh

the uh 16 weeks then we would maximize profit

by getting them to upsell supplements

then sell our supplements on our behalf

and then we bought continuity

which is the three year licensing

which is the 42,000 a year

and note I'm not saying that you have to use all four

I'm just saying

I noticed that my most successful companies did

and many companies do only use one or two

OK so let's look at the model that I showed earlier

with weight loss we had a free promo

get people in

we got cash by selling challenges

that they can get their money back

or sell the goal either one

then we would sell supplements

then we would sell memberships

all the way through rental car

19 bucks a day gets me in the door

then pretty much everything was up sales

so these kind of all happened at once

so I'm saying like this is just a model

like it's it's more about the business

so we had all the insurance

the late pay the late payback

the gas the upgrade in the car all that stuff alright

and then continuity is where they say great

do you want to enter our rewards program

and so great

money models can include multiple in the same business

so you can notice here like there's some here

there's multiples here there was insurance

there's multiple upsells

so it's not like you only have to have one

you can have multiple things there

through the rest of our time together

I'll show you genius ways

that other entrepreneurs have stacked and recombined

these things make lots of money

and I will only show the ones that I also then used

modeled that in my businesses

and what we did all right

kajama four types of offers

so with that being said

we will begin our ride along apprenticeship

which is the next one

alright so we covered how businesses make money

the three prongs of client finance acquisition

the three levels of advertising

they create the best version of CFA

how money models work the four types of offers

now we begin our ride along apprenticeship alright

so we transition to the radical

simple skills are easy to teach

some skills are complex

skills that have many skills bundled within them

that take longer

to get a big enough sample size to be proficient

so for example if you're looking at deals

it takes a very long time

to see lots of different deals

to be able to recognize patterns

it takes a long time to look at lots of different

surgical cases of different patients

to be able to recognize patterns

and so it's more that the larger

meta skill of pattern recognition

takes a longer time to learn

and that's typically why people work

with an expert for periods of time

in order to get that skill set alright

and so advertising

and creating money models

are some of those harder skills

in my opinion it takes time to see those patterns

and to know what to look for

and the better you get the better the student you are

and so there's three steps to teaching as I see it

document demonstrate duplicate

I cover this in my leads book

and so a good teacher

make sure that you do all three of these things

you document you demonstrate they duplicate right

they being well

flip this I I document I demonstrate you duplicate okay

now the problem with me training

like this one to many is that I can't see you do it

right so I can only do the first two right

it'll be up to you to duplicate this

but I will teach you exactly

how I Learned all these money models

so that you can get my first decade of experience

in a day and shortcut your path to your goals alright

so it's me taking

you know 10 or now 13 years or 14 whatever um

and compressing it into a full day

and I'm gonna tell you the stories

how I Learned them

so that hopefully you can kind of relive to the best

way possible as though you were with me alright

and the reason I felt compelled to share these

money models is

I made a very tactical video with 3 money models

2 years ago

and the amount of messages that I got from people

being like I made 50 grand from that video

I made 100 grand

I made a million dollars on that video I was like

oh people get the offer they get the lead stuff

but they're not

they don't understand how to put the money

how to connect that with them making a profit

and then being able to scale their advertising

through sequencing offers together

that was the thing that I didn't know

that people were putting together

and I was like

oh and then that is why I make these okay

so think

of this as entering my private Money Models journal

and so each of these stories

actually was in a journal of mine that I've kept for

like whenever I see anything cool

I just write it down I'm like ah

I'll save this for later like it's kind of like a

like a magic card or a Pokemon card or a like a

a play that you wanna pull out at a later time

like they're they're basically like scratch off winners

like they've already been scratched off

you just got to turn in for money

like these things work

and my notes were scattered all over the place

and then this book was me consolidating

all of them in one place alright

so the rest of this book

in training will be all the tiny tactics I picked up

that make leads and offers

come together into money models

alright

so each money model will have a visual or digital

they'll have a description examples

important points summary

and then uh

this is me making a reminder that if you ever find any

uh in out in the wild

you're like oh

this is totally different and not covering the book

just email it to me at value acquisition dot com

I will mention you um

if it's sweet I'm

I'm gonna be honest like if it

if you nine times out of 10 people

like this is brand new I'm like

that's just a free trial uh

but but

but uh

but if you do have something novel

I will absolutely blast it

and give you all the credit in the world

cause I just want

I want this to be a living thing for monetization

it's just like this one place that like

it needs encyclopedia of of offers okay

for everyone who thinks this won't work for my business

Wanna bet uh

every business can use any of these money models

I'm about to share

I give so many examples to show you how

so instead of just saying uh

that just say how could I use this for my business

how can I make this work and you will find the answer

what would it take

alright so here's my big advertising lawman disclaimer

there are organizations whose sole

responsibility is punishing businesses

using deceptive practices

you must always observe the law

law differs by city state

country and time period

so at the time of me recording this to my knowledge

the things that we're doing are allowed

in the state that I'm currently in

in the United States today

I am not saying that you should do these

these are hypothetical models

to think things through

that comply with your local area and time period

if it's in the future

which it will be if you're watching this

so I tell stories of how I Learned things

under the Assumption that the business owners

I Learned them from did their legal diligence

went in doubt

give people their money back and just get better

it's less effort to get another customer

than to fix a reputation so

I accept zero responsibility for actions that you take

or don't take as a

result of this training

do your own due diligence within the laws of your area

and industry and time period Huzzah

and with that being said

this now begins our ride along apprenticeship

so we are now officially in our apprenticeship

our digital apprenticeship

our virtual apprenticeship

let us begin with attraction offers

so what is an attraction offer

the free versus discount continue in the lineup alright

so an attraction offer generates leads

and converts them into customers

that's what it does they turn advertising into money

by offering something free or at a discount

we do this because everyone wants a great deal

in a great deal

customers get far more value than the price they pay

strangers can only take your word on the value

but they actually understand the price

for that reason discounts make anything

a great deal to just about anyone

and the greater the discount

the better the deal

so the greatest discount of all being free

so free to discount continue

this is a visual representation

of what I alluded to earlier

but 100% off versus 0% off

so this is free this is uh full price

and then this is the also lowest demand

when you have full price versus highest demand

which is free so the more you move this way

the higher the demand the more you have

you give off pretty much

that's how it works the lineup

so this is the lineup

these are the plays that I'm going to explain to you

we've got our win your money back giveaways

decoy offer buy X

get y free pay less now or pay more later

and then free with consumption

this one is not in the book FYI

so with that being said let us begin

so we start with our very first money model in the book

which is an attraction offer

win your money back so

win your money back

is one of these incredibly sexy offers

that I start with

because it's made me more money than any other offer

that I'm going to show you

let's dive in

we're gonna go through how I Learned it the description

the examples important points and summary alright

so this is my beautiful doodle

that exemplifies what this is

so I was in this gym mastermind

where I signed up before I had a gym

because I wanted to learn about the gym business

and this guy Danny uh

said he had a client uh say no and then said

well

I'll pay you 500 bucks and you can train me one on one

and if I lose 20 pounds in eight weeks um

you give me the money back

but I'll let you use my you know my pictures

and so you know Danny was like

well I'd rather take the money than not take the money

and so he did the deal

the dude got amazing results and the thing is

is that once the guy got amazing results

he advertised the before and after of this dude

and he got like

13 more customers from advertising this guy's results

and so

he started talking about that at this mastermind

we then took it at the gym that I was at with Sam

and we tried a six week version of it to shorten it

it was still one on one PT personal training

and so then I had the idea of hey 1

let's see if we run ads for this

instead of just being like

a thing that we tell our customers

and 2 what if we made it large group

instead of personal training

and so those two changes took this from

this is a profitable thing

to this being a money nuclear bomb

and so

we then switched it to a free and non free versions

with credit back and money back guarantees

which I'll explain in more detail

alright so that's how I Learned it

and it was an iteration I mean

this was like a year two years

before we Learned

every single thing that I'm gonna share with you

in like eight or 10 minutes

so now that's how I Learned it

let's go into the description

alright what does this thing even mean

so a win your money back offer works like this

so you set a goal for your customer

and then you tell them how to reach it

and if they reach it

then they qualify to get their money back

or get it back as store credit

and so there's kind of three versions of this

so version one is you just

they bet that they're gonna get results

they bet

that they're gonna take a certain set of actions

or they

bet that they're gonna do a combination of both

and so let's walk through each of them so with results

no matter what they do if the customer gets the result

then they win the money back so for example

making X dollars a month

getting y customers losing Z pounds so losing 20 pounds

you can starve yourself not show up to anything

but if you lose 20 pounds you get the money back right

basically

they bet on their ability to just reach the goal

the second version of this

is that you hold them accountable to doing actions

instead of getting results

so no matter what results they get

if the customer does what you tell them to

then they qualify to win their money back

so for example they attend all sessions

calls meetings

they log progress they take pictures

they do assigned homework

they bet on their ability to follow directions

that's the bet or you do both

is that they have to both follow your directions

and they have to get the goal

now the thing with both is

often times

a customer doesn't have the skill to reach the goal

which is why giving them the directions

and tying them both together can be important

to getting them the best results possible

as an aside

you want to tie the actions that you require them to do

to qualify for the refund

with the actions that do two things 1

that advertise your business and 2

that get them the best results

alright so

what ends up happening with the win

your money back offer

is that it becomes a high cash flow

choreographed onboarding

so if you currently onboard customers

then you're not getting paid for it

it's a cost to your business

and so I would rather make it a revenue

generator for my business

and so the nice thing is that it works

even for people who don't come in for free offers

so this offer works so well when people came in

just cause the referrals and what not

I still gave them this offer

because people got better results

they were more invested in this fund

and so we got better

results out of this than any other program

and so a lot of people think that we made the money on

the people who didn't hit the goal

couldn't be further from the truth

the people who didn't hit the goal

a lot of times

they wouldn't necessarily want to become customers

we had 78% success rates of people hitting their goal

the magic was again

I didn't wait till the end of their program anyways

I would be selling them upselling them

at three weeks into their six week thing

and so I'd say hey

you're down 12 pounds

if you lose eight more

you're gonna be happy forever they would be like

no and you're like OK

well you wanna lose 50 right

they're like yeah I'm like OK

well

so you realize it's not about these six weeks they say

I'm like great

then you won the challenge as far as I'm concerned

cause you realize it's about a lifestyle change

not a six week you know weight loss thing

I just use that to get you in

but what I really want

is for you to make this big change

and so if you're good with it

what I wanna do is take this money

and I wanna give it to you

back to you as though you've already won

and let's just credit towards the main goal you have

and so by doing that we could take the short term goal

and flip it into the long term goal

and so this particular model of acquisition this offer

um works well with businesses

that require customers to do a lot

in order to be successful

and so there's some businesses where like

you work on the roof of the

of the house the house gets fixed

there's really not a lot for the customer to do there

so to win your money back

not the right money model for that

if you have a business where someone has to take action

in order to see results

this is very common in service businesses

sometimes even in software businesses

they need to onboard themselves

they need to put their information

put their profile picture up

whatever it is this structure murders

and so the bottom line is customers put money down

if they do the stuff or they get the result or both

they get it back as cash or store credit

that's how this works

so let's give some examples here

so if you have a rehab facility

it would be like the free kick that habit

in 28 day blueprint or free kick that habit

insert word the suggestion

attend all your rehab sessions

post in the group once a week journal daily in our app

attend your feedback session

in your transformation session

which are both sales and up sale opportunities

so earlier I said you want the actions

they have to take to be things that get them results

or things that advertise your business

the third category is sales appointments

and so you want it to be mandatory

that they attend the upsell opportunities

that you have

so remember earlier I showed the five different places

then

you make each of those places that they must attend

and so the result maybe for these would be like

pass a urine test at the end

in 28 days

that's the result like if they're they're clean awesome

right

and so this would just be a pure results based thing

okay you could add in

these pieces to make it action and results

let's say in a pain relief business

so 28 day 1 0 1 pain relief program

fine

commitment is that you attend all your rehab sessions

do your at home stretches

post a picture in the group once a week

when you're done attend your feedback session

and transformation session

very similar but now it's just about them doing that

and not at all about having the pain relief

because this is one

that's a little bit more subjective

so it might be unfortunately people are uh

not always ethical when it comes to their own money

and so we say okay

them saying well

I went for it I'm still a 10 out of 10 paying

and please give me my money back

so this way

if you have them do all the stuff that becomes the

the the requirement for earning the

the money back example marketing

so let's say you uh

you teach people how to market

you say okay free five clients

a five day challenge uh

the action you have to take is

you have to send 100 outbound messages per day

attend the daily training post in the group

uh once you've done your homework

and the results is make five closes

and the goal is that you have to make five sales

and you have to send the DMS

and if you do both you get the thing back cash back

right now you're like how does the free thing work

I'll explain how you can do free with money down

important points so when your money back works with new

current and previous customers

so somebody who's new can come in and take this offer

you can just offer it to your existing customer base

cause that a lot of them get really interested in it uh

you can use it with past customers

it works for any type of customer uh

it works well with people that

that start and quit stuff

or services

where people are required to do a lot of work

the key is that

you have to have something else to offer

on the back end

that they can take that cash and credit towards alright

so that $500

or whatever amount of money you want to charge

for the thing you then should have something

that's five times more expensive

on the back end

so that they get a 20% discount on that

by crediting it forward now

if you know that you're gonna be giving a 20% discount

guess what you can do to your back and price

if everyone comes in on one your money back

you can raise it by 20%

if every person comes in on that

if people don't come in on that

then that gets more difficult

and so the reason that I

even people who came in for via referral

I still put on the one year money back is

cause I knew my pricing and everything else

was dictated off of this 500 dollar credit

I knew I was gonna give them

if you don't like the idea of giving cash back

you can also advertise it as store credit

so you once you get it you can credit it forward

and so that does create

I would say a longer term customer

um it makes the free part different

and let me explain the way that I made it legally free

at least within the laws of the United States

based on the counsel that I had

was that I had an unconditional money back guarantee

and so that was actually more important for me

advertising free than the whole getting the money back

all of that stuff it turns out

at least from the letter of the law

based on the people that I spoke with

and big big

big big big you really risk

getting in trouble when you have upset customers

and so why my first rule of staying out of trouble is

give someone their money back

if they ask for it it's not worth the risk

it's also just not worth the headache

just give it back go get another customer

that's it alright

so I say don't take blood money

give refunds if they ask for it

but the unconditional guarantee

basically gave me two different types of

kind of guarantees one was performance based

if you do the stuff I'll give you the money back

but I also said I have a service guarantee

which is that if for any reason

by the end of this six weeks

you don't believe that I gave you $500 of service

I'll give you the money back

even if you're at day 41 and 23 hours

and the thing is

is that closed a lot of people because they're like

okay I was like

listen

the goal like I want to get you to stay long term

so if you don't think that the service is worth

you're not gonna stay anyways

and so that made a lot of sense for people

and they're like cool

so from a selling perspective

ask them if they want short or long term goals

and you sell this as the kick

start to a long term thing

and so

you explain the benefit of giving external motivation

to teach internal motivation alright

these are all very vague and amorphous words

but in terms of selling very effective

and so I would say hey

when you were a kid

you probably had to have your mom say hey

you gotta go brush your teeth Timmy

and you be like

you go there and you brush your teeth right

and now that you're an adult

do you brush your teeth and they're like

yes it's like

that's an example of something external

being the reason for you doing an action

until eventually the internal engine kicks off

that was my analogy it's like

so that's exactly what we're gonna use this money for

in the beginning to create a new habit

now our thing was six weeks

you probably heard 21 days to make a new habit

we double that length

so that you can make this into a habit you stick with

we use the external to get you going

the internal to keep you going right

and so that's the toothbrush story

create habits that don't take effort

and that's what we try to build with

these types of money models

and so as an aside when crediting the people

uh on the back

rolled into service over an extended period of time

so this is a pro tip

so for example $600 I wouldn't say great

now you have three months free that didn't work

I did that for a year and it almost killed me instead

take the $600 and extend it over the year

so you say great

so we're gonna sign up for this year long membership

that's me 12 20

400 dollars that's $200 a month

take the 600 dollars off now it's 18 dollars

reverse it back out

so you're basically saving 50 dollars a month

by using 50 dollars for that 600 dollar credit

for the whole year and by doing that

I basically

I got the cash up front and then they paid me again

how to create your win your money back criteria

so this is key

so these criteria make or break the offer

and so good criteria have these characteristics

No. 1 is they're easy to track

so

you want to train them on exactly what they need to do

or they will mess up alright

bonus points if people already do it for example

phones already track steps

that's something that if like if you can use that

then that would be an easy thing that they already do

word processors

for example already track word count uh

cameras automatically date photos

so these are all things that already occur

and so the more magical you can make the tracking

the easier it is for them

the second thing is that you want customers to track

stuff that is likely to get them results

and realistic criteria do just that

so if you think the criteria look too easy

you've probably got close to realistic alright

they may take a few times to get right

but so does anything worth doing alright

so for example it could be you know attend meetings

workouts watch videos

etcetera just whatever the stuff

the best customers do to get the results

make everyone do it on purpose so this is the process

you do this in the beginning and have no idea

you then find people who get results

you look at what they did

then you say

everybody has to do the stuff that the best people did

and then you do it again

you look at the people who did the best

results of that stuff and you say great

everybody has to do that stuff

and you look for the common factors

of the fewest things they all did

not everything they all did

and the third is advertise the business

and I'll have two parts of this

so one is advertising publicly

the other is you basically selling uh

being able to sell them all right

so I like using this as criteria

so that means that like when you work out at my gym

you have to post it publicly

now that means that if every person's working out

three times a week over six weeks

I'm gonna get 18 free organic posts from 100 people

I'm gonna get 18 organic posts in a tiny market

all saying the same words that I told them to say

with a link to our thing

and guess what would happen

we got more customers and at the end

what would they have to do

post a picture of their before and after

and then when they post the picture before and after

guess what that did

brought more customers and guess what that also did

more people would comment on all their posts

and they had to tag me in it

and so I could have all of these leads across

all these comments

of all these people who liked and said

that's amazing what gym is that

whatever so they tagged me

they tagged my business

and then they had the copy that they had to follow

for the structure for those posts again

you're going to give them their money back

so you can have some stuff that's in it

for you

and this kind of falls into the reason why people like

why are you doing this if you give all the money back

cause again the person who's buying

this should believe they're gonna get the money back

cause they believe they're gonna follow through

so like what's in it for you

and you're like dude

i'mma get way more customers than you

two things

I want you to stay and I want you to bring me friends

and if I get your results

you're gonna stay and you're gonna bring me friends

that's how this works the fourth piece here

which is kind of like part 2 of the advertising

is that you include the sales appointments

cause that's gonna allow you to get referrals

get testimonials for the before and after pictures uh

and then obviously upsell your other levels of service

so here's how you apply the store credit

this is important

so when customers win their money back

offer to apply it over a longer period of time

or a bulk package so it doesn't like

you can have them prepay for a year

and have them take it off

I usually have stuff that's five times more expensive

as the up sell off the front end

that way the max I give is like 20% off alright

that's if I didn't change my price ideally

like I said earlier I bump it by 20%

in my experience

this keeps customers engaged and makes you more money

because if you just give it free

I noticed that people it's I hate the quote

but in this particular example

if people didn't pay for the membership

they stopped coming if they just used off credit

and then when their first real Bill came

they'd be like I'm good

but if they had to start paying even at a discount

they ended up coming they kept coming right

and that was the that was the thing that I found out

because if you have a business

where it takes work for someone to do it

then it's like

you want to have them have some skin in the game

and that was actually the term I used in the sale

like we need you to have some skin in the game

and I also told the story I just told

so we're like why don't you do it up front

I'd be like

because honestly when people I did it up front

people didn't come and you wanna

you want this to work I want this to work for you

so I'm happy to give you the discount and apply

so you're still gonna get this money uh

we're just gonna put it over a longer period of time

so that you stick with this

cause that's what you want

that's what you want right

okay cool

um now if someone's like

well I want the free time and I'm definitely gonna stay

that's like cool then sign up for a year

like if you know you're gonna stay

then don't worry about it

it's not for you

I'll give you the first three months for free

this is how it works math wise

so you have a product that costs

let's say $200 a month a customer with $600 of credit

avoid giving them that stuff upfront

instead apply the $600 over 12 months

so 600 / 12 is 50 bucks a month

they now pay 200 - 50 which is one 50 per month alright

so to be clear

they can use the credit however they want

it is up to them if you want to be ethical

and comply with advertising rules and promises

they can use it however they want

I recommend presenting this offer first right

that way they can use it

and then I share the experience I just shared right

and so in depth

details of the upsell offer

are actually in the rollover upsell

which is later in this training

so I'll just leave it at that

because this is more offer structure

the upsell stuff comes later alright

so all meetings and

calls provide opportunities to make more offers

so make every single meeting

that you have with a customer

an opportunity uh to present an offer alright

and so make check in meetings

part of your money back criteria

whenever you can

make all meetings required to win their money back

part of that beyond helping them succeed

they're also the best opportunity to make upsell offers

so after you've checked in

offer what makes sense based on their feedback

and so these are the three appointments I had

so we had nutrition orientation

which was our before pictures

and that's where I sold supplements

then we had our progress check in

which I made my membership offer like hey

commit to staying for the next year

then I had my transformation feedback

which is their after meeting

where I would get after pictures

and then I would make the membership offer again

to anybody who hadn't already bought

and to the people who had bought

I offered them to prepay it

here's another pro tip for you

make everybody a winner alright

so you know this

they don't know this and I don't sell this upfront

you do not mention this in the first sale

the reason I made everyone a winner

is that about halfway through

you make your next offer as though they already won

alright

and so you lower the customer's anxiety about failing

and then you'll keep them longer

they'll also love you more

and so this is what I would say

hey I know you're trying to hit the short term goal

but what's your long term goal

okay that's great to hear

uh you get that this isn't about this program

but about your long term results

so I'll tell you what to show you how much I want

you to hit that long term goal

I'll credit this program towards the other one

whether you hit their short term goal or not

how's that sound so

now I actually

get them to buy

by reducing their risk of losing the money

they agreed to risk so I say

you won the bet without having had having to win

because you get the long term goal

so it's actually a risk reduction sale

if position properly and so at the end of the program

let the losers win so if someone refuses the upsell

and then still fails the challenge

you can still upsell them again

and the way you do that is by acting like they won

so I would say something like this

I'd say don't worry about it

you started that's the biggest victory of all

and even though you didn't hit your short term goal

you met ours so here's the key

even though you didn't hit your goal

you met my goal right

which was finishing what you started alright

so to show you that we're in this for the long haul

I'll credit your entire deposit

towards staying with us long term

that you still get your money back

you still hit your goal how does that sound

and so now they're like wow

these guys are great and so no

the point was not to get people to fail

the point is get people to succeed get them to finish

get some momentum

and then credit towards a longer term relationship

so those are the important points

does that feel like that

has a little bit more context on how to make this work

yes alright

so quick summary when your money back offer rocks

because you get loads of over cash

you get more customers to say yes than you would before

you get a massive amounts of results for customers

you get more long term customers

they advertise your offer for you

that gets you even more customers

and make the meetings

a part of getting the deposit back

and get great results for them

and everyone thinks

this business makes money based on the people who fail

the program no

the real money is from the people who succeed with it

and you have something else to offer them

so trust me on this one the more results you deliver

the more money you will make

think along

and so make the refund criteria easy to track

align with customer goals and helpful for the business

only use a win your money back offer

if your refund rate is less than 5%

otherwise

you need to fix your product before doing this

cause you will risk getting too many refunds

I also added my unconditional guarantee

to make sure that I was super compliant

if anyone ever wanted the money back

I just gave it back to him

by the way by me offering the unconditional

just to give you some context

over 4000+ sales in five years

I gave two back four unconditional people winning

and then wanted to take the winning and leave

or whatever like things like that sure

but people who said I didn't think I got the service

there was two and I shouldn't have sold those people

I like arm wrestle them to get them to buy

put the store credit towards another

preferably more expensive offer

that you want them to stay as customers

so give them the opportunity to

you never want people to stop paying you

that's the key point of this whole offer

and to make more sales and keep more customers

make everybody a winner that way

everyone stays surprised and grateful

when you make your upsell offer

so now my upsell offer is this amazing thing

that they're grateful for me making the offer

rather than this other opportunity to sell them

that is the win your money back money model

so our next attraction offer is free giveaways

so I'm gonna go over how I Learned it description

examples important points and summary

so let's dive in so how I Learned this

so I uh I was talking to um

a business owner and he was telling me about this

you know

crazy play that he had that was working really

really well and I was like okay

well how how does it work

he said

so basically I give away a scholarship for my year

long flagship thing um

if people kind of opt in and they have to

you know answer a couple questions about their business

why I should pick them etcetera

he said so then I do

you know a countdown

and then I do a drawing

and I do a live webinar where I

you know release it live

sell people on how great it is

and so after he he

he told me he's like OK

so I pick the person and I was like yeah

but OK so you just give something away for free

like how does that how does that actually

you know make you any money in the business

he said well

the key is the uh

participation trophy or said differently

the partial scholarship and so he's like

so what I do is

I reach out to all the people who opted in

uh and filled out all these questions

about why they should be eligible

their pain points their aspirations

their dreams why they should be qualified

why this is important to them

he's like

and then I just do a second countdown for people who

have partial scholarships

for them to basically redeem those

and that partial scholarship is a discount off of the

value that I advertise and for my grand prize

right of the full scholarship

and so that structure I was like

oh he said

here's the great part

I use the same structure that I give to the online

fitness trainers

so that they do the same thing when they get customers

so they just say hey

I'm doing a one year transformation or whatever it is

and then they have a bunch of people opt in for it

and they do partial scholarships for everybody else

and so

this clearly became this repeatable framework of

grand prize

participation trophy

or grand prize promotional offer

so you promote the main thing

and then you give

some sort of discount off the main thing

for people who ask for

or are qualified for that main offer

and so this gives you an

amazing way to generate tons of leads

it gives you a very

cool way to ethically sell how amazing something is

like if I if I get up on stage and say hey

I've got this amazing thing

I talk about how great it is

that's one thing now

if everybody in the audience knows that

they're waiting for me to pick one of them

to win this thing they are way more engaged

they're way more leaning in

because they're imagining them actually winning it

so you have kind of a different level of receptivity

which is what I think makes this so powerful

and you also get a ton of goodwill

cause you're like giving stuff away right

so it's just it's an awesome

awesome play now to be clear though

this is

this is something that is so powerful that it is uh

legally um

regulated all right

because if you do one of these and you charge for it

it's called an illegal lottery all right

and so like

these things

work well enough that the laws had to get made to uh

to show uh how not to do them wrong way okay

so how how does this work overall

so I'll just read this to you

so giveaway offers

advertise a chance to win a big prize

in exchange for contact information

whatever else you want and then after picking a winner

you offer everyone else a big prize and a discount um

giveaways also go by names like sweepstakes

he had scholarship

like all of these are different terms

they all mean enter for a chance to win alright

and so giveaway offers um

to run them 1 you just have to pick a grand prize

and a promotional offer right

so think your main thing and then your your uh

your participation trophy

whatever uh ask for contact information

now the promotional offer

doesn't actually have to be different than the grand

prize it can usually be a discount on the main prize

to be clear

or just a truncated version or decreased time

it can be whatever spin you want

but typically it's gonna be some reason

for it to be a little bit less than the grand prize

and then a reason for them to buy

now right

we ask for information and eligibility criteria

like you don't want veterinarians opting in for a

you know um

a retailer's uh

conference in Nebraska if you've got people who are uh

whatever veterinarians in Georgia

like it doesn't make sense right

so you wanna make sure that they're eligible

for your core services

otherwise why would you wanna give something away

to somebody who could never buy your thing anyways

right so

you can still create eligibility criteria

in order to get the giveaway

including questions or actions or anything

you want them to add somebody to a group

or post something like

you can put as many criteria as you want

or actions for them to take

in order for them to be qualified

so then you put the giveaway on a deadline

this is super important

because if you don't have a deadline

then like once I mean all marketing right

you want to have some sort of urgency

that drives people to take action

and then also

this is important when you have the giveaway and you

and you try to

contact everyone else for the participation prizes

you want to make sure that those participation prizes

and them claiming those prizes are also on deadlines

cause otherwise you'll just say like

hey you won and then no one will

no one will do anything right

and so you have to have urgency at each step

uh to drive action

which is just normal marketing stuff

but sometimes you forget alright

now beyond that um

you wanna announce the grand prize winner obviously

and you also wanna give them the prize obviously duh

sometimes I have to say this

like if you're going to advertise a grand prize

you have to give the grand prize away um

and then you contact everybody else

and tell them about the promotional offer

that they are eligible for

which is like congratulations

we thought your information was so compelling

we want to offer you a partial scholarship

we thought your information was so compelling

we thought we would offer this promotional offer

that's the grand prize thing that you said you wanted

it's like that but better or like that

but shorter or like that but cheaper

whatever right

you just you say you told us all this stuff

we think you're a good fit and as a result

we want to give you this offer

uh make your grand prize

the thing you want everyone to buy alright

so make sure you assign a monetary value to your grand

prize

to serve as a price anchor for your promotional offer

so for instance if you sell a 5

you know

5 thousand dollars worth of value thing for $2,000

then advertise the 5,000 dollar value right

let's say that's the giveaway

next you pick your promotional offer alright

so this is a discount on the grand prize

a truncated version some very small difference

that allows you to charge even less

for your grand prize to people who

kind of win the participation trophy alright

and the bigger the discount

the more compelling the offer obviously and so hint

the bigger the value you make this thing um

the better right so remember

leads

enter the giveaway because they found the grand prize

interesting

this is why this is such a key point is that like

everybody already says they want this thing

so you don't have to really like

sell them on wanting it they already want it

we just need to make an offer

good enough for them to say yes right

and so the promotional offer gets you customers

because you offer what they already showed interest in

uh at a discount

and the discount

in the story I gave was the partial scholarship alright

and so you can call your promotional offer

whatever you want free business scholarship

gift card voucher

dollars off store credit whatever right

the point is

is that you have a main thing and you got a

you got a gift card that somebody can win

that can apply towards it bingo

bingo so what else does someone need

in order to qualify or opt in

you obviously need their contact information

otherwise you can't contact them

you want them to be eligible

because if they're not eligible

they're not gonna be able to buy anyways

or they're not a good fit

and then I prefer to also

so this is kind of like how do I talk to you

who are you and then

what actions have you taken

that make you more likely

to be either a great customer

or more likely to bring more other customers

which is gonna be a promotional activity alright

and so other stuff interests you to qualify um

I add these to promote my giveaway more

so might be like

you have to bring a friend to my giveaway

in order to qualify to win

that could be a qualification

it could be you have to join my group

it could be you have to share this post

it could be it could be you have to leave a review

like there's 100 things you could have people

you could have them do them all right

now the more friction you add uh

the

the fewer people are gonna want to enter the giveaway

so it's a little bit of a

a balance between those two things

but I'll say this in general for me

if you have a compelling enough grand prize

people will take a minute

to follow some of those steps to become more qualified

leads for you so yeah

other examples could be you know

attending a call or event

making a post entering a group right

and the key here is that

we want them to either promote our stuff more

or demonstrate higher quality of interest

which said differently

is we want them to consume more of our information

so that they're more likely to make

a purchasing decision

when presented our promotional offer

if they don't win the main prize

once we have all this in place

we put the giveaway on a deadline

to give away the free thing

so you make a lot of razzle dazzle hey 5

4 6 3 2 1 this how many days left

it's me excited everyone hop on right

we make it urgent

by making it only available for a limited time um

3 to 7 days I think works best

I think people's uh

attention spans are relatively limited

so I think you know a weekish works well

um as soon as leads enter the giveaway

you want to update them daily

so first you let them know how long they have

until you announce the winner um

you can do this email

direct message text social media post and so on

if you already have a community

you can do it there publicly and then also uh

one on one at scale like via broadcast um

and do as many as reasonable

once a day across all platforms

tends to work pretty OK um second cause again

you can do it you can get away with once a day

if it's a shorter thing if you're gonna go longer

I probably wouldn't do every day

if you're to 30 day giveaway

which you can do

there's there's situations where that works like

you know if you're at 27 days out

you're like I get it

you might opt out of the giveaway by the end of it

so you might do like I would follow the Whisper

t shout framework that I have in the leads book

um in terms of it's kind of like a reverse launch

but you're kind of launching a giveaway right now

second you provide value along with your countdown

so this is a point that I think a lot of people miss is

you don't wanna just say the countdown

you also wanna be like

let me sell you on how this thing's amazing

and how it's gonna change your life

which people are gonna be excited about

like

let's say you give away vacation for whatever reason

now we wouldn't give away vacation

unless you're in the vacation business

I prefer you give away

if you're gonna use this play the main thing you sell

but I'll just use vacation as simple

a simple example if I gave away vacation

cause I'm a travel agent right

that vacation then what else am I gonna talk about

I wanna talk about the drinks they're gonna have

I wanna talk about the restaurants there

I wanna talk about the weather there

I wanna talk about the beach

I wanna talk about the views

I wanna talk about their hotel room

I wanna talk about all these things that I can use

each day of my countdown to provide value

describing the grand prize

and so it doesn't seem like a

take when I'm reminding them of this thing

that they want to win

and I'm talking about how great it is right

that's the key that I think people miss

rather than just like it's coming

it's coming like that gets tiring right

so just provide value along the way

beyond that show everyone the benefits right

we just said that

and you want to refer everyone to social proof

so this is both the benefits and proof that it's good

so if you do have that vacation

I'm saying if you've sent other people on this

grand prize vacation before

then it's like hey

here's John and Sally who went on the thing to Egypt

and they loved it and then the next day

here's the rooms and then here's

you know Kevin and Kelly who are saying how the

the rooms were spectacular

and how is the best hotel room

they've ever stayed in their whole life

and they wish they could live there right

each one of these

you want to pair the benefit with proof

around the benefit ideally

now a little pro tip

like I said whisper to shout

you can use the exact same framework I have there

for countdowns and urgency

okay so announcing the grand prize winner um

once you do that you then

so let's say you've got you do a webinar

you do a big a big raw raw

whether that's local on a stage

you invite everyone to a thing you do a virtual call

whatever is fine you do it in a group

I like to bring everyone together

because it's gonna maximize

my ability to sell and convert alright

and so um

we announce it publicly

then we message everyone else privately alright

this is the key point many will enter

many will win

that's the key point of what makes this work right

and so now

I'm not saying everybody wins the grand prize

but everyone gets a promotional offer

to apply to the grand prize

which is awesome that's their participation trophy

because of the work that they did

because they were such a great participant

because they comment to the group

because they shared because they told you a good story

you can use whatever because you want

but just give them a reason for why they're getting

the voucher the store credit

the gift card the discount

whatever you want let them know email

text direct message on that big webinar presentation

you can also do the same structure

which is people get on and then afterwards you can say

hey I saw you on there and you can have your own team

or if it's just you messaging them saying hey

I think this would still be a good fit for you

I wanna do a partial scholarship

so I'm gonna be reaching out to

some of you guys on this call

