The 3 Biggest Levers in Business Ep 258

Summary Notes


In a discussion on business growth, the speakers highlight three critical levers: market selection, offer creation, and persuasion skills. They emphasize the importance of operating in a stable or growing market, as even the best offers and sales tactics cannot overcome a declining market. The conversation underscores the transformative potential of crafting a compelling offer, which can quickly elevate a business from average to extraordinary. Additionally, they stress the value of developing strong persuasion abilities to effectively market and sell products. The speakers encourage entrepreneurs to self-assess their position in these areas to identify growth opportunities and improve their business outcomes.

Summary Notes

Importance of Market Selection

  • The market you're in significantly affects your ability to make money.
  • A good entrepreneur in a bad market, or vice versa, will likely be overpowered by the market conditions.
  • The story of Lloyd illustrates how being in a declining market can hinder growth despite having a great product and sales strategy.
  • It's essential to assess the market as a plus, neutral, or negative for growth potential.

"And so the reason that investors look at this stuff is because they know that if you put a great entrepreneur in a bad market or a bad entrepreneur in a great market, the market will usually win."

This quote emphasizes the critical role the market plays in the success of a business, often outweighing the capabilities of the entrepreneur.

"Despite both of those things, he was not able to grow because he was in the newspaper market, which was shrinking by 25% every single year over eight years."

This quote highlights the specific challenge faced by Lloyd, where despite having a strong offer and sales strategy, the shrinking newspaper market led to the decline of his business.

"If you're in a horrible market, it doesn't matter how good your offer is, it doesn't matter how good your persuasive abilities are, you will not be able to outpower a bad market."

The quote reinforces the notion that the quality of the market is a determining factor in business success, and a poor market can negate even the best business strategies.

Business Growth Levers

  • There are three primary levers for business growth.
  • Understanding and utilizing these levers can have a direct impact on revenue.
  • The levers should be approached from the top down, starting with the market.

"And so these are the three biggest lever for growth in a business. Three big levers for biz growth."

This quote introduces the concept of growth levers in business, setting the stage for a discussion on what influences business expansion.

Leveraging Business Opportunities

  • Even in average markets with normal growth, significant profits can be made.
  • The key is to understand how to attract and retain customers, as well as how to maximize profit per customer.

"Most of us are just in normal markets that are growing a normal amount. And the nice thing is, if you're in one of those markets, you can still make a tremendous amount of money."

This quote suggests that ordinary markets present ample opportunities for making money if one knows how to capitalize on them effectively.

Introduction to Business Insights

  • The podcast aims to share practical advice on customer acquisition, increasing customer value, and customer retention.
  • The speakers share their experiences, including failures and lessons learned, to help listeners improve their businesses.

"Welcome to the game where we talk about how to get more customers, how to make more per customer, and how to keep them longer, and the many failures and lessons we have learned along the way. I hope you enjoy and subscribe."

The quote serves as an introduction to the podcast's objectives, offering insights into customer-related strategies and business growth through shared experiences.

The Importance of Offer in a Market

  • The offer is the second lever in a business model and is crucial for transactions with customers.
  • It encompasses the products and services provided in exchange for money, including the terms and redemption process.
  • The quality and uniqueness of an offer can significantly impact profitability, especially in normal markets.
  • An irresistible offer can lead to more customer acceptance and increased revenue.
  • The effectiveness of an offer can range from amazing to poor, with the latter two being undesirable.

"And what I mean by that is what you are literally giving a customer in order to transact with them."

This quote defines 'offer' as the tangible value proposition presented to the customer for the purpose of a transaction.

"This is the products and services that you offer in exchange for money and the terms under which you offer them and what they need to do to redeem them."

This quote elaborates on the components of an offer, including the products, services, pricing, terms, and redemption process.

"Now, if you have an incredible irresistible offer, then more people will say yes, and you can make a tremendous amount of money."

The significance of crafting an irresistible offer is highlighted here, as it can lead to higher acceptance rates and profitability.

Market Conditions and Their Impact on Offers

  • Market conditions influence the necessity for a strong offer and persuasion skills.
  • During exceptional market conditions, such as a high-demand period, the quality of the offer may be less critical.
  • In normal markets, which neither grow nor shrink significantly, the quality of the offer becomes more important for financial success.
  • Understanding the market context is essential for determining the approach to offers and persuasion.

"If you were selling toilet paper during COVID it didn't matter what your offer was or how persuasive you're going to make a ton of money."

This quote illustrates how extraordinary market conditions can override the need for a strong offer or persuasive skills.

"But most of us are in this market. Most of us are just in normal markets that are growing a normal amount."

The quote points out that most businesses operate in stable markets, where the strength of the offer is more critical for success.

The Role of Persuasion in Business Success

  • Persuasion is identified as the third big lever in business, following market and offer.
  • Natural persuaders, such as skilled marketers and salespeople, have an advantage in convincing customers.
  • The level of persuasion can compensate for less-than-ideal market conditions or offers.
  • The hierarchy of importance starts with market conditions, followed by the offer, and then persuasion skills.

"So some people are naturally good persuaders. They're good marketers, they're good salespeople."

This quote recognizes that natural talent in persuasion can be a significant asset in business.

"If I were in an amazing market, it doesn't matter if my offer persuasion abilities are good, I'll make a ton of money."

This quote suggests that in a highly favorable market, the need for strong persuasion is less critical, as demand is already high.

"If I'm in a bad market, it doesn't matter if I'm in good persuasion and good offering, I'm not going to make any money."

The quote emphasizes that in poor market conditions, even strong offers and persuasion may not lead to profitability.

