Scaling Your Businesses with This $100M Offer Strategy (with Greg Hickman) Pt.2 Sept. '21 Ep 419

In this segment of the Greg Hickman podcast, the conversation delves into strategies for business growth, particularly for agency owners and small businesses. The host and guest discuss the importance of early wins, such as offering quick, demonstrable results to build client trust, and the significance of productizing services for scalability. They explore the concept of 'time to value' and how businesses can enhance their offerings with guarantees that compel customer action. Additionally, they touch upon pricing strategies, the Tesla model for business development, and the pitfalls of diversifying too early. The underlying theme is that creating value and solving problems is paramount for business success, and guarantees should not only be compelling but also indicative of a product's effectiveness. They conclude with insights on the impact of proper education in entrepreneurship and the benefits of sharing knowledge freely to foster business growth.

• Time to value is the speed at which a customer can realize the benefit of a product or service.
• Quick wins are early successes that help build trust and momentum.
• Early wins are critical for long-term success, as supported by research.
• Activation points are key early deliverables that drive customer success.
• Identifying what top-performing customers experienced early on can inform these activation points.
• In the CRM space, using specific features or acquiring a certain number of clients correlates with long-term retention.

"So if someone loses ten pounds in the first two weeks, now they believe me." This quote illustrates the importance of quick wins in establishing trust and belief in a service's effectiveness.

"And then that becomes, at least preliminarily, because you don't have any baseline. Those become your activation points..." This quote explains the concept of activation points, which are initial targets set for new customers to achieve early success.

• Deciding between high-cost, low-volume and low-cost, high-volume models depends on the business and customer base.
• It is possible to increase the margin while adding more value to the product or service.
• High value, low cost is the ideal but not always possible.
• It's acceptable to have some high value, high cost offerings, but they should be limited.

"But maybe you're just a scam artist from online that's going to say that and just collect six months of billings and literally do nothing." This quote emphasizes the risk customers perceive when waiting for long-term results, highlighting the need for early wins.

"If they get five clients, they never cancel, but they need five, and we have to deliver five as fast as possible." This quote explains the significance of achieving a specific early milestone (in this case, five clients) for customer retention.

• The delivery cube is a conceptual model for determining how to deliver solutions to customers.
• Balancing high value with low cost is key, but high value, high cost can be part of the mix.
• The Tesla model is used as an example of starting with a high-cost product and moving towards more affordable options.
• The first product or service is often not the final offering but a step towards understanding the market and customer needs.

"Totally." This quote acknowledges the strategy of having high value, high cost offerings as part of the business model.

"You're getting paid to do research and acquiring customers profitably for done for you is probably the easiest thing in the entire world because it's so easy to sell." This quote discusses the concept of "done for you" services as an easy entry point for customer acquisition and as paid research and development.

• Agency owners can help small businesses productize their services.
• Productization can lead to more customers agreeing to higher prices with better margins.
• Guarantees can make offers more compelling and difficult to refuse.
• Cash flow from initial sales can be used to refine the business and solve problems.

"Sell the farm. Give away everything. Get people to say yes, get people to give you money. And then we'll have cash flow that we can start solving problems with." This quote suggests a bold strategy of making aggressive offers to generate cash flow and client feedback for business refinement.

"I'd rather break even with cash flow, because once I have flow, right, create flow, monetize flow, then add friction." This quote outlines a business approach of initially focusing on creating cash flow, even if it means breaking even, and then optimizing and scaling from there.

• Learning about different markets and salons is crucial for understanding their operations.
• Identifying the 20% of activities that drive the majority of profit is key to focusing efforts.
• Productizing services based on the most valuable and profitable aspects discovered during paid R&D is a strategic move.

"listen, 80% of clinics are doing this. This is all horseshit. The 20% that drives all the profit is this."

The quote emphasizes the importance of distinguishing between common but ineffective practices and the few critical activities that generate most of the profits. It suggests focusing on the latter for a successful business strategy.

• Listing problems and identifying solutions are the first steps in the process.
• The delivery cube is a framework for exploring different delivery methods.
• Selling a product with a clear outcome and end date, followed by a downsell of the upsell, is recommended.

"Like you said, you list out all of the things, all the problems that they have and then identify solutions and you take them to the delivery cube."

This quote outlines the initial step in the consulting process, which involves listing client problems and finding solutions, and then using the delivery cube to determine how to deliver these solutions effectively.

• Recurring revenue should come from consumables, while one-time values come from one-off sales.
• Different types of recurring revenue include physical consumables, physical collateralized, digital consumables, and digital collateralized.
• CRM systems are highly valuable because they contain collateral, making it difficult for customers to leave.

"So you want consumables to be recurring and you want the one time things to be the one time value, right?"