and afterwards to get that set up

and then again we have to restart our urgency

because otherwise they're gonna be like

yeah I'll do it someday

for the same reason

people don't buy and take action immediately right

it's always easier to just delay things

so we wanna drive the urgency

so uh

in that message

you ask them to schedule a call to redeem the prize uh

and make sure they redeem the promotional offer again

add another deadline okay

again three to 7 days tends to work well

and the second one works like the first

show the benefits show more social proof

more valuable stuff about the offer

so I'm gonna give you a little bit of math on how to

like kind of walk through this

so when you're explaining

the promotional offer to winners

you wanna use like kind of cost to value

using their discount their store credit the

the partial scholarship um

that you're giving them right

and so

my rule of thumb is to make your promotional offer

equal to 10 to 30% of your gross margins alright

and so for example let's say we advertise a grand prize

with a 5,000 dollar value

but a 2,000 dollar retail price tag alright

so the promotional offer winner gets uh

gets it for 18 bucks that's 10% off retail alright

but when we let them know

they won the promotional offer

we explain that they get 5,000 dollars in value

for an 18 dollar price tag alright

very exceptional

so if I'm that travel agent for example

I might say if you were to book this vacation

not through me without all the discounts I can get

this would cost you $5,000 to do

now if somebody goes through my traditional services

I I might say okay

well I can get this thing for $2,000 um

and that's what I might be able to retail for

but my participation trophy winners will get 10

20 30% off

so that would be somewhere between

200 and 600 dollars off my normal 2

thousand dollar offer but when I'm comparing it

I always have my baked in

efficiencies of what they would have to do

to get this on their own

if they were to just get it through retail

not through my services as a travel agent

and so $5,000 gets discounted

or they can see the discrepancy in value between 5,000

and 18 so now it seems like a screaming hot deal

which makes it more likely for them to take it right

and so you can just compare the difference of a 10%

discount to a 64%

very big difference

and so we want to talk in those terms alright

beyond that bottom line is that remember

everyone entered the giveaway

showed interest in your thing

if you remember nothing else

this is the most important point

we want to sell the hell out of our grand prize

because we want people to be super interested

and because there's a chance

to win so many more people want to dream about it

they want to imagine what life will be like

and so a lot of the persuasive techniques

because there's a chance of winning it for free

tend to be even more effective in this setting

alright so I can't under I can like

I can't undersell this value to you

like

this is one of the things that makes this so powerful

also one of the reasons this regulated alright

and so if anybody shows interest in your thing

you should have an offer to give to them

that's the point alright

and so that's how it works

I'll give you a couple examples real quick

so um if I were a dentist

I might do a pre uh free Perfect Smile giveaway

so grand prize might be a free set of invisible braces

6,000 dollar retail price

my promotional offer might be 2,000 dollar gift card

for my braces right

okay uh

if I have a physical products business

I might be doing a year of organic dog food

subscription alright

so the grand prize your

your food a thousand dollar retail price

and the promotional offer

might be a 300 dollar gift card

for food only usable with a one year subscription

right or only usable if you prepay it upfront

like you can put terms on these things

um the next is services offer

so let's say you have the free

ultimate giveaway for whatever services

you have alright

so uh free one year package 5,000 dollar retail price

your promotional offer is a 2,000 dollar voucher

redeemable towards one year of service

now if you have you know really crappy margins

then you're gonna cut this voucher down

that's okay um

I prefer to tend I

I prefer to sell higher higher margin services um

but these type of things really drive behavior

if you had a consulting offer

like a free 16 week turnaround

which could be business

it could be health it could be relationship

it could be whatever right

so let's say that's a 12 thousand dollar retail price

it's my mega Cadillac super super duper version uh

my promotional offer might be a partial

which might either be half the time or half the price

or the same duration with one piece removed

no matter what um

these things all combined together um

and make a really compelling offer

those are some of the examples a couple

couple little details for you um

talk to your law people about law things

make sure that they're legal in your area

the how you do it eligibility criteria

get you more customers to buy the promotional offer

so I ask questions like to

you know just to get ammo for a sales conversation

so why should we pick you

why this program why now

why does this matter to you

why is this important what are your goals right

these are all important questions

you can ask in an application that then you can cipher

you know go through them and say oh

these are really good people

and you can also order the leads

and score

them based on who you think is more likely to buy

you can also ask for income

you can ask for whatever you want um

if your giveaway doesn't work

so let me just troubleshoot this for you

it means your grand prize wasn't grand enough

so I had um I had a portfolio company do a uh

do a giveaway and it bombed and I was like

how did they or they told me that it bombed

I was like there like giveaways always work

like how did this not work for you

and they told me the grand prize

was free tickets to their event

which is like $300 for the tickets for the event

this is a b to B business with a

like 40,000 dollar thing um

well like whatever 15 to 40 somewhere in that range

right and so it's like

so why do we think that 300 dollars of value

is in any way

like if we're going to sell 40 thousand dollar stuff

we need to have 40,000 dollar giveaways at minimum

and so they reran the campaign with equipment for uh

that business owner type

that was fifty thousand dollars of equipment

and then all of a sudden the giveaway worked right

and so like giveaways are only grand

if you have grand prizes

and they have to be super grand

because people have to want them right

um here's a little pro tip for you

you can give away two prizes for twice the leads

I'll give you an example on the next slide uh

so this is from school

so refer a winner and you win too

so this is really I think this is sexy as hell alright

so I'll just read this to you

but many of many of you are inviting

friends to play the games with you

and that's the point to make business fun

to encourage us even more

we're adding a new incentive alright

if a person you refer gets in the top 10

you get to come too so they won prizes

and so the whole point is

if you double your grand prizes

then what you can do is hey

I'm gonna do this grand prize winner

but if you're the person who referred the grand prize

winner then you win a grand prize too

so let's say in that

in that example with the equipment

I would say OK instead of $50,000 equipment

I'm gonna give two 50,000 dollar packages

or you can give two 25,000 dollar packages

whatever two big packages

and so that then gets

every single

person who's coming into the contest to say wait

I can get way more chances to win

like every person I refer gives me another shot to win

so

there's a huge incentive now to refer tons of people

and this can double triple

quadruple the amount of leads you get in a giveaway

if the giveaway is good enough

so again these are regulated for a reason alright

um but this

this crushes so highly recommend doing that

if you

if you have the cash of the capital double the SNF

I would do it all marketing rules apply

so scarcity scarcity scarcity

limit your giveaway by time number of entries are both

you can run the giveaways for specific amount of time

like 7 days

a specific number of entry like 5,000 entries or both

I like both now I wanna be clear

how would you use the scarcity part

well

I tend to limit scarcity based on how many people um

I have the time and resources to connect with

so if I don't have the team

to be able to actually reach out to more than 200 leads

then I wanna I wanna put my

my qualifications as high as possible

and I want to limit uh the amount of entries to 200

that also increases the chances of winning

which makes it even more attractive

for people to enter alright

and so if you can

if you don't even have the bandwidth to

do more than 200 contacts

then cap it right

and if you can't do it

you can't reach out to those to 200 leads in

in any more than seven days

then it's like cap it at 7 207 done

which leads to the next one urgency

urgency urgency right

so I add urgency in three places for giveaways

No. 1 is to enter No. 2 is to claim

No. 3 is to use or to um

to use the the thing

cause even once you have

let's say a scholarship that you give away

or once you give someone a vacation

give them a time period to use it in right

cause you want them to actually consume it

cause big picture even for

and most importantly

for all the partial scholarship winners

uh this is important because you want them to start

you want them to become customers

you want them to buy right

and so this basically aligns with the three actions

we need them to take and so we put urgency around each

alright

and make it clear in the advertisements how that works

so once you announce the winners

let them know how long they have to claim

and when they do

schedule their call sometime the next week if you can

and then once you let them know what they want

tell them how long they have to use it

I like hours personally

but I've gone up to 5 days in short

just always have deadlines

so this is another another little interesting tidbit

um on a little

more advanced thing that I've Learned over the years

which is when you have the participation

trophy winner calls when you have the promotional

basically calls for everybody who didn't win

but you still want to get to buy something right

at the start of the call

let them know that they have two ways

to use their partial scholarship

their voucher

their gift card their credit whatever alright

and that you'll help them find

which way makes the most sense for them

and then offer the discount on the grand prize thing

first if they take that awesome

if not then offer the same discount

by percentage on any other product

that you have to make sense

so using the dentist example earlier

I might say hey the grand prize is the full teeth

and you're gonna get $2,000 off that

now they might be like

I can't afford that we might say well you know what

80% of your pictures are gonna be your top teeth

not your bottom teeth so

why don't we just do braces on your top teeth

for $3,000

and I'll give you a thousand bucks off that right

and so that way

you can have a back pocket offer for people who still

obviously want to improve their smile

they still want the main thing

but they might not be able to afford it right now

or might not be right for the business right now

and the key is to just discount by the same percentage

that way they don't feel like they're

they're losing out on their partial's caution okay

so if uh if you have a lot of no shows

for in person appointments

and that becomes an issue um

instead of doing mass notifications

for people who qualified

I just reach out to them individually

sometimes that happens so just

it basically just need to do more personalization

and when you get a hold of them

just let them know they have to claim the prize

so if you're recurring every business

what you want to do is apply

the promotional discount

over the longest period of time

that they'll agree to

and then set up monthly subscription

to build automatically at normal rates

after the discounted period ends okay

so let's say that someone wins

you know um

a partial discount for whatever $2,000

and you normally charge uh

$6,000 or let's let's for simple math

let's say you normally charge $8,000

you give him $2,000 off that's $6,000 for the year

so then I would just reverse that into $500 a month

which then at the end of the year

would bump up to whatever

$8,000 divided by 12 is right um

and that way you get the recurring revenue

uh on a on a regular basis

and again

that's you wanna spread it over as long as possible

but you wanna collect as much cash as possible

from up front

so if someone will pay six up front do that obviously

uh but if you can't do that

then extend it over as long period of time

this is what I'm trying to help you avoid

you don't want to say OK

I'm gonna give you $2,000 for the first four months

and then you'll start getting billed on month five

do not do that it doesn't work

it sucks I've already

I've already got the scar tissue to show it

don't do it

just try and spread it over longer periods of time

alright so those are the important points

so this is a quick quick recap

so at the core free giveaways

ask an audience to apply

to get a high value thing of yours for free

many will enter many will win

or one wins and then the rest win discounts uh

you wanna pick a grand prize that people want

it has to be sexy you do a bad grand prize

like do not be cheap on your grand prize 2

give 2 prizes away if you want more people to refer

I think a grand prize

should be about the value of your high cost thing right

now to be clear the reason this is also valuable

is that if you give away something that you

that retails that you actually sell for

let's say $10,000

then it's really is only gonna cost you maybe two

3 thousand dollars in terms of hard cost

or services to deliver that thing

and so like that's a smoking hot like

it's not that much money compared to how much

you have to spend in marketing right

which is why cash giveaways are like my least favorite

type of thing because I mean

I have done them but they

they tend to be my least favorite

because they are the least original

now the plus side of cash giveaways is that

they are valuable to everyone right

and so if you are in a niche

which I hope you are cause you know who your Avatar is

being more specific and making the

the grand prize around your service

allows you to bake in the difference between

what it cost you

versus what the value of it is at a retail price

and I think that's a huge arbitrage opportunity

it also makes doubling the prizes

when you give two away easier

cause if you give two 10,000 dollar prizes away

that really only cost you two or three at hard costs

still works great okay

so then

you want to offer a chance to win the grand prize

to anyone who enters and qualifies

key point and qualifies

don't just give it to anyone

like they have to qualify in order to win uh

and you get great information from every lead

because you make it part of the entry process

and this is why I think this is so magical

people are just willing to

enter pages and paragraphs about themselves

whereas if you just did a normal lead gen campaign

it's hard to get two or three fields right

let alone here you can get massive applications

with whole life stories uh

built into them because people want to win something

so get that information um

and then it'll indicate how your offer

provide more value to them

and this becomes it

very important for when you offer your discounted

or your promotional

or your participation trophy offers later

advertise your 7 giveaway for you know

three to seven days or

hit the number of people that you can manage to call

in that time period whichever comes first

everyone who doesn't win the grand prize and qualifies

gets offered the promotional offer

book appointments with the promotional offer winners

to credit their win towards the grand prize

give them limited time to claim their prize

then

put an expiration date on people claiming the prizes

making them more likely to claim it

and if somebody says no

to your main participation trophy offer

have another product uh

that's probably like half the price

to 1/3 of the price that you have in your back pocket

to make available to them alright

um and it cause it might suit them better

I would just keep the percentage discount the same

that way they still feel like they want something

beyond that that is how you do free giveaways

those destroy like murder across markets

physical products

brick and mortar online like these work

so use them at your own peril

so we just covered win your money

back and free giveaways

as two of my favorite attraction offers

now we get into what I believe is the most flexible

attraction offer

that works for just about any business

which is the decoy offer

so same 5 how I Learned description examples

important points and summary

let's rock and roll so how I Learned it

so John was a mentor of mine

at the very beginning of my career

he had 22 tanning salons

and he would drive me to his lake house

you know a couple times during the summer

and we'd have these three or four hour long drives

and he would just like impart life wisdom on me

and John had lived like an amazing life

he took basically 20 years off

and just raised his daughters

and just went to the lake and and

and shot 16 holes of golf five days a week

and just like lived life um

and he had started from nothing like really

really cool guy and so anyways

he was telling me how his 5 day VIP offer worked

at his tanning salons he's like so it works like this

we offer 5 dollar VIP gift cards

we put them on people's windshield

that's how they used to advertise back in the day

and so people would come in with these gift cards

for five bucks for a 5 day VIP pass to get tan

he said the thing is and this is the key part

is that people don't know how long it takes to get tan

and so they come in for with the five dollar gift card

uh for the VIP pass and we give them the Turkey talk

which is basically if you put a Turkey in

you can't cook it in 1/3 of the time by

by ramping up the the temperature

you just burn the shit out of it

and the insides undercooked

and so tanning kind of works the same way

is that you need to have multiple sessions

to get the right type of tan

otherwise you burn right we're like oh

got it and so it's like

you wanna get what shade of tan

so they would ask that when the person comes in

and then once they knew what shade of tan they wanted

cause it'd be easy to show them they'd say great

well Turkey talk got it

you're gonna need this amount of time

this many sessions

and so either you can pay 25 bucks per session

or why don't we just take that five dollar VIP

and you can pay 1999 a month

we'll take it off the 1999

and you get unlimited as you want

and everybody saw the value

and they'd convert right into EFTS

which is electronic fund transfers

which is just industry term for recurring membership

all right

so that's the VIP 5 day five dollar VIP story

now fast forward a few years

so I'm now in gym launch where four

you know three

four years in and all of a sudden

like our ads are not performing for the gyms

and I was like okay

we gotta come up with some sort of new offer

so I had my team just try a bunch of different things

and I remember this 5 day VIP story

and so we're like hey

why don't we try this one out too

and so

they tried this out in five different mini beta groups

and the winner was this free 21 day transformation

but here's how it worked

and so when someone would come in the decoy offer

this is the five dollar VIP

this is the they think they can get tan in one session

but they can't really is we say cool

so we just said free 21 day transformation

when they come in we'd say cool

the free version of this is

you get one workout per week

and you get at home nutrition course

we'll give you this course

you can take it at home

and you work out once a week for the next 21 days

which is three workouts OK

or we'll give you the unlimited version

so you work out as many times as you want

over the next 21 days we'll personalize your nutrition

we'll give you uh you know

grocery store instructions

exactly what you need to buy

we'll guarantee that you'll lose at least 10 pounds

or 15 pounds in the next 21

days

or we'll give you another 21 days free on the back

and when presented those two offers

they came in for the free 21 day transformation

but when they were presented the premium version

they said you know what I'd rather do that

upselling is as American as apple pie

there is nothing wrong with having an upsell

as long as you still offer something that is free

that complies with what your original promise was

in the advertisement so if someone comes in

and the key point of making this work is that

you can advertise the free 21 day transformation

not also you get all this stuff

if you say you get this other stuff too

then you have to deliver on it

and so the key is

this is one of the benefits of advertising results

rather than the the vehicle

because then you can choose the vehicle

and associate price

however you want in the sales presentation right

and so this offer structure right

this money model is 100% based on the upsell

this is how all of the money of this works

and the key if you have this structure properly is 70

80% of people should take the premium version

so description

so decoy offers advertise something free or discounted

so I could just as easily say 19 dollar or 21 dollar

21 day transformation they come in and they say cool

you can do the 20 dollar one you already paid for

it or I'll credit your 21 dollars towards a 421 dollar

thing which we'll roll it towards

and now you can buy an extra 400 bucks a day

and you're in right

so then when leads ask to learn more

you also present the more valuable premium offer

and the premium offer provides more features benefits

a bonus guarantees and so on

so by putting your decoy offer and premium offers

next to each other

they can see how much more valuable your premium

offer is and so

I like decoy offers so much

because they get more customers overall

and so they either take the decoy version

or they get the premium version

this is an assumed close that means everybody buys

I like that now if they take the premium version

great

if they take the decoy offer also great and guess what

you can also grab a couple of the bonuses

from the premium and toss them in

because you're like hey

I know you're only taking the

the one workout a week thing

but let me do some personal nutrition for you

come back in a week or come back in two days

and guess what

we do with the first nutrition consultant

sell $300 of supplements alright

and so it's it's all good alright

but either way here's the thing is you close everyone

and this makes it cheap and profitable

get new customers and any business can do this

you literally just take what you have

well I'll get into what it is

okay so here are the steps to make a decoy offer 1

advertise a lesser smaller

or simpler version of your premium offer

as the decoy offer then when leads engage

offer both options

but emphasize the premium one and use the bonuses

the premium value

and the guarantees to close the additional people

alright now let's do some examples

so let's say I have a lemonade stand

this is to prove the point

that works with literally any business

alright so you

the attraction offer is uh

this is like what the headline of the ad might be

so you say hey

free week of lemonade for all first time customers

okay now I'm not giving any features

I just said free week of lemonade

now option A this is the free week

is that you can have this free plus water and powder

uh this warm water

right and artificially sweetened

and it may give you digestive issues

uh but you can absolutely have this free lemonade

or you can have the organic

all natural vegan gluten free imported Italian lemons

which are cold

distilled and shipped straight to your door

so you never waste time coming into the store

and so it's like which one do you want right

of course you want this one

you want the premium one and so that's what people take

so let's say you've got um

this is actually a flow tank center

I had an agency that did flow tank stuff for a minute

uh in Allen

so they use a free six week stress release challenge

okay so

the attraction offer is a free six week stress release

uh or um

as you can say a six dollar six week stress release

either way that's free or discount

decoy option you get one float per month with at home

do it yourself stress relief exercises

or premium option is 2 a week floats for 6 weeks

one on one consulting journal

sleep routine and a satisfaction guarantee

guess what everyone took this one

alright now the gym offer this is the local one

so this is

this is basically the breakdown of what we did

so free 21 day transformation

or $21 day transformation uh

workouts done in a school.com group once a day

and a general nutrition plan

so it's like we're a local business

you can get one workout here

the rest of the workouts you can just do online right

you can watch the recordings

you get no support

you get no guarantee or you get unlimited workouts

a personalized nutrition plan

accountability results guaranteed

or you get a 20 days free

so now important points alright

so how to make your decoy offer offer fewer components

older models

or less personalized versions of your premium offer

cause some of you guys are like I don't know

I can think make my my DQ offer

think about what you have make it less personal

make a have you an older version of what you did

give them that like these are

you

just peel off features that cost you the most money

all right and then the thing is

is

your attraction offer only has to get people to engage

nothing more

you just need people to get opt ins for it

which is why you want to talk more about the outcome

and less about the vehicle

now yeah

advertise the benefits not the features I recover them

alright so now you can advertise discounts in four ways

we recovered that one earlier

but as a reminder uh

if you have your lawn thing and you give

and it's 1 hundred bucks a month

and you wanted them to pay $900 for the year

you could say 25% off you could say $300 off

you could say three months free

or you could say one year for $900

12 bucks

all different ways of saying the same thing

so these are all useful

especially with decoy offers'cause oftentimes

they are discounts alright

so the key to making this work is that the contrast

has to be huge alright

the bigger the contrast

the better the deal the more customers will take it

if people keep taking your free offer

your free offer is too good

and your paid offer is not good enough

so you want to keep doing this

until the obvious offer is to take

the premium offer alright

discount offers have higher shop rates than free offers

just as a pro tip if you do have these issues

you can do the 21 dollar thing

if you have shop rate issues in your market

if possible present the premium offer first now

if they ask for the decoy offer

most people don't you then present it

but I'll show you how to do this okay

so what you want to do is

get them to give you permission to sell them

so if they ask to peer about the decoy

then you're legally obligated to present it

on the other hand some of you guys might be

a little bit weak in the stomach

about just offering something

straight for the the high value thing

but here's

let me just share a little bit of like advertising

scars and like years of doing this

almost no one remembers what they opted in for

they barely remember the ad

and so they just they will

remember that this thing

solved the problem that they have

and then when you they come in

you can just make the offer that you want to make them

now if they do remember that thing

then by all means tell them about it

but if you are somebody who's like

I want to always offer the really cheap thing first

fine this works in the opposite way of price anchoring

but fine

have it your way so if you're gonna do it that way

here's how you do it

so you ask them a sorting question first

you say are you here for free stuff or lasting results

everybody's gonna say lasting results

some people will say free stuff

and those people suck

and you can just kick them out basically um

but as soon as they say results

which most people do you skip straight to premium

so this way you've got

permission to then sell them the premium offer now

if they say free then you say the free thing

and then you present the premium

so this way you can still have them ethically select

to get the premium offer first

by asking the question

because you asked them before you made the offer

now if they then at the end of the premium offer say

yes

I want to buy it shut up and close the sale that's it

you don't need to offer anything else

if they say free stuff you present the decoy offer

and then immediately contrast

like you don't even

give them the opportunity to say yes to it

you say and and then you go right into the next thing

alright and so then only after presenting both offers

you then say this is key

which do you think will get you to your goal faster

or which one would you prefer to have

and the thing is

is that everyone will prefer the better one

and everyone will think

the other one will get them to their goal faster

or you can also ask which one

do you think is more likely to help you get your goal

all three of those questions are fine

they obviously force the selection of this one

and they say great

and then you close the sale

all right and so you say uh

so which one did you prefer

and then they say great

they'll have the premium offer

and then you can move forward in the sale

mutually agreeing that is the best thing for them

so when making your premium offer

get excited about it

so present it as a superior offer to the decoy offer

because it is and assuming it

that it is how it is in the customer's best interest

so your excitement

about this thing will motivate

other people to take action

according to your preferences

so from a selling perspective

you wanna talk to the lead

as though you already know

they're gonna make this offer

like they are gonna take the premium offer

you be like

it's almost in a like this is such a no brainer

anybody who doesn't take this offer

like I don't even understand the people like almost

and this is where like if you're a salesman

especially if you work for a business

you're gonna be like

I don't even know why we offer this other thing

like you can do it if you want

but like

this is where everyone gets all the great results

and even how I'm saying this is very matter of fact

very like like I

it

it makes no sense to me why someone would select that

and people will take all the subconscious cues

in your body language and your tone

of which thing they should pick

so for example if I said you don't want this

do you there that's a guaranteed no

I'm I'm asking them to say no to something

that's what I'm saying and so

how you present the offers

is obviously based on your ability to sell

but I'm trying to give you

stack the deck in your favor to make this easy for you

so you will operate from the position of

this is what everyone does

this is just a formality

let me get your ID and credit card

so you can get your value

no hype just friendly disposition

almost bored about how regularly you have to do this

it's like yup so we've got this thing

not really sure why people do that

but this is the main thing great

do you have your card on you

do you have your ID on you

and then you just move right to it

surprise benefit

that's optional to take this a step further

if someone takes the decoy option

you can choose to surprise them with a few

zero or low cost features

from the premium offer just say hey

I'm gonna throw this in

even though it's part of our premium offer

just because I want you to get great results

this also builds goodwill

it also reinforces that you are being truthful

about saying

I really do think this other thing is better for you

and that you do want to actually help them

so it's aligned with the scripting in the sale right

so this builds goodwill it overdelivers

and it increases the chance

that they take your upsell offer later

remember

they're still a lead and if they bought the Dequa

if it's a free thing that they haven't bought yet

if it's not a free thing they paid

they're still a customer

and if you've followed any of my stuff

you absolutely should still up

sell them halfway through

whatever this thing is

and if you give them some stuff now that's good

they will probably increase the likelihood

that they will take more of your stuff

that's good later so in summary

decoy offers advertise something for free or discounted

then when the leads ask to learn more

you also present a more valuable premium offer

make the premium offer

far more valuable than the decoy option

by adding more features benefits and guarantees

strip down your decoy your main offer

to your decoy offer as much as is reasonable

when leads ask about the decoy offer

present your premium offer right next to it alright

ask if they're here for free stuff

or laughing results to get

permission to put the premium offer first

if you still don't want that

then you put the decoy offer and then kind of like

like I mean you can do that

but this is what people get the best results on

and you can still make money

from the leads who pick the decoy option

you'll just learn the best way to deliver your decoy

product and maximize upsells from it

expect to make money fast

if you're not

then make the contrast between the offers bigger

by the way if you're a company

doing over $1 million more in profit

and want us to invest as a partner to help you scale

you can go to acquisition.com and hit the sell button

if you just want help scaling

you can hit the scale button

if you don't have a business

hit the start a business one

which I'll just tell you will route you to school.com

so that concludes the decoy offers

let's get to buy X get y free

so we just covered win your money back free giveaways

and now decoy offers

and one thing that I will highlight

before we get into Buy X

get y free is that an ethical salesman

makes recommendations

that he believes will help the customer

and help the business and unethical salesman

makes recommendations to customers

that will not help the customer

and only helps the business

and so you

making more offers to customers in no way unethical

it is unethical basically if you lie

and so you're either lying to them

about them being qualified for something

or you're lying to them about the quality of the thing

that it will get delivered to them

either way

fundamentally bad salesmanship is rooted in deception

good salesmanship is rooted in education

and if the education is true

which it should be

then the customer should just find out as much about

what they need to do to make a decision as

you know and so fundamentally

if you were a customer

and you were selling your mother

and she had as much information as you

then she should buy the same things

you would recommend to her

with that being said buy X get y free

let's rock and roll

so buy X get y free super super common offer

there's a lot of different ways to do it

and there's like very advanced tactics

which is why I love this offer so much like this thing

it's funny because I like the first three

and I also love this offer too

like it's a banger so we'll cover the main 5

here's how I Learned it so I was in downtown Nashville

I went to school in Nashville college called Vanderbilt

and I remember when I

when I got to Vanderbilt for the first time um

I remember going downtown and there was this uh

thing called Boot Factory

and Boot Factory had this massive boot that was bigger

than a car

big flashing like almost like Vegas lights and uh

on all the windows it said buy one pair get two free

and I was like this business

these guys are idiots

like they're just giving away their boots and I being

you know

like of course fresh to college out of high school

knowing literally nothing about anything

I assumed that I was more intelligent than the store

owner who obviously was doing very well

and so uh

I came back 10 years later and they had expanded

and so I was like huh

that's interesting now 10 years later

I had a lot more business acumen

and so I went in and I like looked around

poked around and I saw that the pairs of boots had

each of them had multiple markdowns on the price

down to $600 for one pair

at least the ones that I looked at

and so it was instead of saying buy one

fairly priced boots or buy 20% off

they had buy one get two free

but if you bought three pairs of boots for $200 each

that's still

like a pretty normal price for leather boots

and so the ones that I like

the ones I was looking at were not like stingray or

you know hippopotamus or something like they were

they were normal leather and so

I realized that they had just fully

baked the cost of three into one pair

and then said buy one

get two free and the thing is

is that because of that

all the bachelor parties would pile in

because the bride would get one

and then the other two friends would get them for free

or one of the friends would buy a pair

and give one to the bride

and one to her maid of honor

or whatever and they just milked it

and so

that is how I Learned this more valuable way of doing

buy X get y free so let's get into it

so in buy X get y free offers customers buy something

they get other stuff free cool

makes sense

the more free stuff they get and the higher its value

the better it works buy 1

get 2 free works better than buy 2

get one free free offers

get way more attention than discount offers

but if you only have one thing to sell

and give it away

then obviously you go hungry if you just say like bye

here's free boots that's not gonna work right

so in situations like this

they tend to lean on discounts alright

most businesses do

so they run sales relying on holidays

seasonal changes or whatever as you know

reasons to temporarily lower the price for whatever

the thing is to get more customers

but by selling more than one thing at once

you can turn discount offers into even stronger

free offers this is the magic of buy X

get y free it will take a 33% discount

and it can make it into buy two

get one free which is far more compelling

and rather than getting two thirds of one ticket

you still get someone to buy two full priced items

but you still effectively gave them a 1/3 discount

which you would never advertise

because why would you advertise that

when you can buy two get one free

it's more strong alright

so I'm gonna give you a lot of different ways to slice

this cause this is what I wanna help you

match this to your business

so when you have more than one item

you can make the discount value large enough

that it covers the price of more stuff

for example I could sell three t shirts for $30 right

so $10 each

or I could sell one T-shirt for 30 and get two free

in both situations

I give away three shirts and get $30

but the perception think about the difference here

if I said hey buy three shirts for $10 each

how compelling is that not that compelling

if I said buy one shirt get 2 free

I'm gonna for sure get way more attention

but the economics are the same powerful

now I'm gonna give you another example

now if I wanted to offer a discount

rather than only reframe the price

so the example here I just reframed the price

I'm still getting the same $10 per shirt

zero discount here I

just re reframed how I'm how I'm pricing my offer

if I wanted to also use this plus a discount

I could sell three shirts

for six dollars and sixty seven cents

so it's like buy three shirts for $20

that would be the discount version

or I could now say

buy one shirt for 20 and get two free

same thing it's still effectively a uh uh uh

a 1/3 discount but it accomplishes the same objective

okay so those are two examples I'm sorry

those that's the description

now I have more examples for you alright

so buy one get two physical products offers

this is the Boot Factory offer

one pair is 200 dollars buy X y free

buy one pair for 600 get two pairs free

so the end

result is to still buy 3 pairs of 200 dollar boots

alright now

here's three versions of this

that I want to break down for you

to show you the power of this

so if you said buy 12 months

get six months free for 818 hundred dollars okay

that's an offer

and a lot of people might take that like that's a

that's a that's a good offer

a better offer would be buy nine months

get nine months free

still 18 dollars a crazy offer would be buy 6 months

get 12 months free for 18 dollars

in all three situations

they get 18 18 months for 18 dollars

that's what it works everyone pays

the same price for the same amount of service

but the third option will be the most compelling

because it has the most free stuff

so important points

buy X get y free

gets people to buy more stuff and provides more value

so it used to take a whole year for some of my service

businesses to make the money

to cash flow the acquisition

but if you do buy six get six

for example

on the front end to attract customers or as a hey

it's our grand opening buy six months

get six months you can attract a boatload of customers

and get 6 months prepayments from all of them

at full price now

guess what happens if I have a full price

or even a higher than full price thing

that I add some little

tiny differentiator during my grand opening special

which allows me to say that this service was

higher than what I would then normally offer later

then it justifies me having an even higher price

so when I say buy six get six

I might just get prepayments

at basically the full price for the year

because I added this extra wrinkle in

that's very high margin for me

so for a gym I might say you get text access to me

which by the way

I probably would give all my first customers anyways

I just wouldn't promise that in the sale

I might for a grand opening

so raise prices

for giving stuff away to preserve profits obviously

if you can only afford a certain amount of margin

then don't give away your margin

that's just like my big obvious disclaimer

now by X y

free works better

if you have more free stuff than paid stuff alright

so give away give more free than you ask people to buy

just play with the pricing

until it makes sense for you

so buy one get two instead of buy two to get one

so these are the same economics

but this one's stronger that's how it works OK

now

the free things can be different from the paid things

so this is key so

you just wanna make sure that the free

stuff still makes the offer compelling

let's say that uh socks have a 10 dollar value

if they buy one shirt for 10 bucks

but get 20 dollars of free socks

it may seem like a better deal now alternatively here

if we're looking at like buy one

let's say shirts are 20 bucks

if I say buy one shirt for 20

and get another shirt free

that may seem like less valuable than buy one shirt

get two pairs of socks free

because what someone's gonna translate it into is

buy one thing get two things free versus buy one thing

get one thing free

now this is a testable proposition in some some offers

two pairs of socks may convert better than one shirt

depending on if the way that that buyer buys

the next logical thing they would need would be socks

so more free

cheaper things can work better than fewer free

expensive things okay

so let's say

I could only afford to give one shirt away for free

but now the same for the same cost

I give 3 pairs of socks

I would probably test buy one shirt

get 1 shirt versus buy one shirt get 3 socks for free

and even though the socks cost less than a shirt

it's still buy one get three

and sometimes that converts better

so I test this rather than offer a 33% discount

try buy one get two free

this here will convert more than this

but they're still 1/3 off

alright so I just like to

if you are going to use a discount

this structure

still makes a discount even more compelling

do not make offers like this if you cannot manage money

especially with service businesses

so if you say buy 6 months of service get 6 months free

if you don't know how to manage money

and you immediately blow the money that they prepaid

you're a bad business owner

so you need to be able to consistently

like if you have to have an accountant

you know do this for you

put all the cash into one bank account

and you can pay yourself

out of that bank account every month

as you deliver services but the worst thing

you can possibly do for your reputation is like presale

a year of service and then

you know like

do not do this play

if you are trying to keep your business alive

if you need this cash

in order to keep the business alive

I think you risk your reputation by doing it

I also cap this at 10% of a recurring customer base

for those who have recurring revenue businesses

so if you want to do a banger buy X get y free

which is a really great cash play

let's say you have 100 recurring customers

cap it at 10

don't let more than 10 of your recurring customers

prepay for the year

cause you still like how I

this is a not a math solution

this is a psychological solution

I've just seen way more businesses succeed

by keeping their recurring cash flow

because most business owners honestly can't manage it

now mathematically

it makes sense to get everybody on annual

but a lot of people can't handle that responsibility

I'm just being really honest with you okay

so this is a great grand opening strategy

as I reference earlier um

this is also a great offer to give for fast cash

now if your business is healthy

but you're like

you know what I want to buy a bunch of equipment

great prepay 10 people go buy your equipment

or you need to go buy a another big oven

industrial oven for your baking business

like totally makes sense for you to do prepayments

and things like that to cash flow fund

rather than take on credit lines

super smart

um so even if customers prepay

you can still upsell them different stuff now

so this is really important

so I made this mistake which is why I share it with you

the people who prepay

especially for services for durations of time

business owners have this fear of selling them

or making offers for other stuff

but here's the craziest thing that we saw

is that the people who prepay for the year

are the most likely people to buy more stuff afterwards

and so these are basically

a way of identifying your hyper buyers

and so they self select they prepay for a year

and guess what happens after that

when I would have big booty

boot camp and a deadlift seminar or

you know um

make your sexy back or I would do buns and guns

or whatever else I would do

lean by Halloween

they were the most likely people to pay

cause guess what

they weren't paying anything for being there

as far as they felt they

they had paid so long ago they forgot that they paid

so it felt like I was just a free gym

and you know what the cool thing about wallets

with people who make money

they replenish and then you can ask again

so if customers only buy once

this is just a disclaimer for the um

for the boot business

the reason they structured their deal that way

was to maximize the transaction

so if you're in a business where people only buy once

then it makes sense to structure

as much into that first sale

as you can'cause you're only gonna get one shot

like the bachelor

parties are probably not coming back to Nashville now

maybe they will but for the most part that's this

you wanna make the big the ask as big as you can

if you're only gonna get one shot

summarizing by X y free in by X

y free customers buy something

they get other stuff for free by X

y free works for stuff that makes sense to buy more of

or get longer access to basic by X

y free offer is reframe pricing

buy 1 get 2 free cost the same as buying 3

except customers see the free offer as more valuable

remember the 18 month service example I gave

so

always try to give more free things than paid things

and you compare

different free things with paid things as well

which you can just test alright

so buy X buy free

can lengthen the amount of time customers stay

