Get Over It Ep 606

Summary Notes


In this podcast episode, the host discusses the importance of adapting to the rising costs of online advertising and enhancing customer value to sustain business growth. He emphasizes that complaining about market changes is futile and instead, businesses should focus on what they can control, such as increasing the lifetime value of customers. By improving their offerings, such as adding one-on-one accountability and nutrition services, businesses can justify higher prices and stay competitive. The host also encourages listeners to invest in advertising platforms early and to continue investing, as today's costs will always be cheaper than tomorrow's. He concludes by asserting that a well-designed business model, or "mousetrap," enables businesses to thrive regardless of advertising costs.

Summary Notes

Business as a Game

  • The wealthiest individuals view business as a strategic game.
  • Success in business requires adapting to changing circumstances and focusing on customer value.
  • The goal is to keep playing the game by staying active and not quitting.

"The wealthiest people in the world see business as a game."

This quote highlights the mindset of treating business as a strategic endeavor, akin to a game, where the objective is to stay engaged and competitive.

Building a Billion Dollar Portfolio

  • Speaker A shares their journey of building
  • The aim is to document valuable business lessons learned along the way.
  • The podcast serves as a platform to help others grow their business and potentially partner with

"This podcast, the game is my attempt at documenting the lessons I've learned on my way to building into a billion dollar portfolio."

The quote explains the purpose of the podcast, which is to share insights and experiences from building a successful business portfolio.

Market Evolution and Advertising Costs

  • Online marketers, including gyms, observe rising costs in platforms like Facebook.
  • Complaining about uncontrollable factors, such as ad costs, is unproductive.
  • Accepting market realities and focusing on what can be controlled, like customer monetization, is crucial.

"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 inevitability of rising advertising costs over time and the importance of adapting to this trend rather than lamenting it.

History of Online Advertising Platforms

  • Initially, online advertising platforms undervalued attention, allowing for high profits even with poor business skills.
  • As advertising costs rise, the ability to profit from online ads requires significantly better business acumen.

"Whenever new platforms open up, they're widely underpriced attention and eyeballs. And so you can make a massive killing, even if you suck at business."

The speaker reflects on the history of online advertising, noting that early adopters could profit easily due to low costs, which is no longer the case.

Customer Monetization Focus

  • Instead of wishing for cheaper advertising, businesses should concentrate on how to monetize customers effectively.
  • Speaker A has successfully managed to outspend competitors by focusing on this aspect.

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

This quote advises businesses to concentrate on customer monetization, an aspect they can control, rather than fixating on the rising costs of advertising, which are beyond their control.

Importance of Customer Lifetime Value

  • Understanding and focusing on the lifetime value of a customer is crucial for business success.
  • Businesses need to diversify their revenue streams beyond a single product or service.
  • The cost of acquiring customers, such as through ads, is increasing, and businesses must adapt.
  • Accepting the reality of rising costs is necessary to stop lamenting and start strategizing.

"And the reason we've been able to do that is because we focus on how much the lifetime value of the customer was, because that was under our control."

This quote emphasizes that focusing on the customer's lifetime value, which is within a business's control, has been key to success across different markets.

"So get the fuck over it, right? Stop whining. It's not going to get better, right?"

The speaker is stressing the importance of accepting the inevitable increase in customer acquisition costs and the futility of complaining about it.

Leveraging Current Marketing Opportunities

  • Businesses should invest in marketing opportunities when they are more affordable, even if they were cheaper in the past.
  • Facebook ads are highlighted as an example of a platform that still offers value for money despite rising costs.
  • The return on investment may decrease over time but can still be worthwhile compared to other options.
  • Improvement and innovation in the business (the "mousetrap") are essential to stay competitive.

"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."

This quote suggests that despite rising costs, current marketing opportunities like Facebook ads should be seized because they will likely become more expensive in the future.

"If the only game that you can play is for penny clicks, it means that you're going to be a penny stock type business owner, right?"

The speaker is implying that businesses aiming only for the cheapest marketing options may limit their growth and not be able to compete with larger, more established companies.

Strategic Patience and Big Picture Thinking

  • Long-term thinking and strategic patience are important for businesses.
  • Blue-chip companies often wait for platforms to mature before investing heavily.
  • A business should not rely solely on cheap marketing tactics but should be prepared to invest more for long-term gains.

"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 indicates that successful, established companies often take a long-term view and wait for a marketing platform to prove its worth before investing, suggesting that patience and big-picture thinking are part of a winning strategy.

Podcast and Video Content Availability

  • The host offers both a podcast and a video version of their content.
  • The video version includes additional effects, visuals, and graphs.
  • The host's YouTube channel provides the video content for free.
  • Listeners are encouraged to check out the YouTube channel if they prefer visual aids to complement the audio experience.

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. You can check out my YouTube channel. It's absolutely free.

The quote explains that the host offers a video version of their content on YouTube, which includes additional visual elements that may enhance the learning or entertainment experience for viewers.

