The Real Issue Holding Your Business Back | Q&A Ep 762

Hello, I'll tell you this one story real quick and then we'll get into it. So I had a guy a few months back and he was really excited to ask this question and he was like, hey, could you go over the closer framework? And I was like, what's your close rate, man? He was like, 40%. I was like, that's obviously not the constraint of your business. So you like traveled across the country, you did the first day, you came the second day, and the one thing that you decided to ask was something that is not a problem in your business. And the thing is, I think it's really telling 'cause a lot of us work on the things that we like and he just likes sales. But the reason that his business wasn't growing was not because it had a lack of closing. It was because of other issues that he wasn't confronting. There's 4 big issues that I consistently see 'cause I've now had a lot of conversations. These are strategic problems, not tactical ones. So it's not like, how should I increase my show up rate? How should I increase the closing? How should I— you know, whatever. They're usually rock and hard place scenarios, meaning that you're stuck because there's this thing where on either side there's pain, and so you just continue. And it's usually one is short-term pain, is one is long-term pain. The first, uh, most common one is that you're mispriced. This is where you're like, okay, I'm at full capacity in my facility, but we're not making any money. But if I raise my prices, then I'm going to lose my customers. What do I do? It's like, well, if you continue, you don't make money. And if you raise your prices, there's another alternative where you don't make money, but then you will eventually make money. Money. These are common rock and a hard place scenarios. A close cousin of that is compensation, is that I've got people on my team who I'm overpaying, and my whole business model is I give 50% of revenue to my therapists. Okay, well, tough to make money when half of top line goes away, at least in a, you know, human capital, you know, based business. Well, if I tell them that I have to renegotiate comp, then I'm going to lose my therapists. But if I don't, I'm never going to grow this business. Rock and hard place. In each of these situations, you usually just have to deal with the fact that you're going to have some short-term pain, or you can just have the long-term pain of the fact that you never achieve your goals. We've been able to move relatively quickly through these because like we encounter these problems too, because these are all problems of ignorance. Is you did something, you did the best of your ability at the time, and then you learned some shit, and then you're like, oh wow, that wasn't smart. But now you know. And that's the, that's the price of ignorance tax, is it hurts a lot because you pay down the debt of not knowing. The next one is overexpansion, which is we have some sort of internal need as entrepreneurs to continue to grow. And we define that by our top line growing or by being close to some rival that we have that we for some reason compare ourselves to that no one else knows or cares about. I was at one location, so I immediately go to two. And I'm just using locations 'cause it's simple, but it could be you have an agency and you go from 10 clients to 100 clients, whatever. But by doing that, you overextend yourself. And so what happens is you abdicate instead of delegate. And so, by the way, you can know the difference because if you delegate, things keep going. If you abdicate, shit gets worse when you give it to somebody else. And so many of you abdicate and don't delegate because of that, because it takes work to delegate, because you have to train someone, you have to get them up to speed, and that takes time, and you're impatient, and so you don't do it, and then you pay the price later. But now what do I have to do? Well, now I have to keep selling and marketing, but all the people that I have in delivery, 'cause I scaled so much, suck, but I have to keep selling and marketing. But then my reputation gets hurt because every single person who comes in says I suck, but I have to keep doing it 'cause I have to support the payroll. Rock and a hard place. A lot of these decisions is sometimes you have to take a step back so you can take two steps forward because there is no alternative. And sometimes that means you going through a lot of pain in the short term. This is why I often say that your lifestyle is your competitor's opportunity. And so if you can live on less so that you can be more offensive or more flexible within the business, It just gives you degrees of freedom. If you can cut revenue or cut profits so that you can reorganize the business to fix a strategic problem, it allows you to be more aggressive in the future. And then the last one is my favorite, of course, woman in the red dress. I have, I'm CEO of two businesses. I've got this amazing idea and I've been doing this thing for 7 years, but this thing sounds great cuz you only know the good stuff. You don't know the bad stuff. And so, you know, you meet the woman in the red dress and you're like, she's amazing. And then you're like, oh my God, she's a crazy ex-boyfriend. She's got chlamydia. Like, oh my God, I didn't know that, but now I'm in bed with her. And you're like, you know, I have I'm an idiot too. And you're like, here we are. How did I get here? She seemed so great. I had a CFO for years. She retired. She was awesome. But she said, she's from the South. She was like, there's always shit. She's like, all businesses have shit. You just have to pick what type of problem you'd rather solve. There are eternal questions that are always impossible questions to answer correctly. Do I push or do I pivot? Do I need to keep pushing through this thing? Or is this one of those times where I need to pivot? Well, there's tons of stories of guys who kept pushing and then pivoted and then it worked. And there's tons of stories of guys who kept pushing and then kept pushing and then it worked. And so how do you know what's right for you? It does ladder up to what we originally started with, which is return on resources, which is given the resources that I currently have, what is the highest probability of success? But that assumes that you have perfect information, which you never do. The answer to that is you don't know and you try your best. So these are the 4 most common problems that I see. I'll probably highlight some of them as you guys ask them. Yeah, let's rock and roll. Who's got the first box?

