3 Questions To asked Yourself For Product And Service Ep 324

Summary Notes


In this podcast, the host emphasizes the importance of product quality over mere promotion for sustainable business growth. Highlighting a shift in mindset from transactional sales to building lasting customer relationships, he references advice from marketing expert Dan Kennedy and a billionaire friend who prioritize products that naturally compound in value over time. The host challenges entrepreneurs to reevaluate their offerings through three critical questions aimed at maximizing value, profit, and customer experience. He argues that a superior product will organically generate word-of-mouth referrals, the most powerful and compounding form of customer acquisition. The discussion concludes by underscoring the long-term benefits of investing in product excellence, as detailed in the host's book, "100 Million Dollar Offers."

Summary Notes

Entrepreneurial Perspective on Product and Delivery

  • The shift from moderate success to significant success in entrepreneurship often involves a change in perspective on product and delivery.
  • Entrepreneurs need to confront the quality of their product if they are not making the desired amount of money.
  • The lack of customer referrals indicates an issue with the product's appeal or value.
  • Dan Kennedy's statement highlights the difference between small and large entrepreneurs in terms of customer acquisition and sales.

"One of the biggest shifts that I had as an entrepreneur are going from, you know, making a few hundred thousand dollars a year, a million dollars a year to making, you know, just under nine figures like we do now, and has been a simple understanding that I'm going to try and hit at in a couple of different ways."

This quote explains the speaker's significant increase in revenue as an entrepreneur, attributing it to an important understanding that they will elaborate on.

"And so 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."

The speaker directly confronts entrepreneurs, suggesting that insufficient revenue is due to the product not being up to par.

"But the reality is that if you have any amount of customers, then people already have found out about your product and for one reason or another, they have chosen not to tell anyone else about it."

The speaker points out that existing customers are not referring others, which indicates a problem with the product's quality or value.

"Dan Kennedy said, most small entrepreneurs try and get customers to make sales, bigger entrepreneurs try to make sales to get customers."

This quote contrasts the strategies of small entrepreneurs with those of larger, more successful ones, focusing on the long-term relationship with customers rather than quick sales.

Long-term Value vs. Short-term Gains

  • The focus on long-term relationships with customers can lead to compounding growth over time.
  • Short-sighted approaches prioritize immediate revenue over sustainable business growth.
  • The speaker's billionaire friend emphasizes the importance of efforts that yield growth over time.

"One has a compounding view and perspective on time and value and the other is short sighted."

This quote distinguishes between the long-term, value-driven approach and the short-term, immediate profit mindset.

"And he was saying, he said, if it's not going to grow on its own over time, it's not worth doing."

The speaker shares wisdom from a billionaire friend, highlighting the importance of investing in ventures that have the potential to grow independently over time.

Ultra Wealthy Investment Mindset

  • The ultra wealthy prefer to invest in products or services that compound in value over time with one-time effort.
  • Products requiring constant promotion and selling may be perceived as lacking in inherent value.
  • Businesses should ideally generate referrals and buzz on their own merit.

"If you put 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."

The quote highlights the ultra wealthy's preference for investments that grow in value over time without requiring continuous effort, suggesting a sustainable and scalable business model.

"On the flip side, 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?"

This quote suggests that if a product requires constant effort to sell, it may not be inherently valuable or strong enough to stand on its own, which is not attractive to the ultra wealthy investors.

Value Creation Through Pricing Strategy

  • Considering how to justify a significant price increase forces reevaluation of the product's value proposition.
  • Imagining the product as ten times more expensive can lead to innovative thinking about enhancing customer experience and product quality.
  • The exercise aims to push the boundaries of perceived value and service excellence.

"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 presents the first question designed to challenge the current value of a product or service by considering what improvements would be necessary to justify a tenfold price increase.

Improving Product Value at Lower Cost

  • The challenge is to enhance the product's quality while significantly reducing its price.
  • This requires identifying one-time assets that can deliver consistent value at scale and profitably.
  • The focus is on cost-effective innovation 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 second question prompts a thought experiment on how to improve a product's quality while drastically cutting its price, encouraging a mindset of efficiency and value enhancement.

Self-Promotion and Community Contribution

  • The speaker promotes their book as a valuable resource for the podcast community.
  • The book represents an investment of time and effort, with the hope of building goodwill and future business partnerships.

"I have a book on Amazon...I put over 1000 hours into writing that book and it's my biggest give to our community."

This quote is an example of self-promotion, where the speaker mentions their book, emphasizing the effort put into it and positioning it as a contribution to the community, with the intent to foster positive relationships and future collaborations.

Fundamental Ideology of Business Value

  • The third question, which is the speaker's favorite, is intended to encapsulate the core philosophy of their approach to business value.
  • The question is not fully revealed in the transcript, but it is implied that it relates to creating a business that inherently provides value.

"And the third question, which is probably my favorite, which I think underpins the entire ideology that I'm hitting on here, is if I had a business, and I wer"

Although the third question is not completed in the transcript, the lead-up suggests it is a crucial part of the speaker's ideology on building a valuable business, likely focusing on intrinsic value creation.

Product Value

  • The concept of product value is highlighted by the first question, which asks how to create the most value in a product.
  • The speaker emphasizes the importance of ensuring that a product provides significant value to justify its cost.
  • Value is seen as a fundamental aspect of a product that determines its success and customer satisfaction.

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

This quote explains that the first question is about determining how to maximize the value offered by a product. The speaker suggests that creating value is akin to answering a high-stakes financial question, indicating its critical importance in product development.

