Podcast Summary
Investing more in customers leads to better results: High customer investment leads to better outcomes, increased sales team conviction, and profit reinvestment for business growth.
Investing more in your customers leads to better results for both the customer and the business. This was a key theme in a recent podcast discussion between Ryan Daniel Moran and Alex Hormozi. They emphasized that the more someone pays for a product or service, the more invested they become, leading to better outcomes. This, in turn, increases the conviction of sales teams and drives more profit for the business. The profit generated can then be reinvested in fulfilling customer needs and acquiring more clients. The focus on high-quality products and delivering on marketing promises was also highlighted as a crucial aspect of business success. So, investing in your customers and delivering high-quality products can lead to a profitable and sustainable business model.
Perceived Value vs Actual Value: Focusing on how customers perceive the value of a product or service can make it more valuable without changing the offering itself. Prioritize creating the best fulfillment for customers, track client success data, and aim for increasing average revenue per client.
The perceived value of a product or service can be just as important, if not more so, than the actual value it provides. This was a key theme in a recent discussion about enhancing business value. By focusing on how to change the way customers perceive the value they're receiving, businesses can make their offerings more valuable without having to change the product itself. An example given was the comparison of two surgeons: one who is performing their first surgery and another who has done 10,000 surgeries. Despite the first surgeon taking twice as long, customers would still likely be willing to pay more for the experienced surgeon due to the perceived likelihood of achievement. This concept was also related to the idea of being customer-centric versus focusing on marketing and sales. The speaker shared that they had been overemphasizing the effort put into a product, but realized they needed to prioritize creating the best fulfillment possible for the customer. This shift in focus makes marketing and sales easier, as customers are already drawn to the value of the product. Another important aspect discussed was tracking the data of client success and driving towards increasing the average revenue per client. This not only benefits the business financially, but also enhances the customer experience and overall value they receive.
Creating value and prioritizing effectively: Focus on creating value, prioritize effectively, and provide exceptional customer experiences to achieve financial success.
Focusing on creating value for others and prioritizing what's truly important can lead to significant financial success, even without relying on complex marketing strategies or upsells. The author shares his experience of making millions without a dialed-in marketing funnel or email list. He emphasizes the importance of discerning priorities and committing to doing a few things well, rather than spreading resources thin. Additionally, the author highlights the importance of building positive word-of-mouth and providing excellent customer service, which can lead to high prepayment rates and long-term customer loyalty. In essence, the key takeaway is that entrepreneurs should focus on creating value, prioritizing effectively, and providing exceptional customer experiences to achieve financial success.
Delivering value and removing barriers for customers: Offering valuable, convenient products and services can lead to high returns on investment. Low-cost front-end offerings can lead to upsells if customers see value, and removing friction can result in higher-priced sales.
Focusing on delivering value and removing barriers for customers can lead to significant returns on investment. The speaker, Alex, shared his experience of having a 36 to 1 lifetime return on advertising, meaning for every dollar spent, he gets $36 back. This success comes from offering products and services that provide results and are convenient for customers, while also decreasing their effort and sacrifice. Additionally, the pricing strategy is important, as offering a low-cost front-end product can lead to higher-priced upsells if the customer sees value in the offering. Alex's business model shattered common beliefs about pricing and proved that it's possible to sell high-ticket items to customers with lower incomes. By removing friction and providing results, customers voluntarily pay for more expensive offerings. This approach has allowed Alex to spend money on advertising and attract a large customer base, setting him apart from competitors.
Demonstrating Value and Justifying Premium Prices: Specialize in a niche, provide high-value services that yield significant returns, and communicate the value to clients to justify premium prices.
Providing high-value services or products justifies charging premium prices. Alex shared a story about his father's concerns regarding the high ticket price for his services, but Alex was able to demonstrate the significant value and return on investment his clients received. He emphasized that they were aware of the cost and willingly paid it due to the results they achieved. Alex and his team help their clients increase their top line revenue by an average of $239,000 and triple their profit, making the investment in their services worthwhile. Additionally, niching down and offering a specialized solution for a specific avatar increases the efficacy of the services and justifies the premium price.
Having a strong conviction in delivering value to customers is key to business success: Believing in the value of your product or service and customers' investment in it drives engagement and success.
