The first step in all this stuff is like do epic stuff.
And then step two is talk about it.
And that is fundamentally how you provide value.
And so when you're providing value in any domain, like I want to build my personal brand, like your personal brand will be built on the amount of value you can provide other people.
You can get whatever you want in life as long as you help enough other people get what they want.
So now we shall begin the hottest of promosy hotlines.
All right, rock and roll.
Tell me about the business.
All right.
We are a $1.2 million pool service and repair company in Raleigh, North Carolina.
Rock and roll.
What's profit?
About 50K after 145 in that owner's salaries.
So 200 all in?
Yeah, yep, 195.
Yeah, right around there.
Cool, that's fine.
Okay, 200K, bottom line.
All right, what's the membership price?
What's churn?
We're about...
It depends, but average is about $4,500 a year per client, and we're only recurring.
What's churn?
Oh, churn.
We lost about 12 people this year, so 12 divided by 176, whatever that is, 12.
Yeah, okay.
So you have 93% retention annually.
Okay, great.
So it turns out an issue.
Fantastic.
All right.
So what do you want to have happen?
What's the problem?
Problem for us is we can't hire and retain and train really talented people.
We find that we can keep people for about a year and then they either want to go do something else or they want to go into a different trade that they view as like a higher, higher opportunity, like HVAC plumbing electrical, um stuff like that.
So we're trying to figure out a way to make it so that people want to stick around and see this as a career that it can be.
Yeah, I'm going to guess, what's your close rate right now when you meet with people?
Our close rate when we meet with clients or with leads?
Well, leads to sell them.
Yeah, selling, we're about 30%.
30%, interesting.
Okay, so...
This is me calling the shot.
This is my guess here, though, is that I'm going to bet we have to fix the sales motion, number one.
Once we fix the sales motion, we can increase prices, step two.
Once we can increase the prices, which will dramatically increase profit, we can then pay the guys more, so they stick.
Yeah, currently they're paid 25% of labor revenue.
So yeah, definitely increasing prices definitely is a way to do that.
And that's the thing.
We're just – our close ratio, I feel like, isn't high enough to warrant the price increase that I know we need.
So it's like I don't want it to go to –
5% close ratio in order to get that.
I mean, dude, for you to get to 5%, you would have to like 10 X the prices.
It would be, it wouldn't be.
Yeah.
Um, so we have to fix the sales motion.
So that's my, so like, this is where you like, you got to pull the thread, right?
So it's like it starts with like my guys aren't staying long enough, but the reality is that like we're not charging enough, but we can't charge more because their sales process is screwed.
So let's fix the sales process.
All right.
So walk me through the sales process.
The sales process we have currently, they basically call our office.
We do a lot of inbound.
We don't do as much advertising as we need to.
So we show up pretty well on Google.
But we're only spending like five, six hundred bucks a month on actual Google outbound.
Well, you do Google ads, right?
I mean, Google ads like Google local services.
Got it.
And so you're in five hundred bucks a month is what you're you're you're putting into PPC.
OK.
Yep.
All right.
How many leads are coming from that?
Leads a week are about two to three.
Okay.
From that, from that 500 that you spent, right?
Okay.
So I'm going to say you're getting 12, 12 a month.
Let's just say 10 for simple math.
So it costs you 50 bucks a lead right now.
Right now, roughly.
All right.
And you convert what percentage of leads?
Convert about 30%.
Okay.
Converting 30% of leads.
You can get that to 50 on inbound, just FYI, but you're at 30%.
That's fine for the purposes of our conversation.
Okay.
So it costs you $150, right?
Yes.
To get a customer who's going to pay you $4,500 a year.
Yep.
Not bad.
Not bad.
Not a bad gig.
So let me ask you this.
What percentage of your costs are variable versus fixed?
I don't have an exact figure.
Let me ask you this.
What are gross margins?
Gross margins are about 50%.
Okay.
So that includes labor.
That includes labor, right?
Correct.
Okay.
So you're going to make, so it costs you $150 one time to make $2,250 per year in gross profit.
Yep.
Banger.
Banger.
Amazing.
Okay.
I need to put more into advertising, yes.
Hell yeah.
Bro, I have got this amazing investment opportunity.