if normal customers stay for 3 months

then buy 2 get 2 customers will keep them for 4 months

so whatever you sell try and extend

whatever the normal customer duration is

by saying saying like

if I know customers stay for three

I do buy two

get two and I price it so that it's still four

I make more money I make 33% more money

it's a great deal uh

if you use by exit y to generate a lot of cash fast

make sure you manage it

you can deliver on your promises

if you need fast cash and your business is healthy

make sure make this offer to existing customers

and just cap how many you sell to

if you have recurring I recommend 10% is the cap um

keep selling customers who prepay for long durations

because they are the most likely people to buy again

with that being said that is by X y free

alright

so we cover the first 4 offer when your money back free

free giveaways

decoy offer buy x y free they just keep getting better

um and right now you're probably

your mind's probably moving like shoot

I could use all of these yes

yes you could that's the point

that's why these things are so valuable

so now we move on to pay less now or pay more later

also super sexy so let's dive in same big 5

how I Learned it description examples

important points

this is my big fancy drawing big and fancy enjoy

alright so how I Learned it

so I went I got this email

for double your reading speed in 3 hours

or it's free by the world's fastest reader

and so I was like sure okay

so I clicked to register and so they said uh

put your credit card down for $0

and get billed 300 bucks after the training ends

and if your reading speed doesn't double

email us and we won't Bill you

you have to attend to be eligible

I was like that's pretty fair

like I mean

if I could double my reading

I would pay $300 for that

and I get to decide if I doubled my reading after I

I decide to pay after I've doubled it already

I was like that's kind of cool

so I said I clicked okay

and then the next page said

or pay $97 right now

and get the Recording Summit for free

and I was like oh

I kind of want the recordings

but I will say I was younger and I was broker

and I was like I want to make sure it works

and so I decided to not take this offer

now on the three hour training or whatever

the first hour and a half or two hours

he had an objective point in the middle

where he was like okay

now I want he tested us in the very beginning

and then at the halfway point he tested us again

you know everybody who raised their hand said

yep my

you know reading speed bubbles

we're like oh

I tripled it or whatever it was

um some people didn't

and then he like called these people out

tried to help them like live whatever

and then after that just at the very end

he was like by the way

if you thought this was good

this is what the progress we made in

you know two hours

if you want

I have an eight week intensive on the back end

that will even further increase your reading speed

and your comprehension

and so you can read at a faster rate and contain more

and ultimately

like learning is the meta skill of everything

like if you learn this one skill

blah blah blah

right and so I ended up not doing that

but I was like wow

this is really interesting

he gets all these people on

he makes money from the 90 sevens

he makes money from the three 90 sevens

and he then pitches people another thing

I was like this is pretty cool

so that's how I Learned it

and I was like I wonder

if I could do something like this for my business

and you can too so let's dive in

so in pay less now or pay more later

you give people a choice to pay full price later

with an implied guarantee of satisfaction

or pay a discounted price now

this play removes all risk from the customer

which is why it's so compelling

the other amazing thing is that you can advertise

that it's free because they put $0 down

and they only pay after they get it

if they want so they pay later and only if they like it

and it combines the benefits of a delayed payment

and a satisfaction guarantee

so it gives us both

it's like it's a delay and satisfaction

that's why it makes it so compelling for people

and anyone can sell this

almost anyone will agree to pay later

if they're satisfied

so from a salesmanship perspective for your business

if you're like not that good at sales

this offer primo but once they agree to pay later

you can then get them to pay

now with hefty discounts and valuable bonuses

like in this example

the recordings was a very valuable bonus

you can also stack other bonuses as well as discounts

so it's like oh my god

which also by the way

shows you the value of delayed payment and guarantees

how much you have to discount

and how many bonuses you have to stack

shows you the relative value

of a guarantee and a delayed payment

so the pay later option allows you to advertise free

since you can choose to pay or not

and this gets lots of leads to engage

but this free offer has an added benefit

which is we get their card on file

so this works just as much online as it does in person

so whether you have either type of business

it works the same way

because if they choose this option

and they hate the product

then they can cancel it anytime

before the charge goes through

but if they accept the pay later option

then we can make follow up offer to pay now

and the option can provide the whatever 20

50% discount

sometimes 2/3 discount like the 97 example I gave

and greater bonuses

and since we already have the card on file

we make it easy for them to pay

because now we already have it right

and so whether they choose to pay now or pay later

you've got customers and likely some profit

but to take full advantage of this offer

you want something else to sell

so have something more

better or newer to offer them when the time is right

alright you wanna market the core value as free

double your reading speed

the prospect puts the car down for the

to consume the service or value

at the end

they're billed for the service at full price

now again if you offset your cost you a car

the customers with the $97

whatever the immediate thing is

then you want as many people to pay

the three times as expensive thing

so it's not that you want to force everyone to do that

and I'll talk about the balance

between the price points later

but the objective is not to get everyone to pay now

or everyone to pay later it's to balance it

just enough to offset your cost to your customers

and then get as many people to then uh

basically delay payments

so you can make three times the amount alright

and so you can charge more for the thing

since it delayed purchase to the same degree

people will agree to pay more later than they will now

and so you can also boost the price

because also if some you

if someone

it basically means

what's the price of the guaranteed delivery

so when you have someone pay today

there's a

a risk metric that they apply to the purchase

on the risk

that they don't get

what they think they're going to get

if I said hey you only pay me after you get a six pack

then people are like oh

then the value of a six pack is directly related

to the price that they pay

which means I could charge way more for that thing

because it's at a delay

and so we wanna give the one time offer

uh of the same thing for 1/3 to 1/2

the price

plus bonuses and guaranteed to get more people to buy

now great alright

so let's do some examples

cause some people are like okay

I get how it works for the reading tutorial

but how does it work for other businesses

so pay later 0 + 2 99 after 3 hour training pay now 1

49 97 doesn't matter recording plus notes okay

now some of you are like wait

I thought it said 20 to 50 I thought it said 67

doesn't really matter you just pick the discount amount

that accomplishes your objective

for offsetting as much cash as you need

to break even on the acquisition

now upsell and also to be clear

if you are doing this

this thing is happening all within 30 days

I also include the cash I get from the pay later option

because they're still paying in a 30 day window

so if I get some today and then some in two weeks

or some in three weeks or some in four weeks

I still get it before I pay my card back

whatever doesn't matter to me

now upsell

the upsell here is the 8 week w reading speed thing

cool so we have 3 offers

pay later pay now upsell

that's how this works now let's say I'm in the

you know find your first real estate deal

OK fine

I do a 3 day workshop pay later for $0

for 3 day workshop

they get billed $500 at the end unless they cancel

pay now is 2

99 for the three day workshop plus the recordings

plus

a one on one call with a distressed property expert

plus printed materials

that they can use at the workshop

kinda compelling now

the upsell is that when they go to the 3 day workshop

guess what you do you sell

$30,000 to take them through

every other step of closing their first deal

within 6 months plus legal templates

uh

an advisor to vet the investment inspection checklist

whatever I don't think I mentioned this yet

but one of the really sexy parts about this is that

because every single person who registers

put his car down the show rates are astonishing

they're very very good

cause every single like you think about like

oh this

how do I make sure people come to the workshops

like dude everybody put a car down

physical products do this right

14 day clothing trial so they have a pay later option

$0 now get it then get billed one 49 in 14 days

Amazon started doing this

it's try before you buy like this

like this works in any business alright

so the pay now option is you pay $97 for the clothing

plus you get an accessory to go with it

but you could have this offer

because then you could advertise that

people could try for free

but you'd still want to monetize it sooner

the upsell could be that

the dress comes with an offer for monthly subscription

to more dresses or more clothes

or clothes in this style

and the customers have to return the product in like

new condition

before billing to qualify for the guarantee

now let's do a local business

I'm giving more examples

because people tend to be less creative

alright

so let's say you've got trim your hedges alright

like very normal you know local business

so the pay later option would be $0

lawn cut plus hedges

and then after we do it and it's to your liking

it's 600 bucks or three 69

now lawn cut

hedges and lawn treatment and some people are like

why is that so expensive

I have big houses whatever fight me

I'm kidding you can choose

change the prices to whatever you want

it doesn't really matter alright

you can make this $59 this 30 $36 it's fine alright

relax relax you're gonna be OK alright

now up sale so the up sale from there is the one

99 a month for long care services

and so then the rep comes to the house

makes the estimate and then offers both options

then up sales once the work is done

and so when they go there to say hey

we can trim the edges and you can pay me right now

or you can pay me after the thing's done

you can pay more

right and then as soon as we get the card

then you made the upsells boom

important points okay so here's the key part

promise a clear yes no result

so first you make a promise yes

no second

make sure you can deliver on it within your time frame

and if you don't they will ask to not be built

and so you wanna make this as objective as possible

for people so they can say yes

I found my first deal yes

I got my first reply from an email

yes my reading speed doubled cause I got to hear like

and you wanna have some sort of measurement before

and some sort of measurement during

so you can see the progress

so for example

if you promised a decrease in shoulder pain

have them rate their pain

before you do your magic trick

and then ask them to rate it after

if it went down

you succeeded and you can sell them something else

keep the promise simple

clear and measurable

this avoids unnecessary cancellations

now make a conditional satisfaction guarantee

so people can only cancel the billing if they qualify

for example

they had to show up to the reading training to qualify

alright it's key point

and so if you don't show up to the workshop

then you can't ask for the refund

so think attendance showing up for an appointment

turning in data make the criteria

what people do to get the value out of the product

alright which should make you feel good too

cause then you could explain it's like

listen I have this as the criteria

because you said you wanna double your reading speed

you're not gonna double your reading speed

if you don't show up

you're not gonna find your distressed property

unless you come to the workshop

have bonuses for your pay now

offers to get even more buyers alright

so if you want more people to take that pay now option

just stack the bonuses decrease the price um

optimizing your pay now and pay later offers

if too many people take your pay later option

discount the pay now option more

add better bonuses or both

and if too many people take your pay now option

go the other direction

if more than 10% of pay later

people cancel their payment

you promise too much uh

the guarantee conditions are too low

or the price is too high and so the last one's

the one that can be kind of tricky is

if you have

a massive discrepancy between pay now and pay later

then sometimes people will get the value

and just be cheapskates that's why having

the objective measure

of whether they got the thing is so important

for this now again

I would explain that 10% is what you should target

or what you should expect

so

10% of people who have pay later are going to just say

don't Bill me

so just factor in the cost of doing business

so if you have 100 people that do pay later

expect 10 to say that now

if like 20 say that more than then it's like okay

we need to change one of these other things

I would say the fourth thing is that

you're selling people who can't afford it

note no matter how well you deliver

some people will cancel the payment and that's okay

just cost of doing business

now uh

this works for recurring revenue businesses

too'cause you're like

how does this work for those businesses

let me explain so

you just give them the option to pay a higher

ongoing rate 30 days later

or they pay less today

and they keep the better rate for good alright

really sexy so plus you can add in some bonuses

so I'll I'll I'll just give you one line now

and we'll talk more about it in the one time

bonuses chapter

uh with continuity but it works like this

someone does a free trial

of whatever your subscription is

into $400 a month

and then on the thank you page you say

or you can pay $300 today

skip your trial

and you get to lock in at $300 a month for life

pretty sexy that's but now in order to do that

you would add bonuses

and that also gives you a lifetime discount

there's two there's two benefits from that

which is why it makes such a compelling offer

but you can advertise the thing as a free trial

but then you can liquidate the acquisition

because you have the immediate thank you page offer

so if you run events workshops presentations

hint at your next offer early

so if the reading guru had said

everyone wants to know

when my next reading intensive starts

because they sell out so fast

I'll get to it at the end but please pay attention

I want to deliver on the promise I made to you guys

to double your reading speed

first by hinting about his new offer

he would have sold more of it and he didn't

but if he had I might have had higher likely to buy

and so I used to do a lot of nutrition consultations

and this is what I Learned myself doing this

is that I would start my consultation by being like

listen everybody wants to know what supplements to buy

we're gonna get to what supplements to buy

but right now we gotta get your way in

we gotta get you to understand food

that's the most important part

everything I just said was true

but by saying everyone wants to buy

everyone wants to know what to buy

I I I seed

the idea that they're all going to buy something

but I see it in a way that's not

it's me talking about everybody else

not the people in the room and so I would say hey

people are gonna interrupt me all you know

to ask about supplements

and it annoyed me and I did it one time by accident

and then of course it worked really well

and then I started doing it every other time

on purpose all right

and so by accident I implied that people who uh

that everybody bought supplements

without actually offering them

and all the head nods actually showed that

they actually did want more products

and so all these factors got more people to buy

when I finally asked them to

so it was a happy mistake that I was sure to repeat

now if you're selling over the phone

get the card first then ask oh yeah

I forgot to ask you

do you want to save 200 bucks on that price

so I'm giving you different selling environment

so if you're selling in person

I explain that the the long care thing

if you sell digitally the thank you page thing

if you're selling over the phone

you get the card first for the trial

you get the card first for the pay later option

then you ask like the thank you pages

once they've agreed to that purchase

then you say by the way

I forgot to mention

do you want to save a little bit of money

or say

whatever the price is and get these extra things

a lot of people say yes and then you should explain yep

so for people who decide to just sign up without uh

waiting to experience it first

if you want to skip the trial

you get VIP seating and recordings from the event

and you get it for $200 less than if you wait

and you won't be able to get those two other bonuses

at any time you wanna go ahead and do that

and so the more compelling those bonuses are

the more people will say yes

great now let's summarize this b alright

so pay less now pay more later offers people to uh

a choice to pay full price

or pay a discounted price with additional bonuses

if they pay now

the pay later option has a delayed payment

with a conditional guarantee

have a clear criteria to qualify for the guarantee

and easy ways to measure it

if you can align the criteria with what

gets people the most value from the product

the pay now option offers a 20 to 50%

sometimes two thirds

discount and bonuses if they pay now

depends how desperate you are to get people to pay

offer customers the pay now option

after they already accept the pay later terms alright

so if they choose to pay now

then they get the discount and bonuses instead of

the guarantee instead of in lieu of alright

now you make your promise easy to track

and difficult to refute so not only is it easy to track

but they can't say they didn't have it

the easier it is to track

and the harder it is to refute

the better it is for this type of offer

so you want to be as clear as a yes

no and if you have more than 10%

canceling the pay later option

you promise too much

the guarantee conditions are too low or the price uh

is too high and

or

the people you're selling to are not the right people

alright so also

give extra attention to the customers who claim

they haven't gotten value

if you remember during the thing

if people didn't say they raised their hand

and they didn't double the reading speed

he attended to them so he could check off the can

he basically purposely

brought down the cancellations

that he was going to get later

and so there

it's really easy to tip people over the edge

it probably takes if especially if an in person thing

you can just easily check those boxes off

and it'll save you a ton of money in cancellations

and that is the pay list now or pay more later

so we covered win your money back

free Giveaways Decoy offers

bias get why free pay less now or pay more later

those are the 5 main attraction offers in the book

and you Mister Video Training attendee get a bonus

No. 6 free with consumption

the reason that this one I pulled out of the book

is because I think it required the most skill to use

and it was the most amorphous in nature

so it's the most complex um

but it's it is one of the most

used things that people have in marketing

so let's dive into it now this one

uh same five

how I Learned it so I went to an event for uh

for my gym to learn marketing stuff

and I went to a side

stage to see one of the presenters

cause they're like three stages going at any time

so I saw this

guy present and he did an entire pitch deck

but then right where you transition the offer

he just didn't

because no one was allowed to pitch at this event

and she said hey

if you wanna find out more

you can just go you know over there and whatever

and so the thing is is they weren't allowed to sell

but at that moment I wanted to buy

and I Learned later

that that thing was called a webinar

and I thought that was really cool

and so

that was more or less how I found out that I could

attend something for free

and then want to buy something afterwards

so I call this free consumption to upsell

so the reason this is a little bit different

is that the promise of the attraction

offer is to get people

and then liquidate the acquisition

because there's a delay here

it like it was loosey goosey uh

not that you can't liquidate within 30 days

so you can again this is why I was like anyways

it's a bonus for you guys alright

so let's get in the description

so I'll show this image real quick

so this is like a lot of times

the consumption

thing is 20 minutes long to five days long

so it could be one free video

it could be a PDF

it could be an audio it could be a live event

it could be a workshop

anything that someone's gonna consume a ton that

then they go

oh this thing's free they learn a bunch they say oh

I can do this and then they put money down

that's how it works fundamentally

you're selling or giving away a selling tool

now effective selling tools also provide value

bad selling tools are just pitches

don't do that let's dive in

so you give the free thing

that teaches and provides value

it breaks beliefs

that most people have around that particular thing

and so

the more knowledgeable you are about your customer

or your prospects

the more you can systematically break their beliefs

around uh

the opportunity that you have

or whatever service you provide

that people get hung up on

so think about this is like FAQ zone steroids

and you want to make an offer

that solves their next concern

or have embedded CTAs or calls to action

to take the next steps in the process

by the way

if you're watching this massive video training

and you want to scale your business

we're pretty good at it and so one

if you're a really big business

you can go to acquisition.com and hit the sell button

and we'd love to look at your business to invest in

if you're a smaller business

call it less than 10 million a year

then hit the scale button

and we'd love to help you scale from a million a month

to beyond $1 million a month

that's an embedded CTA that's how that works alright

and this works for books webinars

VSLS events workshops

video trainings like this

anything where you get people's undivided attention

now what this does is the process

reverse engineers trust

the best way for someone to know

that they're going to get value from you

when they pay you

is to give them value before they pay you

mind blowing I know

and so

I believe that education is the core of advertising

it's the core of marketing

is that you help people shift

their beliefs around something

so that they make a decision to buy

and so the amount of time that you need is in direct

proportion to the price of the thing you sell

how cool the audience is

and what that price is relative to their buying power

so for example if I'm selling consumers

uh if I have a 20 dollar thing

I might be able to sell that in a seven second ad

direct to purchase if I sell a 7,000 dollar thing

I might also be able to sell that

off of a 30 second ad

to a 50 million dollar a year business owner

so it depends

it's the price relative to their buying power

but if you're selling a 500 dollar thing

if it's a physical product

maybe you can get it off of an ad

most likely above that

you start having to add in phone sales

and things like that in order to close deals

now to be clear it is my belief that

every customer

needs a certain amount of information to buy

and so Tesla for example

sells their cars on the internet

you can buy the car online

and so

with enough brand goodwill and enough people making

that are aware of the products

and the reviews that you've had

the word of mouth you can facilitate a 30

50 hundred

thousand dollar plus sale with zero salespeople

but for every person that opts in on the Tesla site

if they also had 1,000 people calling

all the people who didn't

follow through with the purchase

they would make even more money

and so the idea is that marketing

gets as many people over the line as you can

and for everybody who's not over the line

sales fills the gaps

but it's not that sales and marketing are different

they are the same continuum

and so this free consumption thing is basically just

zooming more people along

think about it like microwaving the prospect

so it's like in two days you go from

I don't know who this guy is to

I absolutely trust them

and so I Learned this from some interview I heard uh

from this sounds bad but a guy who had a Ponzi scheme

uh for investments

but I I still

I love understanding what they do for persuasion

because they use great skills for evil

we wanna use those great skills for good

and so he found that he could

get someone to invest many

many millions of dollars with him within four hours

and I thought that that was fascinating

uh just and again it depends on the prospect

who who are we talking to right

if you don't have $1 million

then you would have no idea

but that's it really depends on who you're talking to

alright

so I like to use this analogy of the bigger the plane

the longer the runway and so

if you wanna sell a really expensive thing

relative to what someone has in terms of money

you're gonna need a longer

in order to earn their trust

people don't sell timeshares off of a free ebook

they do

by telling them to fly down for a cruise for 7 days

and at the end of the 7 days

they get them to buy all sorts of stuff right

because after that period of time they trust you

so that is the description that is how it works

that's why we do it now let me give you some examples

so this is a really common one that happens in the uh

chiropractor space so they have the diabetic dinners

neuropathy X

y Z dinners they give these free dinners away

so they sometimes they do steak dinners right

and so what they do is they have a 90 minute

presentation during a three hour dinner

that sells a $50 to a hundred dollar consult

which sounds like why would you waste that

time after they come in for the consult

they then sell them a 5,000

10,000 dollar year long health and wellness program

with supplements and nutrition protocols to go with it

and so the benchmarks there are

you convert 25% of the room into the 15 dollar thing

and then you convert a third of people

who show up for the appointment

into the five to 10,000 dollar thing

so you do the math there it's basically

you're converting

somewhere in the neighborhood of like 10

ish percent um

of the people who show up for the dinner

fundamentally end up buying the expensive thing

so if you have 100 people show up for the dinner

and you sell 10 at 10 k

you make 100 grand from a dinner

this is super common in the education space

so there's these three to five day challenges

these virtual summits things like that

and so these are you know day 1 you give

day 2 you give slash ask day 3 you repitch slash give

that is the very standard structure

and so in the challenge structure it's give give

give pitch

repitch with proof if you have a very high ticket price

you can push people to a phone call

from the 5 day thing

to get someone to finalize the transaction

get details from a salesperson

and so the goal of these challenges

these events these multi day things

these dinners

is to break the core beliefs of the prospect

while you deliver on the tactical promise

that you made at the beginning

and or the headline of the promotion you had

the benchmark that I have

if it's virtual

is that you convert 2 to 5% of people who opted in

not to schedule show everything down

but just if you're saying

I got 1,000 options for my virtual thing

if I can convert uh 2% of those people at a you know

expensive price then I will offset the cost

now if you're like wait

mine's not cheap it depends by market

but if you're going really mass market

really cheap options

it's 2 to 5% if you're in a super niche

it should be way higher than that

that's the basically

that's the worst numbers you can have

it only gets better if you have more brand

more warm audience and more uh

more niche down in terms of what

what you're selling and who you're selling to

so this is an example of something might look like

so on Monday and again you can compress this

like you could make this into one day

rather than five days

it all just like this is basically the the

the stuff that's going to get covered

typically in a process this could be a 90 minute video

everything's just about how much

and how many examples you're going to give

so Monday it's like our story why it's like your story

why we can help what we're

gonna cover and our perspective shift

about how your approach to solving

problems is different how our

our approach is different than what you've had before

Tuesday it's gonna be second valuable negative value

which is regarding their ability or insecurity

it's like what are they most afraid of

what are the thing that they're most concerned about

the next one is gonna be

the second thing that they're also concerned about

this is typically an excuse outside of themselves

so that's like uh

one is I don't think I can do it

something is

this other thing is going to block me from doing it

alright the next one is gonna be met

you mention

your core offer is gonna be coming the next day

and then of course

you pitch and then you repitch with some sort of Q&A

which you add more proof in

that's when you invite past success stories on

you do mini case studies

and then you restack the offer alright

so this is fundamentally how it works now

if you're a beginner

this is like a this is flashing Vegas lights OK

we so by the time you're seeing this

we should have done a big school launch for people

this is more or less

what I teach all the beginners to do

and you're like wait

I thought it was complex if you wanna do it at scale

it's complex if you wanna do it one on one

it's the simplest way to sell so hear me out

you could do this with one person at a time

and so you could say hey

instead of calling it a 3 to five day challenge

say I will spend five days with you

doesn't have to be full days

can be five one hour sessions

you get five hours of my time to help you get this goal

insert goal on the first day

you're going to frame the fact that

you're going to make an offer

at the end you say hey

before we get going

is it okay if at the end of this whole thing um

I just make you an offer of what it would look like

to work with me long term

if they say no then don't do the rest of it right

but during that process

you should understand what their goals are

what the reasons

that the obstacles have gotten the way for them um

and basically

all the friction that they've had to deal with uh

in the past

so this is basically like a a closure framework

clarify with their

label them problem over their past pain

and then sell them the vacation

of the vacation

being what we're gonna cope together

in the next 5 days uh

explain away whatever their concerns are

reinforce decision and then you frame the sale alright

sorry that was fast you can watch it again on slow

that's what you would do on the first day the next two

you know two three days whatever it is uh

you then overcome the main beliefs

that they're gonna have

about the things that are gonna stop them

you're gonna show them one on one

and at the end you say hey

ask for a referral

anybody else who so you can recap it hey

was this great then

you can ask for other people

who would like to go through this free thing with you

and then finally you can make your offer hey

remember that thing I told you about again

do you mind if I tell you about it now

now if you're a super beginner

you can just ask him what do you think

working with me for $3,000 per year

would look like to you

then they can tell you the offer and then you can say

yeah that sounds good let's do that right

if you have no idea

if you have 20 of those conversations

you're gonna have a pretty decent idea

and then you can start making the offer

so this is the easiest way

because if you suck at sales

it's way easier to sell

when you spend five hours with someone building

building value this is exactly what I did

when I started my first business

is I told people to donate

500 to 1,000 dollars to the charity of their choice

and I worked with them for 12 weeks

those 12 weeks was one time a week

for the 12 weeks and then I you know

pitch them at the end for for staying more stuff

now I Learned

now I should have pitched them halfway through

and I probably could have done it in six weeks

lots of things I Learned and so here

there's just X amount of time you need to spend

and you can microwave it with the prospect

you can just do it in five days

rather than five weeks

by just compressing the time period

so these are might be headlines

for whatever your free thing is

it's like free

find your Perfect Product Entrepreneurship challenge

so you could say if you're a beginner hey

I'll spend 5 hours with you

help you find your perfect product

what happens when someone has the perfect product

they're gonna wanna learn how to advertise

they're gonna wanna learn how to put it on a website

they're gonna learn how to

how to manage inventory

and all the other things that go with it

when you solve one problem

you create others

which you can solve in exchange for money

and they will believe you

because you fulfilled your first promise

if you're a marketing agency

it could be free five day find your niche agency

sounds like

if I was trying to help people start agencies

a lot of people like who do I sell to

it's like alright by the end of the five days

you're gonna know exactly who you're gonna

sell to what else you're gonna need

you're gonna learn how to generate leads

you're gonna learn how to sell

you're gonna learn how to price all these other things

and so each of these things a lead magnet

fundamentally what this is

is a big lead magnet that gets people to opt in

and because it's in a short time period

people like the fact that it's fast

they're gonna get this result

you can increase their perceived likelihood

achievement by saying it's one on one

you can

add scale by adding technology and virtual summits

and more automations and things like that

and at the the Max Max leverage version of this is

you run these things on autopilot

every hour and everything

is automated and personalized to the person

that's what

the businesses that do $100 million a year are doing

but if you're starting out

you don't have to worry about shop rates

cause you can just text the people

and see what time they wanna meet alright

you can make this very easy weight loss

uh a plateau buster

you basically walk them through a 5 day plateau buster

what they need to do for eating and

and drinking and whatever else addiction

five days to substance free challenge pain

5 day pain release life coach

five days to get unstuck

it doesn't matter whatever it is

you can usually deliver a tremendous amount of value

in five hours of time

or 90 minutes times five of time and this works

so the reason if you're like me

why didn't you put this in the book

cause it's really long

and there's a lot of stuff to it alright

and so webinars are an example of this

is just compressed into 90 minutes

so instead of you know

day one day two day three like day one is origin story

which you just put in the first 15 minutes

day two is the big obstacle

that most people are gonna count

you put that uh in the next 15 minutes

you basically chunk your way down to 60 minutes

45 to 60 minutes being the

the kind of the value piece

and then the next 30 being the

the pitch with the stack and everything else alright

so the benchmark for most webinars

is converting 10% of the people who show up live

alright strategy call uh

this is one where I want to be really clear

a lot of people have kind of butchered

the idea of a strategy call

because

all sales calls are just considered strategy calls now

but you can relive

you can get this by telling people that you will not

ask for their card on the phone

and this works very sexually um

if you mean it and then what you do is

you just use your qualification call

as the strategy call

and so you do qualify what problems they have

and you should be able to provide value

in terms of clarifying

what next things are concerning their business

whatever it is if it's a B to B offer

it's B to C offer it's

what thing is preventing them from hitting their goals

and at that point you would then be able to

reasonably and ethically qualify them for a sales call

but now that point you have provided value

and then you can make the offer

just being hop on a call with the sales guy

now you wouldn't say that you would say this is John

John's amazing

he cured cancer and he you also have cancer

don't do any of that but you get the ideas

you wanna edify the salesman

and say that he's helped people just like them

get to where they wanna go

and you wanna

ideally tie that to people who've done that recently

using this specific system

and for this

you wanna convert 25% or more of the people who have

hit on these calls

alright important points

so uh

the three beliefs that we always have to overcome

with every single sale

no matter what is people point to circumstances

they say life should be easy and it isn't

and they get upset about it

and so it's like I don't have the money

which is circumstances thing

cause it means that they're not being resourceful

they say I don't have the time when really I really

it just means that they're not prioritizing

everybody's the same amount of time

and so we have to get them to take the finger of blame

and point it towards themselves

and say it's up to me

it's not about my circumstances

it's about my ability to be resourceful

my ability to prioritize right

and so that is what belief number one

you have to break for people is

it's not the outside world

it's me alright the next one is

other people should treat me

the way I want them to be treated

and everyone should do what I tell them to

that doesn't happen and so we have to say

you are actually the one responsible for your own life

and so it's not your business partner

it's not your spouse it's not your dog

it's not your grandma it's not your employees

it's you who are the one who are in control

and so instead of asking for permission

you need to be asking for support

and so that's fundamentally the belief

that we have to help them break in

this thing that other people are gonna stop them

so if someone says oh

I wouldn't be able to do this thing because of my kids

we have to basically reorient that and say hey

this actually how it's gonna help your kids hey

I can't do this because of my spouse

actually

it's gonna help your relationship with your spouse

we have to reframe what they say

and that would be the second big belief

the third big belief is gonna be self

which is I can't do this I'm afraid right

what happens if I fail

and so we want to get them to confront the decision

give them the variables

that it takes to make a logical decision

and make them feel that this is actually a decision

that is not rushed at all

it's something that they've been making a long time ago

today is just the first day they're taking action on it

and so when breaking beliefs

you wanna teach concepts not tactics

this is a big mess up that most people do

when they have this free value thing

the reason is that everyone gets value from concepts

only executors get value from tactics

so summary learn how to break the beliefs

which by the way the way you break a belief is you say

this is what you used to believe

this is why it's wrong this is what's right

this is why it's right proof 5 steps

this is what you believe this is why it's wrong

this is what's right this is why it's right proof

so provide excessive value

teaching concepts that underpin whatever you sell

this is an education process

to create your ideal prospect

and ward off people who are not your ideal prospect

so if you get people in and you're like

I'm losing people if they are the right people

that's bad if they are the wrong people

that's good and these can be

added to any sales process in any business

to increase close rates and the average ticket sold

and so there's a zillion ways to do this

so I'll I'll explain it like this

is that once you can create educational products

if you will that you would give away for free

you can insert them so

if you have multiple sales in a process

between call 1 and call 2

you can give them a video

if you want them to watch something

prior to getting on a call

before call 1 you can force them to watch a video

you can have someone

watch 5 videos before they talk to you

like all of this is just how much friction do we want

uh how little friction do we need to provide

to get people to buy we wanna have as much as needed

but no more and there you go

I already made my my CTA for you

but you can go to acquisition.com

if you want to grow your business

but that's my my cutesy way of doing it

that being said that completes

free with consumption and our attraction offer section

and now we move on to upsell offers

alright so we just covered attraction offers

so these are

the first thing that most people are going to see

when they're entering your business

this is the stuff that gets leads to engage

that's why they're big sexy free things

the upsell offers are things that

we're going to reposition

for them to spend even more money

now sometimes this happens immediately

sometimes it happens you know

a few days later sometimes a few weeks later

sometimes a month later but either way

we're going to be using four of my favorite upsells

so this is step two in our money model process

so here's what they are attraction offers are

with an attraction offer in place

you've got customers and cash

now we want to maximize 30 day profits

so what do we do answer

we make more money to do that

we make upsell offers and when it comes down to it

upsells just mean whatever we offer next

that's all an upsell is

and so when an offer solves a problem

another appears you upsell

the

solution to the problem that your first offer reveals

so every offer opens the door to an upsell

even upsells open the door to more upsells

and often upsells make up the majority of the profit

this way people don't understand

if the objective is that we can break even

obviously we wanna make as much money as we want

but you don't wanna make more money on a few customers

when you can get 10 times the customers

and then make way more on the second sale right

and so often upsells make up the majority of the profit

even if it's not the thing you sell the most of

think about in terms of volume

I might sell 10 times more of my front end offer

but 10 x of my profit comes from my second sale

they can make or break a money model

and so let me show you how much

so here's some examples so this is a classic burger

fries and soda store alright

so this is a our very sad burger shop owner

he sells a burger for two bucks

his cost on the burger is dollar seventy five

he makes 25 cents in profit

he cries himself to sleep every night very sad

now he is a happy tear isn't that nice

of going from 25 cents per sale

to one dollar and seventy five cents per sale

by adding in an upsell of fries and an upsell of soda

and the upsell of quantity of

do you wanna supersize your whole thing

so it's like do you wanna make that a meal

do you wanna supersize that

boom upsell one upsell two

and the thing is is that when they make this up sale

look at how much more they make per sale

a lot more

and so the end result of this goes from ￠25 to 8 x

the gross profit per sale

they're making way more $2

one dollar and seventy five cents from ￠25 originally

and so the thing is is that

you may just be one upsell

offer away from making yours

into a Donahoe's tea like theirs

you just have to figure out

what's your fries and a Coke

and if you don't someone else will

let me talk about when they fail

upsell offers fail or feel cringy

when you offer something that they don't want

so that's either too different

or doesn't solve their existing problem

you offer at the wrong time

so that's before they've experienced the problem

you say hey

you just had a steak do you want another steak

they're like well

I'm not really hungry anymore

you already solved that

you're trying to solve the same problem

you offer it the wrong way

which is they don't believe you

they're like sure

that would be nice but I don't believe you specifically

or it's a combination of the above

this is when it fails now what to sell

which becomes the next up sell offer question

more of what they just got

think quantity so that's uh

one burger to two burgers

better versions of it think quality

so this is why I have a mystery meat burger

when you get a sirloin meat burger

organic burger or newer complementary stuff

think different this is

do you want fries and a soda with that burger

fundamentally that's how this works

so the objective of the upsell is to maximize profit

per customer and to send clients into back ends

note

these structures that I talk about with the upsells

work anywhere I just prefer them as Ascension tools

a lot of these things could also be front ends

each of the offers that I explained in Money Models 1

putting them together

which again the money models putting them all together

some of the stuff I'll give you in continuity

you can use a front end offer

upsell offers you can use a front end offer

I just place them in the places

that I use them most commonly

and I think that they work

at least they have worked the best for me

so this is our lineup

we're gonna start with the classic upsell

we'll do the menu upsell

the anchor upsell and the rollover upsell

I use all of these

I have made so much money on these upsells

and if you follow what I lay out

you probably will too

and I will probably get more animated in these

because I just love these so much alright

with that being said the classic upsell

alright the classic upsell as usual

how I Learned it description examples

important points

here's my lovely visual thing for the classic upsell

how I Learned it here we go

so uh I had a mentorship

whatever you wanna call it

it wasn't really a mentorship

I was just getting paid and I took him as a mentor

he didn't really care about me at all

um

at a fur coat dealer

and he was a fourth generation furrier

and I uh

remember watching how his son who is my friend

that's how I got the job uh

I would be brushing fur coats all summer in the heat

in the warehouse uh

unbelievably mind melting stuff

like boring beyond belief

and the thing that I kept thinking was that

every single one of these coats was $200

and he had seven thousand coats in his warehouse

and I was like holy cow

I was like that's $1.4 million that he's making

just for storing coats for the summer

I was like this is pretty sweet

and I know what I was making

and it was not $1.4 million for storing these coats

and so the offer that they had to get people in

was that they would get people to store their coats

and they said if they stored them

they would get free earmuffs

free for earmuffs so people were like

oh that's cool

and so people would come in for the free earmuffs

and then they would say uh

we'll store and condition the coat for you

and it cost 30 bucks to uh store the muffs

now they'd come in for free earmuffs

but it's the summer

so then they would basically hand them the earmuffs

and then take the earmuffs back

and then they'd say you don't want anything else

do you

and so by saying you don't want anything else

they would assume close the winter storage

the conditioning

