The Game with Alex Hormozi - The Real Issue Holding Your Business Back | Q&A Ep 762

Episode Date: October 23, 2024

Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth.Wanna scale your business? Click here.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Hello. I'll tell you this one story real quick and then we'll get into it. So I had a guy a few months back and he was really excited to ask this question and he was like, hey, could you go over the closer framework? And I was like, what's your close rate, man? He was like 40%. And I was like, that's obviously not the constraint of your business. So you like traveled across the country. You did the first day. You came to the second day. And the one thing that you decided to ask was something that is not a problem in your business. And the thing is I think it's really telling because a lot of us work on the things, on the things that we like, and he just likes sales.

But the reason that his business wasn't growing was not because it had a lack of closing. It was because of other issues that he wasn't confronting. There's four big issues that I consistently see because I've now had a lot of conversations. These are strategic problems, not tactical ones. So it's not like, how should I increase my show up rate? How should I increase the closing? How should I, you know, whatever? They're usually rock and hard play scenarios, meaning that you're stuck because there's this thing where on either side there's pain.

and so you just continue. And it's usually one as short-term pain is one is long-term pain. The first most common one is that you're mispriced. This is where you're like, okay, I'm at full capacity in my facility, but we're not making any money. But if I raise my prices,

then I'm going to lose my customers. What do I do? It's like, well, if you continue, you don't make money. And if you raise your prices, there's another alternative where you don't make money, but then you will eventually make money. These are common rock and hard play scenarios.

A close cousin of that is compensating, is that I've got people on my team who I'm overpaying and my whole business models I give 50% of revenue to my therapists. Okay, well, tough to make money when half of Topline goes away, at least in a human capital based business. Well, if I tell them that I have to renegotiate comp, then I'm going to lose my therapist. But if I don't, I'm never going to grow this business. Rock and hard place. In each of these situations, you usually just have to deal with the fact that you're going to have some short-term pain or, you're you can just have the long-term pain of the fact

that you never achieve your goals. We've been able to move relatively quickly through these because we encountered these problems too because these are all problems of ignorance. You did something, you did the best of your ability at the time, and then you learned some shit, and then you're like, oh wow, that wasn't smart. But now you know, and that's the price of ignorance tax

is it hurts a lot because you pay down the debt of not knowing. The next one is over-expansion, which is we have some sort of internal need as entrepreneurs to continue to grow, and we define that by our top line growing or by being close to some rival that we have, that we for some reason compare ourselves to that no one else knows or cares about.

I was at one location, so I immediately go to two. And I'm just using locations because it's simple, but it could be you have an agency, you go from 10 clients to 100 clients, whatever. But by doing that, you overextend yourself. And so what happens is you abdicate instead of delegate. And so by the way, you can know the difference because if you delegate, things keep going.

If you abdicate, shit gets worse when you give it to somebody else. And so many of you abdicate and don't delegate. Because of that, because it takes work to delegate because you have to train someone, you have to get them up to speed, and that takes time and you're impatient, and so you don't do it, and then you pay the price later. But now what do I have to do?

Well, now I have to keep selling in marketing, but all the people that I have in delivery because I scaled so much suck, but I have to keep selling in marketing, but then my reputation gets hurt because every single person who comes in says I suck, but I have to keep doing it because I have to support the payroll, rock and hard place.

A lot of these decisions is sometimes you have to take a step back, so you can take two steps forward because there is no alternative. And sometimes that means you go through a lot of pain in the short term. This is why I often say that your lifestyle is your competitor's opportunity. And so if you can live on less so that you can be more offensive or more flexible within the business, it just gives you degrees of freedom. If you can cut revenue or cut profits so that you can reorganize the business to fix a strategic problem, it allows you to be more aggressive in the future.

And then the last one is my favorite, of course, woman in the red dress. I have, I'm CEO of two businesses. I've got this amazing idea, and I've been doing this thing for seven years, but this thing sounds great because you only know the good stuff. You don't know the bad stuff. And so, you know, you meet the woman in the red dress, and you're like, she's amazing. And then you're like, oh, my God, she's a crazy ex-boyfriend. She got chlamydia.

