$100M Offers Audiobook Part 2
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What is the pricing and commodity problem in business?
hey guys this is another special edition collaboration between the game podcast and 100 million dollar offers uh today we're going to break down the pricing and commodity problem this is the number one issue that most businesses have and why they can't make enough profit uh the starving crowd problem which is that they're they're selling to people who don't have enough pain who are hard to find who are in markets that are not growing and there's an easy fix for that and i'll walk you through the process and The third chapter we'll go over today is charge what it's worth. All right, this is probably one of the biggest unlocks for the majority of people who have listened to the book and the many messages and reviews that I have read of it.
These upcoming chapters are heavy hitting, and I hope you enjoy them.
We believe every person, every company, and every organism is either growing or dying. Maintenance is a myth. What this means is, if your company isn't growing, it's dying. This is a sobering reality for many of us. I learned the hard way, and my business suffered for a long time because of it.
Let me explain. The market is continuously growing. The stock market grows at 9% per year.
If we aren't growing at 9% per year, we are falling behind. Maintenance, in the most generic sense, would be 9% per year growth, year over year. Furthermore, if you're in a growing marketplace, then you might have to grow at 20 to 30% per year just to keep up or risk falling behind.
So you can see how maintenance is a myth.
How can businesses differentiate their offers based on value?
So then, what does it take to grow? Thankfully, just three simple things. One, get more customers. Two, increase their average purchase value.
Three, get them to buy more times. That's it. Sure, there are lots of ways to acquire customers and zillions of ways to increase order value and purchase frequency, but simply put, that's it. Those are the only three ways to grow. Example, if I sell 10 clients a month and a client is worth $1,000 to me over their lifetime through average cart value times number of average purchases, then my business will cap at $10,000 per month, aka 10 times $1,000. Taking new clients per month times $1,000 lifetime value equals $10,000 per month in max revenue. If you want to grow, you've either got to sell more clients every month while maintaining suitable margins, or have them be worth more by increasing the profit per purchase or number of times they buy.
That's it. Author note, only two ways to grow. To simplify this concept even more, there are really only two ways to grow. Get more customers and increase each customer's value. Increasing each customer's value has two sub buckets. One, increasing profit per purchase. Two, increasing the number of times they buy. For the purpose of this book, I highlight both of those sub buckets as individual growth paths. I did this because I think it will be easier to understand the money models that will come in volume three. All three, getting more customers, increasing their average purchase value, and getting them to buy more, are repeated themes in this book. But if you seek simplicity, both increasing average purchase value and increasing the number of times a customer buys results in one outcome, increasing each customer's value.
Business terms. Before going any further and to better flesh out the concepts that will follow, we should take a second to define and better understand some key business concepts. When I stood in that Las Vegas penthouse in my beast mode t-shirt, I was clueless about such terms.
What are the three essential ways to grow a business?
Let me help you be better than, well, me. Gross profit. The revenue minus the direct cost of servicing an additional customer. If I sell lotion for $10 and it costs me $2, my gross profit is $8, or 80%. If I sell agency services for $1,000 per month and it costs me $100 per month in labor to run that client's advertising, then my gross profit is $900, or 90%. Note, this is not net profit. Net profit is what's left over after all expenses are paid, not just the direct cost of fulfillment. Lifetime Value
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Chapters
8 chapters
1
What is the pricing and commodity problem in business?
0:00–1:37
2
How can businesses differentiate their offers based on value?
1:37–3:28
3
What are the three essential ways to grow a business?
3:28–4:42
4
How does understanding market growth impact business success?
4:42–6:20
5
What defines a Grand Slam offer and why is it important?
6:20–8:09
6
How does pricing affect customer perception and business profitability?
8:09–14:34
7
What role does market selection play in business success?
14:34–20:24
8
How can businesses create compelling offers that drive sales?
20:24–54:20