5 Core Functions of A Business Ep 14

Summary Notes


Speaker A outlines the five core functions of business as defined by Alex Struckman, emphasizing their importance in revenue generation and business growth. The functions include lead generation to initiate customer engagement, lead work to convert inquiries into clients, sales conversation to finalize transactions, fulfillment to exceed customer expectations, and ascension and resale to increase transaction frequency and encourage referrals. Speaker A argues that while lead generation is often prioritized, the other functions are equally vital yet less costly, and can significantly boost both the bottom line and the top line when optimized.

Summary Notes

Introduction to the Five Core Functions of Business

  • Alex Struckman's chart on the five core functions of business provided a structured perspective on the business process.
  • Understanding these functions is critical for identifying areas where a business may be underperforming or missing revenue opportunities.

"I wanted to talk today about the five core functions of business. And this was something that I've, like, I inherently thought, like, this is the process that I think about business with. But when Alex struckman kind of put it on a chart, I was like, oh, wait, great."

The quote highlights the speaker's realization of the importance of structuring the business process into core functions, which was prompted by Alex Struckman's chart.

The Concept of Business as a Pipeline

  • The business process is likened to a pipeline where leads are generated and move through a sequence of steps.
  • Recognizing the pipeline structure is essential for understanding the flow of business operations from start to finish.

"And a business works like a pipeline. Anyone who tells you otherwise, just whatever, I don't know. I don't know what they're telling you, but it's a pipeline, okay?"

The quote emphasizes the speaker's strong belief in the pipeline model of business operations, dismissing any contrary perspectives as misguided or uninformed.

Lead Generation (Lead Gen) as the Starting Point

  • Lead generation is identified as the initial phase of the business pipeline.
  • The focus here is on strategies to attract potential customers into the business's sphere of influence.

"Now, first place is lead Gen. Okay? That's where this whole game starts. How do we get people into our pipeline? How do we get people into our world?"

The quote introduces lead generation as the critical first step in the business process, highlighting its role in initiating customer engagement and the importance of integrating it into the broader business strategy.

Lead Generation Process

  • Lead generation involves creating traffic and determining offers.
  • It is the initial phase where inquiries are collected.
  • Inquiries can include name, phone number, email, or applications.
  • The method of inquiry collection depends on the type of promotion.

"You have to generate leads, which is where you're going to get traffic, what are your offers going to be? Blah, blah, blah. That's all lead gen."

This quote explains that lead generation is the foundational step in attracting potential customers by determining how to generate traffic and what offers to present.

Lead Management

  • The process of taking a lead to the point of entry is crucial.
  • Lead management can be referred to as 'lead nurture' or 'working the lead.'
  • The speaker prefers the term 'working the lead' over 'nurture.'

"Once you have an inquiry, that's name, phone number, email, or an application, whatever depends on the promotion, which one you use. Then what's the process that you take from a lead to get them in the door, which is part two, which you could call lead, nurture, whatever you want to call that."

This quote discusses the importance of the process that follows collecting a lead's contact information, emphasizing the need for a strategy to convert inquiries into actual visits or engagements with the business.

Sales Interaction and Scripting

  • The third phase involves the actual conversation with the lead.
  • It includes the sales script and potentially a series of scripts.
  • Scripts vary depending on the price point of the item being sold.
  • Choreographing an experience to encourage a 'yes' from the lead is part of this phase.

"What does the actual conversation look like once you've made contact with this person? What does the actual sale look like? What's the script? What are maybe series of scripts you take them through depending on the price point of the item."

This quote delves into the specifics of the sales conversation, highlighting the need for a well-prepared script or series of scripts tailored to the product and its price point, aimed at securing a positive outcome.


  • Fulfillment is the phase of providing the product or service to the customer.
  • It is often considered the least favorite part of the process.
  • The goal is to offer an amazing and consistent experience to the customer.

"And then what choreographed experience do we want them to have in order to get them to say yes? Okay, that's the third piece. The fourth piece is everyone's least favorite. Fulfillment."

This quote connects the third phase of the sales interaction with the fourth phase, fulfillment, emphasizing the importance of a positive customer experience to ensure satisfaction and possibly lead to repeat business. It also humorously notes that fulfillment is often the least favored part of the sales process.

Customer Value Over-Delivery

  • Focus on providing a product or service that exceeds customer expectations in value.
  • Aim to surprise customers positively by delivering more than what they paid for.
  • Over-delivering can enhance customer satisfaction and loyalty.

"That over delivers above and beyond what they believe the value that they paid for. Right. And just totally blows them out of the water?"

This quote emphasizes the importance of exceeding customer expectations to create an exceptional experience. It suggests that delivering more value than customers anticipate can have a significant impact on their perception of the product or service.

