https://www.youtube.com/watch?v=\_ArQlwPvGUA

1 00:00:00.000 --\> 00:01:00.000 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 thousand dollars a month
in 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

2 00:01:00.000 --\> 00:02:00.000 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

3 00:02:00.000 --\> 00:03:00.000 first one the exception is that 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

4 00:03:00.000 --\> 00:04:00.000 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

5 00:04:00.000 --\> 00:05:00.000 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 they split test their 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

6 00:05:00.000 --\> 00:06:00.000 if it were a 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

7 00:06:00.000 --\> 00:07:00.000 have to let it shake out you have to
let it 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 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