Yeah, so I've got a business. I was working with the guy who does e-com management for Amazon stores, Walmart stores. So I was leading up his operations. Him and I started a side business doing a tax function. And then also we built the software that runs his entire business, but it's like a separate, like a little shark that follows the big shark. So that business is going relatively well. We'll do about $1.1, $1.2 million this year. It's gotten to the point where. We have these clients that come, I mean, any, anybody who signs up for his other business has to sign up for our business.

Sure.

So I don't need to advertise or market. I'm trying to figure out what's next because right now we have this one channel partner. Anything after that business, Walmart, Amazon, change the game.

Sure.

We can get shut down pretty quick. So we're trying to figure out, do we focus on increasing revenue with our existing clients? We can like, that's one strategy we could take, but that limits us with the one channel partner. Or do we start figuring out how do we take all of our excess capital and either partner with other people, um, create different apps, things we could sell to the Amazon seller marketplace as a whole. We're approved app developers now for Amazon as well. So there's a lot of different directions we can go. And I'm stuck between increasing revenue with our existing clients and getting up a little more or figuring out other streams of revenue in case anything happens to that first one.

I would do neither of those. I mean, my favorite strategy in the world, do more of what's working, which would be you have one channel partner. And so I would be attacking more channel partners. I wouldn't be adding more products. And if you already are, are you good profit margins within the business right now?

Yeah, about 68%.

Okay, yeah, so margins are good. So yeah, I would be getting 10 more of the big sharks as the business model. So that means that you, like, fundamentally you have to crack an acquisition channel to get customers. And so you already know what the partnership model looks like when it's right. Now I'm guessing that guy owns half of this business.

Mm-hmm.

Right? And so it's like, how do I make it compelling for everyone else? So you'll probably eat into your margins, but maybe just say, I'll give you half of the revenue as an affiliate or 40% of the revenue that your customers generate and you don't have to do anything. You just make the intro.

Sure. That was a thought as well.

So yeah, I would do in terms of like, so I think about these in bets of like, what's the likelihood of success? And so building new products is a lot of 0 to 1, which is a lot of net new. You don't know if you have product market fit. Like you have product market fit, which is tough and you have that, which is great. And then different acquisition channel, it's like, well, you already know what partners is like. And so it's like, if I, if I want to take the next natural bet, it's like, how do I change as few variables as possible and take the bet that'll have the most upside? So you getting 10 of these sharks with an affiliate model that makes sense, makes sense to me. And maybe you would do a little phantom pool of like 10% that all of them get a tiny share of that's proportional to the amount of customers they send you so that if you exit in the future, they get a slice. Sure.

Makes sense.

That's what I would do.

Cool. Thank you.

Yeah, no worries.

Hey Alex, right here.

Yes, sir.

Alliance Jiu-Jitsu. I mentioned to you last night that we have, uh, 250 locations as a franchise model.

Mm-hmm.

I also own 2 of my own locations and I want to now open 50.

Mm-hmm.

Um, with my franchise partner, as opposed to just going after franchises, it's just better for us to own locations. We talked about that, but you mentioned, hey, we bought out our, our franchises in one of your portfolios, I believe.

Yeah.

We've looked into that, or I should say I've looked into that, but it just seems that there's kind of like a, um, a delusion to the value of those terms, right?