Business Survival and Strategy

  • The speaker emphasizes the need for businesses to be adaptable and financially savvy.
  • Businesses that rely on low-cost leads and cannot adapt to higher costs are described as "shitty" or lacking in mathematical understanding.
  • Emotional detachment and reliance on data and mathematics are crucial for business decisions.
  • The speaker references a specific business model (gym launch) that allows for selling memberships at a high price point and securing substantial upfront payments.

Right now, if you could only survive in that environment, it's because your business sucked, right? If you could only do lbos and only afford getting leads for $3, and if it was more than $3, 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 highlights the idea that businesses that cannot adapt to changing lead costs may not have a sustainable model or lack the necessary financial acumen.

Increasing Customer Value and Competitive Edge

  • The speaker suggests that businesses should focus on increasing the lifetime value of their customers to stay competitive.
  • Providing more value to customers is key to business longevity, especially in a challenging environment.
  • The speaker encourages businesses to add intangible elements to their offerings beyond just the core product or service.
  • The example given is the provision of one-on-one accountability and nutrition advice on top of gym memberships to justify a high price point.

And so when the sandbox gets filled or when the level of the water rises and only the best players stay because they can keep swimming, 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.

The metaphor of a rising water level represents an increasingly competitive market where only businesses that have built a strong value proposition for their customers can survive.

And so if the objective of the game is to keep playing, the game is to stay in the game and not quit, then you need to look at your business and think, how can I make these customers more valuable?

This quote emphasizes the importance of strategizing to enhance customer value as a means of ensuring business survival.

And by extension, what do I need to do for them in order to make them more valuable? All right, and that's where you need to add the intangibles, because if you're only selling workouts, you're only selling your quote, community. Guess what? Take a ticket. So is everybody else.

The speaker stresses the need for businesses to differentiate themselves by offering more than just the basic product or service, suggesting that additional, intangible benefits can make a business stand out.

High-Ticket Sales Strategy

  • Selling high-ticket items, such as one-on-one nutrition programs, requires a duration-based approach.
  • Customers should be sold on long-term goals, with the option to pay upfront for an extended period, such as 40 weeks.
  • A high conversion rate from walk-ins to high-ticket sales can significantly increase earnings per customer interaction.

Sell one on one nutrition. Sell it in a duration based play. This quote emphasizes the importance of selling personalized services over an extended time frame to secure a larger upfront payment.

So sell them to goals. Sell them for 40 weeks upfront, paid in full, right? The quote highlights the strategy of selling services by targeting customer goals and encouraging upfront payment for a long-term commitment.

Customer Acquisition and Lifetime Value

  • Understanding the cost of customer acquisition and the potential lifetime value is crucial for pricing and marketing strategies.
  • Businesses can afford to spend more on acquiring a customer if the lifetime value and upfront payment are high enough to cover costs.
  • A well-calculated acquisition cost allows businesses to remain competitive and profitable.

That's how you're going to sell. Big ticket. And that's how if one of five people who walks in your door is going to buy a $3,000 thing from you, that means that per show up, you're making $500 per show, right? This quote explains how selling high-ticket items can yield a high return per customer interaction if the conversion rates are favorable.

And 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 $5200 a lead and still break even on the acquisition and still have the lifetime value of the customer to collect. The quote discusses the balance between spending on customer acquisition and the expected return from a customer's lifetime value.

Evolution of Advertising Platforms

  • Advertising platforms change over time, from direct mail to Google, and now Facebook ads.
  • Businesses should capitalize on effective advertising platforms as they emerge.
  • A historical perspective on advertising can inform current marketing strategies.

Believe it or not, this story has already happened. Right? Like, before this, it was direct mail. Before that was Google. Before that was newspaper ads. Before that was catalogs. The quote provides a brief history of advertising platforms, indicating that change is a constant in marketing channels.

Business Adaptability and Value Proposition

  • Businesses must adapt to changing advertising landscapes by improving their value proposition.
  • Complaining about platform changes is less productive than focusing on what can be controlled, like providing more value and monetizing customers effectively.
  • The ultimate goal is to build a sustainable business that can thrive regardless of the advertising platform used.

And if you can't right now, it's because your business sucks. It's because you haven't figured out a way to monetize your customers properly, right? This quote bluntly states that if a business is struggling, it may be due to a poor value proposition or monetization strategy.

Figure out how you can provide more value to your customers. Figure out how you can make more money upfront from the people who are walking your door so you can liquidate acquisition costs so that you can continue to stay and pay. The quote encourages businesses to focus on increasing value for customers and earning more upfront to cover acquisition costs, ensuring sustainability.

Importance of the Business Model

  • The 'mousetrap' or business model is more important than the platform used to acquire customers.
  • A strong business model allows for flexibility in customer acquisition strategies and can sustain various advertising conditions.

The only thing that matters is your mousetrap. And if the mousetrap is right, you can buy wherever you want for as long as you want. The quote implies that with the right business model, a company can successfully acquire customers from any platform without being constrained by changes in advertising trends.

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