$100M Offers Audiobook Part 2

23:48Main point. You want to make sure you can target your ideal audience easily. Clarifying point. There is no issue wanting to serve rich doctors. They are easy to find. This is just illustrative that your promotions must be served to the right audience. 4. Growing Growing markets are like a tailwind. They make everything move forward faster. Declining markets are like headwinds. They make all efforts harder. This was Lloyd's example. Newspapers had three of four makings of a great market. Lots of pain, purchasing power, easy to target. But they were shrinking. Fast. No matter how hard he tried, the entire marketplace was fighting against him.

24:27Business is hard enough and markets move quickly, so you might as well find a good market to give you a tailwind to make the process easier. Making this real. Health, wealth, relationships. There are three main markets that will always exist. Health, wealth, and relationships. The reason that those will always exist is that there will always be tremendous pain when you lack them. There is always demand for solutions to these core human pains. The goal is to find a smaller subgroup within those larger buckets that is growing, has the buying power, and is easy to target. The other three variables.

24:59So if I were a relationship expert trying to find my avatar, I'd rather focus on second half of life relationship coaching for old timers than helping college students in relationships. Why? Because senior citizens who are alone are likely suffering more pain as they are near their deaths, have more buying power, money, and are easier to find, targeting. Lastly, at the time of this writing, there are more people turning 65 each year than turning 20. AKA growing. That is the idea. Think about what you are good at in regards to health, wealth, and relationships. Then think about who might value your service the most.

25:33AKA is in the most pain, has the buying power to pay what you want, money, and can be found easily. Targeting. As long as those three criteria are strong and the market isn't shrinking, you'll be in good shape. But how important to your success is finding a quote great market versus a quote normal market versus a quote bad market? The answer, it actually depends. Let me explain. Order of importance, three levers on success. It's unlikely you're going to be in a dying market like the newspaper example. It's also unlikely you're going to be selling toilet paper in COVID, a buying frenzy. You'll likely be in a normal market and that's totally okay.

26:11There's a fortune to be made within normal markets. My single point here is that you can't be in a bad market where nothing will work. That being said, here's the simplest illustration of the order of importance between markets, offers, and persuasion skills. Starving crowd is more important than your offer strength, which is more important than your persuasion skills. Let's say you were to rate these elements on a scale of great, normal, and bad. You could essentially move down the line from left to right in order of importance. A quote great rating on a higher order piece overpowers anything else lower on the priority scale.

26:45A quote normal rating moves the buck to the next part of the equation. A quote bad stops the equation unless a grade from a higher order component nullifies it. Here are a few examples. Example one, even if you had a bad offer and are bad at persuasion, you're going to make money if you're in a great market. If you're on the corner hocking hot dogs when the bar closes up at 2am with mobs of starving drunk folks you're going to sell out of your hot dogs. Example 2. Most of us. If you are in a normal market and have a Grand Slam offer, you can make tons of money even if you're bad at persuasion.

27:18This is most people reading this book. That's why I wrote it. To help you maximize your success by learning to really build a Grand Slam offer. Example 3. Let's say you're in a normal market and have a normal offer. In order to be massively successful, you would have to be exceptionally good at persuasion. Then, and only then, would you succeed with your persuasive skills serving as the fulcrum for your success. Heck, many empires have been built by exceptional persuaders. It's just the hardest path to follow and requires the most effort and learning. Nailing your offer helps you shortcut this path to success.

27:53Otherwise, you will just have a normal business that takes exceptional skill to be successful. Nothing wrong with that, but probably not what you signed up for. Commit to the niche. I have a saying when coaching entrepreneurs on picking their target market. Don't make me niche slap you. Too often, a new entrepreneur half-heartedly tries one offer in one market, doesn't make a million dollars, then mistakenly thinks this is a bad market. Most times, that's not actually the case. They just haven't found a Grand Slam offer yet to apply to that market. They think, I'll switch from helping dentists to helping chiropractors.

28:28That's it. When in reality, both of those are normal markets and represent billions of dollars of revenue. Either would work, just not both. You must pick one. No one can serve two masters. I have coined the term niche slap to remind entrepreneurs in my communities to commit once they pick. All businesses and all markets have unpleasant characteristics. The grass is never greener once you get to the other side. If you keep hopping from niche to niche, hoping that the market will solve your problems, you deserve to be niche slapped. You must stick with whatever you pick long enough to have trial and error.

