Business success fundamentally depends on three key metrics: Customer Acquisition Cost (CAC), Lifetime Value (LTV), and Payback Period. The ideal LTV to CAC ratio is 3:1, meaning businesses should spend approximately 33% of a customer's lifetime value to acquire them. The payback period—the time it takes to recoup acquisition costs—is critical because cash flow, not ROI, determines business survival. Businesses that can afford to spend the most to acquire customers win, making it essential to focus on increasing LTV rather than just reducing CAC.
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If You Only Watch One Marketing Video, Make It This追加:
Why is it that some businesses explode while others, no matter how hard that they work, they just stay stuck? After doing over $200 million in my agency, generating my clients over 7.8 billion in sales across a thousand different niches, I realized one thing. Whether you're thinking about starting a business, you've already got customers, or you're looking to scale, business fundamentally only comes down to three numbers. First is your customer acquisition cost. aka how much does it cost you to acquire a customer? The second thing is your LTV, your lifetime value of a customer. How much money are you going to make off a customer over their entire lifetime with your business? And the third one is your payback period, which is how long does it take you to get your money back. If you can engineer these three numbers to work in your favor, then you win. And if you don't, you lose. And everything that I'm going to be teaching you in this video is how to manipulate these numbers in your favor so that you build a business that wins. So the first thing that you need to understand is that nothing happens in your business until something is sold. And I think the reason that most business owners completely neglect focusing on things that move the money needle is because it's so much easier and less confrontational to have to work on things that aren't on the front lines out there in the marketplace actually asking people to give you money. It's way easier to sit down, look at your website, think about updating it, or look at your brochures and your branding or do things that aren't very very hard.
That's the easiest things to do in business. However, the things that you really must be focusing on is tip of the spear activity. Like things that are going to build enterprise value in your business. And that's why customer acquisition is literally the most important activity that you can do in your business. Because if you don't have customers coming in, then you don't have a business. Sales is the lifeblood to any business. Yet, most people don't spend a disproportionate amount of time on that one activity. And that's why most businesses stay small because they believe that the money is in the actual delivering of the goods and services when it is not. The money is made in the selling of those goods and services. And you can never ever get this confused because all the best founders in the world are phenomenal salespeople. Like if you take Elon Musk for example, yes, he's very very smart. He knows how to look at things from first principles. He clearly knows engineering. But more often than not, like that guy is just a phenomenal salesperson. There's the reason that he does all the product launches, that he's on stage announcing things, like the guy knows fundamentally how to sell product. And most people, if you kind of sit them down and you have a look at where is all their time allocated, they spend a vast majority, like 80% of their time focusing on things that are not acquiring customers.
And the reason for this is because most people think growing their business is some whimsical mysterious thing like, I'm just going to go out there and get customers. I'm just going to grow my business. But they don't think about it as a scientific equation. If you ask them, okay, how many customers that you going to get? How are you going to get them? They just look at you with a blank face. And it's because they basically run their business off what I call hope and pray. They don't have a systematic system where they can put an input in and it results in an output. And as a result of that, their business doesn't grow. They plateau. They say, "This is too hard." And they don't typically stay in business for very long. or if they do, they basically have a glorified job.
And it's even worse than a job. It's like the whole golden handcuff situation because they can't take leave cuz their business will crash and burn. They are continuously the bottleneck in their business cuz they aren't able to delegate or trust anyone in the organization to do everything and they need to touch everything. And they work out just being extremely overstressed and underpaid. And that's why most business owners make like an average of $42,000 per year. They don't have a business. they've just got a very expensive job. Which brings us to point number two. He who can spend the most to acquire a customer is the one that wins.
And in order to get attention, it's going to cost money. Regardless of whether or you're going down the organic route and you're doing organic content, you're going to need a team. You're going to need editors. You're going to need production people to actually do that, which is going to be a big cost to your business. Or you're going to go paid acquisition. You're going to be running ads. You're going to need media buyers, people that are going to generate funnels for you, salespeople.
All of these things cost a lot of money.
I realized this very early on when I started running traffic and I was like, "Okay, cool. I'm getting clicks. I'm getting leads coming in." And then you start to run the mathematics of how many leads you're able to convert or if you're running an ecom business, like how much of that traffic are you able to actually convert into customers. And then you do that activity for a while and then you start to come up with what your customer acquisition cost is. And then naturally when you're looking at what your customer acquisition cost is, then you're going to be asking the question of like, well, what is the theoretical maximum that I can spend in order to acquire a customer? I'm willing to spend 20 or 30% of what a customer is worth to me over their lifetime in order to acquire them. And then once you understand that number, then you're all like, "Okay, well, I can either try and spend all of my time and energy on reducing what it costs me to acquire a customer, or I can figure out a way to basically make each customer worth way more to me than any of my competitors so that I can spend the most to acquire them." Because if that is the case, right, you don't need to be constantly worried about having the cheapest cost per click or the cheapest cost per lead or the cheapest customer acquisition cost because you can burden a much higher customer acquisition cost because it's just worth a lot more to you.
Pretty simple but very very neglected point in business because if your business is flooded with profitable sales, there is no problem that you can't solve in your business. Naturally, that's the problem that you want to solve first. And make sure that you have a stock reserve of cash so that you can solve all of those problems when you have money coming in. Because understand this, this is a lesson that took me too long to learn. If you can spend more than any of your competitors to acquire a customer, then you go out there and you buy all the customers in the marketplace and you just outmuscle them.
