3 Questions To Ask Yourself For Product And Service Ep 562

Summary Notes


In a discussion on building businesses with lasting value, the host of "The Game" podcast emphasizes the importance of creating exceptional products that compel customers to spread the word organically. He contrasts short-term sales tactics with the long-term strategy of investing in product quality and customer experience to foster natural growth. Reflecting insights from successful entrepreneurs and billionaires, the host, founder of acquisition.com, shares three pivotal questions that challenge business owners to increase their product's value and enhance customer satisfaction. These questions prompt a mindset shift from immediate profit to creating a remarkable offering that ensures sustainable enterprise growth and profitability through word-of-mouth referrals—the only customer acquisition method that compounds over time.

Summary Notes

Key Theme: The Importance of Product Quality for Business Scale and Profit

  • Creating a high-quality product that compels customers to share with friends is crucial for sustainable scaling and profitability.
  • The focus on product quality is a strategic approach to build a business worth owning.
  • Entrepreneurs should confront the reality that if their product isn't being recommended, it may not be good enough.
  • The goal is to create a product that grows organically through customer referrals, which is a key indicator of its value.

"That is what creates an enduring thing. And that is what, when you spend the extra time to make the product so good that people have to tell their friends about it, then that's where you get the unending scale. And also, it's where all the profit is, right?"

This quote emphasizes the significance of investing time to perfect a product to the point that it naturally encourages word-of-mouth promotion, leading to sustainable growth and increased profits.

Key Theme: Entrepreneurial Mindset and Customer Acquisition Strategies

  • Entrepreneurs often believe that more exposure will solve their sales problems, but the issue may lie in the product's quality.
  • The approach to customer acquisition can differ significantly between small and large entrepreneurs.
  • Small entrepreneurs often focus on immediate sales, while larger entrepreneurs prioritize long-term customer relationships and value.
  • The mindset of compounding value over time versus short-term gains is a distinguishing factor between millionaires and billionaires.

"Right now, if you're not making the amount of money that you want to make, it's because the product that you have is not good enough."

This quote confronts entrepreneurs with the possibility that a lack of success may be due to the product's inadequacy rather than a lack of exposure.

"Most small entrepreneurs try and get customers to make sales. Bigger entrepreneurs try to make sales to get customers."

This quote contrasts two different strategies for customer acquisition: one focusing on immediate sales and the other on establishing lasting customer relationships.

Key Theme: Long-Term Growth Perspective in Business

  • Successful entrepreneurs, especially those who are billionaires, often share a long-term growth perspective.
  • They only pursue ventures that have the potential for organic growth over time.
  • This mindset is about building something that is self-sustaining and not solely dependent on constant input or promotion.

"If it's not going to grow on its own, over time, it's not worth doing."

This quote from a billionaire friend of the speaker highlights the philosophy that a business or product should have the inherent strength to grow independently over time to be considered a worthwhile endeavor.

Ultra Wealthy Investment Mindset

  • Ultra wealthy individuals prefer investments that require a one-time effort with compounding returns over time.
  • Continuous effort to promote or sell a product indicates it may not be inherently strong as it lacks self-driven referrals.
  • A product or service should ideally generate business through its own merit without constant active promotion.

If you put in a one time effort into something and it compounds over time, then that is an enterprise or a product that they want to continue to invest in.

This quote emphasizes the preference for investments that grow over time without the need for ongoing active input, aligning with a passive investment strategy favored by the ultra wealthy.

If you have to consistently show up and consistently promote and consistently get out there and sell and sell and do all this stuff, then what ends up happening is that the product itself is not good enough, right?

The need for constant promotion suggests a product's value doesn't stand on its own, which is less attractive to those looking for sustainable, long-term investments.

Question 1: Enhancing Value of Products/Services

  • Consider how to justify a high price point for a product/service by enhancing its value.
  • Reflect on the necessary changes to the product or experience to warrant a significant price increase.
  • This thought experiment encourages a mindset shift towards creating exceptional value.

If I have an existing product or service, and I were to make it ten times more expensive... what would I need to do? What would the experience need to be? What would the product need to deliver in order for it to be worth that much?

This quote prompts the listener to think about how to elevate their product or service to justify a much higher price, challenging them to innovate and improve value.

Question 2: Increasing Efficiency and Value

  • Explore ways to improve a product/service while significantly reducing its cost.
  • Identify assets that can be created once but provide ongoing value at scale and profitably.
  • This approach aims to enhance product quality while considering cost-effectiveness and scalability.

If this product that I have cost one 10th as much as it does right now, but I had to make it better than it currently is, what would I need to do?

The speaker challenges listeners to think about how they could improve their product or service even if the price were dramatically reduced, driving innovation in quality and efficiency.

Visual Learning and Additional Resources

  • The podcast also offers a video version with additional effects, visuals, and graphs.
  • Visual aids can enhance understanding by engaging different brain centers.
  • The video content is available for free on the speaker's YouTube channel.