29:01You will fail. In fact, you will fail until you succeed. But you will fail far longer if you keep changing who you market to, because you must start over from the beginning each time. So pick, then commit. Riches earn the niches. The other reason to commit to the niche is because of how much more you will make. Simply put, niching down will make you far more money. Author note, when to broaden, advice for most people. For most, if you are under $10 million per year, niching down will make you more money. After that, it will depend on how narrow the niche is, or what is called TAM, total addressable market.

29:36A business can only grow to meet the total addressable market. That being said, for most people, getting to$10 million per year is already a 0.4 % achievement. Only 1 in 250 businesses achieve this. So for 99.6 % of readers below$10 million per year, it's almost always easier to serve fewer clients more narrowly. But if you want to go beyond that, you may, depending on the size of your TAM, have to broaden your audience by going up market, down market, or into an adjacent market where your existing services can provide value. For context, many companies expanded to$30 million plus per year serving a single niche.

30:10Chiropractors, gyms, plumbers, solar roofers, salon owners, etc. If you were at$1 million or$3 million per year, thinking you have capped and must expand, you are wrong. You just need to be better. When I truly grasped how much more profit I was leaving on the table, it changed my life. It was what took me from doing acquisition for anyone to teaching it to a specific avatar. In my instance, I decided on a micro gym owner with 100 members, assigned lease, at least one employee, and wanted to help clients lose weight. That's pretty specific compared to, quote, small business owners or my favorite, quote, anyone who will pay me, which is common.

30:46And I was very specific. In that business, Gym Launch, we turned down, and still do, anyone who is not the avatar. That means no personal trainers, no online coaches, etc. Could I have helped them? Of course I could have. I mean, heck, the majority of our portfolio is comprised of non-gym companies. But in order to maintain product focus and high converting messaging, knowing exactly who the product was for was a game changer. It helped us know exactly who we were speaking to at all times and exactly whose problems we were solving, but simplicity and ease may not be enough to sway you. So let me illustrate why honing in on one niche will make you more money.

31:21Reason. You can literally charge a hundred times more for the exact same product. Dan Kennedy was the first person to illustrate this for me, and I will do my best to pass on the torch to you in these pages. Niching product pricing example. Product and then price. Time management product. Price,$19. Time Management for Sales Professionals. Price,$99. Time Management for Outbound B2B Sales. Price,$499. Time Management for Outbound B2B Power Tools and Gardening Sales Reps. Price,$1 ,997. Dan Kennedy taught me this, and it changed my life forever. Let's say you sold a generic course on time management.

32:05Unless you were some massive time management guru with a compelling or unique story, it would be unlikely it would turn into anything significant. What do you think, quote, yet another, end quote, time management course is valued at? $19? $29? Sure. Nothing to write home about. Let's just say$19 for illustration's sake. Now we shall unleash the power of niche pricing in various stages on your product. So let's imagine you make the product more specific, keeping the same principles and call it time management for sales professionals. All of a sudden, this course is for a more specific type of person.

32:38We could tie their increase to even one more sale or one more deal, and it would be worth more. But there are a lot of salespeople, so this might be a$99 product. Neat, but we can do better. So let's go down another level of niching and call our product Time Management for B2B Outbound Sales Reps. Following the same principles of specificity, now we know our salespeople probably have very experienced deals and commissions. A single deal would easily net this salesman$500 or more, so it would be easy to justify a$4.99 price tag. This is already a 25x increase in price for almost an identical product.

33:14I could stop here, but I'm going one step further. Let's just niche down one last level. Time management for B2B outbound power tools and gardening sales reps. Boom. Think about it for a second. If you were a power tools outbound sales rep, you would think to yourself, this is made exactly for me and would happily fork over maybe$1 ,000 or$2 ,000 for a time management program that could help you achieve your goal. The actual pieces of the program may be the same as the generic$19 course, but since they have been applied and the sales messaging could speak so much to this avatar, they will find it far more compelling and get more value from it in a real way.

