The neverending sales cycle...and the balance of goodwill vs salesconversions Ep 106

Summary Notes


In a discussion on the balance between goodwill and conversion in business, the speaker from downtown Austin, likely an entrepreneur or marketing expert, references Frank Kern's concept that income is tied to the goodwill in the market and the frequency of sales offers. They argue that while frequent offers may diminish goodwill, strategically providing value without immediate monetization can build a reserve of goodwill, likening it to depositing into a bank or building pressure for a significant release. They emphasize selling the value of free offerings to both teams and clients, ensuring the perceived value translates into actual goodwill, which can later be leveraged for profitable returns. The speaker advocates for a selective approach to monetization, focusing on offers with substantial revenue potential and maintaining brand integrity and customer loyalty for long-term success.

Summary Notes

Introduction to Goodwill and Conversion in Sales

  • The concept of goodwill in the marketplace was first introduced to Speaker A by marketer Frank Kern.
  • Goodwill is directly proportional to the amount of money made, multiplied by conversion points.
  • Conversion points are the number of times a business asks for money or makes an offer.
  • The balance between goodwill and conversion is delicate; more offers can decrease goodwill.

"So I'm calling this never ending sales cycle and the balance of goodwill versus conversion. So the first time I heard even the concept of goodwill was from a marketer named Frank Kern."

This quote introduces the main topic of the conversation, which is the balance between maintaining goodwill and achieving conversion in sales. The speaker credits Frank Kern for the concept.

"He still markets now, and he talked about how the amount of money that you make is directly proportional to the amount of goodwill you have in the marketplace multiplied by the amount of conversion points you have, the amount of times you ask for money."

Speaker A explains Frank Kern's principle that income is a result of goodwill in the market times the number of conversion points, which are essentially sales offers.

Balancing Goodwill and Conversion

  • Speaker A believes they have successfully maintained goodwill with their audience and customer base.
  • The balance is contrasted with the concept of nickel and diming customers through excessive upselling.
  • Speaker A gives an example of an agency that incrementally increases prices by adding on services.
  • Each additional offer can potentially decrease the customer's goodwill towards the business.

"And so I think that we've done a really good job of having goodwill in our audience and our customer base by balancing this fairly well and putting a lot of attention to it."

Speaker A is confident in their approach to maintaining goodwill while also focusing on conversion, suggesting they have managed the balance effectively.

"And so I think it kind of goes in contrast to the concept of nickel and diming people."

The speaker contrasts their balanced approach with businesses that frequently upsell, suggesting that this can lead to a loss of goodwill.

"So there's a lot of businesses that are out there that love to upsell. Let me give you an agency example, right? So if there was a company that was an agency, and they were like, well, this is our base level, and then for an extra 10%, we'll do your creative, and an extra 10% on top of that, we'll do your copy, and an extra 10% on top of that, blah, blah, blah, blah."

Speaker A uses an agency as an example to illustrate how businesses often incrementally increase their prices by offering additional services, which can be perceived as nickel and diming.

"And so you're nickel and diming someone in order to get more money out of them. But I think what ends up happening there is you lose a lot of goodwill, will, because every time you make an offer, you lose goodwill."

The quote emphasizes the risk of losing goodwill with customers through repeated upselling, affirming the idea that every additional offer can erode the customer's positive perception of the business.

Value of Offers and Goodwill in Business

  • The profitability of upsells or offers varies significantly.
  • The frequency of making offers is fixed; it's binary (either an offer is made or it isn't).
  • Offers that do not generate significant revenue can still erode goodwill.
  • It's suggested to include offerings that don't directly generate revenue in the marketplace as a form of goodwill.
  • Even when not charging for value-added services or products, it's crucial to sell their value convincingly.
  • Selling the value is important both internally (to the team) and externally (to the clients).
  • Enthusiasm from the team is necessary to transfer the perceived value to clients.
  • Goodwill can be seen as a form of currency that is deposited into a bank.

"And the amount of money that you're going to make from every upsell or every offer is not equal."