They simply can't compete with you. And when it comes to acquiring customers, there's fundamentally two ways that you can do it. The first is through referrals and word of mouth. And the problem with this is like referrals are great. Word of mouth is amazing.
However, it is not a predictable channel where you can be like, "Okay, I want to double my business this year." It's not going to be a predictable way that you can sit down and have enough confidence is you're relying off just referrals and word of mouth. Now, the second way that you can do it is through paid customer acquisition. And for me, I believe that this is the greatest skill that businesses can ever acquire because it is a universal scientific equation where you are buying inputs, you are buying eyeballs, you are then processing that attention and generating customers. And you know exactly what it's going to cost you to get double the amount of leads.
We're in a day and age where a lot of people are talking about organic and they're talking about, hey, putting out organic content and getting customers in. The thing that you must realize is that both of those ways are both paid because you're either paying with your time and you're creating the content yourself or you're creating a message and then you're paying the platforms to put that content out. But fundamentally, they are both the same. They both require either human capital or financial capital in order to go out there and therefore all customer acquisition is paid customer acquisition. Which brings us to point number three, the equation for a good business. Now we fundamentally understand that all customer acquisition is paid customer acquisition. Let's now dive into what the numbers of an actual good business look like. So first of all lifetime value of a customer which is you take your total revenue that your business did over the last 12 36 months and you simply divide it by the number of customers or clients that you had in that period and then you know what your typical profit margin is. That's what your lifetime value is. So, an example of that would be say last year you did $250,000 in revenue. You know that over that time period that you had 110 clients. You take your $250,000 in revenue, you divide it by the 110 clients that you had over that time period, which is going to give you $2,279 as your LTV. Now, you need to understand this number intimately. And then every time that you're looking at advertising channels, you're looking at any marketing initiative that you're going to do, you always are looking at that in mind with your LTV and fundamentally understanding that number. Now, the second number that you need to understand is CAC, customer acquisition cost. And this is effectively every single cost in your business that is associated with the conversion of attention into getting customers. So, think about your agency fees, think about your sales team's fees. It must be the costs that are basically tied to customer acquisition. Now, the ideal relationship between lifetime value and customer acquisition is 3:1. You might be thinking, "Wow, I get a lot more in my business." I'm going to get to that in a moment. Now, a bad relationship between LTV to CAC would be 1 one.
Customers worth $100 to me and I have to spend $100 to acquire them. That's not a good equation. You're not going to be making any money. Then you could have a look at another one which might be 5:1 and you this is amazing. I'm making so much money. I've typically found in most businesses when they've got such a high relationship of LTV to CAC, they're simply not spending enough and they're not acquiring as many customers that they could. So, I have typically found that the sweet number is 3:1 because first of all, you're making money and you want to keep spending and acquiring more customers until the point to you get to diminishing returns of below a 3:1 because you could spend say for instance $10,000 per month and have a 5:1 or maybe you could spend 500 grand a month on ads and be at a 3:1. Which one would you prefer? It's very, very simple the answer to that. So typically speaking, you should be in a place where you are willing and able to spend 33% of what a customer is worth to you in order to acquire that customer. But there is a third number that most business owners completely neglect. No one really talks about and it's like this silent thing that is present in every single business. Which brings us to point number four, payback period. Think about it this way. is you spend $100 to acquire a customer that is worth $300 to you. You put $1 in, you get $3 back out.
Kumbaya, we're all really happy. Then you're like, "This is amazing. I'm making lots of money." Then let's just go out there, sub, and let's spend as much money as we possibly can. Let's spend a million bucks a month on meta ads. Then you do that and you realize that there is this big cash trough that you are building and it's like this big red line item on your P&L of like, holy [ __ ] look at all this money that's going out of the business. I thought I was making money. I'm putting a dollar in and $3 coming back. However, that $300 that might come back to you in 90day periods. So you might make $33 in the first 90 days, then it might be another $33 in 180 days, and then beyond that, you're making another $33. So the real thing is, how long does it take us to get those money soldiers to come back to camp? I put $1 into ads. When does that come back? And that is what your payback period is. And this is typically why businesses go out and raise a huge amount of venture capital is because even though that they are profitable, their LTV to CAC is a healthy relationship, their payback period, depending on the business, it might be 90 days, it could be 6 months, it might be a year. For some SAS businesses, it's 5 years. So then the real game is, okay, cool. Not only are we making more money than it's costing us to acquire the customers, but how quickly are we able to liquidate those advertising costs because that will be the bottleneck of how much that you can spend. Cuz unless you're going out there and borrowing money, you're going to have to self-fund this. And what you want to try to do is manipulate that number in your favor where you're recouping that money as quick as possible. I typically like to engineer a business and an offer that I pay back the customer acquisition cost in 30 days. meaning that I can go out there, I can chuck it on Uncle Amex or Auntie Visa, I can run up the ad spend, and then over a 30-day period, I pay no interest and I get the customers coming in, and that doesn't become the bottleneck. Now, depending on how aggressive that you want to go, typically, the more aggressive, the longer the payback period will be. But again, he who can afford to spend the most to acquire a customer is the one that wins. They know that it is a war of going out there and acquiring as many as possible. And so that's exactly what they do, even though that means extending their payback period. Most businesses when I sit down with them and they have a functioning business and it's working, they're spending money on ads that they're acquiring customers, let's just say they're spending 10 grand a month. And this happened time and time again on Shark Tank and it happens every single day. The moment that they go from spending 10 grand a month on ads to 20 grand or 50 grand, the rorowaz drops down. And I'm like, okay, cool. That's fine. What is the the overall lifetime rorowaz? you're looking at like the 30-day rorowaz, like how much do you make off the first purchase, but how much do you make off the lifetime of that customer? And then it becomes a game of how do you manipulate that number to bring that payback period down to as small of a time period as possible so that that finances aren't the constraint on the business and that you can basically run it out on a credit card in a 30-day period and spend as much as you possibly can to acquire customers profitably. And that's exactly how I look at all advertising. I look at it as a little money soldier that I'm sending out to war. And the sole job of that money soldier is to come back to camp with more soldiers. And all I want to know is how long it's going to take him to come back to daddy. All right. So here's the rules with payback period.