33:53This concept applies to anything you decide to do. You want to be the guy who services this type of person or solves this type of problem, and even more niched, I solve this type of problem for this specific type of person in this unique counterintuitive way that reverses their deepest fear. That's why a fitness program for generic weight loss might be priced only at $19, while a fitness program designed and marketed only to shift nurses might be priced at$1 ,997, even though the core of the program is likely similar. Eat less, move more. End result. The market matters. Your niche matters. And if you can sell the same product for 100 times the price, should you?

34:31I'll let you decide. Summary points. The purpose of this chapter is to reinforce two things. First, don't pick bad markets. Normal markets are fine. Great markets are great. Second, once you pick, commit until you figure it out. If you try 100 offers, I promise you will succeed. Most people never try anything. Others fail once, then give up. It takes resilience to succeed. Stop personalizing. It's not about you. If your offer doesn't work, it doesn't mean you suck. It means your offer sucks. Big difference. You only suck if you stop trying. So try again. You'll never become world-class if you stop after a failed attempt.

35:07If you find a crazy good market, ride it and ride it hard. If you pair a grand slam offer with a crazy market, you'll likely never need to work again. Seriously. So have this skill set, the ability to accurately assess markets by taking into account pain, money, targeting, and growth in your back pocket so that when lightning strikes, you can make sure it strikes twice. Having established how to nail a market, let's get back to pricing. The first step to making crazy money is charging premium prices. Free gift number two, bonus tutorial, winning markets. If you want to know more about how I pick markets and find niches that are profitable, go to acquisition.com forward slash training forward slash offers.

35:45Then watch winning markets for a short video tutorial. I've also included a free checklist to see how your market or or niche measures up. It's absolutely free. Enjoy.

35:57Hey guys, hope you guys are enjoying the$100 million offers collaboration episode with the game. You may not know this, but we have a physical copy available on Amazon and a Kindle version. And if you're like me, I get pretty ADD really easily. And I prefer to consume in multiple formats at the same time. You remember it longer, it gets stored multiple places in your brain, lots of science stuff, but either way, it ultimately helps you retain it and use it. So if that's useful, use it. If not, keep enjoying. Chapter 5. Pricing. Charge what it's worth. Charge as high a price as you can say out loud without cracking a smile.

36:33Dan Kennedy. January 2019. All I could see was black. My eyes felt glued shut. I was awake, but the fatigue in my temples felt like a five pound weight was duct taped to my skull, dragging my eyelids back down. I had to concentrate forcibly to open them. The details of the dimly lit room beamed in. I rolled over to the edge of the hotel room bed, feeling each and every muscle on my body as my weight shifted. Hunched on my side, I could see my clothes scattered on the floor. I was so beat the night before that I didn't even remember taking them off. I had just finished a five day gauntlet of keynote after keynote presentation.

37:12Two days of presentations for our highest level clients immediately followed by spending two days planning with our entire company, 135 plus employees. I had missed a FaceTime call from my father that day before. I didn't have anything on my agenda for the morning, so I quickly got up, slid into a hoodie and some sweats, and walked into the hallway to call him back. After the initial pleasantries, he immediately dove into why he was calling. Parental concern. I saw the picture you posted of all your clients, he said, but in an unusually concerned tone. I thought the event was for all your highest paying clients.

37:46I didn't know it was a big event. It looked like you had a thousand people there. Alone in the hallway and struggling to shake the heavy weight of exhaustion still, I tried to gauge where his concern was coming from and what he was getting at. I'd explained this to him already. It was only for our highest level clients. That wasn't all of our clients, I said. Just the ones who pay$42 ,000 a year, our gym lords, like I told you. Every single person in that picture paid you$42 ,000. He sounded almost frightened at the idea. Yeah, wild, right? My voice was hoarse from days of speaking and thousands of 20-second conversations.

38:19Is it legal what you're doing? He asked. Wow, that escalated quickly, I thought to myself. Do they know you're paying you that much? Yes, it's legal, and of course they know. It's not like I'm magically siphoning money. That's a lot of money. I hope what you're giving them is worth it. I contemplated whether it was worth the effort to dive into this or just ignore it. But knowing this was going to be a thing, I took a deep breath and began to explain. If I made you$239 ,000 extra this year, would you pay me$42 ,000? I asked, using$239 ,000 because it was the average increase in top-line revenue of a gym using our system for 11 months.