and the earmuffs that went with the sale

and so that is when I Learned

you can't have X without y

and that is the fundamental basis of the classic upsell

you don't want burgers without fries

you don't want burgers without a Coke

you don't want a fur coat without storing it

you don't want a fur coat without conditioning it

it'd be like taking a car and not getting it serviced

like you don't want X without y

and so I Learned a couple of things

one was the the structure of a classic up sale

which is you don't wanna ask without why

but tactically I Learned the no sale sale alright

and so the way that this works is basically

people have been conditioned over the years to

to say no to salesmen

and so when someone says you don't want anything else

most people just immediately say no

and so

what we want to do is basically imply that the else

means in addition to the thing we just offered you

and by doing that

you get people to say yes by saying no

and so these people who came in to store their coats

agreed to storage conditioning and the free earmuffs

which then got stored at a 30 dollar fee for saying no

that you don't want anything else

so the no sale

sale is what I ended up calling a different sale

which may sound confusing but bear with me

so if someone came to the gym and they said they

ultimately they declined every service offering we had

right which sucks

you would then try and salvage some sort of goodwill

or rapport cause this person walked in

and is basically walking back out

which sucks and so you say

hey listen I still wanna help you for six weeks

and so why don't we just do this as an at home program

alright so

I'll give you this thumb drive

that has at home workouts

that you can follow and then come in

in a couple days

and we will give you a nutrition consult on the house

alright we just want to help you out

and hopefully

maybe when things are a little less crazy

your money's a little bit better

you can come back

and at least you'll have nice things to say about us

and so a lot of people would say yes to that

and so when they showed up to the next appointment

which was the nutrition consult

we would still close the same percentage of them

as we did for normal customers

but here was the cool thing

we actually close them at a higher average ticket

and so the people who bought services

and then bought supplements

average $200 a ticket people who didn't buy services

and then bought supplements

average $300 a ticket and so to me

my lesson from this was that

we tried to solve their problem

not in the way they wanted to solve it

so they wanted to lose weight

but they wanted to have a magic pill rather than work

and so

we needed to have the magic pill available for them

which in their mind would be supplements now obviously

we always say you gotta make sure

you gotta eat the food and all that stuff

but people hear what they wanna hear

and so the thing is

is the magic behind this is that we turned no sales

into sales by just offering them something else so

so what you do is you provide a service for free

that you can monetize another way

so this works for one time services

or even recurring services

provided the recurring stream is high enough margins

to pay for both

different way of saying essentially

I give you thing a for free

in exchange for buying thing B

or I give you thing a for free

and I will encourage you to buy thing B

or I give you a thing for free as long

as you continue to use thing B

any of those things so the earmuff thing he says

I will give you these free earmuffs

and I will encourage you to storage

that's what that was a classic upsell

so if we have a lemonade stand with our classic upsell

we say

we want to give you a free cup of lemonade upsell

one might be do you want a lemonade ice cubes

to make it cold without diluting it

now of course you could give cold lemonade

but then you wouldn't have an ice cube upsell

option 2 would be

do you want a stainless steel to go container

to keep it cold for you

and we'll donate $1 to help children's cancer

to anyone who takes the mug

you also get 20% off refills upsell No. 2 right

so you don't want lemonade in a little paper cup

you want a nice steel mug

you don't want diluted down lemonade

you want lemonade ice cubes right

each of these things are just natural upsells

that can happen

and I prove this point because whatever it is you sell

there's an upsell that's available for you alright

so storage in this business

um I have a whole story around this

but I tell this in the book

so I'll I'll give you the brief version of it

but in the first few months of me being in business

I was struggling a little bit

and so the business owner across

the street was a massive storage unit

and he ended up becoming a member of my gym

because it was super convenient for him

and so he asked me you know hey

how much time you got left to live

and I was like not that long and so he said

come for a ride with me and uh

he took me to his facility and he said uh

how much does a free month of storage cost

and I was like I don't know free and he was like

no $127 and so as we walked in

he asked Judy the front desk girl

he said how much does a free month of storage cost

she was like $127 and he was like

that's right and so I was like how does this even work

and he was like okay

so you come in for a free month of storage he's like

what's the first thing you're gonna need

and he's walking me through the facility

pauses and I was like I don't know

and then he taps the lock on the door and I was like oh

a lock and he's like right he's like

and you can't have any kind of lock

because there's only one kind of lock

that fits this door the locks that I sell at the front

he's like for $47 and I was like

oh okay got it and I was like

so you make 47 people come from the from I was like

but where's the other you know whatever it is 80 bucks

he's like good question

he's like now that you have your lock

what else are you gonna need

I was like uh

you know I'm I'm like

I don't know he's like well

you probably need some boxes

for all that stuff that you have

which I have convenient here

you don't wanna go to another place down the street

or have to order them on Amazon

wait for them to come break them

box them all

this is like we have them right here available for you

and I was like oh right

he's like and we also have a hand toe the

the hand trucks that you can use

to move your stuff in and out at your convenience

for a fee I was like

oh right he's like

you know and uh

this stuff's probably really valuable for you

cause otherwise you just throw it away

but it's valuable enough that you pay to store it uh

we obviously guarantee up to $500 in damage uh

that could happen if there's a flood

or anything should happen

or theft but if you want

you can have a million dollar

storage fee for just an extra

$10 a month

and he paused he was like

you wanna know my margins on that

I was like uh okay

and he was like 90% hahaha

and so he explained that he's like

and you know what happens

a lot of times

is that people's eyes are bigger than their stomach

so they come here and they think

they're gonna be able to fit all this crap in a locker

this big often times they need a bigger unit

it's also a little bit spacier

and that way they can get their stuff in and out

because they don't realize if stuff's in the back

they got to move everything out just to get to it

and so he walked me through every single

every single up sale that they had

and I realized that that's how

a free month of storage created $127

and so many businesses right now

just like the run a car story

just like the storage unit

there are other things that a customer must purchase

they will buy them it's just a question

will they buy them from you

or somebody down the street

so weight loss so for us

up sell No. 1 was at the nutrition orientation

we would sell them supplements

we would then sell them nutrition plans

that was in the immediate version

for me was I wanted to sell supplements

cause I had no more delivery

I could immediately hand it to them

make the profit back and usually

what I made on the supplements

covered the cost of the car customer

so just that sale covered my my cash flow

and I hadn't even started servicing them yet

and so a lot of you guys have

these little things that are available

like if I have a physical therapist

maybe you give four free treatments as your offer

that's a banger offer

a lot of people might consider that

but up so one is you're gonna need these orthotics

these bands these braces

these oils this kinesio tape

all to maximize the effectiveness

of the four treatments

and so they come in for the free month of storage

but they need their lock they need their insurance

they need their boxes

just think about those things for yourself

if you're an education

it's like I offer uh group coaching

provide information in a community for free

and definitely as long as you keep using my software

by the way this is basically

I mean fundamentally what we do with school

we do all this stuff for free

and then just use school to help monetize okay

uh free versus discount

note is that with the classic upsell

it works either way same as normal

so a friend of mine

had a very successful weight loss chain

and they offered services for $5 a month

for their weight loss

and they had doctors and nurses and all stuff there

and I was like that's insane and she was like yeah

cause we don't make money on the weight loss services

and I was like what do you mean

she's like oh

we sell like five grand in supplements

on the second day

I was like oh

so that's where I Learned

that's where I really Learned

a lot of the really Jedi stuff that I know from um

supplement sales I Learned from her

and I paid her top sales person $500 an hour

for two hours

to tell me everything she did to sell supplements

and you know what's crazy

when I told her top salesperson

that I would pay her $500

she was like $500

she's like just to talk to you

and I was like yeah

she thought I was an idiot

I'm I'm dead serious

she she looked at me like I had three eyes on my head

and she was like it's your money

and so she just walked me through

every single

detail of what she did to sell supplements

and that $1,000

two hours that I paid for made me millions

and so I highly encourage you

sometimes the best people learn from

are people who aren't even selling information

just offer to pay them

to learn what they do in their particular niche

or skill and because people are not used to doing that

and you can charge you know

you can offer way more what the value

you know what the what the money's worth to you

you can make way more money that way

so uh

I Learned from her that she had service

that she basically gave for a nominal amount of money

cause she didn't even care about it

just because that drew people in

and then they sell the supplements and the food

and the bars and the shakes um

and yeah they were they

you know they had doctors and nurses working there

that's how they made the money

so important points so No. 1

if you make thing a free

then you gotta be able to give it away for free

if someone comes in and wants the free workouts

you have to deliver the free workouts

now you can't say you have to buy this other thing

otherwise it's not free

you want to strongly encourage the thing

but that's fundamentally how it works alright

so make sure that it doesn't cost you a lot

or anything at all like that thumb drive that we gave

like you can you want it to be something that's cheap

but still valuable the next thing is make the upsells

the next natural thing that they would need to buy

that's the boxes the large units

the locks the

the insurance things like that

the weight loss clinic continuity of service

continuity of supplements done for you meals

hormone treatments etcetera

all of those things were all part of classic upsells

that went through you can't have X without y

you can't have

this weight loss service without these supplements

just think you can't have X without y as your

as your mental framework for what

the next thing I'm gonna offer is

alright this play works so well

because the perception of how essential or required

the next thing is alright

so this is the key point if

supplements is core to how someone's gonna get results

with the main thing the likely they buy is very high

so if you remember the uh

minimum package for the rental car story I gave you

you want this to feel as required as possible again

you don't want to make it required because then it's

it's it gets shady but you want to strongly encourage

people to take these things

to get the best results which ethically

they should be able to get better results with

whatever your upsell is alright

and so

how seamless the upsell process is for the prospect

if you make it frictionless

you can get

sometimes 80% plus of people to take these upsells

I personally prefer to have upsells

that have very little operational drag

so that I can immediately offset cost to get it

getting a customer or it becomes

that's my major profit stream

it depends on what the objective is for your business

boom summary works on the front end

as a back end works as an internal play

meaning you can just upsell your existing customers

that's basically what the storage thing with

with the fur coats was

many of those people were existing customers

you can just upsell those people um

if you suck at sales

this is not a hard sale to make uh

there's a lot of goodwill in this play

because you just make sure that you close the up sale

like it's like hey

let me give you this thing

I'm giving you this free ear buffs

why not take it

but of course you gotta take this other thing too um

and if you aren't getting 80% plus close rates

you're doing it wrong

so that's my big benchmark for you

if you're getting 30% to take it

you're not you're not making it assumed enough

you're not it's

it's not clear enough to them that this goes with

so think about it like that

it has to go with if you go to McDonald's

I would bet you that 80% of people are getting fries

and a Coke you want it

you want a very high uptake rate on the people who buy

the next natural thing

think of this as the thing that goes with the thing

and give the thing away for free

to make sure that all

the thing that goes with the thing

you can make the money on alright

and so the nice thing with this is that

it gives you a lot of upfront customers

and that is the classic upsell

all right so we just covered the classic upsell

I think this next one is my favorite one

in this whole training which is the menu upsell

let's dive in so how I Learned a description examples

important points and summary

so there are four steps to the menu upsell

we unsell what they don't need

prescribe what they do need

ask if they prefer a or B

and then make it easy to pay

so this is me getting super tactical with you

in terms of how to upsell stuff

like a pro

I have done so many upsell consultations in my life

and this works

I have used this sales process in many businesses

like this slays all right

so here's how I Learned it

so this whole process took me

call it years to learn every single piece of it

but every single part is like a

a Lego thing that builds onto itself

so the first thing that I

the first thing that I Learned was uh

well

I'll tell you the story and you can go along with me

so I had that guy who was making supplements uh

and he was making 80 grand a month or whatever

and I was like I gotta start selling supplements

and so I buy $5,000 of inventory and then of course

no one buys my products so I'm there

I've got these full shelves

I'm

I'm reading all the stuff about retail and packaging

and make sure they're twisted the front

but no one's buying these things

and I'm you know

the only sales I was getting were like pity sales

and I could tell the difference

they were like this guy's so broke

sure I'll buy a protein from you right

and so I would I was getting in all the science

I was like the hyper trophy and the body mass and

but you know creatine levels and what like mind you

I'm selling 70% women here

no one cared

and so I just went on a particularly bad day

I went over 19 on nutrition consults

so

the way that I would do is I would sell services for 2

3 weeks at a time

and then I'd schedule all my nutrition

consults in one day

and so I just go back to back to back to back to back

and so I went over 19

so I'm feeling horrible about myself

and this lady comes in and she has a fat ring

an expensive purse and I was like

if I don't close this woman I will kill myself

not really I will just continue to try

but I felt I was like I have to close this lady

and so we get through the nutrition part

and I'm so like

beat down at this point that I was like hey um

do you want vanilla or chocolate for your protein

and she just looked at me and she was like

which one do you like

and I was like chocolate and she was like okay

I'll take that

I was like and I slid across the counter and I was like

okay and then I was like uh

for pre workout do you want kiwi or strawberry

and then I remember she'd asked me I was like

I like kiwi she's like I'll take one of those

so I like put that and now I'm afraid that

I didn't want to scare her away

and so I remembered that she

because everybody had already bought stuff before

and I had all their contracts here

because if someone's payment didn't go through

I would meet them on the council like hey

your second payment didn't go through

let's make sure that's

so I had everybody's cards right there

and so I'd be like oh um

do you wanna use the card that ended in 46 96

and she was like yeah that's fine

and so I just slid them across the counter

she grabbed her tubs

she walked out the door and I was like

holy shit I know how to sell supplements

and the craziest thing in the world

is that I didn't even talk about the products

I just asked what flavor she wanted

and so that was the first thing

I Learned two things on that one experience

number one was I Learned the a or B sale

the which one do you prefer sale was an assumed close

I closed everyone else the rest of the day

I closed another like 12 appointments

whatever it was

I closed every single person the rest of the day

I was so pumped

and I closed I I I Learned the card on file close

which was oh if you have someone's card on file

I didn't want her to have to take her

take her wallet out or like

think about the purchase again

I was like you just card on file she's like sure

and so it made it really easy for people to buy

so those are the two first things I Learned

the a B upsell and the card on file close boom

that was the first thing that I Learned

that became part of the mini close

the second thing I Learned and this is much later

so now I'm I'm kind of a closing machine

I'm closing five to ten thousand dollars a day

when I do my supplement sales days alright

and so now I've got this lady who comes in

I got remember I got back to back appointments

so I would be taking two appointments every 30 minutes

so I would do 48 sales consults in one day

one on one or sorry not one on one

one on two four per hour

and so I would go through these

and so this so I had to be on time

and so this lady comes in

and she will not stop asking me questions

she's like well what if I'm what if I'm traveling

what if I don't have this with me

what if it just asking all the stuff

and she's like well do I take this one at night

this one in the morning

and I was like losing my mind and so finally

I just turned her meal plan over and I just wrote like

take two of these at this time

take two of this at this time

one of these at this time

blah blah blah

and this was how much when

how many what if it's working

what if I'm at home etcetera right

so I wrote down everything they had to do

and I went late so now the next lady

and this was the tough part

because the next lady had come in already

so she's sitting there

waiting for me to finish with this

this chatterbox

and so the next lady comes up and I'm like okay

I gotta get through this one quick

so I can get back on schedule

and then she just says hey

can you do what you did for that lady for me

and I was like ugh

okay great

but here's what happened the first lady

I had gone through the pitch for every product

and then she'd ask all these questions

this lady I just said shoot

to get back on track I just I said okay

you're gonna need two of these

you need one of these you need two of these great

and at the end I said

caught on file and she was like yeah

that's fine and then she bought everything

and I was like holy crap

I didn't even so

what I Learned was

detailed and personalized instruction

explaining post purchase behavior

increase the likelihood that they buy

more than vague and general instructions

so basically this is how you're gonna use this thing

assumes the purchase

why am I gonna spend the time to say

you're gonna take two of these in the morning

one of these at night and then the person's like

oh I'm not buying any of it

it'll feel like a tremendous waste of time for them

so again feeling that like

it's assumed it's part of the thing required

no strolling recommended yes

and so that was the third tactic I Learned a B clothes

I Learned the card on file from the first lady

and then this one

I Learned about detailed prescriptions

so I call this the prescription clothes

the third piece that

that completed the four part puzzle

that became the menu sale

and this is the most deadly of them

it's so good so now

I already told you about the seating thing earlier

that's like I it's that's so savage

and it's still not good enough to make

these four into what the menu

close is right

so this one so now this fast forward a little bit more

so now I'm a closing machine

I'm prescribing things I'm getting everybody to buy

right so now I'm on the road launching gyms

and so I would get good enough that I would

I would just sell out of everything I had right

and basically whatever I had left I'd be like oh yeah

you want kiwi and banana and like just whatever I had

I was like these are the ones you're taking

so I could just sell out all the stuff I had and so um

I sold out pretty early this day

for a couple key products

and normally it would have been fine

cause I would just like

basically recommend different products

different flavors that I I hadn't run out of

but this lady her friend had come at like 10 am

and she was coming at like 3

and so I'd already had like

20 more consults between the first lady and her friend

and her friend was just like

hey just give me all the stuff you gave me

you gave Sandra and I was like

ah OK uh

don't have that so what I started doing I said OK

well I don't have this cause I ran out I was like

but you can get this from down the street

it's not gonna be as good

but it'll get you through the through the program

and this one you can get from this store

this is the brand you want it's not gonna be as good

but it'll get you through the thing

and so she was like OK

thanks so much I really appreciate it

but after telling her

the two or three things that she could get

from somebody else

I then was like but you're gonna want two of these

which you'll take in the morning one of these

would you take it this time

great you wanna use the card you have on file

and she was like sure

and so what I realized was that

I went out of my way to cross out what she didn't need

and this built enough goodwill to upsell what she did

and so what I realized later also

cause she just it just went like water

I can like

I can tell like I have enough sales shops to be like

that was a little too easy

like that was way easier than normal

and so I started keeping products

just to cross them out

and so I'll explain it like this

it's not that I I would have products

that we necessarily wouldn't sell

it was more that I had some products that I knew

almost no one was gonna buy

I'm selling predominantly females

so I had weight gainer

now if I had a guy who's trying to get bigger

then sure but like that would be like one out of 100

and so for 99% of women that were coming in the door

I would be like

well you're not trying to gain weight are you

they'd say no and I would cross out the weight gainer

and then I'd be like hey

well you're not trying to get any chest hair

get a deeper voice anything like that

they're like no I'm like

alright well we're not gonna use the test booster right

and so I would cross out two or three things on my menu

and then I would say great

you can do this now I did have some options

for example fish oil

where I would say listen

I like it was a low margin product

and so I would rather not make $3 on fish oil

and make 40 on a fat burner

and give the fish oil away to close

100% of people on the fat burner

and so that was how I realized what I call unselling

which is you start by telling them what they don't need

so that they believe you

when you tell them what they do need

and so that is what created the unsell prescribe

ask what they prefer make it easier to pay menu close

so you unsell by telling customers what they don't need

so that you can emphasize what they do here

instead of asking if they want to buy or not

you explain what they don't need

as a way to get them excited about what they do

so unsells vary based on customer needs

when some options work best

you can cross out the rest and that rhymes

so after telling them what they don't need

you then prescribe what they do need

so all the unselling is the cross out

then we move to prescription

so in prescription we tell them what they do need

prescription upsells work well when offering a

choice is inconvenient

and you've only one thing that solves the problem

so if you've only one thing

it's like you're only taking this fat burner

there's no flavors for the fat burner

so you're just saying

this is how many you need to take at this time

prescription upselling has two important components

first

you have to explain how it integrates with the offers

they already bought so they already bought service

this is gonna

integrate with how you use our weight loss services

or our workouts or whatever second

you personalize in detail

how to maximize its value for them

so here

instead of asking if they want to buy it or not

you explain how to use it

as if they already have bought it again

we remove the option of not buying

to lower the chance that they don't buy as uh

and and I once uh and once I've told them exactly

how they're going to use everything

we then ask them if they prefer a or B so we say okay

what's your preferences the a

B upsells work for multiple offers

that solve the same problem alright

so you make a B upsells by asking preference

instead of asking if customers want to buy a product

yes or no we ask which one they prefer a or B

so either choice results in an upsell so basically

when you give people the option not to buy

some people don't buy so

I give the option to pick between two buying options

that are simpler

and once they know which one they're buying

and how they're gonna use it

I suggest the easiest way for them to pay boom

we give the card on file close

which is the cherry on top of this upsell sweetness

alright so I literally ask

do you want to use the card on file just like that

so here instead of asking if they wanna pay or not

we refer to ways they have already paid in the past

and this gets more people to buy

because it lowers the hidden costs of buying

picking out which card you wanna use

taking it out

being reminded of ugly buying decisions in the past

cause a lot of times some people like

there is a minor decision that goes when you say yes

and then there's a second yes

when you reach in your pocket

and then you're looking at your card

and then you grab the card

like there's a there's another decision that happens

we avoid that entire decision making process

by just saying when is the card on file

yes and we remove the pain

associated with making the decision

so even the hassle of buying stuff in a rush

so sometimes I'd have people who are about to get

they're like hey

I gotta get this thing like caught on fire

and they're like yeah yeah

it's fine

and so if I if I weren't able to do that close

they'd be like uh I'll pick them up later

and I'll come back and I'll lose the sale

and so it's also the fastest way to close

and that is how that works

so let me give you some examples

and these are fire as fuck hahaha alright

so if I'm a massage therapist I would unsell

I would say hey we have a lymphatic massage available

but I don't think you're pregnant

or just out of surgery right

so we can cross that out fantastic

so then we'd prescribe so since your shoulder hurts

we'll heat you up first

then we'll hit your trigger points

then after that we'll do some dynamic stretches

so that's a prescription now we say

so

would you rather do it before work or on the way home

then great

you wanna use a card on file done if you're like

I can't AB you can absolutely AB anything

and I'll show you how to do in a second alright

so I'll give you another example dog food so uh

you're not gonna need the small bag of puppy stuff

you've got a big dog

so you don't need these vitamins either

because we've got that in the food already

so you don't even worry about that

they're like oh wow

so nice this guy it's already covered

inside of the food that I'm buying

then we say so

but what you're going to do is give your dog

one of these joint chews at each meal alright

every 90 days

you give them one of these wafers for heartworms

also make sure to bring him in back next month

and we can get that booked right now

does your dog prefer chicken or beef flavor

great Wanna use the card you have on file

done digital products

so uh listen you don't need all 8 courses yet

you just need to solve X y and Z

so I'll tell you what

I'll send you some free stuff that solves X and y

and you'll just need one course to cover problem Z

but to solve Z

you're definitely going to do the course

in this particular way

can you put an hour a day towards it

okay great so

this will prevent any other

Z problems from cropping up later

a or B so

would you rather have direct message or phone support

okay great and would you rather start today or Monday

got it alright awesome

usually card you have on file done

so you can use that 4 step process with anything

now important points anything is airb sellable

do you wanna start on Monday or Tuesday

do you wanna have John or Amy as your as your person

do you wanna do your workouts in the morning

or the evening do you want paper or plastic

black or white cherry or strawberry

it doesn't matter whatever it is

if you have one thing you can

think about particular features

that vary within the business

you want phone support you want chat support

it does not matter

you can always make something airb sellable

so that you can have a preferential close

if you make an airb offer

I recommend adding a nudge

so that was when the lady said

which one do you prefer so this is where you say

I like strawberry a lot of people like Amy John's

really good with high schoolers right

so you make a nudge based on the customer's needs

so uh

do you want chicken or beef

a lot of the big dogs like beef done

it's just like you don't you wanna present

so this is what happens

we present the illusion of choice

and then we remove the friction of choice

by nudging this one so they have the illusion yes

I'm buying something

but then we do this and they're like great

I don't have to think about that sounds great

if you go to a restaurant and it's like

hey uh

do you want uh

flambe or do you want creme brulee

and you're like they're like

most people get the creme brulee

or we get a lot of great reviews for the creme brulee

people always come back for the creme brulee

if you say that right after making the choice

we know I got the illusion

but then this is the one that they want me to buy

which might have three times the margin now

if you sell out this is a pro tip for me

two things one is if you sell out of something

you can then just nudge stuff

that you're lower on inventory

so if you've got three bottles of this

and 25 bottles of that just nudge differently now

if you sell out completely

this is something I Learned later

if it's physical products

um or if you're at capacity for your service

take payment and deliver late mean

not deliver late in terms of expectations

but deliver at a delay and I found out that people

cared way less about it being a delay

and care way more about missing expectations

and so if I said hey

I'm gonna take this order for you

so you get exactly what you need

you're gonna get in the mail in 7 days

they were fine with it

I thought that if they didn't walk out with it

no one would buy not the case at all

people were totally fine buying

if I set the expectation now

if I said

they're gonna come in seven and they came in 10

they hated me they if I said seven

they came in four they were happy

and so if you have a service thing and you say hey

you're on the phone you know

you can only take seven people in a week

and you already have eight sold

then you're like shoot

I can't take this guy on

but I don't want to miss this sale

take the deposit start them in 14 days

now this is something that I Learned later

because I had to teach my staff this process

and so

what I found out was that employees love unselling

because it's like it's because you feel good right

so you're talking to the prospect

and cause everybody basically

it's like here are your homie hookups

everybody wants to hook up a customer

cause then they get a little authority

little power they get report with the customer

all those things and so you say hey

I'm gonna help you get a homie hookup by design

so these are the three things that you can cross out

and you can these are the two products

you can tell them to buy down the street

and now once an employee doing it

it actually gets even more powerful

because if it's the owner doing it

then they're like huh

if an employee does it

it's very common for employees to not have the best

interest of the business at heart

and so we lean into that bias that most people know of

that they're like hey

don't tell the boss but now when they're saying

don't tell the boss but you do need these ones

the whole time it's scripted

if you have two options

so this is what happens you're like okay

what if I have two options

but I want people to buy both alright

so the way we think about this

so there's the economist that made this amazing

case study on this so they had their print stuff

and they wanted to offer a digital offering

of the economist subscription

that was the most profitable people they could

they could basically make more gross profit on print

relative to the price so they could charge more for it

relative to cost than they could on digital

cause people's

perception of digital is lower in terms of value

thinking people would buy both

the economist offered the following

so they said $59 a year for the digital subscription

and 1 25 per year for digital plus print

they figured everyone would take that offer

but everyone just took the 59 dollar

your digital and said don't need the print anymore

so their print sales plummeted

and as a result they made way less money

bad for them so this is what they did to fix it

they added a decoy option in the middle

now the numbers here is just so that you can

think about whatever you want

in terms of relative price

but the actual thing that they did was

they had a $59 per year digital

the one 25 per year digital plus print

but this is the decoy

they added a print only for 1:00 25 a year

meaning

they took their best offer and just cut it in half

but kept the price the same

and so now if you pay 1

25 for either of these things now you're like

well you know what

I just basically get the digital for free here

whereas here I have to pay for it

so now this feels like the better deal

and then they fixed the sales

and then way more people took option C

so simply by adding the middle option

they got more people to take both

and so right now if you have two things and you're like

well how do I get them to buy both

add the third offer

that's the same price as both with only one

bottom line is that you present three options option A

option B and option C which is a and B

and you make the price of C

a and B the same as the more expensive between a or B

alright so long as you price the three options

preserve your margins you make customers choice easy

and then you sell both before people take this

after more people take that

so

money upsells

work best when you have multiple offers available

many upsells combine four tactics unselling

prescribing a B offer and the card on file close

unselling lower margin stuff where appropriate

incentivizes higher margin

upsells encourage employees to unsell

and game the system on purpose

by design nudge new customers

towards the thing that makes sense for them

or the thing that you have the highest margins

or the thing that you're running out of

or that you're not running out of

uh in terms of directing their buying decisions

that is the menu up sale

so we just covered menu up sell

which is one of my favorite up sells ever

the anchor up sell is one that is so powerful

it's one of those like very simple ones

that can make you a tremendous amount of money

and so what the menu up sell has in elegance

the anchor up sell has in brute force

so let's dive in here's how I Learned it description

examples important points

same as before let's rock and roll

so I had spent 5 years plus in casual clothes

sweats and a tank top as a gym owner

like the nicest thing I ever wore was a tank top haha

and so when I started gym launch

um

somebody uh that I knew advised me to look professional

he said listen

no one's gonna listen to you for business stuff

if you look like just a gym rat

and so I said okay

I'll listen to you and so he said

don't worry I've got a guy at a suit shop

um that I know and he'll hook you up

and he told the owner I was coming

so I mentally budgeted 500 bucks for a suit

so I was like this is a lot of money

so you know I'm I'm gonna I'm gonna ball out for this

so I entered the shop

made some small talk and he's like

so what do you want I was like

I want a boss suit he was like

okay mind you I'm like 26 whatever

and so I tried you know so he gives me the suit

I tried it on I felt cool

he's like how you feel I was like

I feel like I feel like a boss

and he's probably laughing at himself

so anyways I'm looking at myself in the mirror

and so then I like

kind of look down at the tag that's on the arm

and when I pull it over it says $16,000

and I still can remember

the blood just draining from my face

being like 16 grand

I was like that's a car hahaha and I was like

oh god like what did I get

cause my friend had referred me so I was like

I don't wanna look like a fool here and they you know

they had prepped the stuff

so the sales guy who is the owner

he was also a third generation tailor

obviously not his first Rodeo

uh I looked at I was like hey

uh he's like

he could see that I was a little

distraught from the price

and he's like hey

do you care much about the uh

the the the brand of the suit

and I was like oh no I don't care

I just wanted to look cool and he was like

oh don't worry so he had already

prepared and this is key other suits next to me

and so he took this one off and he says hey

try this on for size and just like immediately

so at this one he's like how does this one look

and I'm like great

like I didn't even want to I was like

I didn't even want to like

I think about potentially having this suit

so I then pull it over and it says two grand

and I'm like alright

like it's more than I wanted

but like I like

at least this is not a car like I can get out of here

you know without embarrassing myself and so uh

he's like do you like it I said sure

I ended up buying like $500 in like

shirts and socks that went with the suit

um and spent I think 25 bucks or three grand

something like that uh

on the way out the door

as I went through the process later

I thought to myself I came in with a 500 dollar budget

and I ended up spending five or six times my budget

and I was like how did that happen

and I realized that

the first thing I saw was 16,000 dollars

and it just made everything seem like nothing

and so uh

Roy Southerland actually tells a story about this

with Rolls Royce

so Rolls Royce stopped showing their cars at car shows

because if you have all these different cars

and then you see a 400,000 dollar car

it seems egregious and so

what they started doing was showing their

Rolls Royces at uh

plane and yacht shows

so

if you just decided not to buy a 50 million dollar jet

a 400,000 dollar car

feels like candy on the way out the door

and so everything is relative

in terms of what the price is being positioned against

and so I was like man

that was really powerful

and it changed how I saw sales

and so that is what happens

I spent five times more than my original budget

and ended up spending 300 dollars on accessories

and shirts which I never normally would have spent

but it felt like nothing compared to the

the new 22 dollar shooter

whatever that I bought

so that is how I Learned the anchor upsell

now here's how it works

so anchor upsells involve offering premium items first

key first if the customer is shocked by the price

you offer a cheaper alternative

by changing secondary features

and this is what's key about this

so presenting a premium version first

at five to 10 times the price

makes the other offer our main offer

the one that we sell to most people

look like a better deal and so

this strategy

leads to more people buying the main offer

and so it works best

when the lower priced

offer has the same core functions as the premium one

it has the same primary features

so the second 22 dollar suit still looked good

it still felt good it still had a good

you know trim or whatever

it looked expensive

but it just wasn't Armani or whatever else

whatever other brand he had

and so for me

the secondary feature of the brand mattered

very little cause I was like

no one's gonna ask me for the brand of suit I'm wearing

they just wanna it just

I need to look cool right

and so the thing is is that every offer

every product

has primary features and secondary features

you want the secondary features

to be different

between your really expensive one and your minor one

but if it's just a little bit different

and it's 1/8 the price people are like

oh this is a steal

now because of what we showed them first

in the suit example

22 hundred dollar suits seem like a better deal

compared to the 16 thousand dollar one

two additional benefits of anchor upsells that happen

as a result number one

is that customers

tend to spend more than they initially planned

I spent five times what I was willing to spend two

some customers will still opt for the expensive option

he probably has done that with a lot of guys

and maybe one out of five guys

buys a 16 thousand dollar suit

and guess what happens

when you take a 16 thousand dollar suit

and divide it by five

that adds 3,000 dollars to every average purchase

so my two thousand dollar suit

actually becomes a five thousand dollar suit

in terms of the economics of the business

so even if one out of five

or one out of ten

people buy something 10 times as expensive

if you have one out of 10

buy something 10 times as expensive

you double your business

not to mention the increased uptake rates

and average spend of all the other customers

so like I said the menu up

so we talked about earlier

very elegant very savage

really good for high volume transaction businesses

this one a fucking ramrod

for businesses that spend

that have fewer customers that spend lots of money

basically

this can still make you more money than the menu upsell

can even though it's just very simple to understand

so here are the steps to using an anchor up sale

you present the anchor the really expensive thing

step 1 step 2 get the gasp alright

expect customers to freak out about the cost

that's expected if you didn't do it

you didn't anchor high enough

that's why I say 10 times the price

so if you're like I don't know

is this an anchor like I added 20%

it's not an anchor

it has to be an order of magnitude larger

it has to be so much larger

that it gets you to recategorize

your original purchase it like think about it

buying planes and buying yachts

compared to buying a car totally different magnitude

it can't be you know

it can't be within 100% it's got to be 5 x 10 x more

once you get the gasp you come to the rescue

you ask if they care about what makes it premium

those secondary features do you care about the

the material or the internal lining

stuff that somebody that most people won't care about

then you present your main offer

and you expect the customer to feel relieved

and see the better deal

then you just ask how they want to pay

which card do you prefer so here's some pro tips

number one is the only thing worse

than making a thousand dollar offer

to a person with a hundred dollar budget

is making a one hundred dollar offer

to someone with a thousand dollar budget

in the first situation

you lose a hundred dollars in the second situation

you lose 900

I've lost tons of customers and mountains of cash

because customers wanted more than I had to offer boo

so now I always have premium up sales

rank ready anchors

only a handful of customers buy them

but that handful of customers bring in big profits

so always have premium offers

even if most people don't buy them

you're not failing if one out of 10 people buy

a 10 times more expensive offer

you still double your business remember

you're not losing customers

by offering premium stuff first

but you will lose money if you don't alright

let's do some examples first one

we'll do a local long care service

so the premium anchor is get my cell phone number

Fancy Mulch Natural Pest Control

bi weekly yard maintenance for $1,000 a week

it's crazy big shock

no worries get my my foreman's number

my my team my crew chief's number

generic mulch normal pest control

biweekly yard maintenance for $200 a week yeah yeah

I'll do that one I'll do that one

cause it's almost the same thing at the end of the day

it's like and they'll probably be like

is this is my you know yard gonna look any different

it's like well not really

it just really depends on how much you care about the

the the quality of the soil

now

for the guy who cares about the quality of the soil

he's gonna buy this thing but for everybody else

which 80% of people don't give a rat's poo

about the quality of this other stuff

they're like no

I'll take the 200 but they don't know that

you couldn't price this at 200

because last week when you offered 200 straight up

people were nickel and diamond you down to one

50 or 99 a week so physical product a painting

the anchor would be the super productive packaging

a 20 year insurance and gift wrap for $1,000

the main offer is normal packaging

and one year insurance and a sticker

for 200 bucks you're like

ah I'll take the normal one

the thing is

is that you want the customer to feel reasonable

by making the purchase

like they're getting a better deal

like they're pulling one over on you

they're like this guy thinks I want thousand

like he doesn't even know that

this is basically the same thing

and it's like one fifth the price

but you designed the game they're just playing it

third is a digital product

so let's say it's a newsletter

so the premium anchor would be like hey

all previous issues and new issues

and 24 hour early access to my newsletters for 1

99 a month or new issues only

and you'll just get it on time for $19 a month

you're like shit oh yeah

I'll do the I'll do the I mean I you know

it'd be cool to get the 24 hours early

but like I'll just take the new ones like that's fine

and it's one tenth the price

and somehow this feels like an absolute steal

but you might have been competing against people at $7

a month before that alright

here's some important points about this this is crucial

you will fail at doing an anchor up sale

if you do not treat it seriously

so if you treat the anchor like a fake

so will the customer

if the guy had put it on my shoulders and been like

it's probably out of your range or said well

that would be a little insulting

but if he's like hey