This quote highlights the varying profitability of different offers or upsells in a business context.

"But the amount of times you make an offer is set. So an offer is a zero or one. Either you're making an offer, you're providing value."

This quote emphasizes that the opportunity to make offers is limited and binary, which implies that making the right offer is crucial.

"But every time you make an offer that's not really that monetizable, that doesn't make you a ton of money. Like a nickel and dime scenario, you're still losing a decent amount of goodwill, but you're not getting a proportional amount of upside from that offer."

This quote suggests that offers with low profitability can still cost a business in terms of customer goodwill, which may not be worth the small financial gain.

"Most times, a lot of the things that most people would argue that you should charge for, you should still put in your marketplace, but only as goodwill."

This quote introduces the concept of offering certain services or products for free as a strategy to build goodwill in the marketplace.

"You still need to sell the shit out of it. And what I mean by that is that people still don't see the value of what you're doing unless you explain to them why it's valuable, right."

This quote underlines the necessity of effectively communicating the value of an offering, even if it is not being sold for a monetary gain.

"If you're going to go through the process of making something that's going to be good and fulfilling on it, you want to make sure that you get your due goodwill, right?"

This quote emphasizes the importance of ensuring that the effort put into creating a valuable offering translates into goodwill from customers.

Goodwill Banking Concept

  • The concept of "Goodwill Banking" refers to the process of consistently contributing value to a customer base or audience.
  • This process is likened to making deposits into a bank account, with the intention of making a withdrawal in the future.
  • Building goodwill is crucial for creating a foundation of trust and value before attempting to sell high-ticket items or services.

You're depositing goodwill into a bank account for a later extraction.

This quote explains the strategic approach of offering value upfront to create a reservoir of goodwill that can be leveraged later when making sales or asking for customer commitment.

Building Pressure in Business

  • The idea of building pressure is compared to pumping air into a confined space, such as inflating a balloon.
  • This metaphor represents the act of consistently engaging and providing value to a customer base.
  • The release of pressure equates to the moment a business begins to offer products or services for sale, resulting in a flow of sales due to the built-up anticipation and value.

Like you're continuing to pump air into a defined amount of space, which might be your defined amount of customer base. You're pumping air. You're pumping air. You're pumping air. And then the moment you release the valve, that's when all the sales start flowing in, right?

This quote illustrates the concept of building momentum and anticipation within a customer base through ongoing engagement and value provision, leading to a successful sales outcome when the product or service is finally offered. Invitation

  • An invitation is extended to business owners aiming to grow their businesses significantly.
  • offers the opportunity for businesses to apply and potentially receive guidance on expansion.
  • The process involves applying on their page and discussing options with their team.

Mosey nation real quick. If you are a business owner that has a big old business and wants to get to a much bigger business, going to 5100 million dollars plus, we would love to talk to you.

This quote is a direct invitation to large-scale business owners who are looking to scale their operations, suggesting that has the expertise and resources to assist in this growth.

High Ticket Sales Strategy

  • The strategy involves filling the base of the business with customers before introducing high-ticket or exclusive services.
  • By establishing a large customer base and providing substantial value, businesses can create a sense of exclusivity and demand for higher-level services.
  • The transition to selling more exclusive services becomes effortless due to the pre-established goodwill and exclusivity.

And so that's why when we teach that we want to fill people's base up before we start doing their high ticket or their semi private training is because we want to build up the pressure in the base of the business so that if we have 200, 300 members, when we say, hey guys, we're going to be offering more exclusive service, we've built up so much goodwill, we've built up so much exclusivity that automatically that next level fills up without any effort, right?

This quote describes the strategic approach of establishing a solid customer foundation and nurturing goodwill to facilitate an easier and more effective introduction of higher-value offerings.

The Ratio of Giving to Asking

  • The concept discusses the balance between how much value a business should provide before it can make a sales pitch or request.
  • It emphasizes that the act of asking should come after a series of value-adding interactions, not taking from the customer.
  • The strategy involves consistently demonstrating value and expertise to build trust, which can then be converted into sales opportunities.