This quote explains the basic principle of differentiating between consumable products or services that should generate recurring revenue and one-time purchases that provide a single value.

• Businesses should sell systems as one-time offerings and the consumables as the recurring components.
• Pricing should reflect the value that the system will generate for the client.
• Overcoming the challenge of clients not being able to afford services by demonstrating the value and potential profit increase through the use of the system.

"We price based on the value that we know that our machine is going to help them produce."

This quote highlights the strategy of pricing services based on the anticipated value they will add to the client's business, rather than the client's current financial situation.

• After solving initial problems with a system, backend consumables that the system requires can be sold.
• Identifying what the business will regularly consume allows for the creation of a tailored recurring service offering.
• Problems solved on the front end lead to opportunities for backend solutions.

"So it's like, what are the activities in the business that have to continue to occur as a result of the system that we sold them? And then those are all the things that we will bundle and sell on the back end."

This quote explains the process of identifying ongoing needs that result from the implementation of a front-end system and packaging these needs as additional services to sell on the backend.

• The host does not run ads or sell anything on the podcast.
• The sole request from the audience is to help spread the word to support other entrepreneurs.
• Audience engagement, such as rating and reviewing, is essential for reaching more entrepreneurs.

"the only ask that I can ever have of you guys is that you help me spread the word so we can help more entrepreneurs make more money, feed their families, make better products, and have better experiences for their employees and customers."

This quote is a call to action for the audience to support the podcast by spreading the word, which aligns with the podcast's mission to assist entrepreneurs in succeeding and improving their businesses and personal lives.

• Guarantees can be used as a sales tool to overcome objections and close deals.
• They can be tested in sales calls before being incorporated into broader marketing strategies.
• Guarantees can be structured risks with known variables, which can be beneficial for both the business and the customer.
• Effective guarantees can increase sales, even accounting for additional returns.
• Overly restrictive guarantees can be counterproductive and less compelling.
• Guarantees should be bold enough to be compelling, yet realistic to maintain credibility.
• The use of guarantees can prompt businesses to improve their products to meet their promises.

"You can obviously use a guarantee as like a sales tool if you're selling via the phone, is that like v one of rollout is."

This quote explains that guarantees can initially be used as a sales tool during phone sales as part of an early rollout strategy.

"For many people, a guarantee is a structured risk."

Guarantees are described as structured risks that allow businesses to control the variables involved, thereby managing potential losses.

"You will sell more people than you otherwise would have, even minus the extra returns, that you'll have a result."

This quote suggests that the inclusion of guarantees can lead to an increase in sales, outweighing the cost of any additional returns.

• Offering bold guarantees can significantly ease the sales process.
• Extreme guarantees, such as doubling profits, can be used as thought experiments to illustrate the potential of such offers.
• A balance can be struck between too bold and too weak guarantees to create compelling offers that increase sales.
• Guarantees force businesses to focus on delivering value and improving their products.
• The underlying message is to fix the product to meet the guarantee instead of avoiding bold claims.

"I'll double your profit in 30 days, I'll double your business in 30 days, whatever, right? Something crazy, right? Or I'll pay you twice the amount of money you paid me back."

This quote exemplifies an extreme guarantee that would make selling effortless due to its boldness.

"How could we guarantee that they're going to double their income? How could we do that? Because if you ask better questions, you'll get better answers."

The speaker emphasizes the importance of asking the right questions to create valuable guarantees that can be fulfilled.

• The ultimate goal is to create wealth through value.
• Businesses should focus on making sales to acquire customers for a long-term relationship, not just to make a one-time sale.
• Providing more value than the cost is key to a successful business model.
• Increasing value can be more effective than lowering prices.
• Solving customer problems in various ways can increase perceived value and lead to more sales.
• The "delivery cube" concept is introduced to illustrate different methods of solving a single problem.

"You create wealth through value, right? You can only sell people once."

The quote emphasizes the importance of creating value for customers as the foundation of wealth creation, rather than relying on one-time sales.

"How do I create value, solve all the problems they have..."

This quote underlines the necessity of solving customer problems to create value, which in turn drives sales and business success.

• Acquisition.com works best with businesses that have a clear integrator and visionary, often found in partnerships or married couples.
• Single founders may need help finding a strong integrator or operator within their business.
• The focus is on increasing the lifetime gross profit per customer with new offerings and scalable delivery methods.
• The next step for businesses around the $3-5 million mark is usually to develop new products or services to increase revenue.

"The businesses that we work best with have a clearly defined integrator and visionary."

This quote highlights the ideal business structure that Acquisition.com finds most effective to work with.

"We usually need to figure out a way to make the lifetime gross profit per customer higher..."

The speaker outlines the strategy of focusing on increasing the lifetime value of customers as a means to grow the business.

