How To Confuse The VC's

Hey everyone, this is Russell Brunson and welcome to Marketing in the Mommy Mobile. Welcome to the Marketing in Your Car Podcast where you can increase your traffic, conversions, and sales in just 10 minutes a day. And now, here's your host, Russell Brunson. Hey everyone. Yes, I'm taking mom duty on today. I've got Nora in the back seat. We're going to pick up Aiden at school. I happen to be 1 minute late already. It's hard to be a mom. No one ever told me this, but it's really hard. Anyway, so that's what's happening today. And the reason I'm a little bit late is we just got a call with some VC people, which is kind of cool. So anyway, first off, they're super cool people. I really enjoyed them and everything, but it was an interesting conversation. You guys want to hear behind the scenes? That's some of the funny stuff. In fact, I'm going to title this, this presentation or this podcast, How to Confuse the VCs. And because it's interesting, they have been been trying to talk to us for a while and basically said, we're not looking for money, sorry. And they're like, well, we know you're not, but we still wanna talk. And we're like, nah, I'm not interested. And they're like, well, please, we can find a voice. You're like, no. And they're, anyway, so finally we got the call set up. But it was just funny, like, I feel like we're in a good position. Okay, is there a nor back there, you guys? Anyway, I feel like we're in a good position. I told our team, I was like, I feel like we're the hot girl that doesn't really want it, so everybody wants her so much more, right? Like, anyway, so we're not interested in taking it, but we thought it'd be fun to talk to him and maybe, who knows, whatever. So we had a good conversation with them and it was cool. Like I said, super cool guys, enjoyed that whole thing. But it was interesting, like if you look at like what they're looking for, there's 3 core metrics that the VCs want. They want what's your cost to acquire a customer, what's the lifetime value of that customer, and what's your churn. Like those are the 3 core metrics that they asked us about that we kind of knew going into it. And what's cool is that like because of all the funnel stuff that we do and hopefully you guys are doing, like it totally confuses the VCs, right? Like they have like one way of doing things, like what's your cost to acquire "Like, well, all of our customers are free." And they're like, "No, like, that doesn't make sense. Like, how much does it cost?" And I was like, "Well, if we buy ads from Facebook straightly to the trial, it's like $150 a member." And they're like, "Wow, that's really, really good." And I'm like, "Yeah, but it's like, it's really good, but we don't do it." And they're like, "Why don't you do that? Like, you should be spending that money all day long." And I'm like, "'Cause we're a startup bootstrap. Like, we're spending, like, the money I'm spending is out of my own pocket. And we're good enough at funnels that if I'm not profitable at break-even point of sale, I don't wanna do it. I don't wanna go in the hole." hold 2 months. Now if I had $100 million from the VCs, sure we'll go waste money on dumb marketing, but we are smart enough to be profitable up front. I said, this is how it works. We've got front end offers, like my free book offer, or the perfect webinar script, or things like that. And I said, what happens is we buy ads on Facebook, it costs us $10 to $15 to acquire a customer there, but we make $30 to $45 in the funnel, therefore we make $25 to $30 for every single customer that comes into our world. And then we have a huge follow-up sequence in place that we promote that then gives us all of our customers for free. In fact, we make money ahead of time before they ever become a customer and then the email sequence gets them into our program for free. And they're like, that doesn't make sense. Like there's, like, I don't think they believe us. I'm like, no, this is how it works. I was like, we do have customer acquisition costs on different channels, right? So like Facebook, or excuse me, with affiliates we pay out 40%, up to 45% to give away cars and stuff. They're like, what, you give away cars? Why would you do that? I'm like, 'cause that's, like, it's awesome. Like that's how it works. Like it's all about recruiting sales teams. Anyway, and then I'm like, and we got our, You know, then people come in now, we're selling onboarding and we're selling certifications, things like that. So it's like, anyway, so we're crazy profitable and they're like, they don't understand it because they come from worlds that aren't profitable typically, right? And so we're showing them our numbers and then we show them the numbers, he's like, wow. He's like, I don't think you guys understand what you guys have right here. It's like, yes we do, this is why we're not looking to take money. Like everything's Everything's fine, like we're really good at funnels. And then the next question was lifetime value of customer, right? And you know, that one was an easier metric, but you know, we've only been in business for a year and a half, so it's hard because our customers, after they start using us, they don't leave us very high. So we showed what that lifetime value of customer was, but it's not like, it's not accurate because that number's growing so fast. All right, I'm at the store, I gotta pick up Aiden, I'll be right back out and we'll finish this podcast when I get back. All right, I got Aiden and he's talking about some movie called— what's it called? Nora.com?

