Mind The GAP: The ONLY Metric You Need To Focus On If You Want To Scale...

call minding the gap. Minding the gap. And the reason why I call this minding the gap is because the more or the wider the gap it is on this specific metric that I'm about to share with you, or the only thing that you need to focus on, the wider the gap is, the more money you make. Welcome guys, uh, to these, um, to today's piece of content. My name is Hernan with scaledriven.com. At scaledriven.com, we help entrepreneurs and business owners scale, and one of the ways that we do that is by widening the gap. I'm going to tell you what the gap is in a second, but before I do that, I just want to invite you to a new class. It's a free training that I recorded. It's 45 minutes long, so it's— and there's a lot of value in that training. So if you want to check that out, go to scaledriven.com/class, scaledriven.com/class. You will be accessed— you will be able to get access to that training. It's completely free, nothing to pay for. It's 45 minutes of pure value. And then at the end of the training, I'll also show you how you can get a $3,000 custom marketing map done for you for free. Yes, you You heard that right. So $3,000 worth of value. It's a marketing map. It's a custom-made marketing map for you to help you scale this year, and you can get it for free. So get all the details at scaledriven.com/class and register there. It's a really good— it's a really good class. It's a lot of, a lot of value, if I do say so myself. So anyways, let's talk about the gap, and basically let's talk about the only thing or the only metric that you need to focus on if you want to scale your business. This is the only thing that you want to focus on. Um, and the reason why we want to focus on as least, uh, or, or as little things as possible is because the more you focus on the things that move the needle, the better your business will do. Like, I, I talked to, I talked to some people, some millionaires and billionaires that I was able— and, and, and I had the luck to work with. And the reality is that they're not adding stuff to their plate, they're actually ruthlessly taking stuff out of their plate so they can focus on those, those things that really move the needle. Alex Hormozi talks a lot about this, and, uh, props to Alex because he's been putting out some awesome content. And he also talks about how most billionaires and millionaires and whatnot, people that are really successful, they actually take things out of their plate instead of adding things in, which is what we usually do when we're starting out. And that's why we get overwhelmed and stressed and the business is not moving forward. So the more you can simplify your business, the better. And the gap is one of— it's the metric that you need to focus on so that you can scale your businesses here. Now, uh, think about this for a second. When you're going down the highway, when you're driving your car, when you're going down a route or whatever, your car has a dashboard, right? And the computer of that car is making a lot of calculations all the time. It's making a ton of calculations, right? It's calculating a lot of different things at the same time, but it doesn't feed you all of that information, right? In fact, it's calculating some things that are contradictory, right? It's calculating some things, uh, that are, that are contradictory. So it doesn't feed you all of the information that it calculates, but it feeds you a couple of really important metrics. It feeds you your gas mileage, it feeds you your speed, your revs, whatever that is, right? So the more you simplify— imagine if you had a dashboard with 1,000 different metrics, you couldn't even leave your house because there's so much information coming up. The same happens with business decisions. The more you simplify them, the better it is for you to make decisions that really move the needle. So the gap, I would say, is the number one thing that you need to focus on when you want to scale. Now, what is the gap? I've been talking about this gap for like 5 minutes now and I haven't told you guys what that is. The gap is literally the gap between 2 metrics, between what's called a cost to acquire a customer or CPA, cost to acquire a customer, and lifetime value of a customer or LTV. All right. So the difference, the gap between these 2 metrics is going to determine, is going to, to set how much profit, how much money your company is making. Let me illustrate this with an example. I had the luck of working with Agora Publishing. Agora Publishing is, if you don't know who they are, it's the number one info product publisher in the world. They're a billion-dollar company with a B, okay? And they, they are known for having a lot of really good working offers out there in the marketplace. Usually they, they, they work with health-related offers and with financial-related offers. And what I learned from Agora is that they were spending— they had a $7 a year monthly newsletter. So a physical paper newsletter, you will get a physical newsletter on your mailbox every single month, once a month, and all you needed to pay was $7 per year. That's it right now. On average, they were paying anywhere between— this was five years ago or four years ago. They were paying anywhere between sixty to seventy dollars to acquire a seven dollar newsletter subscription. Right? The math doesn't add up because if they were paying seven dollars, or rather they were paying ten times as much. almost 10 times as much to acquire a $7 newsletter subscription. But here's the thing, on every envelope that they sent physically to their subscribers, they would have inserts. So they would really have— it was a really good newsletter, by the way. Like, people would stay there for several years because it was inexpensive, number one, but also number two, they would have really good stuff in the newsletter. But they would also have inserts. new products. They would have new— they would have inserts for affiliate promotions. They would have inserts for other verticals that they were running. So they would have inserts on these newsletters. Now, at the end of the first year, remind— remember that they were paying anywhere between $60, $70 to acquire a $7 newsletter subscription. At the end of one year, they were making anywhere between $100 to $150 for every subscription that they were getting because of these inserts, because of these affiliate things that they were selling on the backend, right? So the difference— and this was year 1, right? Year 2, year 3, it was all profit because again they were selling a lot of additional stuff digitally and physically to these guys that were paying $7 a year, right? Because a buyer is a buyer is a buyer. So the gap By the end of year one, the gap of the cost to acquire a customer and the lifetime value of a customer was almost doubling. So they were making $2 for every dollar that they were spending on ads. That's how they were able to spend millions of dollars on advertising every single year and make 2 times their money back. Now, some people would say, well, a year to get 2 times my money, it's a lot of time, especially on this internet