Like, oh, my God. I didn't know that. But now I'm in bed with her, and you're like, you know, I have glimidia too. And you're like, here we are. How did I get here? She seemed so great. I had a CFO for years. She retired.

She was awesome. But she said, she's from the South. She was like, there's always shit. She's like, all businesses have shit. You just have to pick what type of problem you'd rather solve. There are eternal questions that are always impossible questions to answer correctly. Do I push or do I pivot? Do I need to keep pushing through this thing?

Or is this one of those times for need to pivot? Well, there's tons of stories of guys who kept pushing and then pivoted and then it worked. And there's tons of stories of guys who kept pushing and then it worked. And so how do you know what's right for you? It does ladder up to what we originally started with, which is return on resources, which is, given the resources that I currently have, what is the highest probability of success, but that assumes that you have perfect information, which you never do. The answer to that is you don't know, and you try your best.

So these are the four most common problems that I see. I'll probably highlight some of them as you guys ask them. But yeah, let's rock and roll. Who's got the first box? Yeah, so I've got a business. I was working with the guy who does e-com management for Amazon stores, Walmart stores. So I was leading up his operations. Him and I started a side business, doing a tax function, and then also we've been.

built the software that runs his entire business, but like a separate, like a little shark that falls a big shark. So that business is going relatively well. We'll do about 1.1, 1.2 million this year. It's gotten to the point where we have these clients that come. I mean, anybody who signs up for his other business has to sign up for our business. So I don't need to advertise or market. I'm trying to figure out what's next because right now we have this one channel partner. Anything after that business, Walmart, Amazon, change the game. We can get shut down pretty quickly. quick. So we're trying to figure out do we focus on increasing revenue with our existing clients? We can, that's one strategy we could take, but that limits us with the one channel partner.

Or do we start figuring out how do we take all of our excess capital and either partner with other people, create different apps, things we could sell to the Amazon seller marketplace as a whole. We're approved app developers now for Amazon as well. So there's a lot of different directions we can go. and I'm stuck between increasing revenue with our existing clients and getting up a little more or figuring out other streams of revenue in case anything happens to that first one. I do neither of those.

I mean, my favorite strategy of the world, do more of what's working, which would be you have one channel partner. And so I would be attacking more channel partners. I wouldn't be adding more products. And if you already are good profit margins within the business right now? Yeah, about 68%.

Okay, yeah, so margins are good. So yeah, I would be getting 10 more of the big sharp. as the business model. So that means that you're like fundamentally you have to crack an acquisition channel to get customers. And so you already know what the partnership model looks like when it's right. Now I'm guessing that guy owns half of this business.

Right. And so it's like how do I make it compelling for everyone else? So you'll probably eat into your margins. But maybe just say I'll give you half of the revenue as an affiliate or 40% of the revenue that your customers generate and you don't have to do anything. You just make the intro. Sure. That was a thought as well. Yeah. I would do in terms of like, so I think about these in best,

bets of like what's the what's the likelihood of success and so building new products is a lot of zero to one which is a lot of net new you don't know if you have product market fit like you have product market fit which is tough and you have that just great and then different acquisition channel it's like well you already know what partners is like and so it's like if i if i want to take the next natural bet it's like how do i change as few variables as possible and take the bet that'll have the most upside so you getting 10 of these sharks with an affiliate model that makes sense makes sense to me And maybe we do a little phantom pool of like 10% that all of them get a tiny share of that's proportional to the amount of customers they send you so that if you exit in the future,

they get a slice. Sure. Makes sense. Cool. Thank you. Yeah, no worries. Hey, Alex right here. Yes, sir.

Alliance Jiu-Jitsu. I mentioned to you last night that we have 250 locations as a franchise model. I also own two of my own locations and I want to now open 50 with my franchise partner as opposed to just going after franchises. It's just better for us to own locations. We talked about that. But you mentioned, hey, we, bought out our our franchises in one of your portfolios I believe yeah we've looked into that

right I should say I've looked into that but it just seems that there's kind of like a a delusion to the value of those terms right so you go from most in pain to least in pain of the 250 that are open yeah number 250 worst performer yeah I talk to him first got it and then you just go to 249 and then 248 247 246 you just keep working way through got it's it's coming from the perspective of like we don't need to buy you out but you want us to take over this thing for you, I can take it over for you. And then you can just swallow them up. Because a lot of them, I would assume the bottom 20% desperately regret the decision of being in business. That's nothing new with the model. Like bottom 20% for whatever reason,