If you give me $150, I'll give you $2,250 back just at the end of the year.
All right, I'll give you $2,250 back.
How much money are you giving me?
I'll give you as many pennies as I can throw at you.
Okay.
Well, how much cash do you have on hand?
Not a lot.
Not a lot on hand.
That's the thing.
We have two owners in the business, so we're taking out.
Pause.
Pause.
Hurt.
Pause.
Hurt.
So what you need is a money model.
So how much money are you making the first 30 days on a $150 customer?
Generally, so we just transitioned to doing a different type of initial visit model.
Currently, we're getting about $1,500 per client in the first 30 days, but it really depends.
That's our average.
Bruh.
So you don't even need the money because you're getting 10 to 1 up front.
I know.
But then, so our, on that $1,500, there's a good amount of that, which is cost of goods sold.
Sure.
Let's say you make $500 on $1,500.
Let's say you run 30% on the first one, right?
Does that sound reasonable?
Dude, you're still making $500.
Mm-hmm.
On your 150?
Yep.
So why not spend more?
The, I don't know.
I'm just scared, I guess.
Don't be scared, dude.
Put my money where my mouth is.
That's it.
Yeah.
I mean, I'll say this.
I don't know if you were on for the beginning of this, but like this is a super classic issue.
This actually happened a ton in gyms.
So gyms have fixed costs like rent and equipment leases and things like that.
Right.
And so the guys would have a vehicle like this that they're getting 10 to 1 on something really strong.
But what they would do is they would only spend enough money to cover all their fixed costs, but never get into the black.
They literally would just like spend enough to like they play business on defense rather than offense.
Yes.
Yep.
Right?
Like you're playing right now to not be poor rather than to be rich.
Yep.
That sounds familiar.
Yeah.
Yeah.
And you're, and you're willing to make the money for your team.
You're willing to make the money for the landlord.
You're willing to make the money for the bank, but you're not willing to make the money for you.
Yeah.
Real, right?
Yep.
Okay.
So as much as I would like, I'd love to like, you know, dive into a hundred other things.
Like this is.
I'll bet you right now this is the core issue is like I want you to go from 500 a month to 5000 a month to spend.
Because if you went from two to three leads a week to two three leads a day, would that materially change the business?
Yeah, definitely.
But that's the thing.
It's our, We could do that, but then we run into fulfillment issues.
It takes us six weeks to train a guy.
So it's like chicken or the egg.
Six weeks is not that big picture, FYI.
And I'll bet you could do it in three if you really had to.
Right?
Okay.
Yeah, that's the thing when you're in equilibrium.
This is a rule of thumb for me and for everybody who's listening.
If you're in equilibrium, where you're like, I can maybe take a little bit more demand, but then I'm going to be supply constrained.
Get the demand, get the cash.
Then you'll get the resources to take the next move.
And if you have to pay some guys one and a half or one and a quarter or over time to fill the slot.
One, you're going to pay them more anyways, and that's good.
Fine.
And I'll bet you those guys would work more for more money.
Yeah.
So you have flex.
You have more capacity.
You have capacity that's not stretched.
So if you could stretch it, most people like you'd be amazed at what people can do if you're like incentivized.
Yeah.
Yes.
Yeah, definitely.
We could, I mean, our team, our team's pretty, pretty strapped right now.
Yeah.
And are you, are you closing?
So walk me through the sales process real quick.
Lead comes in, you immediately call them within 60 seconds or what?
No, it's basically we have online pricing.
All of our prices are online.
So they hit our website.
They basically sign up.
And then once they sign up on the website, we're contacting them automatically within five minutes.
And they're basically a text or call.
Uh, we basically email, um, from the signup.
Um, we don't do any, any calls right now.
Not, not nothing, nothing automated, nothing.
Did, you could probably double.
You could double your conversion if you just called the leads immediately.
Yeah.
Yeah.
So let's say, let me ask you a question.
If I paid you another 12 million to do one thing, which is to just call your leads in 60 seconds, I give you 100000 a month would you do it?
I suppose I would, yeah.
Well, that's what's sitting on the table right now, because you're not contacting your leads fast enough.
Yes.
You have a double.
You can get to 60%.
When it's PPC inbound, they already know the price.
You could close 60%.