So you go from most in pain to least in pain. Of the 250 that are open, yeah, number 250 worst performer. Yeah, I talked to him first. Got it. And then you just go to 249, and then 248, and 247, 246. You just keep working your way through. Got it. It's, it's coming from the perspective of like, we don't need to buy you out. But if you want us to take over this thing for you, I can take it over for you. And then you can just swallow them up. 'Cause a lot of them, I would assume the bottom 20% desperately regret the decision of being in business. Has nothing to do with the model. Like bottom 20%. I get it. For whatever reason, right? And so then you say, cool, well I can relieve all of this pain for you immediately and I'll take over all the liability of your leases and all the liability of the equipment and everything else that goes with that. 'Cause you know that you know how to run the business better and you might have to fire half the staff, but at least you don't have to like rebuild the facility. It's already to spec. And as long as you like the markets, Cause some of them we close down like, this is a market issue. Local, calm down. Like some local markets just don't have enough to sustain and there's not enough the ideal avatar, whatever. As long as you don't think it's a market issue and we think this should be overperforming and this is being mismanaged, those are the ones that are opportunities.

Got it.

Yeah. I would do that first. I would go mop up because I'll bet you out of 250, you can find 50 without even having to spend a dollar of opening new. Just take over liabilities. Like if you take over a lot, so this is how you can talk through it with them, which is like, you have $300,000 in liability, you have zero cash flow. I'm paying you $300,000 in debt that I will take on.

Right.

And so that way it's not like, wait a second, this thing's, it's like, this was nothing. The opportunity was worth something, but you have now squandered it. And so we have debt.

I'm willing to take that risk on because they love the sport still though, in this situation, they don't wanna like necessarily walk away from their students. They still wanna be there. So I guess how, from just a high-level perspective, do you have any thoughts on how to even work through that frame?

Tough. Mostly because they're going to still have authority in that world.

So to ask them to walk away is like kind of a different conversation than like I think what you dealt with.

I think I know. I think I— yeah, I get where you're coming because they're like the master sensei or whatever. Yeah, exactly. Yeah.

So they do want that. Sorry to interrupt you, but they do want that like kind of relief that you're talking about.

Yeah.

They don't want to manage the business. They just want to like teach classes or whatever.

Yeah.

The thing is like So this would be a test, honestly, because all the French that we have, like, they're not, they just own the location or whatever. I would go in and say, like, I would test on one of them and be like, in front of the staff, this guy has to get up and then I will get up so that everyone understands, like, he's not the man anymore. I'm the man now. He just teaches classes. He has no authority. If your check's fucked up, he can't do shit. If you didn't, like, if you want to know if you can take off, he can't do shit. Like it has to be like a clear transference of power, not in a way to neuter the guy, but like be very clear that like he no longer has authority here so that you could take it over. I don't know like how well that'll go, but if he's bought in and he can sell the fact that like, listen, I'm here to teach classes. That's what I want to talk about. But it's like, hey, you want to talk about arm bars? He's your guy, not me. I'm here for the dollars and cents to make sure the lights stay on and so we can keep this thing going so everybody can keep having fun.

Understood.

Clear division of roles. And if you're like, hey, and like play out scenarios, it's like, hey, by the way, you're like, hey, that's not how we do things here. It's like, duh, that's why it's not working. Right. And so we are going to change things. Yeah.

Monetarily, I think is where I've run into the issue, which I'll have to think through of how to make sure that they also are paid something that they feel that's worth it. So to your point, I think I just need to maybe wait it out for the right, right ones.

There's for sure 25 that will sign their stuff over. Understood. To take, to just, just teach classes. Cuz that's what they thought. They thought when they bought into the opportunity that they were just going to make money doing something they loved. Understood. But then all of their days doing stuff they hate and they barely get to do the stuff they love. So it's like, I wanna give that back to you. 100%. Okay.

Thank you.