38:57For sure, he said. I mean, if I knew I was going to make that back, but what would I have to do? About 15 hours a week of work. And how long would it take me to make the$239 ,000? 11 months. And how much of the$42 ,000 would I have to pay you up front? Nothing. Just pay me as you start making money using the system. I watched it click. My dad got it. Oh, he said, well, then yeah, I would do it. And that's why they do it too. Making shitloads of money breaks people's minds. It literally stretches their minds so far past what they can believe is possible, they assume you're doing something wrong or illegal.

39:34They literally can't even. Why? Because they think to themselves, they can't be that much smarter than me, or work that much harder than me. So how is it possible for them to make a thousand times more than me? Enough money that it would literally take 10 lifetimes for me to make what they make in a year. In the three years leading up to me writing this book, I took home over$1.2 million per month in profit. Every single month. That's more than the compensation for the CEOs of Ford, McDonald's, Motorola, Yahoo, combined, every year, as a kid in his 20s. It angers those who believe that life isn't fair.

40:11It confuses others who cannot comprehend and believe that there must have been a mistake. And it inspires a select few who are bound for greatness. I hope that you are in the last category, because that is who I am writing this for. You can do this. You just need to learn how, and I'm going to show you. Price to Value Discrepancy Quote, I hope what you're giving them is worth it, end quote. Those words would probably sting for most, but when my dad said them to me, I just knew he didn't understand the value we were providing. What I want to show you is how to create and communicate value, aka the worth itness of an offer.

40:44In order to understand how to make a compelling offer, you must understand value. The reason people buy anything is to get a deal. They believe that what they are getting, value, is worth more than what they are given in exchange for it, price. The moment the value they receive dips below what they are paying, they stop buying from you. This price-to-value discrepancy is what you need to avoid at all costs. After all, as Warren Buffett said, price is what you pay, value is what you get. The simplest way to increase the gap between price-to-value is by lowering the price. It's also, most of the time, the wrong decision for the business.

41:20Getting people to buy is not the objective of a business. Making money is. And lowering price is a one-way road to destruction for most. You can only go down to zero, but you can go infinitely high in the other direction. So unless you have a revolutionary way of decreasing your cost one-tenth compared to your competition, don't compete on price. As Dan Kennedy said, there's no strategic benefit to being the second cheapest in the marketplace, but there is for being the most expensive. So the goal of our Grand Slam offer will be to get more people to say yes at a higher price by increasing our value to price discrepancy.

41:54In other words, we will raise our price only after we have sufficiently increased our value. This way, they still get a great deal. Think buying $100 ,000 worth of value for only$10 ,000. It's money at a discount. Free gift number three, bonus tutorial and free downloads. Charge what it's worth. If you want to know how I create value discrepancies for B2B or B2C products, go to acquisition.com forward slash training forward slash offers course, and then watch charge what it's worth for a short video tutorial. My goal is to gain your trust and deliver value in advance. As such, it's absolutely free.

42:25Enjoy. Why you should charge so much it hurts. Most business owners are not competing on price or value. In fact, they're not actually competing on anything at all. Their pricing process typically goes something like this. Step one, look at marketplace. Step two, see what everyone else offers. Step three, take the average. Step four, go slightly below to remain, quote, competitive, end quote. Step five, provide what their competitors offer with a little more. Step six, end up with a value proposition of more for less. And the big secret, those competitors they're copying are dead broke. So why on earth copy them?

43:02Pricing where the market is means you're pricing for market efficiency. Over time, in an efficient marketplace, more competitors enter offering a little more for a little less until eventually no one can provide any more for any less. At this point, a market reaches perfect efficiency, and the business owners participating make just enough at the end of the month to keep going. The bottom 10-20 % of operators get washed out or lose the will to fight. Then fresh business owners enter with no idea and repeat the process of their forefathers and around and around they go. In plain words, pricing this way means you are providing a service at just above what it costs for you to stay above water.

43:38We are not trying to barely stay above water. We are trying to make egregious amounts of money that will have your relatives asking if what you do is legal. Again, we are not trying to get the most customers. We are trying to make the most money. That being said, since there is no strategic benefit to being the second lowest priced player in your marketplace, allow me to give you a brief overview of why I see premium pricing as not only a very smart business decision, but a moral one. Furthermore, it's the only choice that will allow you to truly provide the most value, a unique and strong position in the marketplace.