No, it was called Coconutcron.com.

Coconutcron.com. There you go. Anyway, so to finish this off, my thought— oh wait, what?

Also, do you want me to tell you the story?

Yeah, tell us the story.

Okay, so it first starts with Nora.com and then Wait, I actually kind of forgot the wiki, Dad.

Okay, so that's Nora.com. All right, let me talk to them. I'll talk to them for a minute, and if you want to tell them the rest of the story, tell me, Kim. All right, so the last half of the story is churn. So they're like, what's your churn? And we're like, oh, well, if you look at over the last 3 or 4 months, it's decreased dramatically. And they're like, well, how much? We're like, well, I think before it was like at 16%. We added in this one step in the funnel and dropped it to 12. And then we added in this, 21-day Ignite Your Funnel communication funnel, or onboarding funnel after they came on, and we dropped it down to 9%. And they're like, "You've dropped it that much in this short period of time?" We're like, "Yeah, that's what we do, we test things, we test all the steps in the process and try to decrease churn, and we're always working to get it better and better and better." Anyway, it was just so funny, 'cause I don't think they're used to these kind of things. They're used to having a bunch of money and spending tons to acquire a customer. I was listening to a thing the other day and they talked about HubSpot. HubSpot costs them $10,000 to acquire a customer. No, excuse me, it was a, or was it $1,000? Maybe it was $1,000 to acquire a customer. Something crazy like that. I'm like, are you serious? It's so much easier when you understand what you guys understand, what we understand, all these front-end funnels. That's the magic. So anyway, and then the webinar funnels were profitable, dramatically profitable up front. Doesn't make sense to them. Yeah, bud? Okay, Aiden remembers it. Hold on, he's back.

Okay, then the person says, "That's Nora and that's Zap." So that's Nora and that's Zap? No! That's Nora, that's Zap. So that— the roof's Zap and then the baby's Nora. No! This is Nora and this is Zap.

You guys all getting that? This is Nora and this is Zap.

So this is Nora and this is Zap. Yes!

Nice. So there, I don't know what he's talking about, but it's something. Is it a movie you saw? The End. Oh, The End. So that's a movie. Did you watch that today or is that one you made up?

Um, but I still have to make it because it's— I didn't watch it today, but I just have to do it on a movie. Like on a camera, then everybody will watch it and they'll like it.

That makes more sense. So Aiden right now is wearing some cool Harry Potter glasses. 'Cause I'm a big fan. 'Cause he is a big fan. And his eyes are really hurty. And his eyes are really hurty. So we went and took him to an eye appointment and his eyes were amazing. And so we ordered some, we wanted Harry Potter glasses really, really, really bad, huh, bud? And so we went to Amazon and ordered some, but then the wrong ones came, right? What were they? Did you like the first ones that came?

Um, no.

No, he did not like the first ones. So then we ordered some new ones and so they came and they look awesome. They are about half the size of his head, but he wears them everywhere. Wearing them to school today, huh? They also liked them and really said, "You look weird with them." And his friends said, "You look weird with them," but he still loves them. Anyway, so that's what we got today. I gotta bounce and play with my kids. Just wanted to share that, thought it was interesting. So that's how you confuse a VC. Have really profitable upfront funnels lower your churn through onboarding funnels, increase your lifetime value by having an amazing product, and they're gonna be like, what, that doesn't make sense, how is this so good? And hopefully you'll get people coming to you as well. So anyway, hope that helps you guys. That's all I got, I'm outta here. Appreciate you all, talk to you guys again soon. Oh, one more thing. Oh, say it again.

Bye.

Aiden says bye. Bye everybody. Hey everyone, this is Russell Brunson again. I wanna thank you for listening to Mark in Your Car, I want to make sure you're plugging into everything that we're doing on a daily basis. Make sure that every morning you're plugging into the Marketing Your Car training. If you go to marketingyourcar.com, you can join the email list and make sure you get email notifications when new episodes come out. You can also get links to all the transcripts of every single show we've done in the past. Then every night, well not every night, but most every night, I also do a Periscope show called the Marketing Quickie Show. It's really fun. You can go to Periscope and search my name, Russell Brunson, and subscribe. Every single night you'll get a notification. It will kind of chirp on your phone and you'll have me jump on there and give you kind of the end of the day thoughts and ideas and marketing strategies we've been playing with during the day. Or maybe even and, say and/or you should go to marketingquickieshow.com and over there you can subscribe, you can see past episodes, you can read the transcripts, you can have a bunch of fun. So thanks so much for being faithful listeners. Again, register at marketinginyourcar.com and also marketingquickieshow.com.