marketing or digital marketing industry where everyone needs to click just like that, right? Like, I have clients that are coming to me and say, I need results in 30 days, and I'm like, I don't want to work with you because you're not a business owner, right? Business owners focus on the long run and focus on the long— on long-term results. So these people, they were real business owners. And imagine this, imagine if you would put any investment out there— cryptocurrency, real estate, the market, whatever, right? And I could guarantee that you would make 100% ROI by the end of the year. Would you take it? Of course you would, right? Because it's like mind-blowingly good. The marketplace is only giving you 8% annually on a good year, or on average rather. For the past 25, 30 years. So what if you could? What if you could get 100% return on your investment? Would you invest more? Of course you would, right? But a lot of entrepreneurs are missing the point when they're saying, "Well, my ads are not working." How long have you been running them for? Thirty days or a couple weeks. Of course, there's not going to work because the main point is for you to acquire a customer and then widen the gap. Now again. The gap is between cost to acquire a customer and lifetime value. Now, the cost to acquire a customer is not up for discussion. This is not something that you set up. This is not something that you get to talk to or, or talk, talk about. This is set by the marketplace. This is set by the marketplace. You can make better ads, you can make a better funnel, you can try anything that you want to kind of to lower your cost to acquire a customer, but the cost to acquire a customer will always have a floor, always, no matter what you do, right? I was having this conversation with clients and they come from a different universe, right? They come from the email JV universe and I was having this conversation about, hey, they were saying, well, the cost per click is too much, right? And I was like, don't worry about the cost per click. It doesn't matter, right? It doesn't really matter. The reality is that I cannot just call Facebook and tell Mark Zuckerberg, hey Mark, could you lower the cost per click because I'm trying to target this audience, you know, here in the US. It's kind of expensive. Could you lower the cost per click? No, the cost per click, cost per, per 1,000 impressions, CPMs, it's set up by the marketplace. You don't get a say. It's like me trying to advertise on Google search for credit cards and then not being willing to pay $500 per click. It's not like I can call Google and say, hey dude, like it's kind of expensive, could you lower it? No, that's not how it works. So your cost to acquire a customer will have a floor depending on your audience, depending on your offer, will have a floor. Now your lifetime value, that's where the magic happens. And that's, that's where most entrepreneurs that I know do not focus on the lifetime value. Should be a value that compounds through time, or that it increases through time. So hopefully your gap will widen and widen and widen and widen as you go through time. So you acquire a customer, let's say, for $100, and then after 3 months you make $100 back because you're offering new stuff, because maybe you have a subscription model, because maybe you have a some sort of, of backend promotion. So your, your lifetime value keeps on increasing, it keeps on increasing, and it keeps on increasing. By the time that, you know, by, by the end of year 3, your gap should be massive because you only pay to acquire a customer once. But ideally, if you set things right, your lifetime value will compound. And this applies to everything, no matter what you're selling. This applies to e-commerce stores, this applies to HighLevel or or high-ticket consulting. This applies to info, retail stores, whatever you can think of. The gap between the cost to acquire a customer and how much that customer is giving you through their lifetime, lifetime, is what's going to determine the success of your business, especially if you're spending money on ads. Okay, so always mind the gap and try to widen the gap as much as possible. And have in mind that If you keep lifetime value the same, your cost to acquire a customer will keep on increasing as you start, as you keep on scaling. And especially on social media, the cost to acquire a customer right now for a book buyer in the advertising, in the entrepreneurship space used to be $20, $30 2, 3 years ago, but now it's getting closer to $60 and $70. So what do you need to do? You need to complain and make a tantrum and and just don't advertise? Well, you could go away. We'll buy your inventory. But if you really are in it for the long term, what you want to do is you want to always focus on your lifetime value. That's how you win this game, not by focusing on cost to acquire a customer. You're not— that's not up for discussion. Okay? The cost to acquire a customer, it is what it is. You're paying the marketplace, okay? You're competing against millions of other advertisers, right? If I'm targeting entrepreneurship in the US, that's one of the most competitive, uh, audiences ever. That is like advertising for credit cards, right? If you have B2B offers, which is mostly what we do on social media, we run B2B offers, those are expensive audiences. Those are expensive audiences. Because everyone wants to have a cut of them, and that's fine, that's completely fine. Always mind your lifetime value of customers. So 80% of your focus should be on increasing your lifetime value, 20% of your focus should be on lowering your cost to acquire a customer. Okay, so always mind the gap, and the wider the gap is, the more money you will make. So if you want techniques and strategies on how to widen in the gap which is exactly the point of my conversation and my class, go to scaledriven.com/class. That is scaledriven.com/class. It's completely free. All you need to do is to register, register there. It will automatically start playing for you. It's 40 to 45 minutes long, so make sure that you have the time. There's a lot of good stuff happening in there, and some of the things that I discuss on that class is how to widen the gap so that you can make more money over the internet, which is pretty cool, right? So if you want to scale this year, go to scaledriven.com/class, register for that class. It's completely free. And at the end of the class, I'll also show you how you can get a custom-made marketing plan for you, which is something that we usually charge $3,000 for, for free. So stay until the end of that class and you will get all of the details. And you know what? There's no catch. If you're thinking, okay, well, what's the catch? There's no catch. We want to give out and give away a ton of value because that usually works pretty well. If you want to grow any business, usually having a lot of value out there and giving away a lot of value usually works pretty well. So go to scale-driven.com/class. I hope that this helps. If you have any questions, feel free to drop them in the comments somewhere around this piece of content, and I'll see you guys on the next stream. Bye-bye.