if this isn't you know in your range like no big deal

then I wouldn't have been anchored

cause I wouldn't have taken

I wouldn't have considered the purchase

you have to have them fully consider the purchase

really try and think oh god

how would I come up with this

and what here's what happens

is that your brain or their brain

starts justifying

why it might be worth that amount of money

and then when you offer something one tenth the price

they've already done all the heavy lifting of

of anchoring of comparing why it might be worth that

and then compared to this price

it's totally worth it and that's what we change

as little as we can

from the thing that they thought about

to the thing that they ultimately buy

next point make a premium offer

that you actually want people to buy

if you have this premium offer

that has all these bells and whistles

be ready to service it

because let me tell you the real secret

what ends up happening when people do this

they 10 x their price and they make this really bang

whiz bang thing

and then more than one out of people 10 people buy it

and so this is just also a great way to give yourself

permission to anchor

something 10 times as expensive

a proper anchor gets the gasp

expect them design for them

you want the gasp

the gasp means they considered it if they do not gasp

it either means you didn't go high enough

or you didn't sell hard enough

as in you didn't

truthfully commit to actually selling that thing

like you have to in earnest present it

or this will not work

it'll just be a waste of your time and theirs

and this is especially for business owners

if you teach your team this process

many of them will just skirt through the anchor

because they start selling from their wallet

they're gonna be like

I would never pay for this it's like

of course you wouldn't

you already know how to fix cars

this guy doesn't

and so

we often can never see the value of the stuff we sell

because for us it's easy duh

that's why we have a business around it

you want to sell stuff that's easy for you

and hard for other people

that's how you make money

once you get the gas

you come to the rescue and if they don't balk

like if they if they don't gasp

close the whale if they're like

you know this is a nice suit then you're like great

do you have a card on file

do you wanna you put pair this with a handkerchief

you just move right on in the sale and you're like

oh God I got a whale on the line

I'm just gonna keep going to get more people to

buy your main offer make it a better deal

so this is the primary versus secondary features

you want it to be as little different from the main one

from the anchor as uh

as possible so that they justify the price

already at this 10 times higher price

and when they hear this one

they're like oh

this is a steal because if you make your good one

too different from the core offer

that you're ultimately trying to sell

80% of people

then they actually have to reconsider the offer again

they have to recalibrate price to value

you want them to basically be able to take the same

price to value measurement

they did here

and then here an 80% discount or a 90% discount

because the things that you changed

were not the things they cared about

but if you all of a sudden

have all these things they do care about

then you change primary features

not secondary features

so if you present a more expensive offer first

before a less expensive offer

more people will buy the less expensive offer

than they would have on its own

when you present the anchor

get the gasp come to the rescue

present the core offer

ask for payment for the most effective anchor

make your premium offer five to 10 times more expensive

anchored customers spend a bit more than they plan to

and don't treat an anchor like a fake

or the customer will too

and you will lose trust and waste their time

important some customers will buy a premium offer

that is where you make way more money on this

because one more people buy the main thing

and some people will buy the very expensive thing

the expensive premium offer adds outside profits

with fewer sales

so just because you don't sell the most of it

doesn't mean you don't make the most profit from it

the main offer and premium offer

should have the same primary features

the premium offer has different secondary

aka premium features after anchoring offering

the primary features for 1/3 or 1/5 or 1/10

the price makes the main offer a great deal

it gives them basically the same thing for way less

that is the anchor upsell

alright so we just crushed the classic upsell

the menu upsell the anchor upsell

now let's talk about the rollover upsell

rollover upsell

of these four upsells is probably my most used upsell

not necessarily my favorite

but my most commonly used

so let's break down how this came to be

so I Learned this from when I was doing the

win your money back as the attraction offer

so everyone kept

crediting their money towards the membership

but I would put it all up front right

the membership was for me $150 a month

so 600 bucks was four months of free service

so you know

they did six weeks

and then they would essentially get another four

months for free

and it would almost take me a half year to get my like

first payment from people coming in the door

which was which sucked right

so the thing is is for them

they didn't feel the payment so they stopped coming

and so

I needed a way to upsell people into something paid

and so I drove to a friend of mine's

actually here in Vegas now uh

to learn more about how he ran his gym

and and the thing is I studied everything he was doing

cause he was just doing way better than I was

and uh he said in this offhanded comment

that he was getting 70% plus

people stay on afterwards and pay

and I was like how are you doing that

he's like oh yeah he's like

I just take their winnings and credit towards the year

and he said it just like that

and I was like that's it

all you do is you take whatever they just paid for

and you roll it and so that's the up sale

it's whatever you paid for

I'll just credit it towards the next thing

so let's get in the description

here's how it works so roll over up sales

credit some or all of a customer's previous purchase

towards your next offer and this in my experience

gets way more people to take it

so once I know how much credit to give

I figure out three things 1

who to upsell 2 what to upsell and 3

how to roll over the credit

so for the who

I use roll over upsells in four situations

first is to reengage customers who left a while ago

I call this a win back campaign

you reach out to old customers and say

hey Sandra you haven't been up

you haven't been back in six months uh

but I saw that I owed you some money

and so the subject would be

I owe you money and people tend to respond to that

and so you say hey

I owe you 500 bucks and she's like

what do you mean you owe me $500

I was like well

I promised you this thing and you know

you haven't come back in a while so I wanna take $500

now that could be 100% of what they paid

it could be a third of what they paid so far

whatever and say and I wanna

I wanna get you in here and I'll credit towards uh

this other service thing right

and so a lot of people will take that offer

to credit whatever they paid up to this point

for more help great

and that's what how you can reengage old pup

old people who haven't been back in a while

the second is to rescue upset customers

as a better alternative to a refund

so someone says hey

I hate you and you say hey

no big deal this $500

that you paid I'll just credit towards the thing

I should have sold you originally

so you got all the stuff that you just got for free

it's on me

let's just give you the thing you really need

so I'd rather do a redo than a refund

and that's how we use the roll over there

the third is to rescue other people's upset customers

this is particularly savage

so what you do is you go down

the one star reviews of all your competitors

and you message those people and you say hey

how much money did you spend at so and so competitor

and they're like 12 dollars

fuck that guy and you're like

you know what I'll give you the 12 dollars

of credit towards my stuff

because I just want you to get this problem solved

you turn their biggest hater into your biggest

ambassador savage No. 4

you up sell your regular customers

who walk in the door so there's the four

who's the next one is the what

so remember you can upsell more of what they just got

something better or something new and or different

so to make money

roll their credit over to something more expensive

and so the more expensive thing again

in my opinion should be five times more expensive

so if I'm gonna roll a 500 dollar thing

I wanna roll it towards a 2000

25 dollars plus type offer for the how

you can apply all or part of the discount upfront

or you can spread it over time

and so this is depending on you

so in the examples I gave before

I took it and I spread it over time

you could if you had a smaller amount

do it upfront it's up to you

you can also make up a fee

that you can then wave and use the credit for

there's lots of things you can do here

all right but fundamentally

you can just figure out

now the all or part of it is like

let's say somebody was with you for three years

and they spent five grand with you

you might not credit five grand towards something else

if your services you know

aren't that much maybe it's $2,000 a year

$5,000 three years of service

well you'd certainly want to get that customer back

but if you give them another three years

it doesn't make sense so you can say hey

I'm gonna give you the last

you know the last three things you bought for me

let me credit those instead right

you wouldn't say instead you'd say

I'll credit those for you right

all of those things you can say listen

I'm gonna assume that we did something to mess up

because you didn't come back

and so

I'm gonna assume that the last six months of service

that we did was not up to snuff

so let me make it up to you so examples

so chiropractor

reengage old patients with a win back campaign

so you say who's the who

six months since their last purchase

what new plan how upfront

so that's our who our what and how

so reach out to your old patients

you look at their purchase history

you offer to apply some or all their past purchase

towards something more expensive than what they bought

so I would say hey Mrs

Banks I wanted to give your money back

do you have a minute great

yeah I wanted to see how your back pains going

oh I'm so sorry to hear that

uh well

I've got some good news as a way of saying thank you

I wanna give you $500 your money back

as credit towards staying pain free for good

is that of any interest great

let's get you in let's say a dentist

hey save your own upset customer with a rollover upsell

so who upset customer what

teeth whitening how

front load 200 dollar credit

so we say hey

the person pays 200 bucks for teeth cleaning

but doesn't think their teeth got whiter

we explain they need more to

you know

to get more and upsell into a teeth whitening package

which includes multiple sessions and at home kit

and multiple deep cleanings

then you offer to credit the $200

they just paid for the cleaning

towards the whitening package

this just really works with people who are like

well this isn't what I thought

it was gonna be and you're like

oh that's on me

I thought you wanted this miscommunication

I'll make it up to you let me take everything you paid

so you didn't lose anything

everything that was for free now

and let's put it towards the thing you ultimately

wanted cause the thing is

is they still want the thing they they spent money on

and so

if what they really wanted was higher expectations

then sell them the higher package rescue

cough steal other people's upset customers so who

competitor's customers what service agreement

how roll over cost to break old agreement

so let's say you find a competitor's upset customers

and credit their old purchase with them

towards a new purchase with you

then you roll over the amount they owe them

as a credit towards a longer agreement with you

so let's say they're like ah

you know I would

but I've got three months left

in this service agreement

you say no worries

whatever you have the three months

I'll credit it towards mine

and I'll just make mine a two year agreement

so you'd say like hey

John saw your negative review on uh

their product and it really upset me

to make it up to you

I'll credit whatever payments you have left with them

to switch to ours this way you don't lose a thing

and you start getting the benefits now

fair enough

cause that way

you don't have to wait for that thing to expire

and pay and then wait to get the benefits

you can start getting the benefits now

and you don't lose anything

and I get the customer membership

so

this is where you spread the first purchase over time

so who current customers what 12 month membership

how spread over the first purchase

so if somebody comes in

buys a block of service uh or or of membership time

as soon as they do

you can then offer to apply the entire amount

towards more time like 12 months

I can do rollover upsells anytime

I just prefer to do to do them right then

alright so this is the important points

uh use rollover uh offers to attract new customers

for example you rollover some of

all of the customers

paid somebody else towards your thing

and you can find leads by scraping

contact information from negative product reviews

wherever available

you can do rollover upsells before refunding

this has solved me tons of customers

save me tons of customers in cash

if you did a bad job hey it happens

rollover for a do over

and if they want something different

you can rollover the purchase toward that thing instead

previous customer are still customers upsell them

these are win backs so reach out to old customers

6+ plus months from their last purchase

look at how much they paid

decide how much you wanna give them offer it

example I made personalized videos

this is me personally

I made personalized videos for 200 past customers

this is before AI and all that stuff

it took me like two days um

offering them $4,000 of credit to return

add urgency to roll over upsells

so make them one time only

so this is a key point so this is optional

it's up to you but this is how I prefer to do it

make the moment you present the offer

the only time to take the offer

so they don't get to sleep on it

so

you wanna surprise and delight them with this credit

or this discount so if they want the credit

they gotta take it now if not

no big deal they can always pay full price later

how to price a rollover upsell

so to make money on a discounted offer

you have to have profit left over

in order to discount it right

so I try to make the upsell at least four times more

than the rollover credit

so that gives me a 25% discount at most

if it's four times more expensive

remember the rules of discounting apply

bigger discounts make you less profit

but per sale but they get you more sales

now you don't need to credit the entire amount

I just like to highlight this again

because people do this

and then they ruin their businesses

I'm telling you don't do that

like you can just take as much or as little as you want

the goal is to simply get as much of a discount

that you get responses

so

if you find out that $200 is enough to move the needle

and the average person spend $2,000 a year

then you can say hey

your last purchase with me

of the 2,000 you spent last year was this thing

and that's what you choose to credit

you don't have to credit everything

if you have smaller if

if the person spent a very small time with you

and you have really big packages

credit the whole thing

if they spent a really long time with you

and you have small tickets

credit the last one so

I roll over whatever

I think would incentivize to buy the next thing

and you can just test to find the sweet spot

in the beginning it's $500

you can test 300 whatever

this is my famous gift card play

the way that this works and this is a savage play

and it basically is a rollover

just like package differently

is that you say hey

this works great for like holiday seasons

things like that say hey

this also crushes for Black Friday

I'm giving 200 dollar gift cards away for 90% off

limit 2 per person

and you can only use them on someone else

cause it's the holiday season

so you can do this for Christmas

and you can do this for Black Friday

so you can use it twice if you want

now the key

here you can also do for uh birthdays uh sorry

not birthdays sorry

they give it to other people as birthday gifts anyways

when customers buy the gift card

ask them who they want to make it out to

and if they'll make an introduction

then when that person comes in

the person they introduced comes in

you roll their gift card over into the main offer

and so some people see this and they're like

you want me to give 90% off my main stuff

it's like no bro

I want you to sell a 2 thousand dollar thing

and give 200 dollar gift cards away for 20 bucks

so what's really happening here

you're gonna get paid $20 to get a lead

that's a hot referral that

you're then gonna take the 200 dollars

and roll it into a two thousand dollar product

which you may have marked up by 200 dollars

or you add something to it

that's high margin

that you can justify adding the 200 dollars for that

then you can take the deduction off of all right

so you make the value of the gift card

20% of the price whatever you want to sell next

so if it's a 200 dollar gift card

you make that one fifth of the price so 200 dollars

if I had a 2,000 dollar offer that'd be 1/10

but minimum should be 5

x would be a thousand dollar offer

obviously you can make it more expensive than that

you just want it to be enough that it drives a purchase

alright in our example

we sell 200 dollar gift card for 20 bucks

then apply that 200 dollar offer

with at least a thousand dollar price tag

people pay you to refer their friends

plus you get cash from unused gift cards

wins all around that is the gift card play

final points rollover up sales credit

summer all of a customer's previous purchases

towards your next offer do rollover upstairs

figure out who to upsell

what to upsell and how to credit the rollover

who to upsell old customers

upset customers other people's upset customers

current customers what to upsell

more of something better of something new

something new just make sure that you make a profit

after applying your discount

how to roll over the credit

you can do full or partial purchase

uh give it upfront or you can spread it out

we went through examples of all those

you can price your next offer

for at least four times higher than the credit

so this makes it a 25% discount

everything above that is gravy

I wouldn't do less than that

and to get more takers add urgency

make your roll over credit a one time only offer

and boom that is the rollover upsell

so we just covered all four upsells

the classic upsell menu upsell

anchor upsell rollover upsell

and if you're like man that was amazing

yes I love

those

and the problem is what happens when someone says no

enter down sell offers

so down sell offers of the third prong

of our four prong money model

it's what you do when someone says no

so here's the description in the last section is up

so offers to get people to buy more stuff

if we did a good job we've turned a profit too

down sales begin after a customer says no

we find a solution to meet the customer's budget

so we down sell in two ways

we change how they pay or what they get so how they pay

how much they pay versus how much they pay over time

so now versus later and then what they get

we change the quality

the quantity or something different

so here's what not to do

so these are the rules of not down selling

so this is a real story from a friend

so I was buying a car

and the salesman tried to upsell car insurance

the cost of the insurance

when he first started was $5,000

I said no

but then he lowered the price I said no again

he kept lowering the price

until the same insurance he first offered was at

for $5,000 was now $400 I still said no

at first I said no because it was way too much money

but by the end

I said no because I didn't trust the guy

the entire experience felt dirty

then I wondered was he ripping me off in the car too

now I didn't want to buy the car from him either

how to not down sell people

lower the price to close a sale

but even if you close this one sale

the customer will question every other price

you offer them from that point

going forward and whoever they tell

that's the bad part not just them

everyone else too so you trade trust for a buck

not worth it here's the note

you can offer something different for less

you just can't offer the same thing for less

if he had offered different insurance for less

rather than the same insurance for less

he probably would have been fine

and kept her trust and closed the sale

so the key point was that he offered the same thing

that was once 5K for $400

that's the problem because now

it basically means that your price has no meaning

and you're making it all up

which of course we do make it all up

but we never admit that so let's begin

rule of downselling

remember that they said no to this offer

not all offers see it for what it is

an opportunity to find out what they really want

and then profit from it down sells are trades

when down selling you work with the customer

to find a combination of giving

and getting until you get a match

so if you're gonna give something

you should get something back personalize

don't pressure

so figure out what they like and what they don't like

then offer more of what they like

and less of what they don't

with a price to match it

if someone refuses my large soda upsell

I can offer them alternatives

I could ask if they want a small or juice or coffee

am I being offensive by asking

no it's offensive not to offer to help

offering the same thing in new ways

you limit down sells to what you've got

so think of downsell as more like

100 ways to offer the stuff you already have

not 100 different offers

don't drop your price just to get someone to buy

alright I'm gonna reinforce this one

because

this is the one that everyone just keeps messing up

first off dropping your price is not downselling

it's discounting so

if someone wants what you have

and just doesn't want to pay the price

well that's tough cookies

on the other hand you can offer them to pay less now

and more money over time which is a payment plan

so let's go through the lineup

we're gonna go through payment plan down sales

how they pay trial with penalty

which is also how they pay

but just like a very in depth

tactical thing that I think people do trials wrong

and I'll explain how I like to do them

uh feature down sales

which is changing what they get for the price

these down sales boost 30 day profits even further

they do it by making even more sales

when customers would have said no

and you can use a down sale offer

at any point in a money model

you can use it up front

you can use it after someone takes an up sale

or says no to an up sale you can use it on the back end

any of those things

and that begins our down sell offers

let's start with payment plan down sells

so we just covered down sell offers

now let's rock and roll into payment plan down sells

the main five as always and let us begin

so here's how I Learned it

one month in the business

I got one month's rent left

and I'd only made a few sales that first week

so halfway through the month

a prospect comes in and I really needed the cash

and so she said no to buying

and so normally I just would have given up

but I really needed the cash

and so I was like alright well can you put half down

and she said no

and I was like okay can you put a third down

we'll do three payments and she's like no

I was like well what can you do

and she's like well I can't do anything today

she's like but I get paid on the first

I can put the whole thing down then

and rent was doing the fifth and so I was like

okay so I put zero dollars down today

and then I put her whole payment on the first

and it went through and I was able to pay rent

and all was well in the world Hooray

so that was my first real experience with

learning how payment plan down

sales worked

I got a little more sophisticated over time

which is what I'll share with you

so here's how they work overall

so payments plans work for any price tag

that's one of the nice benefits but they are a gamble

they make money when customers complete payments

they lose money when people cancel before you profit

or when people who would have paid in full

take payment plans instead and then cancel early

so note this is not selling a cheaper thing

this is selling the same thing

with different payment terms

and so

people reject offers when they cost too much today

not necessarily when they cost too much overall

this is a massive

miscommunication and misunderstanding

for salespeople and business owners

people saying no

doesn't necessarily mean that you're mispriced

it just means that

you might have to change the terms of payment alright

it's usually about what they have to pay right now

not what they have to pay in general

and so

people mistakenly think that they need cheaper stuff

and this is not the best course of action

in my opinion payment plans

get the most buyers to pay the highest price

by getting them to pay less now in the moment

but pay full price or higher over time

so here are the 7 steps of a payment plan down sell

we reward for paying in full

rather than punish for paying overtime

this is a big thing that I

I don't see taught very much

and so I'm gonna explain this one in depth

cause it's really important

uh next we're gonna offer financing options

half now half later

check to see if they want the thing

offer to split in the 3 payments

or evenly spread the payments

offer a free trial

so let's give some deep down examples

so step 1 reward for paying in full

rather than punish for paying overtime

so if I take on the risk of a payment

because if you're a business owner

and they don't pay you everything

and you start delivering stuff

then you take on risk right

so then what I do is I increase the price

now normally businesses do this by charging interest

but everybody hates getting charged interest

and so instead what I do is I anchor my first price

I present is the fully baked payment plan price

and then when I say got it

would you like to save some money

they say yes

and I'm like you can prepay and save this much money

so now them prepaying is a savings

rather than getting penalized

so think about like this let's say it's 10 k and 12 k

10 k is the paid in full price

12 k is the payment plan price

instead of instead of pitching people

cause remember anchors still work

instead of pitching people 10

and then they say they know they can't afford it

and then saying okay fine

pay me 12 because you can't afford it feels tough

so instead pitch 12 I know you're afraid of doing it

don't be

the difference in interest is usually never enough

to change a purchasing decision

so like if you had 10 and 20

then yeah but most interest whatever you usually

you know add on top might be 10 and 20%

and so that's not usually

enough to get into a different buying tier

so you present here and if someone says yes

and by the way if everyone keeps saying yes at that

and then you don't even have to mention the pre pay

then it also allows you to incrementally step up

and get kind of like a soft indication

in the marketplace of whether or not you can sustain

a higher price point so

I actually like to use payment plans as a great test

for where I'm anchoring

and I can keep nudging up my price

before I start seeing people freak out

so it's kind of like a testing price

so I would present 12 they say

I'm not sure if I can do it

or maybe they can do it and they're great

Wanna save some money

now they prepay 10 and they're stoked

if they can't do 12 then it's like fine

oh you don't have to do it all upfront

but now I don't have to increase the price

they said they couldn't do 12

and then I said cool

you wanna spread it over time

and now it seems like I'm adding no interest

to the original price see how different that feels like

oh you can't do 12

we can break into payments for you

but if oh

you can't do 10 then pay me 12

it's like ugh

tough right

and this gets around all of that

so No. 2 third party financing

credit card and layaway option

so third party financing

means another company pays me now

or pays you now as a business owner

and the customer has a payment plan with them

the other party so car dealers do this all the time

the dealer gets money from the financing company today

and the customer pays the financing company tomorrow

most times by the way

adding third party financing in

increases revenue by 35% on average

note

it does take work to get third party financing set up

but it is typically worth the effort

credit cards now you're like

how is this how is this third party financing

I Learned this from a master salesman

so I will just teach it to you as I was taught

to me

this is insane close that this works

and it does work

and it still blows my mind that it works

just ask

would you rather that I decide your payment terms

or that you decide

everyone then says well

I would prefer to decide and when they do you just say

awesome just use your credit card

that way you can uh

pick whatever payment plan you want that works for you

if they say well shoot what's the alternative to that

then you say I have an in house plan

which is me picking the dates of when you gotta pay

and that's usually gonna be a much shorter time frame

than what a credit card would allow you to pay it on

and so as crazy as this is

it's wild to me that this reframe actually works

but it does so

especially if you sell to consumers like that

reframe works

no idea why I only state what I know that it works

alright the next one is layaway

this is actually a personal favorite of mine

layaway means paying off the product before getting it

this is actually how they used to do

in the olden days

when there was no credit and banks were all sketchy

people would do layaway

they go to the store they say hey

I wanna buy that thing and the guy would say great

drop off money every Monday for the next 4 Mondays

and then I'll give it to you

and it was a very simple way

now the thing is

is that the customer takes on the risk

not the business but in my opinion

I think there's a lot of really weird

little psychological things with it

because if you make payments

it's like

it's like building up anticipation for a vacation

it's like the whole time like man

I can't wait to get this thing

I can't wait to get this thing on the flip side

when you get the whole thing

and then you make payments

you already got the value and now every time you pay

you like hate them a little bit more right

I mean ideally that's not the case

but I'm just

I'm just explaining my experience as a consumer

some businesses can't do this

they can't they can't do a layaway

but if you do have the opportunity or the option

where it's

where you can delay starting for a little bit

whether it's a service or a product

having them start paying is a great way to do this

and the nice thing with layaways

it's as flexible as you want

and I'll tell you the story of how I Learned this

so I had Alan which was our software company

I mean we still own 25% of it but um

when we started the business

I Learned that in person on boarding

LED to higher stick rates and happier customers

and you wanna get more customer feedback etcetera

and so I would do a single company

full day on boarding or half day on boarding

and I was on the phone selling that onboarding

now the onboarding for context

this was an enterprise level sale

so it was like $20,000

to just be able to white label the stuff

um and then use the

the whole product cause it added a whole

another revenue stream to agencies

and so I was on the phone

this must have been the first week or two

and I was on with these uh

young agency owners and they said um

OK 20 guys do you guys do payment plans

and I was like yeah sure

um I said you can break it up however you want

and they were like awesome

so we'll just do 800 bucks every other week

so that's what they said and they're like

so with that being said

we good to come out you know uh

you know next week and I was like

oh no no you can't come out

I was like you can split it as many times as you want

but you gotta pay it off and the moment you pay it off

you can fly out and they they just said

oh

alright we'll put half down now and half in a month

and then we'll come out then

and so

they wanted to delay my payment for like six months

or more than that whatever the math is

on that and then as soon as I said oh no

you don't get the thing until you pay

they were able to do it in in a month

and so the nice thing with layaway is

that actually aligns

your incentives with the customers

they want to pay it off as fast as possible

so they can get the thing

when it's the other way when you're giving the value

they're incentivized

to make it last as long as possible

this is why I like layaway for the variety reasons

you can close anyone

you can make the payment terms as flexible as you want

you take don't take on risk

they have this kind of like working for it

earning it type feel and for all those reasons

I really like layaway

now if they say no to all of those offers

I move to step 3 so guys these are in sequence

so first we do the prepayment thing

they say no then we offer financing

they say no we say great

can you do half now and half later

so then I say when's the next time you get paid

if I'm doing a consumer sale if I'm doing a B to B sale

I'd be like when's your next inflow of cash

or do you have some sort of you know uh revenue thing

do you have any big contracts hitting whatever

after that I say

wanna just put half down today and then the rest

down when you get paid if they can't do that

then I say okay

well what's the most you can put down today

and I like that question

because it just cuts to the core

but what's the most you can put down today

when they offer an amount

you say great we'll put that down today

we'll put the rest when you get paid fair enough

so instead of doing half down

I might put a quarter down 75% when they get paid

but all I'm trying to do is compress forward cash

remember money models

what we're trying to do with customer finance

acquisition

is get as much as we can in the first 30 days

and this payment plan

downsize process is structured to do that

so I like scheduling payments off of paychecks

since that's when most people get paid every two weeks

so this boosts 30 day profits

more than monthly payments

so it's like half now

half in two weeks and then half and then you know

a third in the next two weeks

so all of I get three payments in 30 days

which is great and if they can't do those

I pause to make sure they actually want it

so sometimes people just keep saying no and I'm like

hey pulse check temperature check

we still good you still wanna do this

and so this is how I do it

no payment plans

gonna satisfy a customer who doesn't want the thing

so make sure the person

actually wants the thing

before putting more effort into selling it

so I might say something like

got it so money's tight right now real quick

just wanna make sure on a scale from 1 to 10

how bad do you wanna do this

now if they say 8 or above

then I keep offering payment plans and say awesome

don't worry we're gonna figure out something

that's gonna work for you

if they say 7 or below I say why not a ten

and then say something like

you're right

I think we may have something that could fit

be a better fit for you and then I pivot the sale

and so then you sell something different

which this is actually an outpoint or an exit ramp

that goes into feature down cells

which is two two videos from now so step five

we offer to split into three payments

so remember this point they said 8 to 10 right

on the scale I downsell from half down to a third down

so I offer a three payment options

so 1/3 now 1/3 on the next two paychecks or 1/3 now

and then 1/3 the next two months

if they still can't do it

then I offer to evenly spread payments

so if they still can't manage it

I evenly spread the payments

or the rest of their service

so even if someone signs up for 6 months of service

it doesn't mean

you need to have them pay you over 6 months

you can have them pay you in 3 months

for 6 months of service

you want to still front load as much as you can

you're the one who had to pay the cost of one

on boarding the customer

but also of acquiring the customer

so for instance for gym launch

uh it was 16 weeks long

so for us in that business

I charged them each week 16 times in total

so that was me spreading it all the way out

if that still creates a problem

I move to step 7 now to be clear

I dealt with very very broke customers

most of your orders don't make any money

and so I had to I basically this was so

so commonly the payment plan

that ended up basically just having pre payment

financing evenly spread

because I just kept getting so many knows

all the way out you simplify it

and at the end of this I'll walk you through this

but fundamentally this is how you map

kind of the network of what your down

your down sell process will be

and then over time you tighten it until it's like

these are the highest likelihood

stop points that my Avatar tends to say yes to

so step 7 is you offer a free trial

now I offer free trials in a very special way

so I dedicate the whole next video just to doing this

but normally the sale ends here

I mean

you can't really get much lower than a free trial right

so here are some important points about payment plans

what I walked you through was a seven

step down sale process it's how I like to map these

now there's a different methodology of down selling

that's simpler to understand and less to explain

it's called seesaw down selling

I like it a lot as well it's simpler to explain

you can pick whichever one you want

and I don't like giving people options

cause people like being told what to do

but I think if you're watching this

and I believe in you

and I think that you can make the best decision

so instead of just asking for the full amount

you say would you rather have giant monthly payments

or tiny ones they'll say tiny

then you say well

it normally costs XXX and if you prepay today

then you get a huge discount and zero monthly payments

that work this frames the payment plan as a negative

and highlights the benefits of prepay

if they say they can't afford it

say the more they put down now

the lower their monthly payments

and so basically frames all of the payments as

we want to make those payments as low as possible

so put more put more down today

so if you can't afford it up front

totally get it we'll just adjust the down payment

until you get a monthly rate you like

and the thing is

is that most people want low monthly payments

and so in order to get a monthly rate they like

they have to put more up front

so the seesaw down saw

I call it this because you're just saying OK

well the more you put down or the less you put down

the more you have to pay overtime

the less you put the more the more you put down

the less you have to pay overtime

and so this incentivizes bigger down payments

get monthly payments lower

if they still say no

you ask if they still want the product just like before

if they do

you pull your chair to their side of the table

and walk them through the options

that's how this works that's the seesaw down saw

it's an alternative path that felt

I felt obligated to at least share with you guys

the thing is is I like

I think with larger sales teams

just having very clear step downs

sometimes seesaw down selling can get really weird

payment plans and so this is for bigger companies

if you have like a finance department

they might hate seesaw down selling because

but if you're owner operated

then you can

you can kind of work out whatever payment plans work

and it is a more flexible way to make payment plans

option payment plans happen

the 7 step one is more like it's ironclad

this is our first stop

this is our second stop this is our third stop

and then that way your your finance team can be like

these are the plans they're in the CRM

we track them accordingly whatever

and so it depends on the size of the business

seesaws smaller business more flexible stuff

the step downs has more scale to it in my opinion

alright so payment plans have built in upsells

so this is one of those really key

sexy things that a lot of people miss out on

and we've made a lot of money from it

so make periodic offers for the original paid in

full discount during their payment plan

so we give a prepayment discount

what you can do is also extend the timeline

that they can prepay and still get the discount

so if you're in any kind of b to B business

especially anything marketing or sales driven

if you are helping them make more money

in their business

which the vast majority of b to B businesses do

then you can say hey

no worries you might not trust us fully today

let's get a third down we'll get going

and then I'll still give you this prepayment discount

for the next 30 days I'll honor it

so then at the 2 weeks and 3 weeks point you can say

hey do you wanna go ahead and do that

hey we're about a week before the the term expires

do you wanna

go ahead and take care of the rest of the balance

and still get the discount

if you've done a decent job

a lot of people like yeah

I'll take the savings cause now they know you

and so we get a ton of people who take that prepayment

if you just extend the window

and you say it on the sale

you say it on the sale after they don't take obviously

the first prepayment

and you do that after you've already closed the card

you're kind of telling them what the next steps are

okay fewer declined payments

so align payment schedule with paycheck dates

that should seem straightforward

when they get paid is when you should Bill

that way you have fewer declines

fewer insufficient funds um

how to make sure payment plans make you money

so after implementing payment plans

if you hadn't done these before

your close rate should increase duh

but if the number of paid in fulls goes down

you have a problem it means you're actually getting

people who used to pay you in full

are now taking payment plans

so those are the big points alright

summary

payment plans let you spread the cost of your product

by charging some of it up front

and putting the rest into scheduled payments

payment plans get more buyers like discounts do

but can also boost profits

because they agree to pay in full price

over time it's kind of the best of both worlds

payment plans only grow your business if

if they get you more customers

and those customers actually pay

see saw

down selling

gradually shifts from paid in full to equal payments

it's a little bit more custom

and it's a little bit more headache on the back end

if you have a small business

you can probably handle it

if you have a bigger business

it can be kind of a pain payment plan upsells

they get the original discounted price

if they pay the balance today

or up to X period of time before that discount expires

align the payment schedules with paycheck schedules

and you will get fewer declined payments

these are the 7 steps of the down sale process

full price then offer a discount if they pay in full

step 2 third party financing

credit card financing and the layaway options

step 3 split the payment in two

and schedule on their paycheck dates

step 4 ask if they still want the product

this is the off ramp to a feature down sale

if it's 8 or above you're good to go

if it's below that

I would I would suggest switching the features around

step 5 split the payments into three

schedule their paycheck dates or monthly

step 6 schedule equal payments

over the entire duration of time

they're working for you step 7

offer free trial in exchange for putting a guard down

which I will cover in depth in the next video

two quick pro tips No. 1 if you're like

what do I pay sales people on a payment plan

I have always compensated off cash collected today

uh main reason for that is

that requires more salesmanship

and that aligns the interest of the salesman

with the interest of the business

which is getting paid today

and if someone goes on a payment plan

and then you do a great job and they continue to pay

that's more the success of the onboarding team

the delivery team

which means that you should be able to save any excess

commissions

on a payment plan for people on the back end

if they're the ones making sure they're getting paid

so that's No. 1 number two

if you have a recurring revenue business

people like how do you do payment plans

in a recurring revenue business

you simply state the annual contract as the price

so let's say it's $3,000 a month

for whatever your service is

you say hey

it's $36,000 and if you prepay for a year of service

you get it for 30 right if not

no sweat

and then you go into whatever your monthly payments

at $3,000 a month if with a a recurring service

you might only have two step downs instead of seven

because you might not have all these kind of like

evenly spaced things that's more for kind of up fronts

or defined in periods things

and with that being said now we go on to free trials

alright so we just completed payment and down sales

and if you get to the end of the seven steps

and someone's like I still don't wanna pay you

or I still don't have the money

either way you can offer a free trial

and I've run a lot of free trials in my life

and I think there's a wrong way to do them

and a better way to do them

and I will explain the better way

so same vibe as always

let's break down how I Learned this puppy so um

we were scaling gym launch

and we needed an HR platform

and Layla was looking at all these different platforms

and she ended up going with this one

and I was like well

what made you you know

pick that platform versus the other

she was like honestly

they were all more or less the same

but these guys said they charged me 500 bucks

and if I attended the two or three training sessions

they would rebate me the $500

but if I didn't attend the onboarding

training sessions they would keep it

and so of course I attended the sessions

and now I know how to use their software

and I don't feel like learning anyone else's

and so they actually got a customer

and we stayed with that platform for years

because of a really interesting way of basically

doing a free trial

now there's was they charged and then did a rebate

but I saw the structure and was like

oh this is really interesting and so I was like

what if we did trials like this

and so that's what we started doing

and so I called it a trial with penalty

that sounds ugly that's how I called it internally

wouldn't say that to somebody

but it's a trial with penalty

so basically a customer can try out your product

or service for free so long as they meet your terms

for comparison the win your money back offer

the attraction offer

gives customers the chance to get their money back

if they meet the terms in a trial with penalty offer

customers only pay if they don't meet the terms

so the win your money back

and the free trial with penalty

are virtually the same offer

we're just changing when they pay and how they pay

so they'll mirror the actions and

results that you used in win your money Back

but this time we use avoiding fees

rather than winning your money back

as the incentive for adherence

so they avoid penalties rather than get

or losing their money that they paid originally alright

so with a trial with penalty

this isn't here's my thing

see if you like it it's here's my thing

you get it for free so long as you do this stuff

which makes you a perfect fit for my next offer

and if you don't then you have to pay for it

so it's kind of like a win win for you

because if they don't do it

then they pay and if they do do it

then they're gonna be really likely to buy

the next thing

now I'm gonna give you something like wait

so if they don't do it

then they pay and they didn't want to pay originally

I'll cover how to get around that weirdness

let's say you normally close