The Importance of Audience Support for Entrepreneurial Success

  • The speaker requests audience support to spread the word about the podcast, emphasizing that it runs without ads or sales pitches.
  • The goal is to assist more entrepreneurs in achieving success and improving their business practices.
  • Audience engagement and word-of-mouth promotion are presented as vital for the podcast's mission.

"Real quick, guys, you guys already know that I don't run any ads on this, and I don't sell anything. And so 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 direct appeal to the audience for support in sharing the podcast, highlighting its ad-free and sales-free nature and its purpose to aid entrepreneurs.

Importance of Audience Engagement

  • Encouraging listeners to rate, review, and share the podcast is crucial for growth.
  • Audience reviews can have a significant impact on the podcast's reach and influence.
  • Sharing content is a way to potentially change the world for someone else.

"mers. The only way we do that is if you can rate and review and share this podcast."

This quote emphasizes the importance of listener engagement in expanding the podcast's audience and influence.

"It'll take you 10 seconds or one."

Speaker D suggests that leaving a review is a quick and simple action for the listener but holds great value for the podcast.

"It would mean the absolute world to me. And more importantly, it may change the world with someone else."

The quote highlights the dual benefit of audience reviews: the personal gratification for the speaker and the broader impact it could have on others.

Crafting Irresistible Offers

  • Transitioning from a normal to an amazing offer is a key business growth strategy.
  • Repackaging the value proposition and terms can create a "grand slam offer."
  • Exceptional offers in business can yield long-term success, unlike finite wins in sports.

"But with an offer, you simply can repackage the value proposition, how you charge and the terms under which you offer your services."

Speaker A outlines how altering the presentation and terms of a service or product can significantly enhance its appeal.

"And the reason I call them that is because grand slams are both very rare and very good."

The metaphor of a "grand slam" is used to describe an offer that is outstanding and highly effective in the market.

"No matter how good your offer is in business, you go in for life."

This quote suggests that an exceptional business offer can secure enduring success, unlike the temporary victory of a grand slam in baseball.

The Role of Persuasion Skills

  • Persuasion skills are essential for success, especially with a normal offer in a normal market.
  • Marketing and selling through multiple channels is necessary to acquire customers.
  • Developing persuasion abilities is challenging and requires time, effort, and resilience.

"The only way for you to be hyper successful is to develop persuasion abilities and so that's learning how to market and sell, how to acquire customers through multiple channels."

Speaker A stresses the importance of mastering persuasion and marketing skills to achieve exceptional success in business.

"It takes a lot of time, takes a lot of effort, takes a lot of volume, takes a lot of practice, a lot of failure in order to get good at this."

This quote acknowledges the difficulty of acquiring effective persuasion skills, highlighting the dedication required to excel in marketing and sales.

Assessing Market Position

  • Ensuring the business is not in a bad market is the first step in growth strategy.
  • Being in a good market is easily recognizable and can significantly impact success.

"The first thing I'm going to do is check this off, is just say, like, are we making sure that we're not in a bad market and we're at least in a normal or good market?"

Speaker A indicates that evaluating the market position is a preliminary action when looking to grow a business.

"You'll know if you're in a good market, believe me."

The quote implies that the signs of being in a good market are evident and can be a strong indicator of potential business success.

Market Positioning

  • Identifying the market position is crucial for business success.
  • The speaker suggests that being in a 'good' market can significantly impact sales.
  • The example given is that selling toilet paper during Covid-19 or hot dogs outside a baseball stadium post-game indicates a strong market positioning.

if you're selling toilet paper, Covid-19 if you're selling hot dogs outside of a baseball stadium, as soon as the game lets out, you know you're in a good market.

This quote exemplifies the importance of market timing and relevance, highlighting how external circumstances can create lucrative opportunities for specific products.

Business Offerings

  • Evaluating the current offering of a business is a key step in understanding its value proposition.
  • Important aspects to consider include the product or service being sold, the terms of the agreement, the price point, and what clients receive in exchange for their money.

What is the current offering? What are we doing in exchange for money? What are the terms of the agreement? What's the price point and what are they getting in exchange?

This quote outlines the fundamental questions a business owner should ask when assessing their business's offerings, focusing on the exchange of value between the company and its clients.

Creating a Grand Slam Offer

  • The concept of a grand slam offer involves reimagining the business's offerings to enhance their appeal.
  • Repackaging, repositioning, and renaming products or services can transform a business overnight.
  • The process can be swift and has the potential to elevate a normal business to an extraordinary one.

And so then what I will do is shift the business from here in this direction to create a grand slam offer.

The speaker discusses a strategic pivot aimed at improving the business's offerings to create what they refer to as a "grand slam offer," indicating a significant improvement in the value proposition.

Skills of Persuasion

  • Developing skills of persuasion is highlighted as a critical component of the entrepreneurial journey.
  • Exceptional sales and marketing abilities can be developed after ensuring the business offer is compelling.
  • Persuasion in business is about being able to acquire clients efficiently and effectively.

And then finally, the last thing that you can do is you can develop all the skills of persuasion.

This quote emphasizes the importance of mastering persuasive techniques as a means to attract and retain clients, which is presented as the final step after optimizing the business offer.

Evaluating Business Growth Levers

  • The speaker identifies three levers of success: market positioning, offer quality, and persuasion abilities.
  • Assessing and rating these aspects can help a business owner identify growth opportunities.
  • The speaker encourages self-evaluation in these areas to determine where improvements can be made.

So if you can rate yourself on these things, then you can identify where you have opportunities for growth and then follow these steps to get to where you want to go.

This quote suggests a methodical approach to self-assessment in key areas of business, which can reveal potential for growth and inform strategic decisions to enhance performance.

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