right? And so then you say, cool, well, I can relieve all of this pain for you immediately. And I'll take over all the liability of your leases and all the liability of the equipment and everything else that goes with that because you know that you know how to run the business better. And you might have to fire half the staff, but at least you don't have to rebuild the facility. It's already to spec. And as long as you like, the markets because some of them we close down like this is a market issue local calm down like some local markets just don't have enough to sustain there's not enough the ideal avatar whatever as long as you don't think it's a market issue and we think this should be

overperforming and this is being mismanaged those are the ones that are opportunities got it yeah I would do that first I would go mop up because I'll bet you out of 250 you can find 50 without even having to spend a dollar of opening new right just take over liabilities like If you take over a lot, so this is how you can talk through it with them, which is like, you have $300,000 in liability, you have zero cash flow. I'm paying you $300,000 in debt that I won't take on. Right. And so that way it's not like, wait a second, this thing's like, this word is nothing. The opportunity was worth something, but you have now squandered it.

And so you have debt. I'm willing to take that risk on. Because they love the sport still, though, in this situation, they don't want to like necessarily walk away from their students. They still want to be there. So I guess how from just a high level perspective, do you have any thoughts on how to even work that frame? Tough, mostly because they're going to still have authority in that world. So ask them to walk away is like kind of a different conversation.

Yeah. So I think what you dealt with. I think I know, I get where you're coming because they're like the master sensei or whatever. Yeah, exactly. Yeah. So they do want that, sorry to interrupt you, but they do want that like kind of relief that you're talking about.

Yeah, they don't want to manage the business. They just want to like teach classes or whatever. Yeah. The thing is like, so this would be a test, honestly, because all the French that we have, like they're not, they just on the location or whatever. I would go in and say like, I would test on one of them and be like, in front of the staff, this guy has to get up and then I will get up so that everyone understands, like, he's not the man anymore. I'm the man now. He just teaches classes. He has no authority.

If your checks fucked up, he can't do shit. If you didn't, like, if you want to know if you can take off, he can't do shit. Like it's, that has to be like a clear transference of power, not in a way to, you know, neuter the guy, but like, be very clear that, like, he no longer has authority here so that you could take it over. I don't know, like, how well that'll go. But if he's bought in, And he can sell the fact that like, listen, I'm here to teach classes. That's what I want to talk about. But it's like, hey, you want to talk about arm bars? He's your guy, not me.

I'm here for the dollars and sense to make sure the lights stay on. And so we can keep this thing going, so everybody can keep having fun. Understood. Clear division of roles. And if you're like, hey, play out to narrows. So it's like, hey, by the way, you're like, hey, that's not how we do things here. It's like, duh. That's why it's not working.

Right. And so we are going to change things. Yeah. Monetarily, I think, is where I've run into the issue, which I'll have to think through of how to make sure that they also are paid something that they feel that's worth it. So to your point, I think, when I just need to maybe wait it out for the right ones.

There's for sure, 25 that will sign their stuff over. Understood. To take, to just teach classes, because that's what they thought. They thought when they bought into the opportunity that they were just going to make money doing something they loved. But then all of their days doing stuff they hate

and they barely get to do the stuff they love. So it's like, I want to give that back to you. 100%. Okay. Thank you. Yeah, no worries. Your YouTube and Layla's YouTube, is amazing and so inspiring and you guys recently made a YouTube change to go all in a business content do you foresee in the next 30 days 60 days quarter any additional YouTube changes and

where are you putting your chips in with YouTube oh great question no I think back to business is going to be the theme for the foreseeable future we did like a quarterish maybe it's like 16 weeks where we just tried we'd experimented with some wider topics and what was interesting and hopefully you guys saw it's like we got more views on that stuff and so I felt confident in saying like oh I know how to get views but that doesn't get me what I want we was just talking to one of our our leaders in the company earlier today, as like we just always try and think from the perspective of what increases the likelihood that what we want to have happen happens.