Product Profitability

  • The second question addresses the profitability of the product by considering the cost to value ratio.
  • It suggests that the product should not only be better but also cost-effective, implying a need for high-margin, one-time investments to enhance value.
  • Profitability is linked to the cost structure and pricing strategy of the product, which directly affects the business owner's financial success.

"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 that I have to do high margin, one time investment type things to make the entire product more valuable, right?"

This quote indicates that the second key question is about improving the product in a cost-effective manner to increase profitability. The speaker suggests focusing on high-margin initiatives that require one-time investments but contribute to long-term value enhancement.

Customer Experience

  • The third question revolves around the customer experience and its role in driving word-of-mouth marketing.
  • The speaker describes the need for an exceptional experience that compels customers to become advocates for the product or service.
  • Customer experience is portrayed as encompassing all aspects of the product or service that influence the customer's perception and satisfaction.

"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 emphasizes that the third question focuses on the overall customer experience, which extends beyond the product itself to include all interactions and touchpoints with the brand. The speaker highlights the importance of creating an experience that turns customers into enthusiastic promoters.

Product Focus vs. Promotion Focus

  • Wealthy individuals tend to focus on the product, while smaller businesses may focus more on promotion.
  • The speaker suggests that promotion should be a means to perfect the product, not an end in itself.
  • Once the product is perfected, promotion can help amplify its reach, but the product quality should be the foundation.

"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."

This quote contrasts the focus of wealthy individuals with that of smaller businesses, indicating that successful entrepreneurs prioritize product development over promotional efforts. It implies that a strong product is the key to sustainable growth and profitability.

Methods of Acquiring Customers

  • There are six ways to acquire customers: paid media, earned media, contact lists, manual outbound, affiliates, and word of mouth.
  • The speaker notes that all methods except for word of mouth are linear, not compounding, in terms of customer acquisition.
  • Word of mouth is highlighted as the most powerful and the only compounding method, emphasizing its significance in marketing strategy.

"And the 6th, which is the most powerful and the only one that compounds is word of mouth. So think about that for a second. Every of the other five ways of acquiring customers is not compounding. Those are linearly scaled, right?"

This quote identifies word of mouth as the most effective customer acquisition method due to its compounding nature. The speaker distinguishes it from other methods that scale linearly, suggesting that businesses should strive to leverage word of mouth for exponential growth.

Customer Acquisition Strategies

  • Traditional advertising scales linearly with investment.
  • Word of mouth referrals are unique in their compounding effect.
  • A high-quality product encourages organic growth through customer referrals.
  • Positive word of mouth reduces churn and negative feedback.
  • The speaker emphasizes the importance of focusing on product and people over promotion.

"If you double your ad spend, you might be able to double the amount of customers you get. Sometimes it's less than that, but you get the idea they scale relatively linearly, right?"

This quote explains that traditional advertising methods may offer a direct correlation between the amount spent and the number of customers acquired, but with diminishing returns as it is a linear relationship.

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

The speaker highlights that unlike traditional advertising, word of mouth referrals have a multiplying effect, leading to exponential growth.

"And that is what creates enterprise value. That is what creates an enduring thing."

The quote underlines the idea that word of mouth can create lasting value for a business, beyond immediate sales.

"And also it's where all the profit is, right? You don't have to worry about the churn as much because the product is so good."

Here, the speaker suggests that a good product naturally retains customers and maximizes profit by reducing customer turnover (churn).

The Role of Product Quality in Business Growth

  • High-quality products drive word of mouth referrals.
  • The speaker has shifted focus from promotion to product and people.
  • Investing time in product quality pays dividends in the long term.

"If you get two people to tell two people, and those people tell two people, then it continues to compound."

The speaker illustrates the exponential growth potential of word of mouth referrals when a product is good enough to prompt customer-driven promotion.

"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."

This quote reflects the speaker's personal evolution, shifting focus from promotional strategies to the core elements of business: product quality and customer relationships.

Time as an Asset in Wealth Creation

  • Compounding activities leverage time as a growth factor.
  • Effort put into improving product quality initially can reduce the need for constant business acquisition efforts.
  • The speaker advocates for creating value upfront to facilitate sustained returns.

"Everything that the ultra wealthy do is compounding. It grows with time, where time becomes an asset instead of a liability."

The quote emphasizes that strategies used by the ultra-wealthy involve activities that benefit from the passage of time, growing assets rather than incurring liabilities.

"Then it will pay you in dividends over time."

Here, the speaker suggests that investing effort into product quality at the start will result in continuous benefits, much like dividends from an investment.

Creating Irresistible Offers

  • The speaker has authored a book, "100 million dollar offers," on creating compelling offers.
  • The book is priced minimally to make it accessible and is a culmination of the speaker's learnings.
  • The speaker encourages the audience to focus on making sales that lead to customer acquisition rather than just seeking immediate transactions.

"It's everything that I've learned about how to create offers that are so good people feel stupid saying no."

This quote summarizes the essence of the speaker's book, which is about crafting offers that are highly attractive to customers.

"I think it's the number one seller in advertising and direct marketing on Amazon right now."

By mentioning the success of the book on Amazon, the speaker establishes credibility and suggests the effectiveness of the strategies discussed in the book.

Call to Action and Engagement

  • The speaker encourages the audience to subscribe for more value.
  • There is an expression of gratitude and a sign-off with a personal touch.

"Love you all. Hope you got value from this. If you did, hit that subscribe button and I'll see you guys in the next video."

This quote is a direct call to action for the audience to engage with the content by subscribing, indicating the importance of building a subscriber base for ongoing engagement.

"Lots of love you soon. Fat."

The speaker concludes with a quirky and affectionate sign-off, aiming to create a sense of community and closeness with the audience.

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