First of all, cash flow, not rorowaz, is the oxygen that your business relies on in order to live. Right? It does not matter what your rorowaz is. It does not matter what your ROI is. You cannot pay staff. You cannot pay rent with rorowaz.
You can only pay it with free cash flow.
So you really need to understand what that payback period is and what it looks like. Then you must understand that your job as the founder is to bring that payback period down to as short as you possibly can without limiting growth.
However, if you're in an e-commerce business, typically you want to shoot for like a 90-day payback period. the burdened cost to actually get that customer into your world has been paid for and then all the orders subsequently off the back of that is mainly profit.
If you're in a service-based business, think setup fees. Think about value ads, upsells. A great upsell is to basically the thing that they just bought to deliver that to them quicker. It's effectively what is it that you can implement in your business that is an upfront cash that will help you liquidate those advertising costs. And what you must understand is that most people, they're going to look at the total contract value as the outlay that they're going to spend. And they're going to be more concerned about that number than they necessarily are going to be about like oneoff fees and setup fees. And they're the things that are really going to help you shorten that payback period. Now, if you're in an e-commerce business, the number one thing that you can implement immediately that's going to shorten your payback period is to have a one-click upsell.
What is it? The moment that somebody buys a product from you, they put in their order, you land them on a page that has a onetime offer for them to either add more of what they just bought or other complimentary products with a click of a button. That offer should be heavily discounted. You should offer them expedited shipping. You should offer them extended warranty or some other insurance that is attached to the product. That is going to increase your day one rorowaz and it's going to shorten that payback period. If you do nothing more than that, you will dramatically manipulate that number in your favor. Which brings us to point number five. Most businesses, they obsess over the wrong number. And this is what I hear all the time. I've got a great product. I've got a great service.
I just need to get more eyeballs. You can just go to the traffic supermarkets aka Google and Meta and you can go out and you can buy as much traffic as you possibly want. And if you constantly obsessing how do you get the cheapest traffic, how do you increase your conversion rates to get the lowest cost per lead to get the lowest customer acquisition cost that you possibly can, there's one thing that is always fundamentally going to be true in business. The cost to advertise is only going to go one way and it's only going to go up. Whoever can afford to spend the most to acquire a customer is the one that wins. So, if that is the truth, it only makes sense to spend the vast majority of your time thinking about how you can increase that number, right?
Because a couple of percentage points increase on your lifetime value is worth infinitely more than shaving down your cost per lead by 10 to 20%. Because coming back to our equation, 33% of a bigger number means that you can spend more to get them. I can buy up all of the inventory that exists. In addition to that, I can afford to go out there and hire the best talent to get the best salespeople to work with the best agencies cuz I make the most money. I have all of that brain power coming into my business. Smarter people, more customers, more profit, more revenue coming into the business. It's a simple equation. And that's why apex predators, they rule the jungle. Now, we understand the fundamental math that makes a business work. Now, let's dive into how to manipulate these numbers to engineer a business that literally wins the market. Which brings us to point number six, to think like a billionaire. If you study these people for any length of time in any industry, you'll understand one fundamental truth. And it's the thing that billionaires care about more than anything else is leverage. I.e., what are the inputs and what are the outputs and how do I manipulate them in my favor where I get as much leverage as possible. So we need to be focusing 80% of our time on revenue producing activities. This is the paro principle.
So if you look at 20% of the inputs result in 80% of the outputs it's the same. If you do the 8020 to the 8020 you basically arrive that 4% of the activities generate 64% of the outputs.
comes down to tip of the spear activities. How do we bring more customers in? How do we be more profitable on our ads? How do we make more money from all of these customers?
So, let's look at how we actually do that on a tactical level and manipulate these numbers. So, the first thing is going to be the messaging that you actually put out there into the marketplace, which is going to convert the eyeballs into doing whatever the action that it is that you want them to do. And that's largely going to be based on the messaging that you put in front of them. And you're going to figure out, wow, depending on my sales copy, on my ad creative, I get more leverage. I get more people to do the activity that I want them to do based on different messaging and different creative. So therefore, it makes a lot of sense to spend a lot of your time understanding how to do that. How to write really compelling direct response copy, how to create creative that stops the scroll right in the news feed and gets people to pay attention, and then how do you convert that attention into actual money? And that is basically persuasion.