And that's without changing anything about the pricing and the offer or anything.
Just from contacting them fast.
10-4.
Yep.
Okay.
So we have two changes that are going to be the biggest material changes.
Number one is you're going to spend way more on ads.
Number two is you're actually going to call your leads really fast.
When you do those two things you have enough gross profit in the first 30 days to cash flow this acquisition anyways.
You're then going to be willing to pay some of the guys you have time and change to do more jobs.
Some of those guys are hungry, want to make more money.
That's why they're leaving.
Give them the opportunity to make more money.
And then part of that is you can also pay them a little bit more money to train the guys faster.
Because they're working longer hours, they'll train them faster.
Yeah.
So incentivize the trainer to get them on the road faster.
Yeah.
So we can open up capacity.
I mean, I would say, hey, you can do it in six weeks.
If you can do it in two, I'll give you a $500 bonus.
Yeah.
That's a good idea.
Yep.
There we go.
Rock and roll.
Great.
Yeah.
Thank you so much.
And I put the incentive is that if you have to go back and fix one of the spots that the new trainee went to, that that guy's got to do it for free if he takes the commission.
Yeah.
Yep.
Yeah, we do.
We do callbacks on then they're on.
But I would do it on the trainee.
If you were to take it from six to two and you're going to sign off that this guy is good enough, I'll give you the bonus.
But you've got to basically certify that guy's work for the next month.
Right.
Okay, so the trainee makes a mistake if they're rushing through it.
The trainer goes and fixes.
Yeah, Big Papa's got to come in.
I see what you're saying.
Yeah, yeah.
Yeah, great idea.
Rock and roll?
Rock and roll, man.
Thank you so much.
Phil, I really appreciate you, dude.
Yeah, you bet.
Yeah.
What is your advice on dental clinic marketing since you had an agency?
We're working for abroad patients using prices lower than their country.
Okay.
What's your advice for dental clinic marketing, since I had an agency and we're working abroad for patients using lower prices in their country?
Okay, so I'll say right now I mean, I've seen this all over the place, but you can advertise in any way, right?
You could do outbound, you could do content, you could do ads.
My bet, given what you're talking about, is I would probably do this as a content strategy.
Like, I don't know if you guys have seen this, like the Turkish hair.
Like they've got, like there's like a whole industry in Turkey around, like guys who are bald getting like their hair back.
And the doctors who are over there just post before and afters, left and right all day long on Instagram, on TikTok.
And that's how they're generating inbound demand.
So I would say that's like number one.
But the way to operationalize that is you have to build it into the customer journey.
So like when they come in immediate picture.
You know, day 30, day 60, it's like we have to go collect these pictures.
And if you want, you can give rebates for it.
Most of the time, you don't have to.
And then by doing that, it's like every single person who comes in the door is a potential before and after.
So it's like you can get 20 figuratively 20 posts a day, or I don't know how many teeth you're doing, right.
But maybe it's two posts a day, right?
That you can source directly from your existing customers and you don't have to do anything else.
And then you can explain just like do the before and after, and then do like a quick 30 second like hey, this is.
You don't have to say their name.
You can cover the eyes if you have to be like, this is a unique case.
And if you're struggling with XYZ pain-based hook, you know this is something we do all the time at our you know, at our clinic, right.
That's thing one.
Um thing.
Two is I don't love winning on price, but it is sometimes just like some of the strategy and that's okay.
You could just experiment with running ads.
My bet, though I'm just saying because anything that's like.
I mean they are.
I guess they are bargain hunting, but people kind of want the best of both.
It's like, they want it to be good and they want it to be cheap.
And so like I would lead with content first.
I would take the best performing content.
And then I would run that as ads with the offer.
So content first, find winner, put a CTA on the end of the winner and then drive paid to that.
That's what I would do.
Hey Alex, a lot of your videos have helped understand a lot of business points that I didn't understand before.
Okay.
I have a full service LinkedIn agency doing content and DMs.
I think that founders, after a certain AR, don't want DMs sent from their account.
Brand risk.
Yeah, that's possible.
So you got two options.
Option one is you just only pick the founders that are below a certain size.
That is an option.
The alternative is that you make it work from their brand.
Just figure like, what stops me from doing more?
I have to figure out how to get this to be openable from a brand.