Yeah, no worries. Yeah. Your YouTube and Layla's YouTube is amazing and so inspiring. And you guys recently made a YouTube change to go all in on business content. Do you foresee in the next 30 days, 60 days, quarter, any additional YouTube changes? And where are you putting your chips in with YouTube? Oh, great question. No, I think back to business is gonna be the theme for the foreseeable future. We did like a quarter-ish, maybe it was like 16 weeks where we just tried, we'd experimented with some wider topics. And what was interesting, and hopefully you guys saw it, is like we got more views on that stuff. And so I felt confident in saying like, oh, I know how to get views, but that doesn't get me what I want. We were just talking to one of our, our leaders in the company earlier today. I was like, we just always try and think from the perspective of what increases the likelihood that what we want to have happen happens. And so what I want to have happen is that we get as many business owners as possible into our And so me making Mosey Meals, the idea was, well, maybe entrepreneurs who are kind of like fitness oriented are going to like this stuff. But what really happened is just a bunch of people who watch fitness stuff, watch that video and don't care about business. The question then comes back because I had somebody else ask me this. They're like, I thought a brand was like your personal thumbprint. Like they're all different aspects. Like you like dessert, you train your calves, like all this other stuff. Right. And so I think it's fundamentally like, what's the main topic? The main topic's business. But if it's business first and then I sprinkle in the fact that I train my calves or whatever, then it's still business people. So everybody in my audience will like it and some of them will like it more. But if I start with food stuff and then business stuff kind of gets sprinkled in, I'm getting the wrong first person. And so business content overlaps 100% of my audience. The other stuff just creates a second form of affinity. So if you like dessert, fitness and making money and philosophy, you're going to fucking love me, right? But if you just like making money, I don't want that person to not want to watch my stuff because I'm talking about not that. But if I have a business piece that mentions dessert, they're not going to not watch the video. And so that's really, it's like, what's the main emphasis? And so for me, knowing that, and I have to do the math on this, this is worth for everybody, is there's 300 million Americans, 9% of Americans have a business, there's 27 to 30 million depending on where you look at the source. So 30 million businesses. But that means like sopranos, hairstylists, LLCs that exist now of those people. So there's 30 million total. Okay. Now how many of those people, like I would say, have like business businesses, like one employee? Well, now we're already at like 10 million. It's like, okay, there's not that many business owners. Like you have this huge world and all of a sudden it gets really, really shrunk down. And then from there that like, like this, like way smaller, right? And so I have to be realistic about like, I'm not going to compete with MrBeast on views. Because entertainment is reinforcing for everyone. Education inherently is harder for some people to consume because it requires work. You have to think, right? And so making sure that you don't take lessons from entertainment, it took me time to learn this, and apply them to the wrong business context. And so everybody here, I think, is here to make money. And so the content that you make costs resources and you expect to get a return on those resources. And so we have to ask what content is gonna increase the likelihood that we get the desired person? And so if I make business content, unsurprisingly, more business owners watch it. If I make not business content, more not business owners watch it. And so as simple as that sounds, it took me 16 weeks to learn. And so hopefully I passed that on to you. But it also means if you look at my views now, we're way lower than we were, but I'm going really deep on business stuff. I've, hopefully you guys like the stuff I've been posting lately. Yeah.

Yeah.

It's way deeper business stuff, but like I get like 100,000 views and my average before that was 400, but I was going wider. But in terms of all the metrics that I care about, the opt-ins on our site that are for business owners, the percentage of people who say I wanna start a business versus I own a business, I wanna scale a business is significantly skewed. It's doubled. Towards own a business. My book sales have doubled. And so the metrics I care about have gone up. And so it's like, it's very tough because making content's very reinforcing because you wanna get more views, you wanna get more likes cuz you get into that game. But you have to make sure you're doing it for the right thing. But as long as we check the box of like, this is about business, then by all means I wanna jam the shit outta the views and whatnot. As long as it's about the right stuff. From that, do you have any iterations that you'll be making from what you just did? Like forecasting for the next 4 weeks? No. No. Honestly, it's just like me making business stuff. As much as I'd love to say we do this really complex strategy, like we get down and Caleb's like, what do you wanna talk about today? And I'm like, eh, this. That's, that's what I make the video on. Sometimes they had like, they'll come with a couple that are pre-prepared and they're like, we pulled a whole bunch of stuff from your, from Twitter and podcasts that we grouped together on this theme that we think would be really interesting. We've already got some packaging outliers that we think would work well here. And then from like, I don't feel like making that, then we don't make it. But if I feel like making it, then I make it. So as much as I want to be like, that's— we have the super dialed system. I just make what I want. Thank you. My 8-year-old loves your cast too. Thank you. Oh, awesome. Took one from MrBeast. There we go. Hello. Shoot.

Yep.

So you talk about price being like the biggest lever, you know, that we have, um, in terms of our profit. You don't really want to be like the lowest in the market. You want to be high end, but you want— but it's okay to be the lowest in the market if you're going in there with a plan of literally disrupt the market. Which you have. Which is what I'm doing. Yeah, yeah. Exactly. He does tax for small businesses, $0 to $600K people. I really love the fact that I'm doing these services for this price because there's so many small business owners who need them at this price. Sure. Kind of want you to speak to whether it still makes sense to like experiment with my prices. And so there's no advantage to being the second cheapest. Okay. So you have to be the cheapest, but that's because you started with the end in mind that you wanted to build a way to operationalize making a good margin on the very cheap price that you charge.

