Get Over It Ep 159

Summary Notes


In a candid discussion, the speaker, who is not named, addresses the challenges of rising advertising costs, particularly on Facebook, and the necessity for businesses to adapt. They emphasize the importance of focusing on what can be controlled: the monetization of customers and increasing their lifetime value. The speaker argues that businesses need to stop complaining about market changes and instead work on improving their offerings, such as adding one-on-one accountability and nutrition services, to stay competitive. By enhancing the value provided to customers, businesses can justify higher prices and sustain their advertising spend, ensuring longevity in a constantly evolving marketplace.

Summary Notes

Acceptance of Market Changes

  • Online marketing platforms such as Facebook have increased in cost over time.
  • Businesses need to accept that the marketplace is an auction system and prices will rise.
  • Complaining about uncontrollable factors like ad costs is unproductive.
  • Historically, new platforms offer underpriced attention which can be lucrative.
  • Early entrants to online advertising benefitted from low costs due to less competition.
  • As costs increase, businesses must adapt by improving their monetization strategies.

"You just need to get over it. It's never going to be as cheap as it was. And guess what? It's never going to be as cheap as it is today, because tomorrow it's going to be more expensive."

This quote emphasizes the need for businesses to accept and adapt to the rising costs of online advertising instead of lamenting the past.

Importance of Monetization

  • Focusing on what can be controlled, such as customer monetization, is key.
  • Understanding and increasing the lifetime value of a customer is crucial for sustainable spending on advertising.
  • Diversifying ways to monetize a customer can provide a competitive edge.

"What you need to focus on is what you can actually control, which is the monetization of the customer."

The speaker highlights the importance of concentrating on monetizing customers effectively as a controllable factor in business success.

Competitive Spending and Diversification

  • Consistent competitive spending in advertising can be achieved through a strong monetization strategy.
  • Businesses should seek multiple revenue streams from their customers.
  • Solely selling a single product or service (e.g., workouts at a gym) may not be sufficient in a competitive market.

"For six straight years, I've tried to outspend everyone in every market I have ever been in... because we focus on how much the lifetime value of the customer was."

The speaker explains their strategy of aggressive spending in marketing, which is sustainable due to a focus on the lifetime value of customers.

"If at your gym you're only selling workouts and you have no other ways of monetizing a customer, then you are losing out."

This quote advises diversifying the ways a business can earn from a customer to avoid falling behind in a competitive market.

Acceptance of Market Realities

  • The cost of online advertising is increasing, and the ability to buy attention is decreasing.
  • Businesses need to accept this reality and stop expecting the situation to improve.
  • The speaker emphasizes the importance of seizing opportunities to invest in advertising when costs are lower.

"Your ability to spend money and capture leads and buy attention and buy eyeballs is going to continually go down. So get the fuck over it, right? Stop whining. It's not going to get better, right?"

This quote underscores the harsh truth that the cost of online marketing will keep rising, and businesses must adapt rather than hope for a reversal.

Investment in Advertising

  • Despite rising costs, investing in advertising, specifically Facebook ads, is still worthwhile due to its targeted reach.
  • The speaker suggests that businesses should compare the return on investment (ROI) now versus in the past and continue investing if it remains profitable.
  • The focus should be on improving the business itself to afford the cost of acquiring customers on various platforms.

"And believe it or not, you still need to double down on Facebook ads. Why? Because it's still cheaper today than it's going to be tomorrow."

The speaker is advocating for continued investment in Facebook ads as they are expected to become more expensive, suggesting that the value they provide today is still significant.

Strategic Business Improvement

  • A business should continuously improve its offerings and operations.
  • The ability to afford advertising on any platform should be independent of the platform's maturity.
  • The speaker contrasts penny stock type business owners with blue-chip companies, emphasizing the need for a long-term strategy.

"Your focus on as a business should be always improving. Your mousetrap should always be improving the actual business so that you can buy and afford eyeballs on any platform independent of the maturity level."

This quote advises businesses to focus on self-improvement to sustain the increasing costs of customer acquisition, regardless of the advertising platform's age.

Long-term Vision for Business

  • Blue-chip companies often wait for a platform to mature before investing heavily in it.
  • The speaker implies that having a long-term perspective is crucial for substantial business growth.

"Most of those guys wait for five years, for ten years before a platform even matures, before they're like, okay, we're going to get into this because they're in boardrooms and they're like, we're not sure if it's worth putting the attention towards opening this new platform."

This quote reflects the strategy of larger, established companies that prefer to invest in advertising platforms only after they have proven their worth over time.

Utilizing Different Media for Content Consumption

  • The speaker offers an alternative to the podcast by mentioning the availability of a video version on YouTube.
  • Visual aids such as effects, graphs, and drawings in the video content can enhance understanding and retention.

"Hey guys, love that you're listening to the podcast. If you ever want to have the video version of this, which usually has more effects, more visuals, more graphs, drawn out stuff, sometimes it can help hit the brain centers in different ways."

This quote is an invitation to the audience to engage with the content in a different format that might cater to various learning preferences and provide a richer experience.