It's all about the ability of effectively communicating and getting people to do what it is that you want them to do. And what I will say is once you kind of identify what those activities are in your business, you're going to realize very very quickly that there is a gap in between where you are and the skills that you need to possess in order to be a master in that. And for me, early on in my career, I'd spent in excess of $500,000 learning these skills, i.e. paying to learn them either through mistakes or through mentors. And there is nothing that it is that you can invest in that will give you a greater return on your money than acquiring skills. Because most often than not, when a business plateaus and it hits a bottleneck, it's simply because the founder doesn't have the skills to solve that bottleneck. And therefore, you want to invest as quick as you possibly can to basically downpay the time that it is to learn that skill. Which brings us to step number seven, which is to identify your dream buyer. Let's run them through a framework that I call the larger market formula, which shows that in any given market, there is always 3% that is looking to buy right now. It doesn't require much skill to convert these people. They already know that they have a need. They're just looking at which is the supply that they're going to go with to solve that problem. Then there's a further 17% that are in information gathering mode. So, they're out there, they're collecting information, they're walking car lots, they might be researching personal trainers or weight loss programs, but they're not effectively looking to buy right now.
Then you have a further 20% that are problem aware. So, they might know that they need to lose weight or that they might need a new car, but they're not out there actively searching for information to actually solve that problem. And then you have a further 60% that aren't problem aware. So, they don't even know that they've got a problem. However, they could be a good candidate for whatever it is that you're selling. Now, once you understand who the dream buyer is in your business, do not do what most lazy business owners do and only focus on the 3% of the market that are looking to buy right now.
Instead, what you want to do is you want to basically go out to a larger segment of that audience and basically have your marketing speak to the entire pyramid.
You can literally scale your business to as big as the ambition that you possibly have. And it just comes down to do I have the skills to be able to go out there and market to all the different stages of that pyramid to basically reach people to sis sort and siphon them and educate them and basically speak to them in a way that when they are ready to buy right now, we are the people that they want to speak to. And the way that we figure out how to speak to them is by using something that I call the halo strategy. And it all starts with something that I call forum foraging where you're effectively understanding first what is the bullseye keyword that your entire market sits around. If you're in a digital marketing agency, it might be the word search engine optimization or SEO or it might be Facebook ads or it could be weight loss.
If you're in the weight loss industry, then what you want to do is you want to start a search on Google and you want to start looking for the forums that are in your industry, right? It might be Reddit, there might be industry specific forums that you can go into and you start mining them for the richest customer intel. It's like being a fly on the wall and seeing all the prospects in your marketplace go back and forth and discuss things. They just pour their heart out. They tell you all their pains and fears, hopes and dreams, and then go look at all of the competitors in your space and read all of their reviews and even read your own reviews. Once you do this and you use this template called the Halo strategy and you fill this out, you will have enough foder to create endless ads. you will know the exact language, the way that they speak. And so that when you do put together ads and you when you do put together offers, which we'll get to in a moment, they are literally striking like lightning because they are speaking in the exact language that your market is speaking in. Now, this is where most people get it wrong. They go and do the halo strategy and then they think, "Okay, this is what it is that I've got to sell based on all this research that I've got. How am I going to sell this thing?
Do what I'm about to tell you do." And that is you sit down and after you've got all of this research, you basically create a product that matches the desire of your market. Not what it is that you've got to sell, what you want to sell, what is convenient to you sell, but what is your market absolutely starving for? What would that solution look like? And that's what it is that you want to sell. Yes, often times that takes you rejigging your offers, maybe literally burning your offers and your products to the ground and rebuilding them. I can tell you right now that there is no one activity that you can do in your business that is going to help you more than this activity. Now, this brings us to step number eight. Now, we need to actually go out to the marketplace and get as many of those people as humanly possible to raise their hand and say, "I am interested in what it is that you've got." And this is all about crafting the perfect bait that literally attracts your dream buyers, which when you boil it down comes to valuebased marketing. Because if we're going to be marketing to a larger segment of the pyramid, people that are information gathering mode, people that are aware that they've got a problem or people that aren't even aware that they have a problem. If you're going out with a mass market type of valuebased marketing, then they're going to be like, "Wow, this is interesting." and then you're going to earn their attention. And if you can get somebody to consume something, then ultimately you're going to get a bigger chunk of those people to convert. So there are a few ways that we can do this. Now, the first one is by using something that I call long form copy. Copy is just messaging that you put out for people to read or consume. It can be in both video or it can be written copy. and whether you're selling a service or a product.
Long- form copy is a phenomenal way to use valuebased marketing because if it's going to be of value, typically it's going to be longer in nature, but it can't just be longer for the sake of being longer. It has to be compelling.
It has to keep people on the edge of their seat wanting to listen to the next word or watch the next word in a video.