But basically it's what ratio do you go? How many times do you have to give before you can ask, right?

This quote poses the question of finding the right balance between providing value and making sales requests, highlighting the importance of understanding when and how to transition from giving to asking within a business context.

Building Goodwill in Business

  • Goodwill is essential for long-term profitability and brand reputation.
  • Consistent value provision to customers builds pressure and goodwill.
  • Not all business asks should be revenue-focused; some should aim at providing value.
  • When significant asks are made, the accumulated goodwill translates into substantial business surges.
  • Upsells and minor revenue streams can damage brand and customer relationships over time.
  • Goodwill leads to customer loyalty and advocacy, which are key to long-term revenue.

One, because you haven't built enough pressure up, but also because not all of the asks that you have in your business are going to be huge revenue streams, right?

This quote emphasizes the importance of building pressure through consistent value addition rather than relying solely on immediate monetary asks, which might not always yield significant revenue.

Keep providing value, keep providing value, keep providing value so that when it comes time where we actually want to make a move, we've built up so much goodwill that it blows the gasket off the top and it becomes an overwhelming surge of business.

Here, the speaker highlights the strategy of continually providing value to build up goodwill, which will result in a significant surge of business when a major ask is eventually made.

Is being maximally converted in a maximally profitable manner rather than continually doing these little upsells and things like that, that in the long haul, I think, damage the brand, damage the customer relationship, and don't allow you to maximally profit in the big picture from your customer base.

The speaker outlines the long-term disadvantages of small upsells, suggesting that they can harm the brand and customer relationships, ultimately affecting overall profitability.

The Strategy of Non-Monetization for Greater Impact

  • Innovating and creating new offerings without immediate monetization can foster goodwill.
  • The selective monetization approach allows for maximized profits in the long run.
  • Demonstrating the value of offerings is crucial, even if they are not being sold.
  • Presenting value as if it were a paid product, then offering it as a goodwill gesture, enhances perceived value and customer loyalty.

Don't always try and monetize everything. Try and provide goodwill. Be cognizant of the fact that goodwill is what will make you the most money and pick and choose the battles that you want to monetize, because that is how you're going to make the most money in the long run.

This quote advises against the constant monetization of offerings and emphasizes the importance of building goodwill for long-term financial success.

The reason that they think that there is goodwill is because you sell them on why it is valuable.

The speaker explains that customers perceive goodwill when they understand the value of what is being offered, even if it's free.

You have to sell it as though you were going to charge it, charge money for it, and then, and only then say, but since I love you, here it is.

This quote suggests that one should present free offerings with the same enthusiasm and value proposition as paid ones, then offer them as a gesture of goodwill to strengthen customer relationships.

Customer Loyalty and Advocacy

  • Customer loyalty is a direct result of perceived goodwill and consistent value delivery.
  • Advocacy from loyal customers is a powerful form of marketing.
  • Selling the value of free offerings as if they were paid increases perceived value and loyalty.

You're going to have the most loyalty. You're going to have people who talk about you, they just keep providing value, they keep over delivering.

The speaker associates loyalty with the continuous provision of value and exceeding customer expectations, which leads to customers talking positively about the business.

That's the key. That's the difference. And that's what will allow you to position yourself in such a way that when you do want to make your move, you crush.

The quote indicates that the key to successful monetization moves is the groundwork laid by fostering goodwill and loyalty, which positions the business for significant success when it decides to monetize.

Conclusion and Well-Wishes

  • The speaker concludes with a message of encouragement and positivity for the future.
  • Wishes the audience a successful year and looks forward to future interactions.

Hope you guys have an amazing 2019 and I'll talk to you sooner.

The speaker ends the conversation with a hopeful send-off for the audience, implying continued engagement and support in the future.

What others are sharing

Go To Library

Want to Deciphr in private?
- It's completely free

Deciphr Now
Footer background
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon

© 2024 Deciphr

Terms and ConditionsPrivacy Policy