To be successful in business, it's essential to have a strong conviction in delivering value to your customers. This conviction comes from within and is based on the belief that you are providing the best possible product or service. The ethics of charging high ticket prices comes from the understanding that people place value on things based on their perceived worth, and this perception can be influenced by the price tag. The more customers invest in your product or service, the more convinced they become in its value and the more likely they are to fully engage with it. This internal certainty is what drives business success. Additionally, the value of a product or service is not just in the product itself but also in the intangible aspects, such as the customer experience and the perceived expertise of the provider.
The power of pricing in creating a virtuous cycle: When customers invest more in a product, they get better results and become more convinced, leading to higher profits and improved offerings for the business.
Pricing plays a crucial role in creating a virtuous cycle for both the business and the customer. When customers pay more, they become more invested, leading to better results and increased conviction from the sales team. This, in turn, leads to higher profits for the business, which can be reinvested in improving the product and attracting more successful clients. Conversely, lower prices can lead to less investment from customers, lower-quality clients, and a less convinced sales team. This can create a vicious cycle that is difficult to break. The speaker emphasizes the importance of having conviction in the value of the product and using that conviction to sell at higher prices. Additionally, the speaker mentions that those who pay the most are often the easiest to deal with. The application of this mindset and methodology to physical products, such as those sold on Amazon, can be a challenge due to the platform's incentives towards low pricing. However, by focusing on the value and benefits of the product, and communicating that value effectively to customers, it is possible to create a successful business and maintain a virtuous cycle of pricing.
Add value through partnerships: Leverage complementary businesses for free goods or services, bundle them with your product, and create a more valuable offering for customers to differentiate from competitors.
As an ecommerce entrepreneur, if you're stuck in price wars and competing on reviews on Amazon, consider adding value to your core product by leveraging partnerships with other businesses. By obtaining free goods or services from complementary businesses and bundling them with your product, you can make your offering more valuable to customers and differentiate yourself from competitors. This approach, called the "delivery queue," can help ecommerce entrepreneurs reverse the trend of price wars and create a more valuable product for their customers. This mental reframe can lead to a significant increase in value and customer satisfaction, potentially resulting in increased sales and a more successful business.
Providing ancillary services or products to address customer needs: Identifying and addressing ancillary problems or needs of customers through additional value-added services or products can help businesses build a loyal customer base and premium offerings. Focusing on the customer's goals and challenges can lead to increased engagement, higher sales, and positive word-of-mouth marketing.
Identifying ancillary problems or needs of a customer and addressing them through additional value-added services or products can help businesses build a loyal customer base and premium offerings. By focusing on the customer's goals and challenges, businesses can create a comprehensive solution and build a strong connection with their audience. This can lead to increased customer engagement, higher sales, and positive word-of-mouth marketing. For instance, in the supplement industry, a customer looking to lose weight might require an eating guide, grocery list, cooking guide, budget calculator, family-friendly meal options, and a workout guide. By providing these ancillary services, businesses can add value to their core product and charge a premium price. Moreover, excellent customer support, speed, and convenience are other layers of value that can be added to a product to create a superior customer experience. Building a strong relationship with customers by addressing their challenges and providing exceptional value can lead to a loyal customer base and organic growth. To achieve this, businesses can leverage various channels such as text, email, social media, and personal interactions to engage with their customers and build a community. By focusing on the customer's needs and providing a comprehensive solution, businesses can differentiate themselves from competitors and build a successful brand.
Creating exceptional value for customers: Think about what you'd include in a $100k product, how to deliver the same outcome for less, and imagine having only one customer to create an exceptional experience for five new referrals.
Creating value for customers through partnerships and exceptional experiences can lead to significant revenue growth, even if your products are given away for free. This was discussed during a podcast interview with Brian Dennen, where he shared his experiences of making millions through affiliate rebates and customer referrals. He suggested three mental exercises to help businesses think about the value they're providing and how they can make it worth more to their customers. The first exercise is to consider what you would include in a $100,000 product that delivers the same outcome as your current offering. The second is to figure out how you could provide the same outcome for a tenth of the price. And the third, and most challenging, is to imagine having only one guaranteed customer and figuring out how to create such an exceptional experience that they'll refer five new customers to you. By focusing on these questions, businesses can reevaluate their offerings and find ways to increase their value and revenue.
