https://www.youtube.com/watch?v=Q2VUuUGfpNY

1 00:00:00.000 --\> 00:01:00.000 good morning everyone it is alex from
ozzy here from gym launch prestige allen and the many other companies
that we have in our portfolio they did 110 million dollars in sales and
i am going to tell you how we did that um and i have nothing to sell you
so um without further ado the purpose of this video is to show you the
six ways to increase lifetime value all right and i'm going to show you
my favorite one at the end of this that i think is the most powerful of
the six all right and so first thing we have to do is define lifetime
value all right so there's two ways to grow business from a fundamental
standpoint number one is you get more customers number two you make
those customers worth more that's it that's it so it would behoove us as
business owners who are trying to make more and grow our businesses that
we should know all of the different ways to a get more customers and b
make them worth more all right now when i say make them worth more
lifetime value is a very loosely defined term you can look on the
internet there's lots of different definitions for it and what i'm going
to do is redefine this as lifetime gross profit all right so lt gp which
is what i care

2 00:01:00.000 --\> 00:02:00.000 about all right because for example if
i'm selling a meal for ten dollars and i make uh it cost me nine dollars
to deliver the meal i mean i make a dollar so if i sell someone and it
cost me five dollars to get somebody to buy a ten dollar meal is that a
good business proposition for me well you're making ten dollars it costs
you five you're getting two to one well my cost of delivering it's nine
out of the ten dollars which means i spend five dollars to make one
dollar of gross profit all right and so that is why it's gp all right
that's why i don't like lifetime values in a more it's a very amorphous
term and so what we're looking for is how much juice how much gross
profit is there over the lifetime of the customer for us all right now
that's not net profit net profits after you've paid all of your all the
other expenses your rent your payroll all the other things um but this
is just the gross margin that comes in if it costs you two dollars to
buy a thing and you sell it for six then the gross margin is four now
you still got to pay you know your warehouse and whatever other things
you have going on now hopefully you understand lifetime gross profit so
i can get into the goodies all right so there's six ways to

3 00:02:00.000 --\> 00:03:00.000 increase ltv the first one is increase
the price sounds crazy but believe it or not price in and of itself is
something that can actually draw alert to your your products you think
if a chanel purse sold for 20 people would think they're as cool no
price in and of itself can create alert around a product it can put you
in another category so much so that people say this is so much more
expensive there must be something different about this i'm going to look
at this more closely right number two is that you can decrease the cost
all right so if i can find a cheaper way to do the thing i can invest in
technology invest in processes i invest in outsourcing all these
different ways that i can deliver the same thing for less i increase my
gross profit so if i had that meal thing that i was talking about
earlier and it cost me nine dollars to make the meal but i found this
new automated robotic process that allows me to do the meals for two
dollars that very much increases the lifetime gross profit of my of my
bit of my of my products and my business but i didn't change anything
besides

4 00:03:00.000 --\> 00:04:00.000 decreasing the cost all right uh the
next one is to increase purchase frequency all right so what this is is
getting people to buy again and again and again if i can get someone to
come to my restaurant today and tomorrow and then continue to come
forever then that's going to be a much more valuable client right and so
that increases if i can get all of my clients to come in additional one
time right that would increase my lifetime gross profit per customer
across my entire business all right so if you're tracking with me number
one you can increase the price number two you can decrease how much it
costs you to fulfill the thing right number three you can get people to
buy more times all right and then four five and six are slightly related
but different all right the first is that you can upsell people all
right now upsells very important here i'm going to define this for you
is selling the same thing but a more valuable version so if you upgrade
right from uh from a honda to a lexus then you're getting upsold right
important and i think it's

5 00:04:00.000 --\> 00:05:00.000 important to define these terms because
they are different types of sales and if you can be more nuanced in how
you think you will think better all right especially when it comes to
your business so the next so that's that's buying so i'll give you a a
food example so if i go from a you know 20 ounce soda to a 32 on soda
that is an upsell it's more of the same it's either better of the same
or more of the same but either way it's the same category of stuff um
i'm just i'm just buying a bigger better version of it all right the
next is a cross sell all right across cell is an adjacent need that i am
solving all right so in the burger or sorry in the in the coke example
if i sell a burger with the coke then that is a cross cell right so
upsell is small coke to big coke or you know uh normal lemonade to to
organic whatever lemonade you know espresso sun-kissed lemonade or
whatever it is right that's an upsell a cross that would be uh what do
you want with that lemon do you want a sandwich with that lemonade uh
what do you want with that soda you

6 00:05:00.000 --\> 00:06:00.000 want a burger with that soda do you
want fries with that soda right that is a cross-sell all right that's a
cross-sell so you're selling an additional thing this is usually the
next natural need that the person is going to have as a result of their
first purchasing decision oftentimes these cross sales are actually
where the majority of the profit happens so sometimes there are
strategies and businesses that are called loss leaders everyone needs
this one thing but the next thing they need is gonna be the thing that
has all the margin and if you know your numbers you can build a model
around that very successfully all right and then finally this is one
that's overlooked is down cells right so a lot of businesses that i'll
talk to or that consult with they don't have any down cells and so that
means that there's all this traffic that's coming to their site or
getting on the sales calls with them but those those people have needs
too and it might not fit in your primary uh category this is especially
true if you sell a higher a higher level service or a more expensive
service um a lot of times you're still paying for this traffic right
this traffic these eyeballs are still yours and i like to think of