Fulfillment Excellence

  • The fulfillment process should be outstanding to leave a lasting impression.
  • Excellence in fulfillment can contribute to a positive overall customer experience.
  • The goal is to ensure that the customer feels they have received significant value.

"How do we do the fulfillment piece? That's amazing."

Alex Struckman is questioning how to execute the fulfillment aspect in a way that amazes customers. This indicates the need for a meticulous approach to the delivery of products or services, ensuring that the fulfillment stage is remarkable.

Ascension and Resell

  • Ascension involves customers purchasing more expensive items or services.
  • Resell is about encouraging repeat purchases from existing customers.
  • Both strategies aim to increase customer lifetime value.

"Which a lot of people totally miss out on, which is ascension and Resell, which I would also put a third silo in there, which is how do we get referrals?"

Alex Struckman highlights that many businesses overlook the importance of ascension, resell, and referrals. These are key strategies for growth by encouraging customers to spend more, buy repeatedly, and recommend the business to others.

Referral Generation

  • Generating referrals is a crucial part of customer lifecycle marketing.
  • Referrals can loop back to lead generation, creating a cycle of new customer acquisition.
  • Encouraging satisfied customers to refer others can be a cost-effective marketing strategy.

"Which kind of loops back to the beginning, which is legion."

The quote connects the concept of referrals back to lead generation, implying that a successful referral program can feed into the initial stage of acquiring new customers.

Upselling and Cross-Selling in a Gym Business

  • Upselling involves convincing customers to purchase more expensive services, such as personal training.
  • Cross-selling encourages customers to sign up for longer memberships or additional programs.
  • Both techniques aim to increase the revenue generated per customer.

"So within the context of a gym business, this would be upselling personal training. This would be getting them to sign longer memberships, or just retention in general is getting them to buy more times."

Alex Struckman applies the concepts of ascension and resell to a gym business model, suggesting specific strategies such as upselling personal training and encouraging longer membership commitments to improve customer retention and increase transaction frequency.

Frequency of Transactions

  • Frequency of transactions refers to how often customers make purchases.
  • Increasing the frequency can lead to higher overall sales and customer lifetime value.
  • Strategies to increase frequency include encouraging regular renewals or repeat purchases.

"Buying another month, buying another month, buying another month. So that's frequency of transactions."

This quote illustrates the concept of frequency of transactions by describing a gym member who continually renews their membership each month, contributing to steady revenue for the business.

Program Upgrades

  • Offering program upgrades can entice customers to invest in more comprehensive services.
  • Clear program durations can help customers understand the commitment and value.
  • Upgrades should be positioned as beneficial to the customer's goals or needs.

"Another piece would be having them upgrade into specific programs that have a clear duration."

Alex Struckman suggests that businesses can offer customers the option to upgrade to specific programs with defined timeframes, which can provide additional value and enhance the customer's experience with the service.

Core Functions of Business

  • Businesses have five core functions to focus on.
  • Lead generation is often overemphasized, while other functions can be cheaper and equally important for revenue.
  • Upselling and customer retention are critical for a thriving business.
  • Alex Struckman will explore each function in more detail in future podcasts.

"And those are the five core functions of the business. So if you look at your business, think about which ones are lacking."

This quote highlights the importance of analyzing which of the five core business functions may be lacking in one's own business.

"But if you never lose customers and you continually upsell people into more expensive services, you can still make tons and tons of money."

Alex Struckman emphasizes the significance of customer retention and upselling as strategies to increase revenue without solely relying on lead generation.

Lead Generation and Costs

  • Lead generation is considered the most expensive aspect of business operations.
  • Other functions contribute to both the bottom line and top line but are often neglected.
  • A balanced approach to all five functions is crucial.

"Lead gen is like the most expensive part of the business proposition."

This quote explains that lead generation usually incurs the highest costs compared to other business functions.

Upselling Strategy Example

  • Upselling can be a lucrative strategy, as illustrated by the gym example.
  • Members can be upsold to premium challenges for additional fees.
  • Upselling enhances customer value and increases revenue.

"ot camp members and they upgrade to special abs and guns. Twelve week challenge for another $800 on top of their $150 $200 a month membership, right?"

Alex Struckman provides a specific example of how a gym upsells its members to a premium service, demonstrating an effective upselling strategy.

Future Podcasts and Audience Engagement

  • Alex Struckman plans to delve into each of the core functions in upcoming podcasts.
  • Invites listeners to share their best practices.
  • Indicates a commitment to providing detailed insights in future content.

"And I will delve into each one of those in a lot more detail in upcoming podcasts."

This quote promises a more detailed exploration of each core business function in future podcast episodes, suggesting that this podcast serves as an introduction to the topic.

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