And so what I want to have happen is that we get as many business owners as possible into our work. And so me making mosey meals, the idea was, well, maybe entrepreneurs who are kind of like fitness oriented are going to like this stuff. But what really happened is just a bunch of people who watch fitness stuff, watch that video and don't care about business. The question then comes back because I had somebody else asked me this. They're like, I thought a brand was like your personal thumbprint.

Like they're all different aspects. Like you like dessert. you train your calves like all those other stuff right and so i think it's fundamentally like what's the main topic the main topic's business but if it's business first and then i sprinkle in the fact that i train my calves or whatever then it's still business people so everybody in my audience will like it and some of them will like it more but if i start with food stuff and then business stuff kind of gets sprinkled in i'm getting the wrong first person and so business content overlaps 100% of my audience the other stuff just creates a second form of affinity.

So if you like dessert, fitness, and making money and philosophy, you're going to fucking love me. But if you just like making money, I don't want that person to not want to wash my stuff because I'm talking about not that. But if I have a business piece that mentions dessert, they're not going to not watch the video. And so that's really, it's like what's the main emphasis? And so for me, knowing that, and I have to do the math on this, this is worth for everybody, is there's 300 million Americans, 9% of Americans have a business, 27 to 30 million, depending on where you look at the source. So 30 million businesses, but that means like sopreneurs, hairstylist, LLCs that exist. Now, of those people, so there's 30 million total.

Okay. Now, how many of those people, like, I would say have, like, business businesses, like one employee? Well, now we're already at, like, 10 million. It's like, okay, there's not that many business owners. Like, you have this huge world and all of a sudden just gets really, really shrunk down. And then from there, that, like, like this, like way smaller, right? And so I have to be realistic about, like, I'm not going to compete with Mr. Beast. on views because entertainment is reinforcing for everyone.

Education inherently is harder for some people to consume because it requires work. You have to think. So making sure that you don't take lessons from entertainment, it took me time to learn this and apply them to the wrong business context. And so everybody here, I think, is here to make money. And so the content that you make costs resources and you expect to get a return on those resources. And so we have to ask what content is going to increase the likelihood that we get the desired

person. And so if I make business content, unsurprisingly, more business owners watch it. If I make not business content, more not business owners watch it. And so as simple as that sounds, it took me 16 weeks to learn. And so hopefully I passed that on to you. But it also means if you look at my views now, we're way lower than we were. But I'm going really deep on business stuff. Hopefully you guys like this stuff I've been posting lately.

Yeah, it's way deeper business stuff. But I get like 100,000 views. And my average, before those 400. But I was going wider. But in terms of all the metrics that I care about, the opt-ins on our site that are for business owners, the percentage of people who say I want to start a business versus I own a business I want to scale a business. It's significantly skewed. It's doubled towards owner business. My book sales have doubled. And so the metrics I care about have gone up. And so it's like,

it's very tough because making content's very reinforcing because you want to get more views, you want to get more likes because you get into that game. But you have to make sure you're doing it for the right thing. But as long as we check the box of like this is about business, then by all means, I want to jam the shit out of the views and whatnot, as long as it's about the right stuff. From that, do you have any iterations that you'll be making from what you just did like forecasting for the next four weeks. No. Honestly, it's just like me making business stuff.

As much as I'd love to say with this really conflict strategy, like, we get down and kill like, what do you want to talk about today? I'm like, eh, this. That's what I make the video on. Sometimes they'll come with a couple that are pre-prepared. And they're like, we pulled all a bunch of stuff from your, from Twitter and podcasts that we grouped together on this theme. I think we think would be really interesting.

We've already got some packaging outliers that we think would work well here. And then if I'm like, I don't feel like making that. Then we don't make it. But if I feel like making it, then I make it. So as much someone would be like, that's, we have the super dialed system. I just make what I want. Thank you. My year old loves your cast, too.

Oh, awesome. Took one from Mr. Beast. There we got. Hello. Shoot. Yep. So you talk about price being like the biggest lever, you know, that we have in terms

of our profit. You don't really want to be like the lowest in the market. You want to be high end. But you want, but it's okay to be the lowest in the market if you're going in there with the plan of literally disrupt the market, which is what I'm doing. Yeah. Yeah. Exactly.

