Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth.Wanna scale your business? Click here.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition Mentioned in this episode:Get access to the free $100M Scaling Roadmap at www.acquisition.com/roadmap
Chapter 1: How can I improve my CAC to LTV ratio?
Okay. So free webinar on the front end, you have a $2,000 offer. Okay.
Then what? $2,000 or 12 month payment plan for $200 a month, which is why our AOV is like $900.
Got it.
Um, and then acquisition costs like 1500 on the client. And then we have a backend that's 10 K has a 7%, um,
That's your problem, right?
Yeah, it's low outsourced sales team right now. And so LTV is like 2400. Yeah, that's a problem. Yes.
That's why I'm here. Yeah, no, your ascension rate is too low. You will probably have to bring the sales team in-house if you want to really fix it. It's very hard to influence the team. You'll want the ascension to be integrated into the onboarding. And so you sell the $2,000 thing. You have your onboarding call.
The onboarding call, the finish of the onboarding call is they set their goal-setting call, with what would become a setter, and then that setter sets for a closer. So they actually get three calls. So they have webinar, buy, they have an actual onboarding call, because you want to make sure you deliver.
One-on-one, or that's a group call?
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Chapter 2: What strategies can help increase customer acquisition?
And my social security number is... Yeah.
Just kidding. I can pull it up.
So I know we talked, yes, last night, which you obviously remember, and a couple other people from your team, we talked about this issue, that my number one constraint probably isn't our cancellation rate, but it is something that I'm really perplexed about and want to at least go back with a little bit of something to share with my team about. So our cancellation rate is a little over 30%,
and this past year we've lost like a million dollars because people made appointments confirmed them and they didn't show up so if you have any insight on what we could do to start improving that i would be really help grateful
Yes, I don't think it's the constraint of your business. So number one is you're going to want to make sure that that time is the right time for them. And we ask questions like, is there anything that will possibly get in the way of you showing up for your meeting? And so we call this an integrity tie down.
And so after you get a time slot, you want to ask that right afterwards because it shakes them out of their mind. For whatever reason, it works. Number two is, I think I mentioned this yesterday, but I think it might be worth considering pulling up appointments. Like to basically, can we bring them up sooner so that we have increased shop rates? The next one is, let's see here.
You want to make sure that you have automated reminders, which you probably do, but then you want to have manual reminders on top of that. So if you have, I would have an office iPhone, and you want to send manual texts at three times. So you want to send the manual text at 24 hours. So basically think night before. Second text is going to be morning of.
And then the third text is going to be 60 to 90 minutes prior. Basically when they have to like get your shit together, get in the car. Now, ideally, we like to have some sort of selection that they pick that we've like some cost we have incurred. So this works exceptionally well for brick and mortar, which is why I'm sharing it with you.
In the gym space, obviously, like we would say, hey, Sharon, I've got... this shirt, tell me what size you're at and I'll pull it aside for you. And so when you come here, I'll give it to you. Or it's like, do you want red or do you want blue? Like just do some sort of AB ask for them. And so it could be as simple as like, you're going to pull, I mean, because it's a dentist office, right?
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Chapter 3: What are effective sales team structures?
So just raise the prices, make more money, that's solution number one. The second solution is change client delivery ratio, which we just covered. So instead of going one to one, you go one to four. So you get more out of what you already have. This gives you leverage and it gives you cash flow. improves your gross margins.
The third way is to bring other people in who can do what you do, which is then delegating the responsibility to somebody else. So that's the ultimate leverage, so you don't have to do any of it. Does that make sense? So those are kind of like the three steps that I think about when I have somebody who's supply constrained and they don't have any time.
They can't grow the business and they can't sell more customers, but they need to sell more customers to grow the business and it's the rock and hard place. And the nice thing is we start with price because it's the fastest and easiest one to do. You have to do anything. You have to change anything. You just say a different word and then you'd make more money.
So our primary thing when we opened was it was 100% private lessons. Yeah. And so that's basically the only difference in the hypothetical gym and gym launch, which I'd... read the whole thing on the plane over here. How I didn't know that book didn't exist until... It's a good book. It's awesome. Yeah.
So what would the... You can still have one-on-one. You can still have one-on-one. I would predominantly sell semi-private. And if someone's like, well, I want the special snowflake treatment, then you're like, awesome, I'll give you the special snowflake price. Right.
How would you design the initial offer for that type of model? the six week beginner challenge.
But it would be something, whatever the fast outcome that you can deliver to a kid who's neurodivergent, who picks up a violin, or whatever the instruments that you teach are. It's like, they'll be able to play a song in this period of time. Now, it might not be good, but you'll recognize it, kind of. But I would want some sort of discrete outcome, and that would be an outcome.
You could also do some sort of subjective thing, which is that they rate X, or you could have a survey at the beginning, a survey at the end. That would be kind of more of an internal thing. But yeah, typically you'll sell some sort of package upfront. I'm gonna guess that the price point for what you're looking at is between 600 and 2,000 is what the upfront package would be.
And then you'd upsell or at least let people go into continuity on the backend. And it'd probably be somewhere in the neighborhood of like six weeks to six months. You would know that range better in terms of how long to sell for. Okay.
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Chapter 4: How can I optimize customer onboarding to boost LTV?
For women.
For women.
Ah.
With a plus sign.
You're like, screw the guys. They don't need to save money.
You know, they can learn from someone else.
I'm messing with you.
So we do 30 million in revenue. Badass. Thank you. I would like to be at I don't know revenue, which comes to my question. Okay.
um and what is stopping me is our cact ltd ratio okay so both cac is too high got the team working on volume right now um ltd is too low okay and aov is too low on our front end okay i think it's actually a cash flow maybe straight potentially but i'm a little i'm a little confused on where like exactly to go to work okay how do you acquire customers right now
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