three out of 10 people on your attraction offer

and now you down sell another four on a trial

with penalty then after the trial finishes

you upsell three of them

so you go from three sales to six sales

which doubles your customers I use this as a down sell

but it could also be used as a front end

so I don't prefer to advertise this

I prefer to present this

after someone already said no to giving me money

some people advertise this as how they get customers

it's up to you obviously

that HR company advertise it as how they get customers

so if you really want to help people

convincing them to put some skin in the game

is a great way to do it and so one of my sales rules

that everyone buys something who's qualified

and so I love that as a concept is like

everyone should buy

like if they're qualified and we have the thing

every person should buy the terms may change

but everyone should buy so

here's the difference between trials and penalties

and rebates a trial is they

you just get a card and then build them later

a penalty slash incentive is

you get a card and Bill later

and also

if they don't complete their activation activities

so the fees are associated with non consumption

and not showing up to other sales consultations

remember

the 4 things we had in the win your money back

is you wanna have them advertise your business

you wanna have them show up for sales consults

you wanna do things that um

that get them results and there's another one

I can't remember what it was

but there's four and those are the main ones alright

so you want to associate them

doing the things that gets them results

because if they get results

they're probably want to buy alright

so they're not here for a trial

they're here to solve a problem

so solve it because trials don't do anything

them

taking actions is what's gonna solve their problem

if someone has a problem with that

it's an easy thing to get around think about the logic

if someone says I'm not willing to commit to that

you're like well do you want the outcome

they're gonna say yes it's like well

you have to do this stuff to get the outcome

so if you don't if you don't plan on doing this stuff

then you're never going to get the outcome

this is just the easiest way that I can give you

all this service for free

if you really do wanna do this

I do wanna do this great

then you're not gonna pay anything

cause you're gonna follow through

and this just gives you added incentive to do it

and if this doesn't work for you

then certainly nothing else will

so let's walk through some examples

so I'll do a B to C version

so business to consumer and then I'll do a B to B

so let's say you do a business to consumer offer

a 28 day kick that habit blueprint

whatever right so

you get the trial for free and avoid the penalty fee

you must

or to get the trial for free and avoid the penalty fee

you must attend all your consulting calls

post your progress in the group once a week

journal daily in our app and attend feedback sessions

and transformation sessions

aka the upsell opportunities

business to business offer 5 day

get your first 5 clients challenge alright

to get the trial for free and avoid the penalty fee

you must send 100 upbound messages per day

report stats on the upbound messages

attend the daily training

post in the group daily once you've done the homework

attend your graduation call

which is the upsell opportunity

and so these look really similar to what the

when your money back ones were

because they are the same thing

now let's say you had a therapy business

so offer a free 28 day breakthrough therapy free trial

plus penalty you're gonna need

to do the homework before each session

and show up if you don't do the homework

you're not going to get the results you want

and if you don't show up

obviously you're not gonna get better

this will give you an added incentive to get better

faster so we charge a 50 dollar

non compliance fee for not doing the homework

or not doing the session if you don't do the homework

then we can't help you in the session

fair enough you should explain it how it works

now in this 28 day thing you can have all the fees

add up to the exact same amount of money

that you would have charged

in a win

your money back so if they have

call it

10 things they have to do over X period of time

and it's a 500 dollar thing

then you charge 50 dollars per thing

now if some things are more important than others

let's say sales consultations

then you can make those ones $100 or $150

and the other things 25

you wanna weight the prices based on the importance

for you as a business and for them getting results

so here's my actual

a step down process of how I sell free trials

so No. 1 is you offer the trial last

if someone makes it clear that they

don't want your first offer

then down sell the trial with penalty

so here's how it might sound hmm

well that sure is a pickle uh

I'll tell you what

how about we just get you started for free

would you be okay with that

great we can help you out

and if you like it you can stay

just let me get your ID and we get the process started

fair enough by the way

here's a little savage pro tip

if you're in person

or you're seeing the person via zoom

when you ask someone for their ID

they have to take their wallet out

when they take their wallet out

they can't say they forgot their wallet

and so now you get the card

they can hold it up to the camera

or they can give it to you in person

and then you take that and what I like to do is

I like to fill out the contract for them

for a number of reasons

one is when they fill out the contract

you kind of stare there like a weirdo

which is not fun so instead

you fill out the contract

and then you can make jokes about whatever's going on

you're like oh man

I should show you my picture

it's brutal oh

you're from Idaho originally

that's interesting oh

you know what my cousin lives out there

blah blah blah right

you're going through and you're filling this out

and you also

make sure that everything's filled out properly

and they didn't mess up the form whatever

so then the way I would do it is

I had the card between my fingers

my index fingers

and I would look at their wallet and I'd be like

I'll trade you for whatever card you wanna use

and I would motion towards the card

but I have this as collateral

it sounds small but these tiny things are like

how you facilitate sales

so then they would then hand me the card they wanna use

and then yet again I copy the card out

because it's very easy for someone

to fat finger a number

and then all of a sudden I can't run the card later

so by doing it this way

I made sure that the card number was correct

and put in the proper place

on the contracts that we're in

if you did an iPad it works the same way

if you do it on the phone

you can have them show you the card either way

and if you're not

the one who's immediately processing transactions

you've got a separate finance team

this becomes more important

especially if there's any delay between purchase

and running the transaction

this also avoids the I don't have the card

I wanna use this I don't have my wallet on me

it gets around all of that stuff

so just a pro tip alright

so first thing we do we offer trials

last that's how I'd say it always get a credit card

so you record their information

you hold on to the ID motion for the credit card

say what card you wanna use

now they have to leave a card

this is a key point if they balk

just say this is

this is gonna sound so ridiculous for me to say this

I believe it or not you know

failed at closing a lot of free trials

in the early days I had a tough time

people would come in for a 14 day trial

and I'd be like awesome

let's get you signed up and I'd be like

so what card do you wanna use

they're like you said it was free I was like

yeah and they're like well

I'll just I'll give you my card after the 14 days

and I was like I mean um

I okay I guess and I didn't know what to do

so this line came out of my mouth and then I

I don't wanna say

I literally never missed another trial again

but I really wanna say

I never missed another trial again

so here's how it would go

they would say

we do the whole contract and I'd be like awesome

what card can I put down

just so I can complete your account profile

so one is it's not to Bill it

it's just to complete your account profile

and if they balked and they were like

I thought this thing was free

I'm like oh

100% it is this is how we've always done it

and by appealing to authority

this hypothetical person who makes policy and rules

everyone just says okay and they just hand it to you

I have no idea why it works

I just know that it works and say

this is how he's always done it

that's it you just shrug and you say

that's how I've always done it

always sell staying and paying

so remember at this point

it's actually a take away sale for you now

so they've agreed they basically

you try to sell them and you're at the end

and they're like there

it feels like they're like not as interested

now you have to remember the leverage shifts

because now you're giving them stuff for free

they have to prove why they're deserve to get it

after you said they had to pay for it

so you say listen

I'm only gonna do this and extend this honor to you

of me working for free to help you get this thing

if you do some things for me alright

so you ask directly

so if this program got you the result

will you stay long term if the person says no

fuck it the whole point of the trial

the whole point of the thing

is to get them as a customer

if they're not interested in that fine

now if you advertise a free trial

then you need to offer whatever you advertise

but the way I said remember I use it last

it's not what I advertise

I offer it under terms

and so you don't want them to begin with

if they don't agree to stay long term

and the reason I asked that is

I don't want you to try it

I want you to get results and out of integrity

I wanna set realistic goals

you're not gonna hit your long term goals

during this trial just to be really perfectly clear

but you will establish habits

that will help you get there

and we're gonna help you do that for free

but if you want to get your long term results

you're going to have to stay on after

I just want to make sure that

you're not looking for some sort of quick fix

when you say it like that

people are like got it you're like because listen

I can't ethically promise you that

and as soon as you say that

you now have the moral high ground

they can't say shit to you alright

and so that's how you sell staying and paying

so now that you've said OK

I'll do it for free everyone's like OK

sure sure sure I'll do it for free and you're like

no no no not so fast Susan

if you get the result you staying OK

do you think you're gonna accomplish this

in the time period you're gonna

get progress you're not gonna get to your goal

I wanna set that expectation up front

so as long as you're comfortable with this

I'm happy to give this little

this little test run this kick start for you

but I'm only in this for the long term Susan

I think and I wanna ask you directly

are you in this for the long term

they say yes you're in

you have now sold the idea of them staying long term

if you can't sell that for free one

you need to work on work on sales

but they also might just not be a good prospect step 4

so now you sell consumption commitment

so explain the fees after getting the card very key

so at this point in the sale right

we've we said cool

let's get the trial started I have your ID

let's get the card sign it

you stay you sell the idea of staying long term awesome

now once we have the card

we have the payment information

now we basically get agreement on terms

it's much easier to get agreement on terms

post getting purchasing method rather than pre

I'm just giving you guys this

off of years of experience

just use it if you want alright

so I say something like this I say listen

so we're gonna do our part as long as you do yours

and that's that's fair right

okay cool

so now I just ask that you bet

on yourself so if you miss or skip any stuff

your results are gonna suffer

so we charge to keep you on track if you miss

no big deal you'll get dinged a little bit

but but it's not gonna get you off track

it'll get you back on track with that little

that little ding alright

so if you follow through you're gonna

get all of this stuff that I told you earlier

for free so

this is the best way

that we can get you amazing results

and keep it free for you

so it's the best of both worlds

now that last line I used more times than I can count

which is

this is the best way that I can get your results

and still keep it free it's the best of both worlds

I'd say that a lot of times it works

note if you explain the fees before you get the card

you'll get way more resistance and way more like

what about this and why is this this

if you explain it afterwards with the same like

this is just how we've always done it attitude

people will agree

or they'll tend to agree at far higher likelihood

and the last point that I'll make is that

I always have them initial

next to each fee they're agreeing to

and so again

you don't want to have like 19 sets of fees

you want to have as few things as are

that are important to you

so it'll usually be the sales consults

they have to attend

whatever the key metric for them getting results are

and maybe them doing some advertising for you

cause remember you're doing this for free

so they might as well do some advertising for you

they gotta post

they gotta you know give you a testimonial at the end

whatever so they have to agree to doing those things

if you're gonna give a free trial

get some stuff for it that's the whole point of this

if you're gonna give

you should get so that step 4 is that we get the card

then we explain the terms

then we have them initial

next to all the fees that are associated

we explain why we have the fees

which is for their benefit

it's the only way we could still

ethically tell you that we could help you get results

and keep it free

that we get the best of both worlds done great

so now uh I like making the check ins required

that's basically just an explanation of the fees

so I would say alright

uh yep

and you agree to attend each of these three check ins

the first first time we do X so that you can

the second time we do y so that you can

the third time we do Z so that you can obviously

we charge if you miss these three

cause it's the only way we can get your results

so this is me explaining how

I would explain each of the kind of clauses

that I'm initial having them initial next to

so this would be like the sales consults

now again I'm not gonna call them sales consults

I'd say hey

you gotta attend nutrition so that we can fix your food

you gotta attend the the progress meeting

so that we can adjust the

nutrition to keep the results coming

and you gotta attend the transformation meeting

at the end so we can get your after pictures

that should make sense right yes OK

cool done right

this is like there's not a lot to object to there

the question is okay well

how do trials make me money

so this is how I upsell from a trial

but everything I just said

went through

is how my step by step process for selling a trial

with penalty which will get you far more customers

and long term commitment then

just telling someone to put a card

and wish for the best so when someone takes a trial

one of three things happen

they like it they hate it or they don't use it

so here's how I upsell in each of those scenarios

so if they like it this is the easy one

you already set them up for automatic billing

cause it's a trial great

so meet with them anyways

during the transformation meeting

whatever meeting you wanna have close to the

middle or close to the end

and you still offer the the longer term

or higher value version of your service

or both alright

so again

they just didn't trust you enough in the beginning

let's say you have three sales consultations

you sell different stuff

or have potentials for upgrades

at the first and the second

you should still absolutely pitch the next thing

cause now they're in they've had a taste

the the whole dynamic has completely shifted alright

and so

successful customers tend to get even more value um

out of your better and more profitable stuff

so it's ethical for you to make the offer to them

if you can help help

now let's say they hate it turn the frown upside down

so ask them what they would have liked to be different

tell them they're totally right

and that you're angry at yourself for missing this

do not blame them

only one person can be angry and it needs to be you

ask if they'll give you a chance to make it up to them

because of how outraged you are

at their terrible experience

and now since you better understand their needs

that they're a better fit for your new

higher level thing then offer them that yes

this is a sale and yes

about half of people believe it or not buy this

they come in for this free trial

they wanted more everything

whatever and you say that's on me

I suck

I'm so pissed for you that should never have happened

I should have offered you this

and that's cause I didn't listen

and I should have listened better

so let me make it up to you huh

sell this thing now let's say they didn't use it

you reach out to people multiple times

before you get to this point ideally

but when you do that

you explain that you need to meet with them

you offer to wave the fees cause remember

they signed they were gonna do stuff

I don't want the 50 dollar fees don't care at all

I do that just to hold them accountable

and I tell them that

I offer to waive the fee if they get back on track

right so now you can get them back on track or again

offer something better so I say me personally

I don't like billing non starters

cause it's like a great way to get 1 star reviews

I prefer not to have great ways to get 1 star reviews

and a small fee isn't worth that

but it's your choice it's up to you

so I personally just use the fees

as leverage to get them back in

because that's where I'm gonna get the long term

lifetime value a couple other tidbits

so to tweak tweak your trial to get the most customers

if no one takes your trial

lower the requirements or the priorities

if people take your trial but don't follow through

emphasize explaining how the fees help them

and make sure that you include meetings as mandatory

like you have to highlight

that's why I have the little separate lines

from the two initial and I walk through it with them

don't let them read it explain each one

get them to nod then initial alright

if people don't stay on the back end

better emphasize the value of staying and paying

that's the early part where I said hey

if we get you the results

would you stay we added that back in to our scripting

when I saw my guys weren't doing it

and we weren't getting as many ascensions

we added it back in

and then way more trials started ascending

let people make up for goofs

so people often get discouraged after getting build

but you can offer the opportunity to make it up

so

this does a great job of getting people back on track

and converting

but if they miss that you're justified in billing them

so I don't see like if you they miss something

you reach out you reach out again

you say hey

I'll make it you know

I'll wave it

just come back in if they miss the next one

it's up to you I usually don't

but that I think that is a completely

you're completely justified in building at that point

in terms of naming just call it a trial

just say we do it in a special way

and the way we do it gets people results rather than

than not results that's pretty much it

so even though

the trial with penalty has some special features

you should just call it a trial

um otherwise people may get scared or confused

and no one wants to be penalized alright

and if they ask you why you do free trials this way

just reply with that's how we've always done it

pay less now uh

or pay more later versus trial with penalty

so I use pay less now

or pay more later as a down sell for physical products

or one time services

I use trial with penalty as a down sell

for recurring products or services

also I've only made this work in businesses

where the customer has to do work to get results

so if you find other types of businesses

that this works for

these trials where they don't have to do anything

let me know for the most part though

it's usually when somebody has to do something

often times like software

usually have to do a lot of stuff

in the software services it's common

for customers to have to do a bunch of stuff

that's more that's more normal

discounts uh get card on file

so some people get weird when you offer free stuff

and then ask for a card

and if you have a super low price

it justifies the card so a small price uh

means the card will probably work

when automatic payments start

so instead of a free month

you might offer a first month for

a first month for $1

or then X dollars per month when it recurs

and so if you want

you can offer for a buck a dollar down $10 down

whatever um

if you have a hard time with it

anybody

who has any acumen in sales should never have an issue

closing a free trial with a card

personally rebates are a little tougher uh

but they work the same way

you just get them to pay up front

so I consider rebates similar to when your money back

but usually for smaller like smaller in scope

so just get them to do the thing you need them to do

and then they get the rebate

so that was kind of like the

the story that I gave with uh Layla

so she paid you know 500 bucks

she had to attend two webinars or three webinars

very clear very small very straight forward

that's where rebates are kind of nice

um rather than

you know billing because the thing is the rebate

you know the card works because you

they paid for it and they get it rebated

which is basically a rollover

onto their service afterwards

so those are the important points quick summary

in a trial with penalty offer

customers can try your product or service for free

so long as they meet your terms

trial with penalty down sell offers

get yeses from people who would have said no to do them

you get the card get the commitment

explain why they have to do it to get the results

the meetings they have to attend

and what happens if they don't do it

and use the same refund criteria from your

win your money back the attraction offer No. 1

to create your trial with penalty criteria

this way at the end of the trial

they've done the stuff that makes a great

long term customer

and they advertise your business for you

break up fees

you can charge by criteria or you can charge a lump fee

I like breaking them up so

you can either say

it's $50 for each of these occurrences

or you can just say if you mess up any of these

you pay the full boat

I prefer the small dings because then people are like

oh I missed one

now I shouldn't even try right

I don't like that

you make money by getting people results

and turning them into customers

not nickel and dying them with fees

my personal opinion

so use mid trial check ins to make more offers

if they love it give them more of what they love

if they have problems

swap it for what makes sense for them

if they aren't using it

offer the ability to make it up to avoid the fees

this style of trial converts

as much or much higher percentage on the back end

which is why I do them it retains goodwill

because you actually look like you're trying to help

which you are

and you get agreement before explaining the fees

just as a quick reminder cause it's super important

and you can always do a normal trial as a down

down sell and remove that

but at that point I don't think that person really is

they're just trying to leave um

and remember everyone buy something

that's free trials

so we just covered payment plans and free trials

or trial with penalties whatever you want to say it

now

we have the third and final of the down sell offers

which I like to call feature down sells

let's begin the same 5 how I Learned description

examples important points and summary

look how clean this drawing looks so nice okay

so fundamentally you wanna buy the thing no

it's too much I remove some features I say

how about now that's how this works alright

so how I Learned it

a friend of mine told me that he had 3 x

his close rate last quarter from 25% to 75%

and I was like what on God's earth did you do

and so

I asked him if he used a payment plan or discount

he said neither and I was like okay

how does that work

he said he lowered his price by removing a feature

and I was like well

what feature did you remove

and he said my guarantee I was like what

he said yeah

so I have my 4,000 dollar thing and then people say

uh no

I can't afford that and he says

no worries he said I can do it for 2,000 dollars

I just won't give you a guarantee

and then what happens is

people see the value of the guarantee now

and then they reclose themselves on the higher priced

offer and so

we went from 25 out of 100 people buying

the expensive thing to 35 buying an expensive thing

and 40 buying the down sell

that's how I Learned the feature down sell process

so here's the description

so feature down sales

lower prices by changing what the customers get

so here we're actually lowering prices

the all the other examples were changing terms

here we lower prices

and I do them by offering less quantity

less quality

lower price alternatives or cutting optional components

so all features have a price and a value

this is where it gets really

really slick if you remove something

the price goes down sure but the value goes down too

so what features you remove

and how much you lower the price

affects how good of a deal the person gets

so this changes in your offers

price to value affects how people buy

so people wanna get the best deal for them

and so if you remove stuff they hate

and then lower the price a lot

they get a great deal if you remove stuff they love

and lower the price a little

they get a worse deal and this is where the

science of feature down selling becomes really

really sexy alright

so people will see the value in the thing you removed

after they see the difference in price

as in people will weigh how much money they save

against how much value they lose

so feature downselling gets customers to re

upsell themselves on the more expensive offers

so this means that you want to remove features

from highest to lowest value

since people want more value for their money

this incentivizes

customers to get the highest value purchase

for them feature downsells have a simple formula

take something away

lower the price and then in so many words ask

how about now so let's do some examples

so let's say you were down selling

product and service quality

so for services this might mean a lower amount

fewer sessions less time

shorter duration

for products it might mean fewer of them

alright so a product quantity downside would be

hey instead of a three month supply

how about we start with a just one month supply

a service quality downside might be saying

instead of four sessions a month

why don't we start you at two sessions a month

so this is service and quantity

alright so let's talk about product quality

so here's how we would down sell

you think about older versions

less reliable materials

materials of lower social status etcetera alright

so product quality say instead of set of leather seats

how do vinyl seats work

how's that sound feature down selling

service quality is a little bit more complex

because there's a whole bunch of them alright

so this means a lot of things

and I'll give you a few ways that I change

the quality of services and the hint

is that this always works to increase

service quality as well

so you can go the other direction as well

when you're thinking about

each of these vectors of quality

for services you can make your more expensive thing

have more of these alright

so instead of a 5 minute response time

why don't we just start you at overnight

response times you'll still save some money

and you'll get your answers just with a small delay

here are some more service quality features

so time availability

so specific times versus whenever you want

whenever you want is obviously more valuable

so if you're down selling it say alright

well you can only come on these office hours

rather than whenever you want

so days of week so that would be Monday

Wednesday

Friday versus all days it could be times of day

so 9 to 5 versus 24 hours

it could be amount of time

so you get 15 minutes of work calls versus sir

60 minutes of work calls

it could be location availability

this is where one location versus all locations we own

it could be cancellations

which means you can have reschedule fees

or it's free for you to reschedule uh

speed of response

you can reply in minutes versus hours versus days

speed of delivery so you can wait in line

versus priority versus same day versus next day

versus next week these are all different service ratio

one on one one on many

many to 1 which is the ultimate versus this

I have many of my team members on one person

communication method so

text support versus chat support versus video support

you've got provider qualification so is it the owner

a longtime employee

or a new employee who's Super Junior

is it live versus recorded

so you can watch it happen now

or watch it after it happens later

you can have in person versus remote

would you rather have

be here in person with me or watch it somewhere else

would you rather have do it yourself

would you rather us do it with you

or would you rather us do it for you

uh expiration so this thing works forever

or this is only works X times

or only works at specific times personalization

do you want it generic

or do you want it made just for you

insurance guarantees

so this is a thing of like lengths of time

so this works for 1 year or for life

in terms of the guarantee

so coverage this works when specific bad thing happens

or works when any bad thing happens terms

unconditional or only if you do X

y and Z it's a conditional guarantee

so all of those things are quality service downsells

which you can also flip into upsells

but if you're thinking about like man

how do I make my how do I how do I remove features

well you probably haven't even quantified

half of these for yourself

so quantify what your service expectations are

you don't need to mention

any of this stuff to somebody

but when you want to start peeling things back

you then tell them what it is and then remove it

so downselling by removing entire features

so rather than lowering quantity or quality

remove the feature itself so in the story

he removed a guarantee

so instead of priority chat support

email support and calls

why don't we just keep it to chat and email support

but drop the calls to save you some money

you still get your answers

it'll save us some time

and we can pass the savings on to you

so we remove this stuff

and then they can keep that stuff for a lower price

so feature downselling done for you to do it yourself

so this is a key one

this probably happens for a lot of service businesses

so some of you guys have like

online trainings and things like that

one to many that you were like hey

what if I download something else

most of the times you should just ignore it

but if you do insist here's a way to do it

so if someone says no to all your service down sells

you can down sell

another product that solves the same problem

so for a chiropractor for example

you say hey instead of chiropractic adjustments

let's just start you with some tools

you can do it yourself at home

then you'd sell home massage tools

foam rollers mats

etcetera so

this is just like the no sale

sale that I had in the supplement thing

where someone doesn't come in

they don't wanna buy the service

we say fine we'll do nutrition consult

and then we sell them the do it yourself version

which was the at home thumb drive

with nutritional support

but if you're gonna do this other thing

what happens you open up

a whole another can of problems that we get to solve

through them buying more stuff

if you're a painter well

if you can't afford me painting your house

why don't I just give you the paint

and let you lease one of our spray machines

for daily use easy down sell Alex Romazi

instead of me and my team buying your company

and actively growing your business

why don't you just attend a workshop

cough go to acquisition.com right

that's the idea so done for you is me and my whole team

doing everything we possibly can for good forever well

if I peel that back to okay

well just come to a workshop and you get a couple days

and we're gonna

look at all the things that we would do

we'll tell you exactly what we do

but it would be in an hour rather than for life

it's two days

the hour is if you're with one of our experts okay

so let's do important points

so remember never never negotiate price

maintain the position of a helpful guide

some more feature down

selling means trying to find the best deal for them

you can have unlimited shots on goal with a customer

as long as you remain helpful

you're like totally understand

let's see

if we can figure out something that will work for you

no one's offended by that if you're like

oh if you don't do that do this it's like yeah

feels a little feels a little icky

so you just want to keep that frame back foot of like

let's just find something that works for you man tweak

okay this is important

so tweak your feature downsell process

so we have the job of making the product

have the highest value to cost

in the eyes of the customer

but in the beginning

you won't know much about your customer preferences

so as you solve the same problems

for the same type of customer

you wanna learn what they find most valuable

and then you'll start standardizing it

because if everyone has the same order of

importance or preference then when you remove things

you can remove things in a specific order

like my friend removed the guarantee

and he knew that

that got the highest amount of uptakes

all right

so here's how I standardized my downsell process

so first I cut something valuable

and lower the price a little bit alright

so that's exactly what he did

so he had his guarantee thing

he lowered the price now I said two thousand

I don't remember what he lowered his price at

but if let's say it was four grand and he says okay

well I'll remove the guarantee and offer for thirty

five hundred because it's a tiny amount different

and I took something really valuable away

they're like oh no I'd rather have this

so they re upsell themselves

because I took something really valuable

and decrease the price a little

now at this point if they say no to that

I do this to get well

I do that to get them to reconsider the original price

if that fails

I continue removing features and lowering prices

until they buy so

I'd rather have people get something

rather than getting nothing

now at this point

the next feature I would typically remove

I would have a big decrease in price

because now I'm saying okay

this might be a price issue

so now I'm gonna try and take away

things that they don't care about

with a big decrease in price

and now I'm increasing the value

so basically

the first one is like a hip check of like big

valuable thing like a guarantee

tiny decrease in price they re upsell

they don't re upsell they would say hey

let's put the guarantee back in

and let's take this other feature away

and take a massive amount off the price

and then at that point they're like

oh wow less of this thing I don't care about

and way lower price sounds good to me alright

now if you want

you can start naming your feature combination

first class business class

economy as you remove features and change prices

now I prefer to name my cheapest combination

remember the rental car story

the minimum so

I like it because it implies

that they have to get at least that thing

and if someone rejects all other packages

I just say so nothing more than the minimum package

then same as they told me

and we do that because it always only works uh

doesn't always work but it's uh

it's very effective okay so

just like we have our

temperature check during the payment plan

down sell process we also have a temperature check

during the feature down sell process

so if you make two changes in a row

and they still refuse

make sure they still want the thing

you still say the same hey real quick

just to make sure that we're on the same

same scale here uh

1 to 10 how bad do you want this thing

now again if they say eight to 10 cool

we're gonna figure out something that'll work for you

they say less than 10 it's like hey

maybe I need to reconfigure this thing

or let's just figure out different terms of payment

and you actually

cross sell back to the payment plan down sales

so eight or above

start payment plan down selling after each down sell

ask deal or fair enough

and this is something that I've just found

that works ridiculously well with feature down sales

or payment plan down sales

is that it's

you're fundamentally kind of in like a barter mode

not in a bad way it's just like hey

let me make this work for you so if we did this

would that work for you right

does that sound fair that like deal that work

when you say those types of things

people have a hard time denying reciprocity

and so you say I want this thing you say

got it I will meet your I will meet your terms

I will remove this thing

but now you will meet my price fair enough

and if you do that two or three times

it's very hard for people to say no because they

it's hard for them to say no

that's not fair and my podcast episode 2:02

I give a

full verbal breakdown of exactly how I say this

with tonality so if you wanna listen to my podcast

episode 2 o two Alex Romizi

the game uh

you can listen to me actually walking this through

and so if you've got sales guys who do down sales

like highly recommend now um

free orientations

boost do it yourself feature down sales

so let me explain what I mean

so I ask so even though we're not gonna work together

so this is like now they're

they're not they're not buying anything on X

I still wanna help this is like the nutrition thing

how about you just come to a free orientation on X

tomorrow at the end of the orientation

I offer a DIY product

that solves the same problem as the done for you

services just a lower price

so I could also say

come to our home painters orientation

and so at the home painting orientation

I could then sell the daily rental of my machines

and some buckets of paint for them to go do it right

that's the idea so we just have another way

another version of our offer

that doesn't take much time from us for them to do it

and still pay us now um

just as little pro tips here

highly recommend feature down selling your guarantee

tiny decrease in price remove guarantee

many people re upsell themselves

and you could also feature down sell current customers

so this is a pro tip

so we found across our portfolio company

something really interesting

so when we compared LTV across all service segments

there was a service segment that was unbeknownst to me

that was the second highest LTV

and the reason that it was unbeknownst to me

or interesting was that they were at a far lower price

so typically the highest LTV customers

are the ones that pay the most

but in this instance the churn was so low

on these low to mid priced customers

that they ended up being worth a lot of money

and so this is what was different

about this particular customer group

the customers that we

in our companies had proactively went to

this is after we've already sold them stuff said hey

you're only using

four out of the six services that we offer

or you're only using four out of the six features

did you know that

you can get these four features at this lower rate

people are like oh no

I didn't know that and as soon as we say wait

well

why don't I just go ahead and take care of that for you

and I'll just lower you to this rate

that way you have the better deal for you

those people never leave so if you have people

there's this big misconception like

well I want to just

hopefully I'll just build them as long as I can

no find the people like hey

I get where you're coming from

this blew my mind which is why I'm sharing it with you

if you see people aren't using your stuff

they're going to cancel

and I have tons of data to support this

on the gym side

I'm sure it works across all businesses

but if people don't consume the stuff

they cancel at a much faster rate

and so

it's much easier to just adjust down the price to

match what they actually use

cause that's what they're actually getting value from

and then they're like wow

these guys are ethical and honest

they proactively asked me to pay less

I love these guys they went from being like

I might cancel cause I'm not using some of this stuff

to these guys are amazing

because they initiated it

so sure you can do this on a cancellation call

that's kind of like a last chance

but you get the goodwill

if you do it by you reaching out to them

and this is the last one that I love

this is the only way that you can lower your price

alright so you get you can quote me here

this is the the big exception

that you can lower your price

without changing what you give them

and that's because you change what they give you

so let's say I have a 500 dollar thing and they say

I just absolutely cannot afford anything

less than 400 dollars and I say

totally understand but for $400

you would do it yes okay

I will accept that under these terms

so now I've changed the offer

I say I'll do that

if you leave me reviews on all these sites

you leave me testimonials

you post every day

and you send me two referrals right now

introduce me to two people

by doing this

I then trade $100 for what is hopefully

more valuable to me

than a hundred dollars of advertising

and so every person can do other stuff

and so fundamentally this is price plus barter

so if somebody comes to me and I did this

if somebody comes to me and says

hey Susan signed up for $400 and I signed up for $600

I'm like oh

do you wanna do what Susan did

cause I would love that

because Susan cleans my gym for me every day

and she also introduced me to three of her friends

and she posts on Facebook every day

do you want to do that

we can get you set up right now and they're like

oh

I'll keep the 600 I'm like god

no worries so you absolutely have your ass covered

because these are the terms under which Susan did

pay less

and so if someone absolutely no way can pay less barter

because

there's always some things that they can do for you

and most of the time

that's gonna be the form of advertising

they can leave your reviews

they can leave your testimonials

and they can send you friends

so summary

so feature down sales lower prices by removing stuff

you take something away

lower the price can ask how about now

typical feature down sales offer less quantity

less quality

cheaper alternatives or remove features all together

people tend to see the value in what you removed

after they see the price difference

you may get more people to take the more expensive up

by doing it this way

if you remove stuff they hate and lower the price

a lot people

more people will take the down sale

if you remove stuff they love and lower the price

a little more people will take the original offer

so the first down sell gets them to reconsider

my first offer the rest of my down sells

get them to consider the best deal for them

if a prospect rejects multiple down sells

see if they still want your thing before continuing

this is the 8 to 10 thing

if a prospect likes a combination of features

but still doesn't like the price

start payment plan down selling

which is very effective at this point

cause now you've really got this thing right for them

it's like OK this is a sweet of features

this is the price they like no

this is everything I want

I just can't afford it and like

can you afford it in general or not afford it today

they're like today cool

then let's break this out

how can you do half now

half when you get paid and you go down that path

now you can feature down

sell existing customers before they cancel

which actually extends the LTV

and you can discount customers

in exchange for them advertising your business

those are feature down sells

and finishes or concludes our down sell offer section

and in the next and final of the four 4 prongs

we talk about continuity offers

so we just finished the down sale offer section

and now we move on to the magic of continuity offers

I've been a continuity guy my whole life

and so this is a section that I hold

near and dear to my heart

and has made me a tremendous amount of money

it also stabilizes cash flow for business

and so in our four money models

we have attraction upsells

downsells and now kaboom

continuity so

continuity offers provide ongoing value

that customers make ongoing payments for

until they cancel

they boost the profit from every customer

and give you one last thing to sell

continuity offers are awesome

because you sell once and get paid again

and again and again so here's my quick explanation

let's say you offer something for $1,000 to 100 people

and 10 people buy

you make $10,000 ten times a thousand dollars okay

now let's say that you talk to the same hundred people

but you make your thousand dollar thing

$50 a month instead

and at 50 bucks we can get 40 out of the hundred to buy

and if you keep those people for 20 months

you still make $1,000 from each customer

so you go from making $10,000 now

and zero dollars overtime

$2,000 now and $40,000 over time

and as an added bonus in the first example

if you only sold 10 customers

you'd only have 10 customers to upsell later

if you use a continuity offer and sold 40

customers

you'd have four times the customers to upsell later

which is a massive difference

this is fundamentally why people do continuity

you can sell more people at a lower price

you can still collect the same LTV

and you get four times the customers to upsell later

the pros are you can attract more customers

compared to something more expensive

the cons are but you make way less money now

which makes it tough to use as an attraction offer

on its own which is why we put it last

or at least why I tend to put it last

so the TLDR is that by making continuity offers last

we get the best of all worlds

we get cash today from attraction offers

upsell offers and down sell offers

and we get a little cash today

and tons of cash tomorrow from continuity offers

note to be clear you can make continuity offers

whenever and however you want

there are no rules alright

they can attract new customers

upsell and downsell current customers

or reengage all customers

same as all the others so

the objective here for content offers

within the money models that I explained

is to maximize lifetime value per customer

these have lower absolute gross profit

but higher gross margins often times

there are three topics we will cover down sell

the upsell calculating back of napkin LTV and big head

long tail

so let's rock through it so down sell the upsell

so this is my ￠2

I found it works best to down sell your up sell

so get more cash up front

sell shorter duration

and then add value and then sell it for less

alright

so when I explain this I had my 16 thousand dollar

16 week thing

thousand dollars a week and then I'd say hey

let me give you five times the value

and then it's less and people are like whoa

but I extended the term

so that's how I downsold my upsell

a lot of times

people want to increase the price of the upsell

there's nothing wrong with that

this is just an alternative method

that I found worked really well

my challenges in the beginning was $600 for six weeks

and then back in we sell $200 per month

so it's less so one is $100 a week

one's $50 a week it's half the price

and as a member you get all these benefits right

and so I like the down sell

the up sell process

because if they said yes to this thing

they're like oh

this is an even better deal

and then we convert even more of them

alright so here's how it sounds

so have you enjoyed everything so far

they say yes mind

if I tell you about a way to save a little bit

and get a lot more they say yes

you say so given you've enjoyed X