He does tax for small businesses zero to 600 K. Keep up. I really love the fact that I'm. doing these services for this price because there's so many small business owners who need them at this price. Kind of why you speak to whether it still makes sense to like experiment with my prices. And so there's no advantage to being the second cheapest. Okay. So you have to be the cheapest, but that's because you started with the end in mind that you wanted to build a way to operationalize,

making a good margin on the very cheap price that you charge. Yeah. You have a gazillion businesses that right now are within your market, zero 600K of the 10 million businesses that I described earlier. That's like all of them. Yeah. Right? Yeah. Like so few businesses actually make money.

Yeah. And so you are perfectly suited to the majority of business owners, solar printers, single, you know, tiny location operators and whatnot. If I were to buy your business tomorrow, I would just jam 10. That's why I asked you. I was like, how many people can you sign up a day? And you said you can handle 10 to 15 new customers a day, which for accounting and tax is absurd in terms of you.

That's right now, but I mean, you give me a month. Right, no. And so when I heard that though, it's like, that's exciting. And so all my entire focus is like, you already have this back end that runs really good margin on this tiny price. Yeah. Did you just jam the living hell out of the front end? Yeah.

That's it. I wouldn't mess with anything on the back end. You have 1% churn. People like it. You have a huge value discrepancy. It's low price. I would just jam as much as humanly possible. When you increase price, you have two things that occur downstream, which is that conversion

rate typically drops and churn, if you have recurring, goes up. And so when you're figuring out what the best price is, is you want to say, and if you don't know how this works, it's you have price, works is you have price so let's say it's 10 bucks a month divided by churn which let's say it's 10 percent whatever all right equals a hundred dollars of LTV right so that's that's what we're going to make from a customer so then the only other variable that we have to factor into it and we factor price and churn in is what's our conversion rate and so if we're selling we get a hundred clicks we have 100 calls whatever the first thing in your sales process is we say okay well we have that many clicks we converted this percentage at this price that's the first thing that the

price is going to affect but it'll also affect how long they stay Because in general, cheaper prices have lower turn, but not proportionally lower return. And that's where the magic of pricing comes in. And so if you double your price, you don't typically cut your conversion in half. If you double your price, you can cut your conversion by 25%. But if you did that, that makes a lot of sense. And where this makes even more sense is let's say you run a business that has, let's say you have 20% margins, right? If you raise your price by 20%, you might have a 5% drop in conversion. But if you have a 20% increase, Right, which you then multiply this by 0.95, which would be 19%.

All right. So we'd have a net 19% increase in revenue and we had 20% margins, which means we almost 2x the business in terms of profit. And so pricing is the strongest lever that you have on making money. And most people get so afraid of this because what happens is that from an anecdotal experience is that especially if you're the one taking sales calls, you're very close to the sales of the business, you increase the price and all of a sudden your reward cycle goes, down because you're used to getting yeses on you know five out of ten and now you're

getting yeses on three out of ten and you're like oh my god this was a terrible decision what were we thinking but when you do the math you're like oh we make more money to serve fewer people and if we serve fewer people that costs even less money and we make more money doing that huh and so this isn't me selling you on raising your price but i am just selling you on doing the math yeah so if your conversion rate does not drop and your churn does not increase and you raise your price, more money good. But every time you do a test, and this is for everybody, you always guarantee a cost of testing.

You don't guarantee upside from a test. And so one of the big things that feel like a lot of people in this room do is they want to test things all the time. You have to make a really good argument for why this is the constraint of the business that's worth the price of the test that you are guaranteed to pay,

which is you have to retrain the team, you have to change the script, you have to change your point of sale, you have to change your system, like all these other, your contracts, there's all these things that have to change downstream from this one change. And we do this haphazardly, oh, this week I have this flavor of tests that I want to run.

But then your team's always telling you, like, you're changing things all the time. And the reality is you are. You'll be surprised. But a lot of times when I stepped away from businesses, they made more money. And so, like, we need like this much Alex, not this much Alex. And so there's a reason that like, I only talked to portfolio companies like once a year. Because like, I'm like, okay, I'm going to come in and fuck all a bunch of shit up. And I'm like, all right, go do that.

