A Magic Business Genie Grants You 3 Wishes...

we doubled the profit of a five million dollar business in less than eight weeks and we followed a single specific process that i'll break out in this video and at the very end of the video i'll walk you through a hypothetical example of a cavs business that would be the best business ever that taught people how to grow their cabs so you can apply it to your business using the same process so i want you to imagine that you have a business or you'd like to start a business that has a hundred customers that pay a hundred dollars a month i'm trying to use the simplest math possible so 100 customers 100 a month so that means it's doing 10 000 a month in revenue now let's assume that in order to fulfill those customers we have eight thousand dollars a month in cost so making two profit ten thousand dollar top line two thousand dollars bottom line eight thousand dollars of cost that's the business now you rub a magic ipad a genie appears and this is not any kind of genie this is a business genie and this niche genie has one wish that he can grant you and so he says i can grant you one wish he says i will double your business in one of three ways you need to tell me which way you want me to do door number one or wish grants of number one is i will double the amount of customers that you bring in every month with this business let's assume that your churn is not that good so people stay for on average three months number two i will double your price so you'll have the same number of customers and i'll double how much they pay you every single month nothing else will change door number three he says now what i'll do is i'll double how long they stay so instead of staying for three months they'll stay for six months which of the wishes do you take the genie up on really be honest in the comments tell me what your first guess was going to be a b or c so with door a he doubles it so now we have 200 customers a month what happens well if we have 200 customers paying us a month we now are making twenty thousand dollars in top line revenue and assuming everything's scaled proportionately we would have four thousand dollars a month in profit and sixteen thousand dollars a month in cost double the number of customers we double the amount of profit doubled our business awesome let's go to door three because people are staying twice as long but you're getting the same amount of customers per month eventually you will get to the same equilibrium point as the first one the exception is that wish accomplished does something more powerful which is it increases your ltv now because of that and the additional months that they pay you most businesses it's more profitable the last one someone pays than the first one usually a cost of acquisition cost of onboarding there's more costs associated with getting a new customer than keeping someone if you can double the lifetime growth profit per customer then your cost of acquisition can be bigger than it could in the first example here i eventually get to the same top line but i have more bottom line because i didn't have to spend as much on marketing so between a and c you pick c now you're like alright well what about door b so let's say we had the same hundred customers but now instead of paying 100 a month they're paying 200 a month we still have the same cost of fulfilling them it's 8 000 and our profit went from 2 000 a month to now we have literally the extra 100 a month that's pure profit so we six x the profit of the business with one change for those in the audience who are thinking but not as many people would buy so i told you that we increased how much profit the business made i'll tell you the one change that we did was we've looked at the entire marketplace that were selling a similar service to theirs and it was based on our research we felt that the market could support a 50 higher price and so we literally and this is already a pretty expensive thing we literally did nothing but add 50 to the price and changed nothing about the product and guess what happened more people bought why because when something becomes more expensive people perceive its value in a higher way and because of the brand that the person had it was more aligned with the person to have a higher price tag now most times in most markets you have supply and demand and when the price goes up demand goes down in most markets now not all markets and more times than not it doesn't drop by the same proportion so if you double the price sometimes you sell a third fewer but if you double the price and you've 6x the profit potential on a customer if i 6x my profit on a potential customer and i do it at uh two-thirds the price then i tripled the profit of the business still you still make way more money and so finding the absolute perfect point of profit many times comes from raising the price and pricing is one of those very interesting things because it's very tied to emotions a lot of people are very afraid of raising the price because they don't want to break it i want to talk to you about how to raise the price if that is your goal which is why the number one lever that you have on profits is pricing and constantly testing a lot of people's tests split test their pages they split test their scripts offers but the thing that they forget to test is their price and it's the strongest lever of all three levers okay so let's walk through a hypothetical business and the steps that we would need to take in order to increase the price if that's what we decided was the right call so the first thing we would do is we'd survey the existing audience using the van west store pricing survey and let's say this business sold a 12-week grow your cabs program and let's say it was 1200 for 12 weeks very simple and on the first third of the survey we're trying to find out more about the customer so we're like hey you know what was the main reason that you bought this was there an event that was coming up that incentivized you to do it what's your income level what's your job what was the primary way that you found out about us right so it's like okay these are the things that we know about the avatar and so we've got those client demographics okay second part is the four questions of the van west what if it was super expensive what if we're way too cheap what if it were a stretch and then what

what if it were a stretch and then bargain right those are the four questions now we say of all the things that we do in our cavs program which is the book the training the nutrition the stretching thing that we have the one-on-one calls for accountability the body system that we've put together so you have an accountability buddy like all of these things that we do in our value stack which of these if we only had one of them you would keep and which of these if we got rid of one you would lose and not care you take that data number one number two now we communicate it internally first all right so we got to communicate to the team we got a community of sales team security marketing team then we communicate it to our customers this is what's happening this is why it's happening past present future this is what we did to get here this is why it's important now this is what we're trying to do later we're investing the business because we want to fulfill our promises finally now we bring it up to the new customers who are coming in so we hit our lists up to let them know we had the urgency in step four and then the last step is now we officially have this new price now what we want to do now is expect the fact that the change in price will probably result in fewer sales by total volume and the reason for that is because we cleared the pipeline before the price change it happens once you have that you have to let it shake out settle and it's really trying it's very difficult to do that because it takes guts but once you make that you let it settle then you just do the math and let the math do the talking but if you sell it at twice the price you make more money so in our hypothetical cab scenario let's say we bumped it to 2000 or 3000 because we found out that was the price that was right at that sweet spot that was the stretch but they'd still do it we might have just two or three x the profit of the business by making that one change and maybe because cavs are the coolest thing ever got even more people to buy it because they thought they really could get the results that we said we were gonna help them experience if this was interesting to you go to acquisition. com third video is on pricing you can watch more about pricing as it applies to your business it's absolutely free you don't need opt-in or anything you can just watch it