y and Z we want you here for the long term

so here's what we're gonna do

if you're in this with us for the long term

we want to reward you with even more stuff

and do it for less you in great

that's the sale it's very straightforward

so people think about monthly cash flow

more than they think about duration

so we had three year contracts

so the total

contract value was way higher than the 16 weeks

but the monthly payment was significantly lower

and so this is the power of commitments and contracts

it can significantly increase LTV if you deliver value

so that's down sell the up sell

now let's talk about calculating back of neck and LTV

so the simplest way to do this is look at your price

divide it by your monthly turn

and that gives you your lifetime revenue remember

we still have margin on this

we still have some cost of delivery

now the gross margin times lifetime revenue

equals your lifetime gross profit

so for example

let's say our price minus our cost of goods

times 100% equals our gross margin

so let's say we have 100 dollar price

20 dollar cost of goods times 100 = 80% gross margins

okay so now we take our 80% gross margins

we multiply by our lifetime revenue

and we get $800 of lifetime gross profit

that's how much we make per customer over lifetime

that is what you can calculate for yourself

given whatever it is you have

so you divide your price by your turn

that gives you the revenue

then you basically

just figure out what your gross margin is

multiply that by that and there you go

so getting people into continuity

automatically extends LTV

even with a company that does one time transactions

most recurring stuff that has basically no added value

I'm just being super real with you

the recurring is usually 3 months

which still 3 x G l t v

so if you sell physical products

which maybe have one time use

if you just get someone in subscription

it usually triples the value of the customer

so if half the people do that thing

then you've got half the people doing 3 x

and half them doing 1 x

which means you double the revenue of your business

not bad just by making it available

so the valuable money lesson is

people think more about price than they do about term

they think more about what they have to pay today

not what they're gonna have to pay tomorrow

to extend LTP just to give you an example here

if you have that hundred dollar per month thing

and you have 10% turn

your lifetime uh revenue would be a thousand bucks

if you go from 100 dollars divided by 3% turns

you go from 10% to 3%

you have a 3,000 dollar lifetime revenue massive

so some people are like oh

it's only decreasing churn by you know 7% no

you decreased it by 70% or 300 sorry

300% in terms of what it is alright

and so churn is how many customers leave monthly

from the ones who started the month

by percentage so if you want big LTV conquer churn

make this number

the people who cancel every month go down

and the amount that you make from that is unbelievable

so that's back of napkin LTV

so now let's talk about Big Head Long Tail

so John taught me this he said

you can shear a sheep that should

that should say sheep uh

you can shear sheep you can shear sheep for a lifetime

but you can only skin it once

and so he explained this

one thing to me that I've always remembered

he said you know

I had this membership at a tanning salon

that was a hundred dollars down then 10 bucks a month

he said or you could just pay 1999 a month

he said the he said

people would call him up

before their cards would expire

to make sure they got to save that

ten dollar a month thing and so

because they felt like they had bought that lower rate

they didn't want to lose it

and so that concept of the big head

long tail came from John like

if you pay $1,000

and then something's $50 a month afterwards

the likely that you want to cancel that's way lower

and so if you say hey

you can pay a thousand bucks now

and then you can earn this lower rate

or you can pay $200 a month

a lot of people are like shit

I'll just pay the grand and then keep the 50

but the thing is is that 50

the turnover that 50 is so low

that you even make more overtime than the $200 a month

so you have to play with the numbers here

but typically the more offset

the upfront versus the continuity

the more valuable it is

and I will do one little side quest here

and then we'll get into them

I think the main reason that a lot of education

businesses and media businesses

do not have good

continuity is because the price to value is mismatched

if I teach you arithmetic

the day before you learn arithmetic

it's unbelievably valuable

you you learn

you will be able to do mathematics in the world

how valuable is that

the day after you learn arithmetic

you getting a course on arithmetic

is that worth nothing

and so the problem is that a lot of uh

media and education businesses will take that

continuity concept that I talked about earlier like

well I could sell way more people

but the problem is that the value

diminishes precipitously with information

because once you've Learned something

you've Learned it

you've gotten you've extracted the value

and so the way that I like to think about this is that

either you sell Bolt

payments up front so you sell annual memberships

which I'm obviously a big fan of

or you can sell one time prices

for things that deliver one time value

and then you'd have much lower

continuity for things that deliver ongoing value

and so you basically

break apart the things that are one time value versus

consumable value and I'll give you an example

so in Gym Watch we had um like a sales system

once you install the sales system

you have the sales system okay

got it so that would be one time value

something that would be recurring value

or consumable value but would be calls with uh

one of our business consultants

who's gonna make sure that you're tweaking

the things in your business

and look at the metrics every single month

having access to the new plays

or new releases that were released every single month

that's something that's consumed every single month

cause it's new

if we had new ads that we were going to test and run

to make sure they were winners

then every month you're like

I want the new ads

so those are things that are consumable

so it makes sense to price

the payment plan or the continuity

based on the value of those consumables

not the blended value of the one time thing

and the consumable

because that blended value would be much higher

and would have a much higher likelihood of churn

and so this is how

I would prefer to fix most education businesses

nothing wrong like they often have high churn

simply because they're mispriced

they kind of try to price in the middle

when really

you should price way high up front and lower over time

or alternatively just charge annual

and then that way you're just

basically looking back into the future and saying hey

if a year from now you can do all these things

would that be valuable yes

and then you have a whole year to figure out what

the next big thing you're gonna have is

basically

buys you more time to figure out what the next

offer you're gonna make them

that the first offer you did solved

so if I taught you how to sell

well then maybe you wanna learn how to market

if I taught you how to sell

maybe you wanna learn how to onboard

there's gonna still be the same offer

solution cycle that exists

and you can still

include that within the continuity that you have

so real word offer

so let's say you $5,000 down 200 bucks a month

this also do the big head

long tail helps with client finance acquisition

because you have this big upfront payment

you can offset the cost to your customers

offset your sales commissions

and then you get the continuity

and the nice thing here is

the cancellation rate is very

very low because of sunk cost fallacy

people don't wanna lose money

they put down so it's very unlikely

someone's $5,000 down and then cancels

month two enterprise value is based on a discount

applied to future cash flows

which really comes down to how much money

and how likely is it to occur

and so for you to have a very big business

you want lots of money

that's gonna happen in the future

that's very likely that gives you a big multiple

on the value of your business

if you have very little money

and it's very unlikely to occur

then it's a small multiple or none at all

so

this features into how likely will we retain customer

retain customers

retain revenue and have that increase over time

this is where continuity becomes more valuable

this is again this is not in the book

so this is me giving you bonus stuff um

there's a difference between recurring and reoccurring

revenue so Netflix is recurring

think memberships Coca Cola is reoccurring

I am a Coca Cola product buyer

I buy lots of their drinks

and I do that on a regular basis

but I don't have a fixed membership

but I reoccur both are great

the key with this one is that

you just need to demonstrate that hey

I for example

there's a sauce company that I like and I bought

I bought their sauce for like four straight years

and I use it every single month

I go through three or four bottles a month

and I've been using for years

and sure as hell

you can bet that they can calculate that

the average person who buys a bottle over time

buys another 20 bottles

that makes it a very valuable business

company 1

let's say that's got top line of $10 million EBITDA 3

company 2 is 10 million and 3 million EBITDA

okay this one's all transactional

you might get a 4 x multiple

this is all recurring

and based on how much you retain it

it might be worth 8 to 15 times

so it's 24 to 45 million so between 12 and 24 to 45

that's a hell of a lot more money

so this is problems worth solving

and so if they stay

buyers will pay and when I say buyers I mean investors

so my personal note is that you sleep great

this is me telling you personally

when you know on the 1st of the month

that all your bills are paid

and your profit is already locked in

and everything else you have is gravy

and so recurring slash continuity equals stability

which is why it's the fourth pillar of this

it's also the thing that will usually make your company

the most valuable so have I sold you

hopefully

on adding some recurring element to your business

great so

let's get to the three best combinations

that I've seen and used

continuity bonus offers

continuity discount offers and then the wave fee offer

alright

so let's rock and roll and now we do bonus offer

so we just covered the intro to continuity offers

and why continuity offers

will make your business more valuable

they will stabilize cash flow

they can sell more customers

that you can potentially upsell in the future

and they give you one last thing to sell

now we start into continuity bonus offer

which is one of my favorite

continuity offer structures

so here's how I Learned it

I saw this ad that said

I'm giving away all my courses for free

and I was like that's insane

what's the catch

and so I had bought some of this guy's courses

so I knew that the courses

the price points that he was selling them for

were the legit prices

and so for me to buy all of them at once

it would have been $24,000

he said

or you can just get a free trial of my three hundred

ninety nine dollar a month newsletter

so I get the first three days free

and I get all of this stuff just for trying it

and I was like wow what a deal

then on the thank you page

it said or you can pay today for 2

99 a month and you get just the

all the back newsletters

that I've done up to this point

if you do this

and you get to lock in this two 99 a month for life

this is also a lifetime discount

this is a combination so uh

one of my team asked me they're like man

I'm thinking about all the different businesses

that I've seen

and some of it's like combination of this and this

it's like yeah that's 100% the point

these are as as narrow down as I could focus them

so that I could

kind of teach or break down each of the concepts

but these absolutely mix and match

you absolutely can do when you're in a back

into a rollover offer into a continuity bonus

that also has some lifetime discount components to it

like there's unlimited variations

and that's the joy of this

this is what I love

when I'm building a money model for businesses

taking the the Lego pieces and putting them together

and being like wow

look if we did this we get this percentage here

look how much we can extend LTV

that's the that's where the real magic happens

but you can't build a building unless you learn how to

lay a brick so that's what we're doing okay

so note he didn't offer the 24,000 dollar offer

he simply valued it all right

now when I saw that I was like

that's a really cool offer

this is then when it happened in my world years later

so there was this gym owner that hopped on a call

and I was like okay

you know tell me your numbers

and he was crushing everyone's numbers

and I was like dude

what are you doing and he explained

that he had a new way of getting members

and it wasn't that

he had started offering a different front end offer

in terms of his advertising

so he kept our ads he kept our copy

all that stuff was the same

but when people came in

he had a different way of kind of judo chopping

how he would make the presentation

and so what he did was

he increased the price of his challenge

and so then he offered that thing

after selling it to them

as a free gift for just becoming a member

so remember I came from the gym world

we wanted to sell continuity

at the end of the day

you just want everyone to get into memberships

but the thing is no one wants to buy a membership

that's the problem

and so we have to come up with 21 day transformations

28 day transformations six week challenges

all this stuff to get people in the door

and then they realize after they work out

they feel good they want to do this for life

but people don't just come and sign up for memberships

not often and people get a way better experience

when you have some sort of like

structured onboarding

and so what he did was he was like huh

he said he did it by accident one time

and then he was like oh my god

that went so easily which by the way

is how most of the sales innovations happen

somebody came in and he saw them on the challenge

but they couldn't afford it

and he said you know what

I'll give you the challenge for free

if you just sign up as a member

and they were like oh cool

and just like that he figured

he could take this really valuable thing

and get everyone in continuity

by just giving it to them for free

and so by doing that

he was closing 70 to 80% of people walking in the door

which is monster

and he was getting them to sign up at full price

and my personal benefit

there's this cool good will feeling of like

you know what you want this really valuable thing

I'll just give it to you as a gift

you sign up as a member

and here are some benefits to becoming a member

that you wouldn't even have if you bought this

so now let's get into description

so with continuity bonuses

you give the customer an awesome thing

if they sign up today typically the bonus itself

this is key

has more value than the first continuity payment

that's really all there is to it

so he offered this big 600

800,000 dollar thing

if you sign up for 200 dollars today

the first example with the newsletter thing

he offered this 24 thousand dollar thing

if you sign up for a trial of a 400 dollar a month

continuity so bonus is adding value and so for products

you can give away very small things

or one big product that compliments the subscription

for services you can give away a defined program

onboarding setup

or features that add value to the core service

all of those things will be

things that you can give away

as bonuses for connoting

discounts are lower in cost

so remember that anything you offer for free

can also be offered as a discount

free stuff and discounts

both affect how we make decisions

so we wanna do both to get the benefits of both

when making continuity offers

I prefer to get people to start

if I add more good stuff

bonuses and take away bad stuff discounts

so that's how you do it add more good stuff

take away bad stuff

get more people to buy now to make it work better

add urgency

only they get that stuff if they join right now

also you can offer the bonus as a standalone purchase

or you can only make it available

if they buy your continuity

so either of them work

and I'm gonna show you some really cool math examples

at the end of this video of price tests

we've run to generate more cash up front

or more people taking continuity

so there's actually some signs I can show you of like

how much cash do you want up front

versus how many people do you want to take continuity

and then what percentage is

the right percentage to offer

so you can get the right distribution you want

and we tested this across a lot of location

so I feel pretty confident about it

so on their own continuity offers get less cash now

remember less cash now

and that makes it tough for getting customers

profitably but the way that I use them

we can still hit our 30 day profit goals

which I'll explain in a second

so first I do all my big cash attraction

up sell and down sell offers

so I should already be profitable

I should already have cash from all those original

offers then continuity offers

get a little bit of cash

from the first month's payments

then I offer people who bought that one month

a discount for pre paying more months

this further boosts 30 day profits

giving me more cash to advertise

and stacks recurring revenue

so think about how that goes

big attraction offer buy X

y free win your money back whatever

got it then we do our upsells

got it then we do our downsells

got it then we get them into continuity

really soft pitch we got them on continuity

we gave them some bonuses in order to say yes

now that they're on continuity

we already have the commitment

we then say hey

you're already committed

let's just prepay and save some money

we stack even more cash forward

and that's how you just stack stack

stack stack

stack you front load the money

so that you can

scale your advertising and go to the moon

alright let's do some examples

so physical products let's use pet food

alright so one time bonus

get every dog toy you've ever made for free

an 800 dollar value

when you sign up for our monthly food shipments

for 59 dollars a month now monthly bonuses

you'll also get a new dog toy every month as a member

also cool then it's something else that I can give

so those are two different kind of bonus

continuity offers that you can have

one is upfront to get them to buy

the other is to get them to stay

now service short term accelerator offer

so one time bonus for the short term accelerator

it costs $1,000 on its own

get it free when you become a member for $100 a month

same concept as the gym the bonus package is the VIP

community

members enjoy first line access to our events

longer support hours as in longer

not longer time period

uh better support reps and faster response times

so if you become a VIP member

not only do you get this big benefit

you also get this recurring benefit

of continuing to pay and stay

digital product offer so one time bonus would be uh

get all my past 40 newsletters valued at 15,800

whatever by becoming a member today for only three

99 a month after 30 day free trial

lifetime discount plus lifetime bonuses

if you pay today

you can lock in a lifetime discount for two 99 a month

and you get early digital access

and a physical copy every month

now important points

focus on the bonus not the membership

this is really important

join my membership program isn't very compelling

not nearly as compelling as get this free

valuable thing so advertise the free valuable thing

then explain the rest of the offer

once they show interest

so if I'm talking about the $800 of dog toys

I advertise my free $800 of dog toys

not my dog food

if I'm talking about my six week challenge

I'm talking about the six week challenge

they come in I explain the thousand dollar thing

I say or you can get that whole thing

and this other thing for less

that's the idea

is you advertise the thing you're gonna give away

not the thing you sell

bonuses kind of work like upsells

more of the same you get two years of past newsletters

by becoming a member

so they're coming in for newsletters

so you get more of that thing complementary

you get nutrition services for free

when you sign up for one of our fitness memberships

great that's complementary goes together

you can have an upgrade which is better right

you get a free gold membership

when you buy a bonus membership

so that's limited availability

keep your bonuses related to your core offer okay

this is key

so if the bonus that you give is too different

you will attract the wrong types of customers

so for instance

don't advertise a free T-shirt to upsell tech services

that wouldn't make sense

but advertising a free T-shirt to upsell

T-shirt printing makes sense

if I wanted to offer a free fix or get out of jail

free card for we'll fix something

that's going wrong with your servers

that might be a great

free bonus that I would give away

that makes sense to naturally

then upsell tech services

now make bonuses things you already have and do alright

so for instance

the two past years of newsletters cost no extra time

but are super high value and

onboarding is something that you have to do

with a customer or client anyways

so you might as well slap a price on it

and give it to him as a bonus

if you value it they will too and so again

the whole challenge

thing that we created back in the day

the defining programs

which many service providers offer

they're usually fundamentally just fancy onboarding

so

you can just make sure that people all go through this

fancy onboarding

but you put a price associated with it

so then you get way more people to sign up for your

continuity alright

so physical bonuses on digital products

and digital bonuses with physical products alright

so if I have a digital membership

I might offer a hat

a shirt or tool or something else related to the offer

now if I have a physical product or service

like a boxing gym membership

offering live stream sessions

can get more people to sign up

also if I have a digital thing

I might offer boxing gloves

that I would give if they buy my digital membership

so crisscrossing physical and digital

in my opinion works exceptionally well

so this strategy

often lowers the cost of getting a customer

more than the cost of bonus

that's the point and so even if someone

you know takes the bonuses and then runs

we still typically get

a lower overall cost to our customers

in general

and we can still make it up on everyone else

if it gets too expensive

maybe shift your offer and then give that one a try

but more often than not adding the bonus will

in the long term net you way more money

use realistic bonus pricing

the bigger the value anchor on your bonus

the more compelling the offer

but you also have to make the anchor believable alright

some business owners make up ridiculous values

don't do that it won't anchor the customer

and you'll lose trust with them

so this is a great opportunity to give away products

that you've sold before in the past

so then you can anchor on their actual prices

and use real discounts and bonuses

so it's like I used to sell this for two grand

and here's receipts of me selling this for two grand

would you like it for free if you sign up for 200 bucks

a lot of people say yes to that

but that's ethical and it's real and it's believable

you can bonus customers by giving them titles

this is a little clever

so you can give customers titles

uh when they stay 3 months or 6 months

or 12 months and beyond so things like silver gold

diamond double diamond

etcetera and so they get status in the community

and you can have some little frills and that

that they get some little bonuses

that are associated with those titles

but the main thing is if they know that in two months

they're gonna get this this upgrade in status that will

that can drag people through the continuity

and you can typically extend each time

how long before you give them the next kind of

reinforcing event so in the beginning

maybe once they get to 90 days

if you know

most people turn at you know

two months then you put the thing at three months

or two and a half months right

so that then that pulls poor people through

now once they get to the third month

it's like hey

you got this boosting status

you get some other upgrades

and then the next one might be at month eight right

it's like okay

so that's five months later

and once it's eight then it's like okay

the next one happens in a year

so you can keep bumping out how long it is

just like video games the first level is really easy

second level is a little bit harder

when you go from level 99 to level hundred

it takes you more time than it took you to get to

the first 20 levels

same idea so a good friend of mine actually does this

and after a while she found that her customers

cared more about the title than any other bonus

that she gave and she told me that

they even introduced themselves to her by their title

so if you can't think of something to give them

at the very least

you can just call them something special

and so people would come to her and be like hi

I'm double Diamond or hey I'm a gold right

it's like hey if it's it

status is the cheapest thing that you can give someone

and also many people value it

more than just about anything else

alright uh

you can make free bonuses

discounts and make discounts free bonuses

so hear me out so free bonus

become a member for $200

and you get this thousand dollar program

as a free bonus steep discount

get the thousand dollar program for $1

if you become a member for 200

so again the free plus discount thing you can make

you can interchange these things

when making your continuity offer

anchor the bonuses

first sell them the benefits of the amazing bonus

not the continuity offer the bonus

then use your high value bonus as an anchor

it may shock them and that's okay

remember the anchor upsell

same idea we can still use it as an anchor

now the higher up we go

then the more it's gonna become an anchor

and less likely for them to buy it

the lower it is the more people buy

and I'll give you the exact math on that in a second

because when you ask hey

do you want to know how you can get this for free

if they do which they will explain

hey just become a VIP member today

and you'll get it all as a free gift just for joining

or you can just buy it on its own for XXX

which would you prefer so someone's doing the math

they're like shoot

this thing's a grand or I get the grand thing for free

when I sign up for 200 bucks a month

well basically at month five I quote break even

but I still get all the value of being a member well

I'll do that now

if that price was $300

or you get the 300 dollar thing for free

when you do the 200 dollar membership

you might be like hey

I'll just do the 300 dollar thing

so how big you price the difference

will indicate how many people take the upfront cash

versus the continuity offer

and so more bonuses get more people to join

that's the TLDR so after you ask them

if they want to know how to get it for free

you tell them they can when they join

then you say on top of that when you become a member

you'll get amazing thing 1

amazing thing 2 amazing thing 3

and mention the individual dollar values of each

to anchor that value and actually

it further stacks the value of the 200 dollar thing

and so stacking bonuses this way

gets even more people to join

the continuity so here's the math example

I told you that I was gonna break down

so we ran this test and I can only say that this works

for brick and mortar fitness sales

in this offer structure that being said

if I were a betting man which I am

I would bet this pretty much transfers across uh

domains especially service businesses

pricing for continuity versus offering cash

so for whatever reason

people pick one time payments over continuity

even with higher one time payments and to be fair

I'm kind of this way so if someone says hey

do you want to sign up for membership

or do you just want to sign up for one month

one month is twice the price I might be like

I don't feel like dealing with the cancellation

just like just put me on the one month thing

and so offer a higher one time payment option

this way some customers will make you more money today

while other customers stack

recurring revenue for tomorrow

so we change the price depending on our goals

I've tested this a ton at least for me

and the data in this range looks really clear

so this is basically the take rates um

based on the price so this is the price

so if we're three times the price

you're gonna have almost 90 you know

90% of people taking continuity

if you're you know 1.3 times the price

then you're gonna have 50% of people taking cotton U

d and 50% of people taking the one time offer

so this is the actual data as it broke out

so if you want to get 50% of people to take continuity

then you make the standard offer 1.33 times

which in my personal experience feels about right

so the example is hey

this one time program is 400 bucks

which would then equate to 2

66 a month if it was 6 weeks or 1

99 a month membership so I say pay 400 for 6 weeks

or you can become a member for 1

99 a month at that point at that price point 50

50 will take the a 400 dollar offer versus doing 1

99 a month

even though this is 1.33 times more expensive

and so for me I find this the most important number

because that tells you the break

even price in the market so people basically value

at least in this particular setting

when we tested this

that people value not being on continuity

as a 33% premium

that they're willing to pay on the price

to not have to deal with cancellations

or anything like that

I find that to be very interesting

so if we want 60% to choose continuity

we make it 1.66 times more if we want 70%

we double it if we want 80% to choose continuity

we 2.3 exit

if we want 90% of people to choose continuity

we 2.66 exit so basically

once you're at about 3 x

the price of what they would have to pay

almost everybody takes the continuity

but if you're like shoot

I would rather get some of that cash upfront because

you know these these 600 dollar payments they add up

it's not bad well

fine if you have 70% of people choosing continuity

but 30% take something that's twice as expensive

you're actually getting a decent amount of cash upfront

and so you just need to play with

how much cash do I need

so that I can offset my cost to acquire customers

and then I can stack as much recurring as I want

and this is the actual data that we have

the exact numbers for this matter

less than the principle

the smaller the standalone price

compared to the continuity price

the more people buy the standalone

the larger the standalone price

the bonus price compared to the continuity price

the more people choose continuity

so if you want more cash up front

make bonuses and continuity plus bonuses

separate offers

make the bonus offer only a single payment

that's 33 to 266% more expensive than the first month

Continuity plus bonus the bigger the price difference

the fewer standalone purchases you'll have

but the more money you'll make up front

from each of them and based on the data that I shared

people pay 33% more to avoid continuity

in other words

if you charge 33% more for the one time bonus

half will buy it if you want even more cash

offer bulk prepaid discounts

so both continuity

upsales boost 30 day profits by a lot

alright and I alluded to it earlier

but I'm saying it again

cause it's so freaking important

so you offer buy 5 months get one free

only one out of every 8 people have to take the Upsale

to raise 30 day profits by 50%

that can make or break your money model

so think about that

only one out of eight people need to take your buy five

get one free for you to raise by 50%

the cash you make in the first 30 days

make the damn offer no

the laws of discounting apply

the larger the discount the more people would take it

so if I say buy 5 get uh get one

I could also say buy six get six

and I bet you

I get a hell of a lot more people take it

and I might double or triple my upfront cash

so this actually takes continuity

and turns it into yet another

upfront cash play that you can do

to offset acquisition cost and scale your advertising

if you want commitments

you can pair the bonus with a commitment

so here's an example so

only allow customers to get the bonus if they join

and commit to three six or 12 months

so you get more people to commit this way

but fewer people will take it

at least compared to giving it to everyone else

so I'll say it this way so

the original version that I showed you on that chart

was hey

buy the you can either buy this thing for 500 bucks

whatever it is or you can get the 500 dollar thing

when you join our membership for 200 dollars a month

that's with zero commitment

I could say you can buy this thing for $500

or if you become a member

and you commit for six months

we'll give it to you for free

so then I lock in six months as the sale

I get them to to say yes to an extended term

so it's still more money than here

than what I would get that 500 dollars

so I basically give a 500 dollar thing to them

to get them to say that they'll give me

twelve hundred dollars a commitment

or 24 dollars if I make it a year

and so you can also

if you want way more people in continuity

you can just incentivize them to take continuity

so that being said

in the beginning if you're not sure what to do

just offer the bonus as standalone

and then have continuity month to month

just to make this easy for you

so here's some summary points uh

with continuity bonuses

you give the customer an awesome thing

if they sign up today typically

the bonus itself has more value than the first

continuity payment

if you use continuity as an attraction offer

advertise what you give away

not what you sell as continuity

advertise the bonus not the membership

make your bonus related to your core offer

so you engage the right leads

if I say you know I'm giving away dog toys

I wanna sell dog stuff

you don't want to give away t shirts

to sell tech services if possible

make your bonuses stuff you already have

and do this way you don't need to change your business

in order to accommodate the bonus

more people start continuity

if you add more bonuses and take away more bad stuff

in other words add more discounts to add bonuses

add more good stuff only if they sign up to discount

take away the cost of actual products

services or features that you normally sell

sell the value of the bonus before

telling them how they can get it for free

this is super important people mess this one up

you have to really you have to

you have to sell it as though it's a standalone offer

it's just like the anchor

if you don't seriously sell it

people won't seriously consider it

they have to seriously consider it

and then they will be incentivized

when you say now that you're sold on it

do you wanna know how you can get it for free now

they're gonna wanna take the continuity offer bonuses

as standalone option for more upfront cash

so you can sell them on the bonus and then just say

cool

the only way to get that is if you sign up as a member

you can do that totally up to you um

but if you want to have some offer cash

which a lot of people do

especially if you're advertising

this is especially important for small businesses

and local then allow

allow them to buy the sandal and offer

and you just price it based on how much cash you need

if you want half the people to take the sandal offer

price it at 33% above

and to boost offering cash even more

you can offer anybody who signs up for continuity

to prepay for the next 6 months

or the next year if they buy in bulk

you basically do a buy X

get y free as your upsell on the back of continuity

and you're like wait a second yes

you can move the offers around in terms of your order

this is where it gets fun

and that my friends is how call of duty bonuses work

alright so that was call of duty bonus

let's talk about continuity discounts

so super common in the continuity world and there's a

I don't say right and wrong way

but there's at least a way that I like to do them

versus how everyone else does them

so this is my little visual look

you get this free time if you do this commitment

get X y free with y commitment very simple alright

but there are cool

a bunch of very cool things that I've done

cause

I've been in the contract world for a lot of my life

and so there's some neat stuff that I can show you so

um

this is less how I Learned it

but one of my favorite stories

young neighbor of mine

when I moved into our neighborhood in Austin

um he had exited a waste management company

so trash and you know I walked outside

I meet the guy

he seems totally salty the earth awesome dude

and so I was like

tell me your story like how this all happened

he's like oh dude

I maxed out my credit cards for an entire year

my I asked my whole family for money

none of them gave me any money

I maxed out everything I had um

and what I did was I just went to all the big

you know apartment buildings and I said

I'll give you a year of service for free

if you switch over to me

if you sign a five year agreement

so basically a six year agreement

one year free and then five years on the back

so he was able to do that

and he got all these big apartment buildings over

but it also meant that he had to deliver services

for a year before getting paid

so talk about like very tough cash flow cycle

but he was able to do it and then as a result

he was able to eat up a ton of market share

and they ended up selling to a national conglomerate

and making a ton of money for it

and so he had this like big Ferrari in his driveway

and was just like a normal dude

and it was it was a really cool guy

um and so that's fundamentally what he did

so this was a discount continuity play

it says bonus it should say

it should say discount there we go

so here's the description

here's how it works

to make a one time continuity discount

you give products or services away for free

if the customer commits to buying more products

and services overtime

makes sense

so this can attract loads of potential customers

and makes a very easy sale that anyone can close

if you look around

you see this offer in many different industries

so think internet pool cleaning

gym memberships landscaping

anything that's rentable storage leases

get your first two months free

if you sign up for a year

things like that you can make this work in any business

as long as you know two things

No. 1 is first how you will apply the discount

you can do it in four ways

and I'll show you all four second

your cancellation policy because

a lot of people don't always keep their commitments

so let me give you some examples

so this is the first way that you can do

a continuity discount so upfront

you can apply the discount upfront

and push out the term as in

the official time starts after the free time ends

so in the story that I gave

he gave a year for free

and then he had five years on the back

so he basically gave 20% away

here three months free

12 months on the back now

this works best in industries that have

successful histories of reinforcing contracts

so cell phone carriers can do that

because they'll cut off your cell phone stuff

storage works well with this because they'll

they have your stuff

real estate works well because they'll kick you out

cars work well because they can take your car back

right anything that has collateral

tends to work really well with this type of model

which is why a lot of them do it all right

now if you have historically high turn

then skip this one cause

it means that you don't have a lot of enforcement

and this is probably not the best way to do it

now this does not get customers profitably

all right

so he lost a bunch of money for the first year

and then he made a bunch afterwards

but it does get customers it delays cash

so if you want more profitable options

continue on down our list

a fun note here is that

instead of giving time away for free

you can also give it away at a discount right

so that you can protect the offer and cash flow

so that same concept of I'll give you one year free

he could then say

I will spread it over 5 years and decrease it

the same way as we did with a rollover credit

just applied as a front end offer also

I'll give you a pro tip on this this guy

so if you are gonna do an upfront deal

let's say that you say

when you sign up for a year long commitment

I'll give you three months free

make sure that you get 12 months on the back

you don't make this three plus nine

so I see that a lot of times people mess that up

so you're gonna massively decrease your contract

by basically you're saying you're you're

you're overcoming the hardness of a one year sale

but you're not getting the full one year sale

in the back so you wanna get the three

so this is technically a 15 month agreement

the first month first three are free

next 12 are paid

what people mess up is they do three months

and then nine so they have a one year agreement

so little pro tip so the second one is at the end

I love this one

so you can apply the entire discount at the end

and you push out the term

so long as they make the payments on time

and I love this cause it also

encourages adherence to payment schedules

and they get a bonus time

equal to the value of the discount

so here we say great

I'll give you 3 months free

after you sign up for the year

and you pay for the whole year

so I'll give you your three months for free

but you have to pay all 12 on time

so I can still attract customers saying

3 free months when you sign up for a year

and I just say great

you get it at the end

I explain the terms they earn their free time

which is why I like this so much

and it encourages good behavior

the third way you can do this is

you can spread it over time

all right and so the spread over time

as you apply this kind of across the term

this is what I was kind of referencing earlier

but I have enough a nice pretty visual here

so for him if we said okay we give you your uh

your three months or whatever it is

uh free or four months free

then we just divide everything

we basically take 25% off the uh the payment schedule

so three months free for a year at $200 per month

you've discounted by $600

by spreading that $600 over 12 months

six hundred fifty dollar per month alright

we've already been over this one

but you can still again

you use that 600 dollar credit as the thing

you advertise now that's the difference here

so you advertise what you would roll over eventually

as your front end offer so you say that 600 dollars

I'm gonna give you 600 dollars of credit

I'm gonna give you three months free

remember the same thing you can do three months free

you can say the amount off

you can say the absolute amount $600

all of those are different variations

that you advertise

you say you get that free when they come in

you say great I'll spread it over the term

now after the term finishes it goes back to full price

this is after the first one or two payments

so I'll explain how this works

so this one is probably like

best of both worlds kind of thing

if you sell you know

a 12 month commitment

and then they get the three months afterwards

some people are gonna be like ah okay

I mean I was hoping I get it upfront but fine

I get it now

the people who sign up for that will be great customers

but this is kind of what I was considered the midline

the middle line somewhere in between

so you can get one or two payments up front

then you give the free duration

then you get the contract commitment that begins

after that

that's kind of a little bit of the best of both worlds

because here

you get to liquidate the cost of acquisition

so the way that I like to position this is

you get the free time up front

but you have to pay first and last

so that gives me two months that I can get up front

so I can offset acquisition cost

pay commissions and then they get their free time

but they still paid for two months

so I have some skin in the game

before get their free contracted period alright

so they pay a few times

then they get their one time discount

the way you collect

a bit of cash to cover the acquisition cost

and some delivery cost I prefer to do it by

presenting it as first and last month

or last month up front

or adding something like a one time fee

so it's like yep

you absolutely will get the the 3 months

we do have an on boarding fee

or we do have a setup fee that you have to pay

but you'll still get the 3 months immediately

and then the the payments will kick in

so all three of these are variations

you could also do last month plus a fee

you can do first and last plus a fee totally up to you

but these are all variations

that allow you to advertise

huge chunks of time and still monetize acquisition

it also makes sure that the

whatever payment method they give you

actually goes through and so sounds like a small thing

but actually pretty material

alright so here's some additional examples

you've seen real estate

two months free lease when you sign a 12 months lease

uh storage free month which we know 1:00 27

it's not really free month

uh with a 12 month commitment

gym 2 months free with 12 month whatever

uh cleaners 3 free cleanings with 6 month contract

massage 2 months of massage 2 times a month

you prorate the free discounts over the duration

so they still pay upfront

which is just like the rollover upsell

except with cash

alright so those are all examples that you can use

now important points display

$1,000 per month with three free months in four ways

what is free the three free months

the absolute amount off $3,000 off percentage off

25% off comparison will discount your mortgage

so don't eat into the term with discounts

extend them so this is what I was referencing earlier

so you don't want to do 9 then 3

you want to do 12 then 3

if you're getting the the one year

that's all this is

that's the main point now sounds small

but it's 33% more money so don't miss that up

highest value per word of this entire presentation

number one you want to Bill on weekly every two weeks

every four weeks or every 12 weeks

etcetera the reason for this is fundamentally

that people misunderstand that

there are four weeks technically 4.3 weeks per month

and so if you Bill on four week cycles

there's 13 billing cycles in a year

which means you get one full month of revenue for free

and so if you look at your monthly recurring revenue

if you would like to put that in your pocket

this month for example

you can guarantee that you put it in your pocket

by just changing your billing from monthly

to every four weeks now some people say hey

well you said weekly

it's more that there's

you can present the prices weekly

but you still Bill on a four week cadence

because I found this out the hard way

if you Bill weekly

you get a bunch of financial pain in the butts

of people changing cards and like hey

can I pause for one week pain in the butt

so presented as whatever you call it 50 bucks a week

but you Bill at $200 every four weeks all right

just to be clear

so this is fundamentally how it works

that gives you 8 per 3 8.3% more revenue

so that may not sound like much

but if you run a

a 20% profit business if you go from 20 to 28%

it's going to make you a lot more money

that's almost a 50% increase in revenue

so I think there it is 41% right

kind of nifty

and the best part is you don't do any more work

you just change a few words in your contract

and how you present the price

that's it in my experience

I've never had any difference in take rates between

every four weeks versus every month

but you make a lot more money

so you're welcome 3% more revenue for four extra words

yeah it's X+ a 3% processing fee

now

I've never had anyone not buy because of processing

the 3% added to your top line for no extra work

goes straight to your bottom line

if you run a 10% profit business and add 3%

you just added 30% to your profit pretty worth it

and this works especially well when paired with

they get two forms of payment

recurring businesses