Yeah.

You have a gazillion businesses that right now are within your market, $0 to $600K of the 10 million businesses that I described earlier. That's like all of them, right? Like, like so few businesses actually make money. And so you are perfectly suited to the majority of business owners, solopreneurs, single, you know, tiny location operators and whatnot. If I were to buy your business tomorrow, I would just jam 10. That's why I asked you, I was like, how many people can you sign up a day? And you said you could handle 10 to 15 new customers a day, which for accounting and tax is absurd. Absurd in terms of your—

I think that's right now, but I mean, you give me a month.

Right. No. And so when I heard that though, it's like, that's exciting. And so all my entire focus is like, you already have this backend that runs really good margins on this tiny price.

Yeah.

Dude, you just jam the living hell out of the frontend. Yeah. That's it. I wouldn't mess with anything on the backend. You have 1% churn. People like it. You have a huge value discrepancy. It's low price. Yeah. I would just jam as much as humanly possible. When you increase price, you have two things that occur downstream, which is that conversion rate typically drops and churn, if you have recurring, goes up. And so when you're figuring out what the best price is, is you want to say— and if you don't know how this works, it's you have price. So let's say it's $10 a month divided by churn, which let's say it's 10%, whatever, all right, equals $100 of LTV, right? So that's That's what we're gonna make from a customer. So then the only other variable that we have to factor into it, when we factor price and churn in, is what's our conversion rate? And so if we're selling, we get 100 clicks, we have 100 calls, whatever the first thing in your sales process is, we say, okay, well, we have that many clicks, we converted this percentage at this price. That's the first thing that the price is gonna affect, but it'll also affect how long they stay. 'Cause in general, cheaper prices have lower churn, but not proportionally lower churn. And that's where the magic of pricing comes in. And so if you double your price, you don't typically cut your conversion in half. If you double your price, you can kind of cut your conversion by 25%. But if you did that, that makes a lot of sense. And where this makes even more sense is let's say you run a business that has, let's say you have 20% margins, right? If you raise your price by 20%, you might have a 5% drop in conversion. But if you have a 20% increase, right? Which you then multiply this by 0.95, which would be, uh, 19%. All right, so we'd have a net 19% increase in revenue and we had 20% margins, which means we almost 2x the business in terms of profit. And so pricing is the strongest lever that you have on making money. And most people get so afraid of this because what happens is that from an anecdotal experience is that especially if you're the one taking sales calls, you're very close to the sales of the business, you increase the price and all of a sudden your reward cycle goes down because you're used to getting yeses on, you know, 5 out of 10, and now you're getting yeses on 3 out of 10. You're like, oh my God, this was a terrible decision. What were we thinking? But when you do the math, you're like, oh, we make more money to serve fewer people. And if we serve fewer people, that costs even less money and we make more money doing that. Huh. And so this isn't me selling you on raising your price, but I am just trying selling you on doing the math. Yeah. So if your conversion rate does not drop and your churn does not increase and you raise your price, More money good. Mm-hmm. But every time you do a test, and this is for everybody, you always guarantee a cost of testing. You don't guarantee upside from a test. And so one of the big things that feel like a lot of people in this room do is they want to test things all the time. You have to make a really good argument for why this is the constraint of the business that's worth the price of the test that you are guaranteed to pay, which is you have to retrain the team, you have to change the scripts, you have to change your, your point of sale, you have to change your, your, your system, like all these other, your contracts. There's all these things that have to change downstream. From this one change. And we do this haphazardly. Oh, this week I have this flavor of test that I wanna run. But then your team's like always telling you like, you're changing things all the time. And the reality is you are, you'll be surprised. But a lot of times when I stepped away from businesses, they made more money. And so like, we need like this much Alex, not this much Alex. And so there's a reason that like, I only talk to portfolio companies like once a year because like, I'm like, okay, I'm gonna come in and fuck a whole bunch of shit up. And I'm like, all right, go do that. I'll see you in a year. Because if I'm there all the time, I mess too much stuff up. And so it's like you just need just enough to change the real few things that matter. Because if I only have a day, then I'm only gonna look at, all right, what are the big things? Let's change this, let's test that, that's it. And so for you, I'd be like, okay, I would consider tweaking profits if it's not operationally complex for you. Look at the conversion rate, look at the churn, separate out the cohort for those customers. So tag them so you can see if their churn is different. Because if the churn goes from 1% to 2% a month, you cut LTV in half. Because you're so low on churn that just literally 1 to 2% cuts. I mean, it's massive. So unless you more than doubled the price, if churn goes from 1 to 2, it's not worth it. Okay. Your churn's so low that that's why I'm like, don't fuck with it. You're already super profitable. Just jam as much as you can on the front end. It's not worth the risk. What do you mean by jam as much as you can on the front end? Sell a bunch of people. Okay. Yeah. Thank you. Market and sell. Yeah.