If you ever want to have the video version of this, which usually has more effects, more visuals, more graphs, you know, drawn out stuff, sometimes it can help hit the brain centers in different ways.

This quote informs listeners about the availability of a video version of the podcast, which can provide a richer, more engaging learning experience through visual elements.

Value of the Product

  • The $100,000 million dollar question focuses on creating maximum value within the product.
  • The aim is to determine how to enhance the product's inherent worth to the customer.

"The first question, which is $100,000 million dollar question, hits on value, which is how do I create the most value in the product itself?"

This quote emphasizes the importance of considering how to maximize the product's value to ensure it delivers the greatest benefit to the customer.

Profit of the Product

  • The second question addresses the profitability of the product by considering cost-effectiveness and quality.
  • It challenges the business owner to improve the product while reducing costs to increase margins.

"The second question hits on the profit of the product. Because if it's one 10th the cost and I have to make it better, this means I don't have to do high margin, one time investment type things to make the entire product more valuable, right?"

The speaker is highlighting the relationship between cost reduction and product improvement in enhancing profitability, implying that significant one-time investments can enhance the product's overall value.

Customer Experience

  • The third question delves into creating a customer experience so exceptional that it would compel the customer to promote the product or service on their own.
  • The focus is on what makes a customer experience remarkable enough to generate word-of-mouth referrals.

"And then the third question hits on the experience, which is, what's the customer experience, which is everything else that surrounds the product that we're selling or service that we're selling, right. What is the experience that has to occur in order for this customer to become a raving fan?"

This quote stresses the importance of the entire customer experience surrounding the product or service, and the need for it to be so outstanding that it turns customers into advocates.

Importance of Product Focus

  • Wealthy individuals tend to prioritize product discussions over promotion.
  • Smaller businesses often focus on promotion, but the speaker argues that promotion should serve to highlight a well-crafted product.

"And what's interesting is that every super wealthy person that I know pretty much exclusively talks about product. And usually the really small people that I know only talk about promotion."

The speaker notes a trend where successful individuals prioritize product quality, while less successful individuals may focus more on promotional strategies.

Six Ways of Getting Customers

  • Paid media refers to advertising.
  • Earned media is about organic followings.
  • Contact lists include owned contact information like phone numbers and email addresses.
  • Manual outbound encompasses direct outreach strategies like cold messaging and calling.
  • The speaker does not finish listing all six ways due to the transcript cut-off.

"And the reason that it's so important, at least in my opinion, is that if you think about the six ways of getting customers right, and if you don't know what those are, it's paid media earned media."

This incomplete quote indicates the speaker's view on the significance of understanding the various methods of acquiring customers, including paid and earned media as examples.

Customer Acquisition Strategies

  • There are six ways to acquire customers.
  • Five methods scale linearly: doubling efforts leads to doubling returns.
  • Word of mouth is the only method that compounds, creating exponential growth.

Every of the other five ways of acquiring customers is not compounding. Those are linearly scaled, right?

This quote emphasizes that most customer acquisition strategies offer proportional growth to the effort and resources invested.

Whereas word of mouth referrals, which is the 6th way of getting customers, is the only one that compounds.

The quote highlights the unique nature of word-of-mouth referrals as a self-multiplying method of customer acquisition.

The Power of Word of Mouth

  • Word of mouth can lead to an enduring enterprise with significant value.
  • It requires initial investment and effort to create a product worth talking about.
  • This strategy minimizes concerns such as customer churn, negative reviews, and badmouthing.

And that is what creates enterprise value, that is what creates an enduring thing.

The quote illustrates the lasting impact of word-of-mouth referrals on a business's value and longevity.

You don't have to worry about customers badmouthing you because instead they're telling their friends about how good you are.

This quote explains that a superior product naturally leads to positive promotion through customer satisfaction, reducing negative feedback.

Importance of Product and People Over Promotion

  • The focus has shifted from promotion to prioritizing people and product quality.
  • Investing in the product leads to sustainable scaling and profitability.
  • The ultra-wealthy focus on compounding growth, where time becomes an asset.

And honestly, when I look back on my own trajectory, how much I talk about promotion in the beginning of my career versus now I talk so much more about people and product.

The speaker reflects on their professional growth, recognizing the increased importance they now place on the people involved and the product quality over mere promotional tactics.

Compounding as a Wealth-Building Strategy

  • The ultra-wealthy utilize strategies that compound over time.
  • Time is leveraged as an asset rather than a liability.
  • Initial efforts and patience can yield dividends in the long run, contrasting with the short-term focus of making the first sale.

The real nuts of this is that everything that the ultra wealthy do is compounding. It grows with time, where time becomes an asset instead of a liability.

This quote underscores the strategic focus of the ultra-wealthy on activities that offer growth over time, turning time into an advantageous asset.

They're just trying to get a customer to make a sale rather than trying to make a sale to get a customer.

The speaker contrasts the short-sighted approach of seeking immediate sales with the long-term strategy of building a customer base through sales that result from a superior product and experience.

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