I'll see you in a year. Because if I'm there all the time, I mess too much stuff. And so it's like you just need just enough to to change the real few things that matter because if I only have a day Then I'm only going to look at all right what are the big things? Let's change this. Let's test that. That's it And so for you I'd be like okay, I would consider tweaking profits if it's not operationally complex for you Look at the conversion rate look at the churn separate out the cohort for those customers So tag them so you can see if their churn is different because if the churn goes from 1% to 2% a month you cut out TV in half Because you're so low on churn that just literally one to two percent cuts I mean it's it's massive

So unless you've more than doubled the price if turn goes from one to two it's not worth it Okay, your turn's so low that that's why I'm like don't fuck with it you're already super profitable Just jam as much as you can in the front end. It's not worth the risk What do you mean by jam as much as you can in the front end? Sell a bunch of people okay Yeah, market and sell yeah Alex nice to me. I'm Jake Nice to meet you I feel that the constraint in our business at the moment is how we acquire customers We have a JV model. So we help coaches, consultants grow and monetize their audience on Instagram.

We went with partners, so they promote our webinar. And then for two or three days, four days on their calendar, we do re-sip. So we're maxed out of sort of 50, 60 partners that we can possibly promote per year. Why? Because of the size of our database is 10,000. So if we promote them, let's say three days, four days promoting a partner, our calendar fills up. So we can't therefore promote them any further.

You have 50 to 60 partners who promote your webinar. Yeah. And then you sell their audience. Yes. Okay. Yeah. And then you're saying because you have to cross promote, you have to promote them. Yeah, they promote us. So we promote them. That's, it's like a re-sit. How long have you been doing this? Four years. Okay. And you had the same offer four years ago, right? Yeah, yeah. Okay. And the size of your list four years ago. What was it compared to now? 5,000. And what is it now? How is the list so small if you're doing 50 JVs? It sounds tiny. Well, we haven't been. Like we scaled to 50 last year. The year before it was 20. But even so. I mean, 50 JV partners to get 10,000 people. I think we're burning through the list because as soon as they come through our kind of initial sequence then we're promoting somebody else immediately to say so is the model flawed in my mind I was here you say in like more better new I'm thinking I don't think we could do any more yeah it kind of makes we could if you slice the list up but still the 10,000 seems like an outpoint to me like something doesn't make sense there like shoot like the top affiliate

that we had who promoted my book launch said 10,000 opt-ins there's one guy yeah but if we're resip and an hour list is 10 10,000. If we work the partner who's got 20,000 or 30,000 or even 50,000, they're generally sending two, three times as many leads as we are to them. So we're not as an attractive partner. Right. That's what I'm saying.

So weird is that you have 50 or 60 people sending you leads and you only have 10,000. That's the part that doesn't make any sense to me. I think it's the whole reciprocal thing. That's the issue. Like there's tons of people who build affiliates. They just don't say I'm going to promote you. I just compensate you with money in exchange for promoting me. Like every affiliate model that exists on the planet that is scaled is just you promote me,

get paid. Yeah. So you would build that as opposed to going to a new channel like Instagram, for example? Yeah, I mean, you already know how to do that. I would just, I would probably play with the, this is the price compensation one in terms of those four, is that I would just play with the deal structure. And so you might have to, I mean, you don't have to go with a couple of different versions, but I like, fundamentally people will promote other people's stuff as long as it, and here's the big thing is it has to, it has to be accretive to their audience. It has to be value additive. If you can find a way, I'm going to give something amazing to your audience, which is like, I'll do a Q&A for your audience,

if you're one of the top, however many. And so then that gives that audience a reason or that promoter a reason to promote it, and it gives the audience a reason why they would click through their link. It's like, I would like this thing that doesn't benefit the promoter, but benefits me as the end user. And so that doesn't detract or take goodwill from the list. Instead of thinking like restroposity or whatever,

think like, what would I need to do in order to make sure that their list was better off from promoting my thing? And then do that. Okay. Does that make sense? Yeah, it does. So a front of mine has a big, big JV business, and what he does is he gives away a free service that he provides.