Alex, nice to meet you. I'm Jake.

Nice to meet you.

I feel that the constraint in our business at the moment is how we acquire customers. Uh, we have a JV model, so we, uh, help coaches, consultants grow and monetize their audience on Instagram. We work with partners, so they promote our webinar, and then for 2 or 3 days, 4 days on their calendar, we do recip. So we're maxed out at sort of 50, 60 partners that we can possibly promote per year.

Why?

Because of the, the size of our database is 10,000. So if we promote them, let's say 3 days, 4 days promoting a partner, our calendar fills up, so we can't therefore promote them any further.

You have 50 to 60 partners who promote your webinar.

Yeah.

And then you sell their audience.

Yes.

Okay. Yeah. And then you're saying because you have to cross-promote, you have to promote—

Yeah, they promote us, so we promote them. That's, it's like a reciprocate.

How long you been doing this?

4 years.

Okay. And you had the same offer 4 years ago, right?

Yeah.

Yeah.

Okay. And the size of your list 4 years ago, what was it compared to now?

5,000.

And what is it now?

10,000.

I mean, how is the list so small if you're doing 50 JVs? I just don't understand.

Well, we haven't been like we scaled to 50 last year. The year before it was—

But even so, I mean, 50 JV partners to get 10,000 people on a list.

I think we're burning through the list because as soon as they come through our kind of initial sequence, then we're promoting somebody else immediately to sign a lease.

Yeah. Yeah.

So is the model flawed? In my mind, I always hear you saying like more, better, new. But I'm thinking, I don't think we could do any more.

Yeah.

So it kind of makes me think—

Well, you could if you slice the list up, but still the 10,000 seems like an outpoint to me. Like something doesn't make sense there. Shoot, like the top affiliate that we had who promoted my book launch sent 10,000 opt-ins. There's one guy.

Yeah, but if we're reciprocating, our list is 10,000. If we work with a partner who's got 20,000 or 30,000 or even 50,000, yeah, they're generally sending 2, 3 times as many leads as we are to them. So we're not as an attractive partner, right?

That's what I'm saying. So weird is that you have 50 or 60 people sending you leads and you only have 10,000. That's the part that doesn't make any sense to me. I think it's the whole reciproc— like the whole reciprocal thing. That's the issue. Like there's tons of people who build off affiliates. They just don't say, I'm gonna promote you. I just compensate you with money in exchange for promoting me. Like every affiliate model that exists on the planet that is scaled is just you promote me, you get paid. Yeah.

So you would build that as opposed to going to a new channel like Instagram, for example?

Yeah, I mean, you already know how to do that. I would just, I would probably play with the, this is the price compensation one in terms of those four, is that I would just play with the deal structure. And so you might have to, I mean, you'll have to go with a couple different versions, but I like fundamentally people will promote other people's stuff as long as it, and here's the big thing is it has to, it has to be accretive to their audience. It has to be value additive. If you can find a way, I'm gonna give something amazing to your audience, which is like, I'll do a Q&A for your audience if you're one of the top however many. And so then that gives that audience a reason to, or that promoter a reason to promote it. And it gives the audience a reason why they would click through their link. It's like, I would like this thing. I can do something that doesn't benefit the promoter but benefits me as the end user. And so that doesn't detract or take goodwill from the list, right? Like instead of thinking like reciprocity or whatever, think like what would I need to do in order to make sure that their list was better off from promoting my thing? And then do that. Okay. Does that make sense?

Yeah, it does.