Okay, that's another way.
Maybe it just takes twice the volume and then they're willing to do it.
The next kind of thinking process there is.
You can frame it out to like.
You can either sell them heavy on why it doesn't matter.
Option one.
Option two is you can figure it out from the brand perspective.
Option three is that you only take on smaller guys.
But I think these are features, not bugs, unless you just figure out another way to get customers.
Because I understand why somebody would not want that.
But I would say like, what is your objective as a CEO?
Is it to grow the business?
Okay.
Do you think that you're your brand as a CEO would be better if your business were bigger.
I think you should just sell them on it.
And not everyone's going to say yes.
But if half the people say yes, because you sell them on it, then you can keep growing the business.
Then that sounds good enough for me.
All right, Google ranks, and then I'm going to Mr. Drew next.
All right, I'm a 17-year-old kid looking to start my own pool construction.
Dude, I just did one. pool company, did digital marketing for a year.
My dad has a little construction license in Florida.
Yeah, dude, I would run $5,000 a month of PPC and I would call the leads within 60 seconds.
I would sell a 1500 package up front and I would roll them straight in continuity right after that.
That's what I would do.
Senor Drew, or I think the Germans say Er Drew, like E-R-R, or I don't know if that's how they say Er.
All right, Drew, what's up?
We're cooking.
Alex, nice to meet you, man.
Nice to meet you, too.
Talk to me.
We made this app for defense contractors.
You made an app for defense contractors?
That's right.
So it allows them to show their client a fence right in their yard.
Oh, fence contractors, not defense contractors.
Those are wildly different things.
One people are blowing up fences.
The other person are building them.
Good to know.
That's right.
That's right.
Yeah, we're trying to cross country lines.
All right.
So we got fence contractors.
All right.
You built an app for them.
All right.
There's an app for that.
What's revenue?
About half a million a year.
All right, 500K per year.
What's revenue retention?
Our churn's about like 8% monthly.
Ooh, that's high.
That's high.
Okay, 8% a month.
All right, that's pretty high.
All right, what's price?
It's $1.99 a month, cancel anytime.
And we also, that's for two users, like five users, it's $2.99 a month.
Okay, got it.
And so what does this app do?
So it actually allows them to show their client a fence, like right in their yard.
It's like the dream outcome on the value equation.
Let's put it right into their yard.
Yeah.
It's a sales tool.
Yeah, exactly.
Okay.
So why are they turning?
So really like our biggest thing is, if they don't use it and like sell a fence within the first 10 days, They churn.
If they actually go out and we hear them sell a fence.
They literally love the product and it's very rare that they cancel.
Okay.
How do you get leads right now?
We'll cover that in a second.
How do you get leads?
So we run Facebook ads just for an instant form.
We have a couple of questions up front.
And then our automation puts them right into our CRM and we reach out right away.
Yeah.
What's CAC?
About $130.
Yeah.
CAC, not lead, not CPL.
A CAC cost to our customers 130 bucks.
When we hit like a really good ad, our cost per lead is like a dollar 50.
Like this past week we hit one that was crazy.
And, um, that's insane.
I would not get used to that cause it will not stay there.
That is insane.
Also, I personally, like I do a lot of the sales personally.
So like right now I'm not paying like a commission, which really helps.
Yeah, well, yeah, that's nice, right?
When you do things yourself.
Okay, so, I mean, LTV to CAC is still fine, but this is what I want to encourage you to do.
Do not scale your ads at all until you fix this churn issue.
There's no point.
You're just going to pour it out the back.
There's no point.
Zero point whatsoever.
Like, you want to be able to figure out What activation is.
Now, if you know that they sell a fence, right, with the thing, they stick, right?
We know this.
Yeah.
Okay.
So then the question is, how can we incentivize them or how can we make it easier for them to have that happen faster?
So what do you, do you charge $199 up front for this?
So we do like a 10-day trial with like the credit card attached.
Like we say like, you know, it's how we've always done it.
If you don't like it in the first 10 days, you can cancel.
Yeah.
Dude, I think it's a trial issue, dude.
Yeah.
That also includes like during the trial, the 8%.
So it might be like lower when someone actually converts to a client.
Yeah, I see what you're saying, like the pie equation, like we're not going to our hypothetical max might be too low.