And the way that we do that is by basically taking all of the raw materials that we got from our Halo strategy and we think about where is our prospect right now and where is it that they want to go. And your messaging must scream that you have the ability to do that. Better yet, the ad in itself, it must get somebody closer to where it is that they want to go. Because the first transaction that takes place in business is when somebody gives you their name and email and contact details in exchange for something that it is that you want. And it is that contact details. It might be them to book in a phone call with you. It might be them to download an opt-in. And the best type of high-v value content offer that I have physically ever seen is a down and dirty PDF. The reason that they work so well, you can think about them as an ebook, is that it gives your prospect an immediate hit of dopamine and a tangible solution to a problem they've got right now. This does not need to be your magnum opus. It doesn't need to be a best-selling novel.
It needs to be a high-value piece of content that solves an immediate specific burning problem where they download it, they go through the content, and they're like, "Geez, this was really, really good, and this person gave it to me for free." The information that you give away for free, it should be better than people's paid information, like courses that they're selling for 500 bucks. Your free information needs to be better than that so that when people go through that process and they consume it, they have gotten a disproportionate amount of value in that transaction. You've got their name and email address. They've gotten so much more value than giving that to you that the next logical step for them is to reach out and to book in a call with your team. When you do this right, you've already answered the biggest question that everybody has, which is, are you legit? And you've already basically delivered value in advance to them. And it makes the job of the sales team so much easier because that skepticism that is so rampant in the marketplace, it goes down because value is the antidote to skepticism. So that needs to be very very specific and you need to go out there in the marketplace and overd deliver on that first transaction. Now you might be thinking Sabrey, I have an e-commerce business. How is this applicable to me?
First of all, in most businesses, it still is applicable because the reason that you buy products is to solve a problem. You might be buying some kind of moisturizer that solves eczema. So instead of saying buy my eczema cream, which only a very small percentage of the market is going to do, you can basically create a free report and a guide about natural remedies that help with eczema. And one of the points in that free guide can be your cream. If that's not the case, the other thing that works incredibly well is to create something called a video sales letter.
And this is the same thing. You want to call out your audience that are experiencing a problem, but instead of saying buy my [ __ ] you are then educating them about all the things about the problem that it is that they've got, all the ailments, all the existing solutions in the marketplace and how they fall short. And then you pivot into your offer. But you need to make sure that everything leading up to that is informational in nature and that regardless of if someone watches the entire video sales letter and they don't buy, they still walk away with value.
Now, when it comes to putting together either of these messages, you want to use my $7.8 billion copywriting formula, something called newif. And that is your message. It needs to be new. It needs to be unique. It needs to be exciting, easy, predictable, and huge. All of the messaging that you put out, it must signal all of these points because it signals to the user that this is new. It is novel. It is something that is worthy of my attention and I must pay attention to things that are new because that kind of scratches the shiny object syndrome and then you're going to get more people consuming your stuff. Now, it needs to be unique because it's got to be unlike anything that your marketer has ever seen or heard about before. It must be exciting. It must be a huge opportunity that has only become present now. It's also got to be easy. There is implied work to get the benefit that you're talking about. No one is going to watch it. Then the next point is it's got to be predictable. Even if it's easy, you must show me undeniable proof that a lot of people have gotten the benefits that the claims that you're making in your messages. So I know that even depending on all the objections that I've got and all the reasons that this is not going to work is that you have a parade of proof to show me that this whole formula, this system, this ingredients, whatever it is that it is that you're selling is going to be a predictable outcome for your audience. And then the last one is that it has to be huge. It can't be a small thing that's not very exciting because their news feed is going to be filled with so much other [ __ ] that is going to basically hijack their dopamine that they're going to want to pay attention to that unless the opportunity or the benefit that you're promising them is absolutely huge. Now, when you go through this process, what you're going to realize in order for your copy to be newif, it's got to be polarizing. And do not worry about that.
You are competing with endless entertainment that exists in somebody's smartphone. That is the literal hunger games of attention. And unless your message cut through the market like a hot knife to butter, you're going to be dead on arrival. Do not worry about offending a few trolls and leaving negative comments on your ads. I often say, right, unless 50% of the comments on any content or ads that you put out are negative, then the party ain't popping. Because messages that are rewarded in the algorithm are ones that spark debate. And if you're speaking to everybody and you have some vanilla limp copy that doesn't offend anybody, then it's not going to be polarizing and you're going to be paying a disproportionate amount of money to reach those people. Which brings us to step number nine, which is to actually capture leads and contact information.
So most people go out to their marketplace, as I've already established, and they try to sell them stuff straight out of the gate. We already know the customer acquisition cost is going to be very very high cuz we're marketing to 100 people but only speaking to 3% of people and we're basically neglecting the entire dating process that takes place in order to take a customer from who the hell are you to shut up and take my money or the other analogy that I like to use. It's effectively the same as walking into a bar and speaking to someone and asking them to marry you on the first date.
You're not going to be very effective if you do so yet. That's what most business owners do. They're going out there and they're trying to marry complete strangers. There is a sequence of events and that's exactly the sequence of events that we want to run cold traffic to. And we're going to use a high value content offer to get out there and to actually get our market to raise their hand in a sea of people and say, "I'm interested in whatever it is that you've got." We can use that in the form of opting in and giving us their name and an email address in order to watch our free training, which is our video salesletter. or it could be to download a free piece of information, a cheat sheet, white paper, a swipe file, something that is going to give them an immediate solution to a pressing problem. Then you want to craft up a piece of information that specifically promises them the benefit that would be their dream solution. Then you wrap that up in a piece of information and you say, "If you want this, you have to give me your contact details." So that's how it starts. But then off the back end of that, once we've got those people to raise their hand in a sea of people, there's going to be a percentage of the people that do that that I call hyper reactive buyers. And these are the 3% that everyone else is marketing to.