lose mounts of cash

because payment processing problems

so basically people's card goes

you know their their numbers change they

they move states

there's some guy in Nigeria who tries to build them

whatever right

they've got something

and they have to change their card

and so first customers don't cancel

but their payment information changes or expires

second

customers max out cards or have insufficient funds

fix both issues with the same solution

and so what we do is we say

hey now that I told you about this 3% fee

remember kind of the rental car like hey

there's this fee

you want to avoid this fee that I made up anyways

yeah that's what we're gonna do

so if you want to avoid that 3% fee

do you want to save some processing

awesome so just give us a second form of payment

in case anything happens to the first one

if they ask why which they rarely do

just say we only have the process to be

because it costs us money to get new forms of payment

every time something changes

in this crazy world

people's cards are changing all the time

so we pass those savings onto you

so now I'm positioning this as a benefit to them

I'm passing the savings onto you

even though I made up these fees to begin with right

and that's how it works and just like that

you give up the 3% increase in revenue

to have a decrease in churn

and often times if your churn decreases by

call it 20% because of the involuntary churn

you more than make up the 3% in revenue

now there's a third little payment hack for you

which is you can get ACH if you can

so ACH is something called Automated Clearing House

which basically how banks pay one another

and so if you can get a second form of payment

try to get ACH so this links directly to their bank

and it's the cheapest way to transact besides cash

so if you don't know what ACH is

you can Google it but fundamentally

wherever you process money

they usually have an ACH option

and think about it like this

how many times have you changed your checking account

or your bank in the last 5 years

probably not

nearly as often as you've gotten new credit cards right

and the same thing applies for your customers

and so if you get this is the second form of payment

this thing's gold

it pretty much never declines because it really can't

they either have the money or they don't

and so this way I like having two forms of payment

one's a card one's ACH

we get the ACH by giving back the processing fee

and here's a fun little benefit of ACH

not only do you get the reduction in turn

you also save some money on processing too

because it's cheaper to process via ACH

usually by 1 or 2 percentage points

so gift cards so

you can give the discount on time

in the form of a physical gift card

you can mail it to them if they are out of the area

so if they're you know if you're a national business

you can mail it to them uh

the customer can apply the discount whenever they want

after their first three payments right

so you can say hey when you buy

we're gonna give you these three months free

but I'm gonna give it to you

the to you in the form of this card

and I'm gonna mail it to you

and then you have to remember to come back

and redeem it now you might be like Alex

well deal with it you can do whatever we want okay

and so then that way they can also

if you want a position to make it sound good

they can gift it to a friend if they want alright

that way it's like hey

gift it to a friend and beyond that

many people simply forget to use it

and in that instance

you just get the full price sign up alright

so in the quote

worst case scenario for the business owner

they get it

and then they redeem it after a certain period of time

so you still got payments

and you made sure the card worked

and they were a legit person

the second condition is they give it to somebody else

which is awesome I'll absolutely accept their friend

which is now a free customer

that I don't have to pay for

and I will give them that three months

in some sort of aggressive way

I might spread it over the term

might use one of the other ways

or they just don't use it

in which case we got the full the full price sign up

so you can use the discount that you want

in the form of a gift card

which is basically the same as a rebate

so this is a fun one so

try lifetime discounts at your most common turn point

so you advertise lifetime discount

but you make customers earn it

so they get a lower rate

if they stay past wire X period

and you make the wire X period

the month of the average customer drops off

so first time I saw this was on Amazon

they had a continuity for rice packets

I buy rice and they had 5% off if you go on continuity

and 15% off if you stay past five months

and so this is the idea is that you want to

and it was five months to the same address

like they're pretty particular about it

but you can get a lifetime discount

and if they know and I'm sure they did the math

that they knew that people would stop paying at

called the four month point

and so they say okay well

let's put a big nugget after the four month point

where they get a lifetime lower rate after that point

and so

you can think through your own business the same way

and hang the carrot

and you can also use this in the advertising

so let's say you know

every customer stays four months on average

you tell everyone up front

they get a lifetime discount after month four

so a lot of times

people are willing to pay more up front

if they know it's eventually going to go down

but this does two things one is

it gets people to buy at higher rates

than they otherwise would

because they know it's gonna go down

and two it gets them to stay longer

because they know when it's going to go down

so as the time approaches

tell them the newer

lower rate is right around the corner

this is key so if you do know that it's at month 4

month five or whatever

that they're gonna start getting a lower rate

at month two at month 3

be like hey

two months left hey

one month left remind them

the fact that they're earning that discount soon

and it'll basically

continue to incentivize them to stay and pay okay

so I said you have to have two things

one is knowing how you're going to apply the free time

or the discount and the second was cancellations

so there's four ways that I like to approach

cancellations so if someone cancels during a trial

so you can say

you're allowed to cancel during the trial now

if you do that it'll increase sales

cause then people will be like

okay well

this is easy

this is no risk but you'll decrease stick rate

meaning

the number of people who will stay on the back end

the other version of this is that

you can have zero cancellations

and say there are no cancellations allowed

which works with good customers

but it will decrease sales and increase stick

sometimes though I mean for example

Netflix and some of these other massive companies

they don't even try that

because they have customers that are unenforceable

and so if you're going to have zero cancellations

make sure it's with good customers

if you do zero cancellation policy on bad customers

you will decrease sales

but you will not increase stick

so you'll just get the cost but not the benefit

another way of doing this is a pro rated fee

based on savings accrued

that just sounds like fancy terms

but basically if they cancel uh

you know a month 6 and got 2 months free

you just build them the difference of what they saved

over that six months

and this one is probably the simplest way of doing it

which is you just have a one time breakup fee

so you have an outlaw out clause

it increases stick

it increases sales and you get money on the way out

and you can also use it as a negotiating chip

to figure out something else

I like this one because it's the easiest to explain

it's very simple and I like the negotiating personally

so the way this would look would be hey

um listen

you can get like you have a 12 month agreement

if you want to get out of the agreement

it costs you two months

that's it so it's very straightforward

so if you cancel at month one or month 11

it doesn't really matter it's two months breakup fee

now when they come to break up you set it up front

they initial next to it you say hey

this two month breakup fee what was the issue

and then you can try and leverage that wave the fee

get a get a review get a referral

get them to upsell all these other things okay

cancellations you need to have a cancellation policy

figured out ahead of time

there are many common ones

30 days or 60 days notice cancellation fees

cancel anytime etcetera

since everyone comes into my continuity

offers on a discount of some kind

this is my favorite just make the cancellation fee

equal to the discount that they agreed to get

so if they got $600 in discount by committing

they can pay $600 whenever they want to cancel

this is very simple to explain right

so if they got 3 months free

then you just got to pay for 3 months at any time

if you want to break early

I like this everyone gets it

now make sure customers know how to cancel

this sounds obvious

but it's one of the first things you should do

this is my recipe for preventing 1 star reviews

is tell them exactly how to cancel

so if customers have nowhere to complain

inside your business

they will definitely complain outside your business

so try to get them to complain to you

rather than to everyone else

now if you have no obvious way for them to cancel

more people will vanish and complain

by having a clear way for them to cancel

then you can at least talk to them

and have a real chance to save them

now I want to be very clear

small businesses do not get rich by making

stuff hard for their customers

if you make it easy

you'll suffer less and get fewer 1 star reviews

and have a chance to save them when they do

because you'll actually know about it

so try to make it easy for them to contact you

when they wanna cancel

or they wanna let you know about a change and stuff

don't make it hard like you will lose more money

I promise you if a customer wants to cancel

ask to do it in an exit interview

I like this some people like to vent

let them remember the angry boat

so get more angry about the problem than them

and they may try to calm you down

and as soon as they try to calm you down

then you have won

so sometimes they'll just save themselves

like actually wasn't that big of a deal

like cool why I think it's a huge deal right

you wanna have that happen

so if they complain about something you can solve

then buy golly

solve it alright

and if they want a better product

do a rollover upsell into a higher level of service

if you have one to offer

I've had many people buy a lower cost offer

and then complain

because they wanted higher cost features

so then I offer the higher cost features

and then they buy yes

it happens and yes it works

so use cancellation fees to the customer's advantage

so I might say hey

I'll wave your cancellation fee

if you come in and tell me what I can do better

this gives the customer a real reason to give feedback

which by the way makes us better

then I can use their feedback

fix the product

or offer something better suited for them

so I can make more money at the very least

they'll have nicer things to say about the business

if I actually try and solve the problem

now this isn't the classic uh

you have to cancel in person

that's not how you say it

that just makes it a pain in the butt

so you say I have this cancellation fee

we can charge it or if you're willing to at least

sit down and tell me what we could do better

I'll wave it for you that is now friendly

it's like fee or feedback

your choice and when you have the feedback

it's you really want to have a dialogue with them

it's not

you don't want to go straight to a sales pitch

that's not gonna work

you want to tell you want to let them vent

you want to feel have them feel validated

you want to be more upset than them

you want to have them calm you down

you say that you made the mistake

and that's unacceptable

ask them to see if you can make it up to them

then you do a rollover and you get a do over

that's the idea those are the important points whoo

alright summary

so continuity discounts give continuity time for free

if customers sign up today

front loaded discounts convert more customers

but they have higher turn

back loading discounts convert fewer customers

but they have lower turn

spreading the discount keeps cash flow

while providing the full discount

which is one of the reasons I like it a lot

use gift cards to give the discount to new customers

and allow them to gift it to a friend

or use it on themselves at a later date

you get the full price sign up and you get a referral

or you get somebody that's gonna use it later

both of those things are good

allow customers to earn a lifetime discount

on your month of greatest turn

and let them know throughout the time

as they get closer to it

that that discount is around the corner

light cancellation terms get more people to sign up

but more people leave

higher cancellation terms get fewer sign UPS

but more people stay I prefer to let people cancel

and have to pay the difference between what they saved

and what they would have paid

if they didn't get the discount

if they cancel early

make sure customers understand how to cancel

and understand how to contact you

if a customer wants to cancel ask for an exit interview

incentivize

them by saying that you will wave the cancellation fee

which gives them a real reason to do it

so that they can either choose fee or feedback

and the goal is to make more money

not give more stuff away

and that is how we structure this stuff

Kaboom continuity discount

alright so we just covered continuity

bonuses and continuity discounts

now we go to a special continuity offer

that I really like a lot and it's

the other two are kind of like big amorphous versions

this is a very specific play

it'll be the shortest of the three

but for many of you people who have services

or anything that's on continuity

especially if you're on boarding

or some sort of getting clients results quickly

this thing is a beast alright

so here's how I Learned it

so after a long career in business

a friend of mine entered uh

the consulting space

with the intention of creating a lifestyle business

so he said hey

I just rather make 5 million bucks a year

with no employees and then have some big company um

and he said you know

I don't really lose anyone

so I don't really need to market

and I was like that's really interesting

a weird thing to say I was like

so I assume like all right

so you just collect payments up front

whenever somebody says I don't have any turn

I usually just assume well

you have no turn if you only have prepayments

he said no I've got mostly payment plans I was like

huh

how do you do that he said

well once you hear it

you're gonna kick yourself for not doing this

all along I was like alright

so what do you do he said

I just say that you can pay $25,000 to start

and then go month to month after that

for $4,000 a month or you can go to $4,000 a month

if you commit to the year

so just about everyone takes the year

then I just have them initial on their contract

that they understand that if they exit early

they have to cover a 25,000 dollar onboarding fee

so if someone calls to quit

I just say oh yeah

no worries just wire over the onboarding fee

and I'll get you cancelled right away

and that usually keeps people in it

it also gets people through

the emotional UPS and downs of business and I was like

that's pretty sweet so if you look at this visual here

if you had a 1000

you know a thousand dollar month continuity plan right

you could say cool this is 5,000 down

then thousand bucks month to month

or I will waive the 5,000 dollar fee

and it will be free with a 12 month commitment

at $1,000 a month

and you pay that if you want to cancel early

so this is fundamentally a neat cancellation term

fundamentally it's what it is

but because we pair it as a price on the front end

it becomes a very strong sales thing too

so with the other version

we use the 3 months free or whatever to get someone in

and then we say cool

you have to pay the difference if you cancel early

here we sell them on the vacation and we say

we have this massive on boarding fee

but I'll waive it if you sign up for a commitment

then that also hangs as a knife

if they don't wanna pay it today

they're not gonna pay it 6 months either

and so

the same reason they signed up is the same reason

they'll keep paying here's our description

so the way fee offers work like this

first you ask customers to pay a starter fee

as a part of doing a month to month program

typically you want to do that to three

to five times the monthly rate alright

so if it was a thousand dollar thing

you'd want to be a 5 thousand dollar uh front fee for

you know the example was 4,000 dollars a month

and 25 thousand dollar sign up fee

that's the idea alright

then you offer discount the entire fee

if they commit to the longer term

and the commitment period

should be minimum of 6 months

ideally 12+ if it's less than that

it doesn't really make any sense

so if they cancel inside the term they pay the fee

customers can choose to pay the big fee

and keep the option to quit at any time

or they can commit to 12 months and get the fee waived

and many will commit to avoid the big fee

there's also a clear point after four

five six months where if they paid the fee

it's the same as staying in which case

it basically gets them through that initial turn point

and then after that

there's no financial reason to leave

the back half of the contract

so we take the greater risk if they pay month to month

but they take a greater risk if they commit

and so if a customer chooses month to month

we lower our risk with the startup fee

but we lower their risk

year to year by waving those fees

and if they commit and they want to quit early

then okay they pay the fee as though

they had paid month to month from the beginning

very simple

bottom line is that customers will stay longer

if leaving cost more than staying

and to make this equitable

if they stay the full term

they can cancel if they choose with no fee

that's what makes it fair to both parties

so if you need to feel better about yourself

for charging these things

uh

whether real or made up you should get that looked at

but if you need a reason why

well here's a perfectly reasonable

also made up reason for you

you can say this whenever we onboard a new customer

it always takes more resources

than an existing customer

who's been with us for multiple months

so in order to give you the best experience

we charge a one time onboarding fee setup

activation engagement

enrollment whatever made up thing you want to say

to give you the experience

that experience so you'll never have to be it again

and it's for your own benefit

so you get the most out of your experience

now we know that if you learn how to use our services

the right way you be 23.7 x times more successful

so you can say initiation

onboarding enrollment

startup setup

processing activation

build commencement

you can just use whatever word you want

and put the word fee afterwards

and that's what it can be

so that is our description

let me give you some examples

so we'll use all combinations

but we'll assume $5,000 on boarding fee

and $1,000 a month for all of them okay

so wave fee with commitment

this is my personal favorite

it's clean and simple

commitment 12 months monthly rates

thousand dollars a month fees

five thousand dollars if they pay month to month

option A pay one time

5 grand plus a thousand dollars for the first month

then pay a thousand dollars a month thereafter

cancel whenever you want option B

wave the $5,000 if you commit to 12

pay a thousand dollars per month

only pay the 5,000 dollar fee

if you break your commitment early boom

very simple

very straightforward there's a visual if you want

you can do a different version of this where you keep

uh the month to month rate higher

so if they cancel the discounted commitment

you build the difference alright

so let's say uh they basically the longer they stay

the bigger the cancellation rate

so if they've accrued you know

uh

$177 of savings or $67 of savings every single month

on their commitment

the day they wanna they wanna break the contract

they pay the difference in savings up to that point

now let's do some important points

so four variables for this method

you've got the commitment length

you've got the commitment rate

you've got the month to month rate

and you've got the fee that they're gonna waive or not

there are more versions of this

beyond the two that I shared

you can figure them out on your own

now I had an earlier version of this that had like

nine different versions and my editor was like

you're honestly just gonna confuse people

so don't do that so fundamentally though

you can mix and match these however you want

you can have a like

the rate difference between the people who commit

can be less you can have a the length be a variable uh

the rate that you charge month to month is different

the fee that you waive so

all of those things kind of go into this deal structure

the recommendation that I have is a model that works

which is take the price

multiply it by five make that the fee

wave it and that holds

that basically hangs over the head the whole time

and if you want again

the ethical reason for this is that

many businesses and many

services have emotional UPS and downs

their volatility for customers

and so having something

kind of like guardrails to keep someone on point

during the rough months

can help them overall see success

and I believe that so that's not just not

that's not just word smithing

that's true um and this vehicle or pricing structure

money model allows you to build incentives around that

all right so fees get them to start

people get value out of committing immediately

because they avoid a fee

people want to avoid fees so more people sign up

to continuity mission accomplished

Hooray that's how this works

fees also get them to stick

which is lovely

so people will stick for the same reason they started

by sticking to avoid the fee

so people quit for millions of reasons

but by incurring an additional cost

a larger fee in order to cancel

their original reason for quitting

immediately shrinks

compared to the value of avoiding the fee

in English if the cost to quit exceeds the cost to stay

they will probably stay presenting the fee

justify the fee

by explaining the cost of taking on new customers

for longer term programs basically

if they want short term flexibility

they pay their own setup costs

if they commit to staying long term

we'll pay their setup cost for them alright

if someone asks for additional reason

just say it costs us money to get you started

if you only want to test us out

you cover those costs if you commit to longer

I'll cover them

now if more than 5% of people want to cancel early

look into that pricing incentivizes sticking

but it can't and shouldn't overcome a terrible product

you want to nudge them

not handcuff people into paying for something they hate

cause then they'll just hate you

now if you want more upfront cash

have a smaller fee

a smaller fee encourages more people to go

month to month this is the same uh

difference we had with the earlier version

with the continuity bonus offer

same idea

except this is just a fee rather than a program

but some people will pay

and I'll tell you what my guess would be to get 50

50 to sign up which would be a 33% increase uh

a smaller fee will get more people to go month to month

a larger fee will encourage

more people to make the commitment

but if you need more cash upfront

then you can make the fee

one and a/2 to three times the monthly rate

and that will get more people to choose

that more flexible option

and when you do this more people will take it great

and you get more cash upfront

so you can drop the fee

after the customer fulfills the commitment right

so if someone stays the entirety of the commitment

and I'm repeating this

cause some people forget about this

and then wants to cancel

then they have honored their commitment

and then you need to honor

the fact that they don't need to pay that fee anymore

that is what makes it equitable

that's what makes it fair OK

so I prefer this offer for commitments over one year

and longer alright

so the longer the commitment

the better this works this works

especially well with services

that take a long time to work

so think about SEO investing

weight loss these are all things that take a long time

for someone to really get closer to their goals

it keeps people committed when they get emotional

cancellation fees for a cause

so this is like a 2:01 version of this

um but if you want to keep customers extra motivated

you can donate the money that they would be paying

for a cause that they are against

so you just say hey

what cause do you absolutely hate

great if you cancel early

I will be donating your entire setup fee to them

so this gives them two reasons to stay first

because they don't want to shell out the cash second

because they don't want to call

they don't want to give it to a cause they hate summary

so wave fee offers

present a month to month option with a fee

or a wave fee if they commit

I typically make it 3 to 5 times my monthly rate

at minimum the commitment length should be a year

the larger your fee

the more buyers will opt for commitment

the smaller fee

the more people will do the month to month option

which will give you more cash up front

if the customer meets the commitment

the fee officially goes away boom

that is the wave fee offer

so we just finished all of the continuity offers

continuity bonuses

continuity discounts and the we fee offer

which leads us to making your money model

so it is now your turn

remember there's document demonstrate duplicate

this is where I turn it over to you

where you need to combine

these things in such a way that you can maximize

the amount of money that you make in the first 30 days

so you can profitably acquire customers and scale

so let's do a quick putting it all together

so overview a money model

attraction offer upsells

downsells continuity

we have covered all four if you are starting out

just pick one of the money models

to inspire you to do something in your business

alright if you're more advanced

you can start weaving two together

there are no rules for this

you can stack these so

you absolutely can do an attraction offer

that you use as an upsell offer in your business

you can use a

continuity offer on the front to attract customers

all of these things are possible

I try to present them in this way

in the most logical format

that I have tended to use them in my business

but there are no rules in business

as long as it is legal so I leave that to you

alright examples

so this is my fitness offer

so I try to conceptualize this for you

so okay

on the front end I ran a win your money back offer

then we would upsell from a service perspective

for anybody who bought that

we'd upsell buy X get y free

so this would be them pre paying time

and then we would upsell the continuity bonus

great so that would be the role of our upsell now

if someone uh didn't want to do win your money back

then we would down sell the free trial with penalty

and then we would

do is the menu upsell in terms of supplements

and then we do the rollover upsell on the back end

and so this was fundamentally the money model

so I used 1 two

three 4

five of the offers that I talked about to make

the money model that we had

for fitness

this model was superior to other models on the market

which is why our gyms consistently outcompete

other gyms in the marketplace

alright so this is gym launches model

so we used a decoy offer that was the strategy call

that was the uh

you could also consider it a free with consumption uh

depending how you wanna see it

but we had that offer then we did a classic upsell

then we did the menu upsell on the back end

into what level of service they wanted

for the extended period of time

did you want these other services that went with uh

Gym launch or sorry Gym Legacy

which was the back end that we had

so some people opted for the highest version

some people said

you know I don't need like agency services

I just want the ads like you don't have to run them

hey uh but I do want you to uh train my sales team

and so we would basically menu up

sell

the features that we thought would be best for them

now if people didn't take the offer

we had a payment plan feature down sell free trial

right and so this so this is 1

2 3

4 5

6 6

of the structures

that I went over for this presentation

is what created the gym launch money

mop now uh newsletter and consulting

so I just love this money model

it's just like one of my favorite ones

uh cause I mentioned it uh during this video uh

trading a couple times

but this was an attraction offer

which is a free trial be like wait

how can you use free trial as an attraction offer

yes there are no rules

so we used a free trial as the attraction offer

the thing that made it cash flow was the pay less now

pay more later option of saying hey

we'll get you the past newsletters

and technically

this was combined with a lifetime lower rate

so this is a continuity discount and a pay less

pay less now pay more later put together as one

this was the thing that got them to engage

so free trial start 3 99 a month

oh wait let me give you two years of newsletters today

and give you this discount

if you choose to skip your trial

and then of course the uh

the back end on that one was uh

the business

you know Upsold Consulting and things like that

if it were me

this is just that that particular business

if it were me I would do buy X get y free here

so now that I've got the continuity

I would then say great now that you're in continuity

if you buy seven I'll give you five

and then I can front load even more cash

now if if I know that people stay on average 2 years

then I wouldn't do that cause that would lose me money

but if people stay

let's say on average another 3 months

then it makes sense to do buy 6 get 6

cause I still double LTV and get that cash up front

so these were actually my original notes

so I I wanted to show you how mine actually looked um

and I've changed some of the names

to make them a little bit more like friendly

but this is actually what it looked like

in terms of how I would design

the money models

and so the possibilities really are endless

so let's go through steps for making your own

so step one is you start with an attraction offer

all always starts with getting people to engage

getting leads to engage with you

step two is you pick an upsell offer

you figure out okay the people have come in

they're coming off when your money back

they're coming on uh buy X y free

they're coming on uh decoy offer

whatever it is they're coming on

the front end you say great

now I'm either gonna do a menu up sell

I'm gonna do an anchor anchor up sell

I'm gonna do a rollover up sell

all of those things you can use as your second

second piece then you can pick your down sell offer

so what if they say no to any of these other offers

well we have our entire down sell flow

which is we start with payment plans uh

then we do a free trial

or we do payment plan to feature down sell

then we go to free trial

you just pick the ones that you know

that you can execute on right now

step 4 then you pick a continuity offer

and the result is that you get your cash back

in 30 days more customers and make more money

so here's some notes

one perfect one of these at a time

if you try and do all four at once

or six of these things at once

you're you're gonna break your business

like I strongly recommend just start with one

one is enough there's already enough complexity

you doing anything new that you haven't done before

I try to include as many important notes as I know

to make these things work

in these trainings and in the book

there's some things that are in this

a video training that are in the book

there's some things in the book

that are in the video training

it's the way it is uh

so read both if you're really serious about it

but if you have enough from either of them

by all means please take action alright

now if you are going to start one of these things

start it with a lower price

get people to say yes

and then start raising prices in stages

that's my recommendation

payment plans based on how I told you to present the

the discounted rate

uh basically

the prepayment discount versus the payment plan rate

is a great way to get

kind of a look into the future of what prices

the market will sustain

I like this little saying simple scales fancy fails

I want to have as few of these as humanly possible

because the fewer pieces I have in my business

the fewer things can break

and so I would rather start with the simplest possible

thing that accomplishes the objective

which is that I can offset my cost

to acquire customers

I can recycle that cash within 30 days

and I can keep scaling basically

removing acquisition is the bottleneck in my business

once I've accomplished that

we've accomplished our objective

we no longer need outside money to scale

which is pretty sweet

this is a little bit of an advanced tip

affiliate products can fill money model gaps

so if you're like okay

well I want to do a by X y free then just do a by X

y free on someone else's product

so then you can still sell your main thing

and then use somebody

else's product that you send traffic to

so you can get cash

you have no operational constraints now

you can use that for complimentary services

rather than something that's gonna

take away from your core offer

you can turn attraction offers into continuity offers

automatically just with renewal by X

y free for example if I said buy 6

get 6 it becomes a continuity offer

if after the end of that first year

it rolls into continuity

if I do win your money back and say hey

after this period

you then roll into continuity if I say decoy offer

I could say hey you paid you can either do this uh

you know this

this simple thing that's not that good

or this amazing thing for more money

that has a guarantee after that period

it rolls into continuity

so you can take any attraction offer that I had

and just immediately turn into continuity

by just saying adding a clause that says

it rolls into continuity at this price

and again

you can mix and match these however you like so I

I present them in this order

because this is the most logical order that I can

think of and as I have used them in my businesses

but this is no

in no way a limitation on your ability to innovate

and honestly I want you I want you to send me

all the cool money models you guys figure out

like that's the point

this is me just showing you all the stuff that I know

that I could fit into a presentation

within a reasonable amount of time um

and so again right you can use attraction offers

upsell

anything that you can that you can put your mind to

you can figure out okay

so that is how you make the money model

and let's go to 10 years in 10 minutes

so we just walked through

how to make your own money model

now we're gonna do 10 years of my life

more like 13 or 14 uh

but 10 years in 10 minutes sounds sexier

so we're gonna call it that alright

so

where money model fits in the grand scheme of things

so my first broke 100 million dollar offers

answer the question what should I sell

answer an offer so good people feel stupid saying no

my second book 100 Million Dollar leads

answer the next natural question

how do I find these people

answer you advertise this book

100 Million Dollar Money Models

answers the next natural question

how do we get them to buy

answer a money model so what we covered

a money model is a series of offers

designed to increase how many customers you get

how much they pay and how fast they pay it

it's a deliberate series of offers

a good money model makes more profit from a

customer than it cost to get and service

them in the first 30 days

that's the bare minimum

a 100 million dollar money model

makes more profit from one customer

than it cost to get and service

many customers in the first 30 days

which removes cash as a limited resource

scaling your business

this is what gives you limitless scale

this is how I've scaled

let's see I got Allen from zero to 1.7 million a month

in six months I got Jim

launch from zero to 4.4 million a month in 20 months uh

we've gotten I can't tell you the school metrics

I'll just say that they're even better

uh and um

we have other copies of the portfolio that we've scaled

at that same level of speed

alright and so if you can master this skill

this may be the single

most valuable thing that I can give you

which is why the sub headline of this book is

how to make money

money models have four types of offers

attraction offers upsell offers

downsell offers and continuity offers

attraction offers

get customers by offering something free or a discount

often they also make money by offering a better deal

at a higher price that we covered

we covered five we covered win your money back

which is where you set a goal for the customer

and tell them how to reach it

and if they reach it

then they qualify to get their money back or get it

as store credit we covered giveaways

where you advertise a chance to win a big prize

in exchange for contact information

and anything else that you want from this prospect

after picking a winner you offer everyone else a

the big prize at a discounted price

in second place

the decoy offers are also attraction offers

where you advertise a free or discounted offer

when the lead asks to learn more

you also present a more valuable premium offer

the premium offer includes more features benefits

bonuses

guarantees and so on and gets more people to buy it

buy X get y free

you offer customers free stuff

in exchange for buying stuff

for money

the more free stuff and the higher it's value

the more people buy X to get y free

pay less now or pay more later

you give people a choice to pay full price later

or pay a discounted price now for additional benefits

we also did free with consumption

which I won't bonus here but fundamentally

you give away a lot of free value

and that increases

the likely people buy a very expensive thing from you

the more expensive the thing

the longer and the more free stuff you give them

then we have upsell offers

which is are whatever you offer next

that is my very literal scientific thing

try and break like fight me

an upsell is whatever you offer next alright

so typically it's gonna be more better or newer

version of whatever they just bought

these can get you lots of cash fast

we covered 4 the classic upsell

where you offer the

solution to customer's next problem

the moment they become aware of it

you can't have X without y the menu upsell

you tell customers which options they don't need

then tell them which one they do need

and how to get the value from it

prescribe and you don't need that

you need this the anchor upsells

you offer the most expensive thing first

if the customer balks you offer a much cheaper

and still acceptable alternative

no worries you don't care about X

this may be a better fit for you

d rollover upsells you credit

some or all of a customer's previous purchase

towards your next offer since you already spent $500

I'll just credit that towards staying a full year

pick your price which I ended up not including this

I'll probably make a YouTube video about it

down sell

offers are whatever you offer after someone says no

that's my scientific uh answer for that

and by turning no's into yeses

you make more money we covered three of my favorites

so payment plan downsells

you offer the same product at the same price

but they pay some now and the rest over time

when you get paid

let's do half now and half then trial with penalty

you let customers try your product or service for free

so long as they meet your terms

if they do

then they have a better chance of becoming paying

customers if they don't

they pay if you do X

y and Z

I'll let you start for free

feature downsells

you lower prices by changing what the customer gets

I offer lower quantity lower quality

or lower price alternatives

or cut optional components altogether

if you're okay without a guarantee

I can knock off $400 that's how that works

then we had continuity offers

which provide ongoing value

that customers make ongoing payments for

until they cancel

these boost the profit of every customer

and give you one last thing to sell

we covered three of my favorites

Continuity bonus offers so with a continuity bonus

you give the customer an awesome thing

if they sign up today typically

the bonus itself is more valued than the first

continuity payment if you sign up today

you'll also get X y

Z valuable thing and if you want them to stick

you can continue to give them bonuses

to maintain the service continuity discount offers

we covered as the second type

we covered first month back end commitments

and you give the customer free time now

now or later if they sign up today

and so the key point is that

there's four different places that you can spread it

out at the front

at the end in the middle

in between that's the point

spread out over the whole thing

but that is fundamentally

how continuity offers work to get people to sign up

then we have the way fee offers

so first you ask customer to pay a starter fee

as part of joining a month to month program

then you offer discount the entire fee

if they commit to the longer term

if they cancel inside the term

they pay the fee premium which I didn't

I cut from this one I'll make a YouTube video about it

cause I think it really only applies to software

and I thought that was too niche

alright you build money models one stage at a time

once I get customers reliably

then I make sure that they pay for themselves reliably

then I make sure that they pay for other customers

reliably

then I start maximizing each customer's long term value

then I print as much money as I possibly can

bottom line the knowledge in these bullets

brought me more free and profitable customers

than I've known what to do with

if executed they will do the same for you

and with that

cash will no longer be a constraint in your business

I hope that this book and this training

helps you guys grow your dream

as big as you darn well please

and that is 10 years in 10 minutes

so in the next one we'll just put it all together

and put a nice bow on it and we'll wrap this puppy up

alright we just covered 10 years in 10 minutes

so now let's put this whole thing together in a bow

we're rounding home we're going towards home plate

we're in the end zone

we're in the red zone we're finishing this out alright

so my quick final words so this is a

something that I finished

100 million dollar leads with

and I just it's something that I

I really believe a lot in

so this is a screenshot taken without permission

from Ray Dalio's book principles uh

and this is basically his his

his concept of learning principles overall

is that you have big goals

then you fail

then you learn principles from the failure

then you improve and then you set more audacious goals

and so fundamentally this is the learning process

my goal with all the stuff that I have

is that I just share the stuff that I've Learned

I'm not saying this is the only way to do business

I'm saying we've now done

we've built three businesses to her

four businesses

passed $100 million in enterprise value

two or three I think passed $100 million

I think the third is about to hit $100 million a year

plus an annual revenue and so

I can't say how to do $1 billion a year in sales

I don't I don't know that yet

but I can say they get to $100 million

we've done it multiple times

and in terms of enterprise value more times than that

and the stuff that I shared is the stuff that I know

works and so I recommend doing it that way

so that I can hopefully save you this part

and just have you go from here to here and beyond

and so I will read this uh

this fun little this fun little snapshot that uh

Layla got this is earlier on our career

this is before I became Instagram famous uh

and before I started making YouTube videos um

this is when I just done gym lunch

and we're just doing our own thing

being private um

and so Layla snapped this when I wasn't looking

and I was like damn

I look pensive AF uh

anyways this is the second time we taken a private jet

and it was dope

they figure if you go down with the ship

your seatbelt won't save you

regardless to every hard motherfucker

who's disappointing their parents

wives husbands

friends

fake friends and everyone else who doubts you No. 1

I'm your biggest fan No.2

it's about to get real so get hard fast

No. 3 you cannot lose if you do not quit

I used to repeat that to myself over and over again

when I didn't want to keep doing it

if you feel hopeless welcome to entrepreneurship

if you feel like you'll never make it

you're on the right path

if you feel like you're a disappointment to everyone

you know keep fucking moving

because at the end of the rainbow isn't a pot of gold

it's you

it's the real you that's been underneath all along

whispering in your ear just one more step

one more call one more sale

and when I say that I'm your biggest fan

it's because I was there and I know that

because I know exactly what it feels like

having both 100% confidence

and a thousand percent doubt

at the same time so here's all you gotta do

just keep moving keep fighting

keep improving your time will come

success is the only revenge

so it's been my great pleasure

putting this all together for you

um I hope that you

surpass me in every way humanly possible

if you do then I will have succeeded

if you die without sharing all your knowledge

you have wasted your life and I mean that

um making real business

education accessible to everyone

has been my personal mission

and it's been the joy of my life

the most joyful thing that I've done um

up to this point so I continue to do it

um and in accomplishing your dreams

you help me accomplish mine

so the possibilities are endless

I hope to hear the combinations

most nation puts together

so I can add them to the repertoire

if you have a company by the way

that deserve $1 million in profit

and is cash flowing and founder LED

you can go to acquisition.com

and we can see if we can help you scale

you can just hit the scale button

if you're looking to sell a business

we really like at this point

probably look at companies that are worth I don't know

$50 million plus like it should be a big business

and if you're not there yet

that's fine just go and we'll help you scale alright

and so um if you're at neither of those levels

then consider going through the

hundred million dollar offers

and a hundred million dollar leads books

and the corresponding trainings

they're free on my site

if you have $0 they are also $0 again on my site

if you're an audio person

you can listen to them um on my podcast

so the leads book and the audio

for the offers book are both there

so if you're like I'm broke as hell

I get it and that's why I have that stuff for free

alright

so if you're struggling to figure out who to sell to

you can go to acquisition.com forward slash Avatar

so this is like a single that I released uh

between books uh

because I got a lot of questions about like

really specific to Avatar stuff

so I wrote a whole chapter on that

that you can go grab alright

we'll just pop your email and we'll send it to you

um if you're struggling to figure out what to sell

that's what I made hundred million dollar offers for

you can scan the QR code if you're uh

struggling with getting people to buy my next book

will be on persuasion and sales maybe

I don't know we'll keep it mysterious uh

and if you want a job at acquisition.com

or one of our portfolio companies

we love hiring mozionation

just go to acquisition.com

forward slash careers slash open slash jobs

but probably just careers will take you there

and you can see all the openings across all of our

portfolio companies so if you're a savage

and it would take 5 people to replace in your business

we would like to talk to you beyond that

that is the end of my presentation and uh love you all

keep murdering it I meant what I said

you accomplishing your dreams accomplish mine

so keep crushing it out