Business Sustainability and Economic Challenges

  • Businesses must be adaptable and financially sound to survive market fluctuations.
  • Overreliance on low-cost leads and inability to adapt pricing reflects poor business health or lack of financial acumen.
  • Emotions should not drive business decisions; reliance on mathematics and economics is crucial.
  • High acquisition costs can be offset by higher upfront customer payments and increasing customer lifetime value.

"If you could only do lbos and only afford getting leads for $3. And if it was more than $3 and you only had $10 leads, and at $10, you priced out. You have a shitty business or you don't know how to do math."

This quote emphasizes that a business that cannot adapt to lead costs higher than a very low threshold is either fundamentally flawed or lacks proper financial strategy.

Importance of Diagnostic Selling Process

  • Implementing a diagnostic selling process can significantly increase the value of memberships.
  • Selling additional services like accountability and nutrition can enhance membership value.
  • Gym Launch's success with high membership fees demonstrates the viability of this approach.

"But if you have a diagnostic selling process and you're selling one on one, accountability and nutrition on top of it, you can sell your memberships for $425 a month."

The speaker highlights the effectiveness of a diagnostic selling process combined with personalized services in achieving high membership rates.

Customer Lifetime Value Enhancement

  • Building a business model that maximizes customer lifetime value is essential for long-term survival.
  • Providing substantial value to customers is key to increasing their worth to the business.
  • Adding intangible elements to the service offering can differentiate a business from competitors.

"Because they spent the time to build the mousetrap that built the highest lifetime value per customer, because they were, in the end, providing the most value, those are the guys that are going to stay and continue to play."

This quote underlines the importance of creating a business model that focuses on delivering value and maximizing customer lifetime value to ensure longevity in a competitive market.

Differentiation Through Intangible Offerings

  • To stand out, businesses should offer more than just basic services like workouts or community.
  • Providing unique intangible benefits, such as personalized accountability and nutrition coaching, can make a business more competitive.
  • Offering long-term, high-value packages can attract customers willing to make significant upfront investments.

"So if you want to stand out so that you can provide more value, look at the things that. Look at what we're doing."

The speaker suggests looking at successful examples, like their own business practices, to understand how to offer intangible benefits that increase value and differentiate the business.

High-Value Sales Strategy

  • Selling long-duration, high-ticket packages can dramatically increase revenue per customer.
  • Even if a small percentage of leads convert to high-value sales, the overall revenue per lead can be substantial.
  • This strategy allows for higher spending on customer acquisition while maintaining profitability.

"Sell them for 40 weeks upfront, paid in full. Right? That's how you're going to sell. Big ticket."

The quote advises on a specific sales strategy that involves selling long-term, prepaid packages to increase the average revenue per sale, which can lead to higher overall profitability.

Understanding Customer Acquisition Costs

  • Knowing the cost to acquire a lead and ensuring it aligns with the value of the customer is critical for business sustainability.
  • The ability to break even on customer acquisition and profit from their lifetime value is a competitive advantage.
  • Companies that can't efficiently monetize their customers will be outperformed by those who can.

"If you know that you're getting one out of three leads in the door to show, then it means you can spend $100 and $200 a lead and still break even on the acquisition and still have the lifetime value of the customer to collect."

This quote emphasizes the importance of understanding the economics of customer acquisition costs relative to the lifetime value of a customer.

Evolution of Advertising Platforms

  • Advertising platforms evolve, with each new platform eventually being replaced by another.
  • Historical progression has moved from catalogs, to newspaper ads, to direct mail, to Google, and now to Facebook ads.
  • Being a student of history can help businesses capitalize on new advertising opportunities.

"Believe it or not, this story has already happened. Right? Like before this, it was direct mail. Before that was Google. Before that was direct mail. Before that was newspaper ads. Before that was catalogs."

The quote provides a historical context for the evolution of advertising platforms, suggesting that change is inevitable and businesses should adapt accordingly.

Business Adaptation and Value Creation

  • Success in business requires adapting to changes in advertising platforms and focusing on value creation.
  • Complaining about platform inefficiencies is less productive than improving business models and offerings.
  • The goal should be to provide more value to customers, monetize effectively, and build a sustainable business.

"It's because you haven't figured out a way to monetize your customers properly, right? It means you're not providing enough value."

This quote highlights the necessity for businesses to focus on providing value and finding effective ways to monetize their customers.

Platform Irrelevance and the Importance of the 'Mousetrap'

  • The specific platform used for acquiring customers is less important than the business's overall strategy and value proposition.
  • A well-designed 'mousetrap'—or business model—allows a company to thrive regardless of the advertising medium.

"The only thing that matters is your mousetrap. And if the mousetrap is right, you can buy whatever you want for as long as you want."

The quote underscores the idea that a strong business model is more critical than the choice of advertising platform.

Engagement and Appreciation

  • The speaker encourages engagement from the audience through likes, comments, emojis, and podcast reviews.
  • Expresses gratitude for the audience's participation and encourages them to have a successful day.

"If you can drop a like, drop a comment, drop a smiley face, drop an emoji, and if you're listening at home or in the car on a podcast, drop a review."

This quote is a call to action for audience engagement and shows appreciation for their interaction with the content.

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