7 00:06:00.000 --\> 00:07:00.000 this as one person's trash is another
person's treasure there's always a business that can do something with
uh some of the kind of the sawdust the excess capacity that we have that
exists within our business right and so down cells you can either down
sell to someone else's product and get affiliate commissions get
referral partner commissions for for for sending business their way or
right and i like that a lot because you're you have a nice relationship
with another business you think they have a good product they specialize
in serving that type of customer um and you both benefit you make money
they get free customers everybody wins the customer gets solved right
and they're going to thank you for making the introduction as long as
you have good partners which you obviously should the other way to do
this is to have lesser you know lesser lesser cost of fulfillment but
it's solving the same need so um i'm trying to think an example of this
so yeah if you had like a done for you service of some type right and
the person couldn't afford your full suite of services you could down
sell a kind of a done with you or do it

8 00:07:00.000 --\> 00:08:00.000 yourself version of that right and so
making those products taking the one-time investment of making that
product or making that you know done with you version of your of your
primary done for you service or whatever it is a lot of times can serve
as a really good downsell right if someone walks into a facility for
personal training and they can't afford personal training obviously
there's groups and things like that they could do that would be a
natural downside but maybe they want to stay at home and you give them
an at-home version right so there's all these different ways you can you
can slice and dice this but fundamentally if we have people that were
normally not giving us money because they would say no but now we're
able to monetize them in some way we have now made more money per
customer all right and it's really per per person who walks into our
business all right so six ways to increase lifetime value of a customer
lifetime gross profit one is you can increase the price and
automatically you make more money number two is you're gonna decrease
how much it costs you to fulfill the thing that you're promising number
three is you can increase purchase frequency or getting the amount of
time someone buys from you get them to buy more right over time number
four is

9 00:08:00.000 --\> 00:09:00.000 upselling them that means having
structured upsells where they can get buy more of the same stuff or
better versions of the same stuff all right cross-sells is selling the
next adjacent needs you have to think yourself someone buys my service
what's the next thing they're normally going to need i'm going to sell
them that too right and it also makes their life easier because they can
get all their stuff from one place makes you more money everyone wins
and then finally what can i do with the sawdust what are all these
people who are coming into my business who can't necessarily afford my
main thing and how can i how can i create something that's still going
to solve their need but doesn't cost me that much so i can still make a
good a good margin on this stuff or how can i refer the business out to
someone else and still get a kickback from it and so those are the six
ways to increase lifetime gross profit now i told you the beginning i
was gonna tell you the thing that i think is the most powerful it's this
guy understanding price pricing is one of the most underutilized levers
in the entirety of business most people figure out their pricing by
looking at the marketplace taking average saying i guess i'll charge
that

10 00:09:00.000 --\> 00:10:00.000 the secret that they don't know is
that everyone else is broke think about it everyone else is broke and
especially if you're entering the small business ownership the reason
that small businesses are small is because they think like small
business owners not big business owners that's why they stay that's why
they stay small and so don't model small businesses look at the pricing
models of big businesses now strong word of caution here there are
market penetration strategies that businesses can do because they have
funding and things like that but if you look at mature businesses
businesses that have gone through the rapid growth phase and then have
sustained look at the pricing model they have because what the model
that they had they have already tested and obviously has produced
sufficient margins that they are able to continue to grow their company
all right and so don't look at the small guys don't look at the person
who's out of shape and try and model what they're doing right that's a
problem fitness is a horrible example because people have great genetics
or bad genetics in any ways but point is don't look for dentists who
have bad teeth right look for somebody who's got nice teeth

11 00:10:00.000 --\> 00:11:00.000 and i'm sure there's genetics there
too these are horrible examples but hopefully you get the point all
right is that pricing is the most important lever and i'll give you one
quick example on this if something cost me ten dollars to fulfill right
and i charge twenty dollars for it cool i'm making you know fifty
percent gross margin but if i say you know what i'm going to charge 50
for this thing or you know what we'll say 30. so i go from 20 to 30
right i just doubled the lifetime gross profit of my business doubled
right there are very few of these other mechanisms that can double or
triple or quadruple the lifetime gross profit of your business or per
client rather than price all right which is also why it's one of the
ones that people have the biggest limiting beliefs around and the ones
that most people struggle to increase and the good thing is if lots of
people struggle to do it it means there's plenty of opportunity for all
of us all right so six ways to increase lifetime gross profit there's
two ways to grow business one of them gets is getting more customers the
other one

12 00:11:00.000 --\> 00:12:00.000 is increasing how much those customers
are worth and here are six strategies that you can think about within
your business of how you can apply these things um to your client
journey so that you can make those clients worth more without doing any
extra work lots of love keep being awesome catch you guys soon bye