Yeah, well, you do need to figure out what the post-conversion churn is, not total churn.
Cause, especially if you're smaller, like you, factoring in your trials and churn, it's going to mess all your numbers up.
A hundred percent.
Yeah.
Okay.
So I'll say this.
So you, you, you go through the money models book already.
Yep.
So the free trial with penalty would be the first improvement that you could make to this.
That's like the smallest operational change that you could do.
The second level of it.
Yeah, that's free trial with penalty.
You could use that as a front end offer instead of a downsell offer.
And just say like, we will give it to you for free as long as you X, Y, Z. Right.
So you have to use it.
Right.
Like if you go out and sell someone a fence right in their yard.
It's free for the first 10 days.
Well, you're already doing that, so there's no reason for them to do it.
You know what I'm saying here?
Okay.
Yeah, I see what you're saying.
You have to have a penalty associated with it.
That's option one.
Option two is that you charge them up front and then say, I will rebate you the $199,000.
If you use the app to put it in at least two people's yards or three people's yards, whatever the average, let's say they close 30.
Say, like you do, three yards in the first 10 days where you put the fence in, I'll rebate you back the 199.
And I'll tell you why I'm doing it.
Because I know that if you do it, you'll stick.
Let me just show you my cards.
Because as soon as you use the tool, you'll make more and you'll never leave.
So I'm going to incentivize you to use it.
I do what you're saying.
Totally.
Okay.
Cool?
So just make the second month free.
Okay.
So we literally just charge $199 up front.
If they use it two or three times, we can give them their money back right there.
Right.
Well, you don't need to give them their money back.
Just don't build the second month.
Build the third.
Okay.
Yeah, that makes sense.
Okay.
Yeah.
That would be it.
100%.
Yeah, 100%.
That's all you have to do.
Just get it to 80% a year.
So you want to be at like, Less than 2% a month.
I know it's got to be, yeah, it's got to be like closer to 1% a month.
All right.
I'm a man on a mission.
I'll make it happen.
Okay.
And I want you to do this though.
Measure the churn from, basically don't even look at churn on the front end.
Look at conversion rate and then post conversion rate measure churn.
That's what you should be looking for.
Okay, so only measure the churn once they've actually converted into a subscriber.
Right.
Yeah, and your true CAC, I'm guessing now, because it's costing you $130 to sign up a trial, right?
I got to look at it closely, but I'm pretty sure it's something like that, yeah.
Yeah, and then let's say it's one out of three trials convert?
I don't know.
It's something like that, yeah.
Yeah.
So your actual CAC is closer to 500, not 130.
Okay.
Cost to acquire a customer, not a trial.
I think it actually is 130.
It is around 130.
Okay.
Because, like right now say, we get 100 leads, I'll sign up about, you know, eight of them on a trial and we'll get like three or four or something like that.
Okay.
Okay.
But yeah, I would go rebate second month free.
They bill, you know, you bill them up front.
It'll also get them way more likely to commit to it.
Also at $200, you can like be on call if they have any issues tech wise.
A hundred percent.
Yeah.
As soon as we sign someone up, We like bam bam, like right to an onboarding, like as soon as we can.
Like, it pays that.
So...
Um, we do that.
We go right into an onboarding, teach them how to use it.
And then honestly, once we get them, like they place the fence, like right in front of them.
So all your effort is activation, dude.
That's it.
All the, all the effort, all the incentive goes there.
Once you have that, the rest of the machine works.
A hundred percent.
Absolutely.
All right.
That's it.
That's what we do.
It was great to meet you, man.
Thank you so much.
Pleasure, Drew.
Appreciate you.
Bye-bye.
Toodles.
All right.
Atman Deshmane.
Hi, Alex.
I'm a 27-year-old physics coach for high school students based in India for Olympiads.
Okay.
Medical and engineering entrance tests.
Interesting.
How do I enter and serve customers in the United States and EU?
I don't know how you're going to enter the US and EU, because that we've got the fence guy who was just on here.
He's big on that stuff like, you know, border.
I'm kidding.
So how do you enter?
Well, I mean, fundamentally.
I'm going to give you the obvious thing.
I don't know how good you are.
If you're out of India, I don't know how good your English is.