44:10Let me introduce you to the virtuous cycle of price. I've used this framework in most of the materials I release because it needs to be consistently reinforced. The forces of the marketplace will grate on your belief system. You must stay strong and ignore them. Here's the basic premise of why you need to charge a premium if you want to best serve your customers. When you decrease your price, you decrease your client's emotional investment since it didn't cost them much. You decrease your client's perceived value of your service since it can't be that good if it's so cheap or priced the same as everyone else.

44:42You decrease your clients' results because they do not value your service and are not invested. You attract the worst clients who are never satisfied until your service is free. And you destroy any margin you have left to be able to actually provide an exceptional experience, hire the best people, invest in your people, pamper your clients, invest in growth, invest in more locations or more scale, and everything else you had hoped in the goal of helping more people solve whatever problem it is that you solve. In essence, your world sucks. And to make matters worse, your service probably sucks because you are squeezing blood from the proverbial stone.

45:15There's just not enough money left over to make something exceptional. As a result, you fall in line with the armies of average businesses that race to the bottom. I've lived that life. It's terrible. If you love your customers and your employees, please stop shortchanging them when there is a better way. Here's the reverse. This is what happens when you raise your prices. When you raise your prices, you increase your client's emotional investment. You increase your client's perceived value of your service. You increase your client's results because they value your service and are invested. You attract the best clients who are the easiest to satisfy and actually cost less to fulfill and who are most likely to actually receive and perceive the most relative value.

45:52You multiply your margin because you have money to invest in systems to create efficiency, smart people, improve customer experience, scale your business, and most importantly of all, to keep watching the number in your personal bank account go up month after month, even with reinvesting in your business. This allows you to ultimately enjoy the process for the long haul and help more people grow rather than burning out and shriveling into obscurity. To swing the argument even further in favor of higher prices, here are a few interesting concepts. When you raise your price, you increase the value the consumer receives without changing anything else about your product.

46:25Wait, what? Yes. Higher price means higher value. Literally. In a blind taste test, researchers asked consumers to rate three wines. A low-priced wine, a medium-priced wine, and an expensive wine. Throughout the study, the participants rated the wines with the prices visible. They rated them, unsurprisingly, in order of their price, with the most expensive being the best, the second most expensive being the second best, and the third, cheapest option, being rated as a cheap wine. What the tasters didn't know is that the researchers gave them the exact same wine all three times. Yet, the tasters reported a wide discrepancy between the high-priced wine and the cheap wine.

47:03This has deep implications for the direct relationship between value and price. In essence, raising your prices can directly enhance the value you provide. What's more, the higher the price, the more lure your product or service has. People want to buy expensive things. They just need a reason. And the goal isn't to just be slightly above market price. The goal is to be so much higher that a consumer thinks to themselves, This is so much more expensive, there must be something entirely different going on here. That is how you create a category of one. In this new perceived marketplace, you are a monopoly and can make monopoly profits.

47:36That is the point. One final point I want to drive home. If you offer a service where a customer must do something in order to achieve the result, or solve the problem you say you solve, they must be invested. The more invested they are, the more likely they are to achieve the positive result. Therefore, it follows that if you care about your customers, you should get them as invested as humanly possible. Ideally, this means pricing your services or product in such a way that it stings a little when they buy. That sting will force and focus their attention and their investment in your product or service.

48:09Those who pay the most, pay the most attention. And if your customers are more adherent and follow through, and if they achieve better results with your service than your competition, then you are in a very real way providing more value than anyone else. This is how you win. But I know this isn't easy, and it shouldn't be. Your product must deliver. So many wish to shortcut the real work. Do that, and you will fail. In the real world, to have the quote gonads to charge big ticket prices, you must outwork your self-doubt. You must be so confident in your delivery because you have done it so many times that you know that this person will succeed.

48:43Experience is what gives you the conviction to ask for someone's entire year's salary as payment. You must believe so deeply in your solution that when you look at yourself in the mirror at night alone, your conviction remains unshakable. So let me bring this section home with my personal experience, my premium price experience. In my first niche consulting business, Gym Launch, I teach owners a better business model. Before proxizing my consulting services, I flew out to 33 gyms in 18 months to do full gym turnarounds. We would fly out, fix everything in gym, and relaunch it in 21 days. We would average an increase in$42 ,000 in additional sales in 21 days.