We're still going to market to them, but what we're also going to do is we're going to be getting the other 97% of the whole pyramid by going out there and using information instead of hard offers to get them to enter into our world. And then once they do that, we're going to hit them with something that I call a Godfather offer where we're going to capture a percentage of those hyperactive buyers and we're going to make them an offer straight out of the gate so that we can basically help them in a more intimate way solve their problems. And then we can extract those people out of the pyramid that are ready to buy right now while we continue to nurture, educate, sift, sort, and siphon the rest of the market to get them to a place where they are ready to buy. Which brings us to step number 10, my infamous Godfather strategy. What is it my prospects want and what is it that they need to do in order to get that offer?
They're the two parts that make up an offer. The way that you get into the mindset of writing a Godfather offer is to sit down, have a couple of double shots of espresso. Forget about your lawyer, your accountant, your business partner. If you are the rain maker, you are the one that is responsible for bringing customers into your business.
forget all these people and write down on paper what is the most ridiculous offer that you could ever come up with that you could tell nine out of 10 of your audience and they would literally be grabbing their credit card as you were explaining this offer what is it that that offer would look like then what we want to do after we've gotten that down on piece of paper is we want to then start to tone it back right and actually think about okay I can't deliver on that and start to wind it back to something that you can actually deliver on. So once you have got that, let me talk you through the actual seven parts that make up a Godfather offer. So the first thing is the rationale. How does this offer even exist in the first place? Why are you able to make this?
Are you an industry insider? Do you have a specific business model that is super super lean where you can sell televisions directly from China, cut out all of the middlemen, and sell directly to the end consumer? That's the way that you're able to sell this product so cheap is because you have eliminated all this wastage in the supply chain. You need to set up why this offer even exists in the first place and how you are able to deliver on it. Because without a credible why, the offer just seems too good to be true and it won't seem believable. It will just seem like you're making some outlandish claims. So you do need to support that claim with the rationale of the offer behind it.
Then the next part is to build value. So a transaction takes place where value exceeds price. And so effectively what our job as marketers is to do is to build as much value as possible when compared to the price that it is we're asking. A great way to do this is to build value to the everyday price. What everybody else charges or how much that this offer should be priced at based on the value that it is that you're delivering. You build value to that price point and then you do a striketh through or a drop-down price anchor and then you tell them what the everyday price is for whatever it is that you're selling. Which brings us to the third element, which is how do we even price this offer to make it irresistible in the first place. Well, what you want to do is you want to lead with the most aggressive price that you possibly can.
Now, I hear the objections. I hear you saying, Sabry, how am I going to make any money if I do that? because that's what's going to make up the bulk of how irresistible our offer is. And we want to design it that we're going to make all of our money on the second and the third sale and that we don't need to make much money on the first sale. And that in itself is what makes it irresistible. It's taking something that people build their entire business off charging say $2,000 and then you're pricing it at $1.99 and they're like, "How is this even possible?" Like that's when you know you've got a good offer when your prospect is actually trying to justify how you can even make money doing it. Then you know, okay, I I'm off to a good place. And then you basically convert way more people than anyone else in your marketplace. And then you have the relationship with the customer and you make all your money on the second and third and fourth and fifth sale and so on and so forth. Now, this is nothing new. It's what businesses call loss leaders and they've been using them since the dawn of time. It's exactly why supermarkets sells diapers or nappies at almost break even, if not at a loss in some places, because they know that's what brings the mom into store. Then they can sell them the everyday items, the milk, the eggs, and all the expensive [ __ ] on the checkout as they check out. It's basically something to bring people into your world that then you then make money off the back end.
The advantages of doing this is not only do you convert as many people as possible, you do that by going out to the marketplace with one price, right?
One super compelling price point that doesn't burden the prospect with all of the different choices that are available and it makes that first sale the only logical solution. People will always value today money more than they value tomorrow money. And for that reason, we are going to always offer payment plans where we're going to split the overall price that we charge in our offer up into payment terms that they can pay 30, 60, 90s, maybe even over 12 months. And the reason that we do that is by doing it, we're going to get way more people saying yes to our offer because they're only saying yes to a smaller price today, which is the money that they value infinitely more than tomorrow's money. We're going to bring more people into our world. And it basically means the value in their mind for what they get right now is a lot higher than what they have to pay today in order to get access to it. Which brings us to part number five, premiums. So a premium is something that you are going to give in addition to the product that it is that they're buying for free. And the way that you should think about it is the premium that comes across with whatever it is that you're selling. It should be something that is so valuable that people could justify the price of what you're selling or what you're asking them to do just based off the premium alone. You want to give away all of your secrets and sell the implementation.
Information is abundant. You can go on to Claude, Chat, GBT, Google, YouTube, Tik Tok, and get endless information.