So by the way, this is great for you. It's actually tax and accounting stuff. And so he gives away some sort of tax accounting, whatever, on the front end that they can add to every single sale that they have. So they add it to their stack. They had his service to their stack, so they get a premium for the service that he provides. And so by doing that, they just get all margin and they have to do anything. And he gets free leads because they come to him.

He delivers the service that he promises, which adds value to that person's audience. upsells them additional services and that's the trade and so you just need to find something that gives value truly rather than take take yeah make it a give to both them and their audience and you'll have an endless amount of leads that you can do affiliations with awesome thank you that help yeah okay cool this a Alex yeah name is Derek Surrett nice on of DV Solutions federal forecasting app and federal contractor I created some software to help small businesses kind of simplify their business development and market

research efforts in the federal contacting space. Okay. You've insulated yourself with a team of subject matter experts that are highly intelligent. And my question to you is, what book would you recommend to us for closing? Honestly, I'd recommend the actual videos I put out there more than the books. Okay. Just being real. Because I have a podcast or two or three that cover just obstacle overcomes.

And are you familiar with the closer framework? Fairly. Okay. So if you just Google Closer Framework, Alex Ramosey, If you Google diagnostic sale, Alex Ramosey, objection overcomes Alex Ramosey. All three of those will pull up probably 10 plus videos that are really in-depth trainings for me on how to sell. That'll probably be more engaging for your team that you could just like play for them. They'll have a higher likelihood of actually doing it than reading a book more likely.

Okay. That's actually what I would do. Okay. Yeah. Yes, sir. Hey, Alex. B2B pricing question. Seems to be a drop off and conversion rate after a certain point.

the internal. What you say after a certain point? Do you mean in the life cycle or like at a price point? At a price point. Okay. Yeah, call it $6,500. The internal team is great at upselling, so ramps, not walls. There is an onboarding cost associated with that.

So it's like knowing all of those pieces, how would you structure, how could we lower the initial cost while maximizing lifetime value and not take a negative? What do you sell? Who do you sell to? B2B, Amazon TikTok agency, actually. So you sell to TikTok store owners. D-To-C top 100. Amazon and TikTok optimization.

It's like CRO stuff? Or do you run ads to it? Both. Okay. And so the onboarding price is build out of their account, integration with the software, building listings, optimization, building out content. Got it. And so you charge $6,800.

Onboarding could be anywhere from, depending on catalog size, up to $20,000, $25,000. Okay. And that's a problem. The people are like, no, that sounds like a lot. Exactly. What's the ongoing price? Anywhere between 6,500, all the way up to 30,000 a month. 6,500 to 30,000 and 6,500 to 30,000 per month.

Okay. Do they commit to anything or no? Yeah, we've been playing around with time periods between higher for month to month or 12 month for lower. So I'll give you something that's one of my favorite offers ever. Let's say it's $30,000. All right, we'll just use a big price. $30,000 down, no commitment.

or if you're willing to commit to the fact that this is going to take a little bit of time and like you're not an inpatient Molly, right, that this is going to take at least six months or at least 12 months for us to put all of our systems in place, I'll stomach the cost of getting you onboarded as long as you commit to 12. And if you get cold feet, you just pay what you would have paid to go month a month. Sweet. So let's say we're doing a gym. So I would say, hey, it's $500 to sign up at the gym and the $99 a month after that. Or I'll waive the 500. I'll onboard myself as long as you're willing to commit to a year. And if for whatever reason during that year, you choose to cancel, you pay what you would have paid if you want month to month. So the 500 act as an

anchor. It positions the price that you're doing monthly as much lower, which is nice for the sale. And then they're like, wait, so I can either, it's like, hey, I don't want to commit to that time. It's like, no worries. Just pay that. And well, like, I have, I have to incur cost to get you onboarded. That cost has to get paid one way or another. I will stomach it because I can spread it over 12 months if you're willing to commit to that. If you're not willing to commit to that, I'm not going to lose money bringing you on. So it's up to you. If you're willing to commit and you're convinced enough

from what I've said that we can help you out, I will eat that. Now, for whatever reason, three months from now, you're like, screw you. Then I'm like, then you pay the all-mort. And you're out. Does that make sense? Yeah.

Cool. All right.