49:20It was wild. My fee was 100 % of the revenue I would bring in. At our peak, we were turning around eight gyms a month. This quickly became a logistical nightmare. After the wear and tear of living in motels month after month after month, I thought to myself, there has to be a better way to do this. One month, there was a gym we were scheduled to go fly out to, but I simply didn't want to do it. So I told them we were going to cancel the engagement. The gym owner practically threatened me to help him. So I said I would help him, but he would have to do all the work. But I would show him how. Within 30 days, this gym made almost$44 ,000 in new upfront cash collected, which was four times their previous month.

49:57As soon as I saw that my process could be duplicated from afar without me having to fly people in, our business exploded. I had found the missing link because my travel schedule was no longer a constraint. We went on to sell 4 ,000 plus more gyms over the next few years and counting using a done with you rather than done for you model. But back to premium pricing. When I entered the space, low-priced competitors offered full-service marketing solutions for$500 per month, with a single high-priced competitor charging$5 ,000 for his product. I wanted to be the premium price leader. I wanted to be so expensive that it created a lure around what we were doing.

50:35So we came in at three times the highest-priced player and 32 times more than the lowest-priced player. A price of$16 ,000 for a 16-week done-with-you intensive. Then we upsold 35 % of those people to a three-year$42 ,000 per year agreement for us to help them grow their gyms. For context, the average gym owner makes$35 ,280 per year in take-home profits. If that's the average, it means half make even less than that. So for many of them, they were committing to half of their yearly salary or more to buy our program. And I was selling this to grown men as a kid in his 20s, telling them I was going to help them make more money.

51:10This was possible because my conviction was stronger than their skepticism. How? Based Based on a voluntary survey taken at our last full company event with 158 gyms responding, we found that a gym launched gym who has been in our program for 11 months will experience the following average improvements. Top line revenue growth of$239 ,000 per year. Recurring revenue growth of$160 ,000 a year. Bottom line growth aka profit from$29.43 per month to$89.40 per month. That's 3.1x increase. Average client growth of an additional 67 clients. Churn, aka percentage of clients who leave each month, drops from 10.7 % before to 6.8%.

51:53Retail sales, an additional$4 ,400 per month in retail sales after they started working with us. Prices, on average, went from$129 per month to$167 per month in average revenue per gym member. Their survey just proved what I already knew. I had complete conviction in our product. I knew it worked. I had outworked my self-doubt. Summary points. What should you take from this? First and foremost, charge a premium. It will allow you to do things no one else can to make your client successful. We were able to charge a premium because we provided more value than anyone else in the industry. In a real way, we were charging only a fraction of what our clients made using our system.

52:31This is important. Our clients still got a deal. The gap between what they paid, price, and what they got, value, was massive. As a result, the virtuous cycle continued to spin. We charged the most money, we provided the most value, our gyms remained the most competitive, made the most money, always had the latest and best acquisition systems, and had the support to implement them at lightning speed. We made many mistakes along the way, but our pricing model was not one of them. It allowed me the room to make big bets without losing the farm. The truth is that 99 % of businesses need to raise their prices to grow, not lower them.

53:07Profit is oxygen. It fuels the fire of growth. You need that if you want to reach more people and make a bigger impact. In order to charge so much, though, you must learn to create tremendous value. Let's head there next. Hey guys, hope you enjoyed the second episode of$100 Million Offers. The follow-up to this is that we have a course available on the site. So if you're a visual learner, you like watching things, I have a full slide deck. presentation, checklist, documents, everything that goes along with this book. It's absolutely free. All right. You don't even have to give me your email. It's free.

53:39It's on my site at acquisition.com forward slash training. Poke around. There's other courses there that I think you'll also enjoy. And next episode, we're going to be going over probably the single most famous chapter in the book, the value equation. And I'll have a special little secret surprise at the end of that episode as well. I hope you guys enjoyed as much as I enjoyed making it for you.

54:03Acquisition.com Volume 1,$100 million Offers. How to Make Offers So Good, People Feel Stupid Saying No. Written and performed by Alex Hermozzi. Copyright 2021, Acquisition.com. Audio Production Copyright 2021, Acquisition.com.