Heck, what do you think I'm doing here right now? This brings us to part number six of a Godfather offer, which is a power guarantee. Something that you must understand is that in every transaction, risk takes place, right? Risk is apparent and it's either you're asking the prospect to burden all that risk or you as a business owner is willing to burden the cost of that risk. And so most people when they hear about coming up with a very powerful guarantee, they all say the same thing to me, which is this sub. I can't guarantee that.
because I do guarantee that there is going to be a percentage of my market that I aren't able to fulfill on that and that I'm going to need to give them their money back. And a money back guarantee is just one guarantee. So, let me unpack all of them for you. First of all, you have you buy this either doesn't deliver what it is it says it does. I will give you your money back.
Pretty simple. Or you can have a 30-day money back guarantee where they change their mind, you will refund their money.
Then you can have a conditional guarantee where either you buy this, you do all the things that I tell you to do and you still don't get the result, then I will give you your money back. That is another guarantee. Or another way for the people that are a little bit less risky or they're more riskadverse I should say. Then you can have something of like you can buy this product, do these things, either you still don't get the outcome that it is that we promise, we will continue to work for free or we will replace your product until you do get the outcome that it is that you want. So when people hear all that, they're like, "This is going to cost me." Guess what? If you're in most countries, you already have a guarantee by law. Most consumer law in most country, if you don't deliver on what it is that you say that you will, you have to give them money back. It's typical some kind of 12month guarantee. Or to look at it through another lens, if I did business with you and I wasn't happy and I came to you and I was like, "Hey man, like this didn't work out the way that we both intended it and I didn't get the outcome that I wanted." What is it that you would do? Most people would be like, I would work with them until they were happy if they're a good business owner. If that's the case, then you already have a guarantee, but you're just not using it on the front end as a marketing tool to bring more people into your world. And the thing is, if you're not doing that, then you are already paying the cost for having a guarantee.
What do I mean by that? By not having a guarantee, you are paying the cost of an increased customer acquisition cost.
Because if there is perceived risk in the transaction, then less people are going to respond or buy once they generate into a lead than you want them to. And so your customer acquisition cost gets inflated. And there is nothing that is more costly than a higher customer acquisition cost. So instead, by taking the thing that you are already doing in your business and simply using it and advertising it on the front end, you will get typically two to three times more people converting into your business. if you have a Godfather offer than if you just don't have a Godfather offer. If you look at your customer acquisition cost right now, just basically reduce 70% off that. That's what it is that it's costing you to not have a guarantee right now. So, can you still not afford to have a guarantee? I dare say you probably can. But the way that you want to do this is you do want to tie it to performance where possible.
It can't just be a situation where basically people are coming in and milking it. However, if you just look at what the redemption rates are on most guarantees, it's typically less than 3%.
If you have like more than 3%, it means that you're making uncompliant claims and the offer is probably too strong and you need to tone it down a little bit or you need to soften up the guarantee so that you don't have such a high guarantee or the way that you're selling right now is wrong. If you have less than a 1% then I would say that your your marketing isn't aggressive enough and you need to push it even more cuz you could be getting way more customers coming in if you're a little bit more aggressive. So examples of this might be if you follow our system, you come in and do our workouts, you're going to lose 9 kgs in 12 weeks. And if you don't, we will give you your money back.
We will work with you for free until you do lose the 9 kgs. Which brings us to the seventh point of a Godfather offer, which is scarcity. So offers without scarcity, they simply don't convert because there's no reason for me to buy right now, then I won't. And delay is the death of a sale. If I can come back and it's like a book on a bookshelf and this offer is always going to be there and I can just come back whenever it suits me and pick this book off the bookshelf and have it, then I'm never going to act. There's no urgency. And so here's the thing. In a world of fake scarcity and countdown timers and people not being genuine, you cannot just go out to the marketplace and say things that aren't genuine. People do the sniff test, right? They do the Google sniff test. They go check out if you're legit.
And if you're not legit, the word's going to get out very, very quickly and then that fake scarcity is going to come and bite you on the ass. So, the way to build real scarcity in your business, real scarcity exists in every business.
If you're selling e-commerce products, I assume you don't have unlimited inventory sitting in your warehouse, right? There's a limit. There's a stock limit. So, advertise that. Let it be known. If you do want to buy, there's a window of time that you have to buy cuz offers with scarcity convert. You just got to make sure that the scarcity is genuine. So, now you have all the seven points that make up a Godfather offer.
Do this for your own business. But then once you've got it, what you want to do is you want to scream this thing from the rooftop so that it disseminates everywhere and everyone can see this thing. That's how you actually get a huge amount of people to come in and want to do business with you. So in terms of our landing pages, our video sales letter and our ads and putting this offer absolutely everywhere we can.
This brings us to step number 11. So here are the nine questions that every sales message must answer. Whether it's a Google ad, it's a Facebook ad, it's a video sales letter, it's a landing page, it's a product description page, or it's even your homepage. If you don't answer these nine questions, you'll never be converting as much traffic and bringing in as much customers as you possibly can. Question number one, is this of personal interest to me? If you've done your Halo strategy research, you know who it is that you're trying to talk to of your dream buyer. your headline, it needs to scream directly to that person and say that this information is directly of interest to me. And the way that you do that is to make sure that you have a big specific benefit that that market wants more than anything else. And then you also wrap it up with some element of intrigue. It's not enough in today's day and age just to go out and say, "This is the big benefit that you'll get if you pay interest to this." It has to be intriguing. And the way that you do that is by answering the first fundamental question. How does this apply to me? And an easy down and dirty way of doing this, it's lazy, but it works every single time is just to call out the target market. Attention 40-year-old men who have 12 kilos to lose. Attention business owners who want more customers. You just pick exactly who it is that you're trying to talk to and you say it right there in the eyebrow or the headline of the ad.