• One product, one prospect, one channel can lead to significant business growth, potentially up to $10 million.
• Continuity can be seen as an extension of the front end or as the next offer in a business's product line.
• The timing for adding continuity to a business model is a strategic consideration.

"One product, one prospect, one channel to get you to a million. Pretty sure I saw Leila say on Instagram that could get you to 10 million."

This quote discusses the potential scalability of a focused business approach to achieve significant revenue milestones.

"When should someone be adding continuity?"

The speaker poses a question about the timing of introducing continuity, suggesting it's a key strategic decision in business growth.

• Discusses six ways to increase lifetime gross profit per customer: increasing price, decreasing cost, encouraging more frequent purchases, upselling, cross-selling, and downselling.
• Emphasizes the importance of choosing the right strategy (upsell, cross-sell, downsell) based on the category of the product or service.
• Warns against the common entrepreneurial mistake of cross-selling too early, leading to the challenge of managing two companies.
• Highlights the relationship between the level of the entrepreneur and the size of the opportunity in determining profit potential.
• Illustrates the pitfalls of expanding too quickly in brick and mortar businesses, where multiple locations can lead to diminished profits.

"So six ways of increasing lifetime gross profit per customer, right. Price. So increase the price, decrease the cost, get them to buy more times. Upsells, cross sells downsells."

This quote lists the six methods by which a business can increase the lifetime gross profit per customer, which is a fundamental concept in maximizing business revenue.

"But most times people try and cross sell, and that is a mistake."

Here, the speaker is cautioning against the common entrepreneurial error of cross-selling prematurely, which can complicate business operations by effectively running two separate companies.

• Discusses the 'entrepreneurial ceiling', where business owners' ability to scale is limited by their competence level.
• Stresses that starting a second business often leads to halved revenues and profits for each business.
• Cautions against the illusion of being an 'owner' when in fact the entrepreneur still fulfills multiple executive roles (CMO, CEO, COO).
• Suggests focusing on one business channel, maximizing it, and then creating a new product offering.
• Advocates for an extended time horizon for substantial business growth, beyond short-term programs.
• Explains the concept of sometimes needing to scale back in order to leap forward, using an example of a business that cut services and became more profitable.

"You will make the amount of money based on what level of entrepreneur you are. That's like level of entrepreneur times opportunity size."

This quote suggests that an entrepreneur's income is determined by their skill level and the magnitude of the opportunity they seize, indicating the importance of personal development and opportunity assessment in business success.

"And so until you can really transition to owner... they're still CEO, they're still COo, they still have four hats on."

The speaker points out the misunderstanding many entrepreneurs have about their role, highlighting that many still operate in multiple executive capacities instead of truly being just owners.

• Emphasizes the need for businesses to specialize and focus rather than offering too many diverse services.
• Mentions the difficulty in scaling and selling a business that doesn't specialize.
• Uses an example of a business that was streamlined by cutting services, which initially led to a decrease in revenue but eventually resulted in a more profitable operation.
• Discusses the strategy of opening new locations steadily as part of a focused business model.

"It's really easy to do one thing 100 times. It's very hard to do 100 things one time."

This quote captures the essence of the importance of focus and specialization in business, suggesting that mastering and repeating a successful formula is more effective than trying to manage a multitude of diverse, unrefined business ventures.

• Criticizes the coaching and training industry, pointing out that many coaches have not achieved the success they teach others to pursue.
• Highlights the problem with the "fake it till you make it" mentality and the importance of genuine success.
• Shares personal motivation for giving back, with a focus on providing free, valuable education as a means of empowering entrepreneurs.
• Discusses the strategy of acquisition.com to provide immense value for free with the goal of supporting entrepreneurs to reach a certain level of success independently.

"Most people haven't done it. If we're being super real, most people haven't done the thing that they're selling they how to do."

This quote questions the authenticity and experience of many business coaches, implying that real-world success is a critical component of credible business coaching.

"The most valuable thing I can do, the marketplace, is give all the experiences, the skills, the traits, and the beliefs that have shaped where we are now to everyone."

The speaker expresses a desire to contribute to the marketplace by sharing personal experiences and knowledge, emphasizing the value of genuine expertise and the impact of education.

• Explains the mission of acquisition.com to provide valuable resources for free.
• Shares the long-term vision of helping entrepreneurs grow their businesses without immediate financial gain.
• Describes the business model of taking equity in companies and supporting their growth.
• Discusses the importance of trust and shared values in business relationships.

"The whole idea with acquisition.com is just give away more value for free than other people charge for."

This quote outlines the business philosophy of acquisition.com, which is to provide more free value to entrepreneurs than what others might charge for, thereby building trust and demonstrating genuine support for business growth.