So a friend of mine has a big, a big, big JV business and what he does is he gives away a free service that he provides. So by the way, this is great for you. It's actually tax and accounting stuff. And so he gives away some sort of tax accounting whatever on the front end that they can add to every single sale that they have. So they add it to their stack, they add his service to their stack, so they get a premium for the service that he provides. And so by doing that, they just get all margin, they have to do anything, and he gets free leads because they come to him, he delivers the service that he promises, which adds value to that person's audience, and then he upsells them additional services. And that's the trade. And so you just need to find something that gives value truly rather than take-take. Yeah, yeah, make it a give to both them and their audience, and you'll have an endless amount of leads that you can do affiliations with. Awesome, thank you. That help? Yeah. Okay, cool. Good day, Alex. Yeah, hello. My name is Derek Surat, nice to meet you. Uh, owner of DV Solutions, federal forecasting app. I'm a federal contractor. I created some software to help small businesses kind of simplify their business development and market research efforts in the federal contracting space. Okay. You've insulated yourself with a team of subject matter experts that are highly intelligent. And my question to you is, what book would you recommend to us for closing? Honestly, I'd recommend the actual videos I put out there more than the books. Okay. Just being real, because I have a podcast or 2 or 3 that cover just obstacle overcomes. And are you familiar with the Closer Framework? Fairly. Okay. So if you just Google Closer Framework, Alex Hormozi, If you Google diagnostic sale, Alex Ramosi, objection overcomes, Alex Ramosi, all 3 of those will pull up probably 10+ videos that are really in-depth trainings for me on how to sell that'll probably be more engaging for your team that you could just like play for them. They'll have a higher likelihood of actually doing it than reading a book. More likely.

Okay.

Thank you.

That's actually what I would do.

Okay.

Yeah. Thank you. Yes, sir.

Hey Alex. Uh, B2B pricing question. Seems to be a drop-off in conversion rate after a certain point. The internal—

when you say after a certain point, do you mean in the lifecycle or like at a price point?

At a price point.

Okay.

Yeah.

Call it, call it $6,500. The internal team is great at upselling. So ramps, not walls. There is an onboarding cost associated with that. So it's like knowing all of those pieces, how would you structure, how could we lower the initial cost while maximizing lifetime value and not, not take a negative—

what do you sell?

Who do you sell to?

Uh, B2B Amazon TikTok agency. Actually. Okay, so you sell to TikTok store owners, B2C top 100, Amazon and TikTok optimization.

It's like CRO stuff, or do you run ads too?

Both.

Okay.

And so the onboarding price is build out of their account, integration with the software, building listings, optimization, building out. Okay, content. Got it.

And so you charge $6,800?

Uh, onboarding could be anywhere from, depending on catalog size, up to $20,000, $25,000.

Okay.

And that's a problem. The people are like, no, that sounds like a lot.

Exactly.

What's the ongoing price?

Anywhere between $6,500 all the way up to $30,000 a month.

So $6,500 to $30,000 and $6,500 to $30,000 per month.

Mm-hmm.

Okay. Do they commit to anything or no?

Yeah, we've been playing around with, with time periods between higher for month to month or 12 months for lower.

So I'll give you, I'll give you something that's one of my favorite offers ever. Let's say, let's say it's $30,000. All right. We'll just use a big price. $30,000 down, no commitment. Or if you're willing to commit to the fact that this is gonna take a little bit of time and like you're not an impatient Molly, right? That this is gonna take at least 6 months or at least 12 months to really, you know, for us to put all of our systems in place. I'll stomach the cost of getting you onboarded as long as you commit to 12. And if you get cold feet, you just pay what you would've paid to go month to month.

Sweet.

So let's say we're doing a gym. So I would say, hey, it's $500 to sign up for the gym and then $99 a month after that. Or I'll waive the $500, I'll onboard you myself, as long as you're willing to commit to a year. And if for whatever reason during that year you choose to cancel, you pay what you would've paid if you went month to month. So the $500 acts as an anchor. It positions the price that you're doing monthly as much lower, which is nice for the sale. And then they're like, wait, so I can either, it's like, hey, I don't wanna commit to that time. It's like, no worries, just pay that. And we'll like, I have to incur cost to get you onboarded. That cost has to get paid one way or another. I will stomach it because I can spread it over 12 months. If you're willing to commit to that, if you're not willing to commit to that, I'm not gonna lose money bringing you on. So it's up to you. If you're willing to commit and you're convinced enough from what I've said that we can help you out, I will eat that. Now, for whatever reasons, 3 months from now, you're like, screw you. Then I'm like, then you pay the onboarding and you're out. Does that make sense? Yeah. Cool. All right.