Question number two is, why should I pay attention to this right now? In a world of endless distraction and infinite options, why is there a time-sensitive window of why I should choose to actually pay with my attention on what it is that you're asking me to do right now? If it's not urgent, if it's not time-sensitive, then I will delay. And delay is the death of a sale. And so, in order to do that, you must sell the consumption of the actual ad in itself.
Because if they don't consume it, they're not going to convert. You can't basically take it for granted that they're going to get to the end of your sales message and buy. You must sell the consumption in itself. Question number three is, is this the exact specific solution that I need? So, you need to make it very, very clear on how your offer solves their specific problem, how it's different from the other alternatives that they have tried and that it's almost like that this offer was custommade for them. And they feel like you've been reading their Gmail, right? their G- chats, their WhatsApp messages, and it's as if you've listened to what they're saying and you've crafted this specific offer directly for them. That's how it needs to feel when they come across your ads and your offer. Not a generic solution that would be applicable to everyone, but a very unique specific solution directly for them. Question number four is, what is newif? What is new, unique, exciting, easy, predictable, and huge about the offer that it is you're making? Question number five, what is the undeniable proof that what you're saying is actual a reality, not what it is that you just think. No, you must bring the receipts.
You must be able to prove without a shadow of a doubt like you are trying to convince a jury, right? That there should so much undeniable, unquestionable proof that what you're saying is true. Screenshots, reviews, average results that people get. And the more that it is undeniable, the more powerful that it is. So you can't just say it, you need to show it. Show don't tell. The best way to do this is to create a folder on your computer called proof. Whenever you see something that is proof of the claims that you're making, it's a five-star review. It's someone in a Facebook group that you got your customers on. It's an email from a client. It's somebody's ad accounts. You take a little screenshot. You whip it into that bad boy. when it comes time to build your landing pages or put together your offers that you've got an entire parade of proof that proves to your prospects the claims that you're making are true. Which brings us to question number six, which is how does it actually work? So now you've got them emotionally bought in. You've kind of presented it as being this new, unique, exciting, easy, predictable, and huge solution that's going to solve all these things. Now you actually got to run them through the logistics so that their rational brain can kind of start to logistically understand and logically rationalize the sale and go, "Okay, cool. This is what I'm going to get.
These are what the steps are going to be." And you got to do that. You can't just sell purely off emotion. You need to sell to both the different parts of the brain if you want to convert as many people as possible. The seventh question is what are other people saying about it. So this is where you want to use both written testimonials and also video testimonials. You want to use screenshots of emails that you receive, text messages. You need to have some mechanism in your business for collecting reviews so that you can show people all of these different elements because you can sit here as long as you want and tell everybody how it's irresistible, talk about the price, talk about all this rationale, but ultimately people are going to be skeptical as [ __ ] And the more that you can point to other people of them saying, "Hey, these are all the great benefits that I've got," they're going to believe that infinitely more than whatever it is that you're saying. Question number eight is, what guarantee do you have that this is actually going to work for me? It's all well and true. You've made these claims.
You've showed me all of these people that have gotten the same benefit that you're promising me, but I still don't believe you. I'm still highly skeptical.
I am a unique snowflake. I am very different to all of these customers that you showed me. My problems are unique.
My business is unique. My customers are unique. I want a written guarantee. And that's what people expect. So, you want to basically put an absolute irresistible guarantee in front of them that you're removing all of the risk that you're asking them to place in order to buy your product. You are burdening all of that risk. And then that is the way that you're logically going to convert as many of these people as possible. When they look at your offer and they say, "I've got nothing to lose." And the the further that you are away from that scenario where they have nothing to lose and they have something to lose, the less people that you will convert. Which brings us to the last question, which is what do you want me to do next? Most people gloss over this and they think that people are just going to know what you want them to do.
No, no, no. You must explicitly tell them exactly what it is that you want them to do. You don't just say, "Click on this link and book in a phone call."
No. You must say, "Click on this link.
You will be taken to a short survey.
Fill this out so we can really customize your entire solution for you. We can identify what the bottlenecks and constraints are into your business. And then we can create a road map of exactly what the step-by-step process is to take you from where you are right now to where it is that you want to go. Cuz that way objections are handled, questions are answered, and conversion rates skyrocket. and they are the nine questions that every single sales message must answer. If you make sure that you're doing this at every single step of your funnel, your conversion rates will absolutely skyrocket. Your funnels will pull their heads off and your offers will go absolutely batshit nuclear on the internet. So once you've gone through this entire process step by step, you've built out all of these things. The first place that you're going to arrive at is I've got all this in place now. How do I let people know about it? So, if you like this video, I've put together a very detailed step-by-step guide that takes you from A to Z on everything that you need to do as a complete beginner or an advanced media buyer to set up Facebook ads and get them in front as many people as possible, get them raising their hands, converting in your funnel, and ultimately showing up in your bank account as that sweet and juicy rorowaz.
Like, subscribe, and I'll see you in the next
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