So I'll be real like this is me.
I'm just trying to help.
All right.
So if you want to enter those markets, there's no way anyone actually knows where you live online unless you say so.
And so you would just make content. in English and you would attract those customers.
That's it.
The reason many of the people may not be doing that with you is that they think that you're in India.
And so I would strongly encourage you to do whatever it takes to remove your accent so that you can have better access to those markets.
This is non-politically correct advice.
This is me trying to actually help you make money.
All right.
That's what I would do.
There's a whole series of YouTube videos actually about how to like remove an Indian accent when speaking English.
I know this because Sharon talked about this to me.
So when Sharon came here to the US, he had a really thick Indian accent and he actually got the same feedback which is why I feel fine sharing it which is that you, like you, will be limited by that accent, especially if you're trying to enter these markets.
In terms of EU, I would say like, honestly, like why bother?
Like, just start with the US.
It's the biggest, richest market and you probably already speak English decently.
So I would just focus on that rather than try to like piecemeal the European markets, unless you're just saying UK rather than Europe, in which case you just speaking clearer, better English and making content in those well, not in those markets, but online to those avatars will attract those customers.
All right, Caleb Stewart.
Started my roofing company in January.
Been doing Law of 100.
Great.
Love that.
And went full-time.
Congratulations.
How do I bring someone else on and get them to do this versus just doing it for themselves?
You mean like go recruit a sales guy?
I'm guessing you're not saying like, why don't people go do roofing?
I mean, because it's work.
But the way to... So the progression is you need to...
Sell people, stage one.
Stage two is you need to recruit somebody else that sells.
Stage three is that you recruit a team of people that can sell.
Those are the three levels of salesmanship, which, by the way, for all the entrepreneurs here who love to say that they're really good at selling, you are level one salesman.
You need to transition your identity from sales god to sales training god and sales leader.
And so it's no longer about how well you can close.
It's about how well you can get people to learn how to close on your behalf.
So, uh, how do I get people to not do this on their own?
Well, they can do it for you and get paid for it.
So I'm not really, I'm not actually really sure.
I feel like it's like a mental thing, cause you're like new to this, but I Like this is to me.
This is not a thing.
Like just go recruit other salespeople say hey, this is what I'm willing to pay you as a commission.
Let me show you how to door knock.
Okay, demands.
All right.
Is there a way to become like you or what you suggest for providing value in any business field?
So number one, definitely don't want to become like me.
You want to become more like you, the ultimate unlocked version of yourself, not me.
That's thing one.
Because I will not beat you at being you.
And you will not beat me at being me, right?
So there's no point in trying to copy or clone me.
Just be the most of you.
Now, within that context, if you're being the most of you, the question is then who and who do you provide the most value to and around what context or topic?
Do you have unique insights that you've gained either that you've gained right?
And so when you're starting out, you have to do it in one of two ways.
You either have to have achieved something already which is notable, that gives you proof, or you have to let your effort be the proof.
And so if you say hey, I made 2000 videos on TikTok and here's what I learned, then you will.
You will have something valuable that you have learned.
The first step in all this stuff is like do epic stuff.
And then step two is talk about it.
And that is fundamentally how you provide value.
And so when you're providing value in any domain, you're like, I want to build my personal brand.
Like, your personal brand will be built on the amount of value you can provide other people.
Like just help other people, like Zig Ziglar said, this old school personal development guy.
He said you can get whatever you want in life, as long as you help enough other people get what they want.
And I think it's so true.
So I would just think how can I help other people get what they want?
And if you don't have enough proof and everyone misses this, start for free.
Work for free.
Get experience.
Go get 10 free clients.
Go do the work for them.
Make it a free trial plus penalty, right?
It's a great way to get started.
I talk about this in the first chapter, or one of the first chapters in the leads book, your first five clients.
It literally outlines the entire offer structure, when to start charging.
All of this is inside of the leads book.
I think I have it.
It's page 51.
So I explain my first business and how I did it, how the outreach worked, how I started for free, and then when, how to do the like, literally like what messages to send, how to send them, and then the actual process of doing this.
And I give you 11 ways of showing proof.
It's on page 61.
It's 11 ways to show proof so that you don't look like a newbie.
Okay?
Rock and roll.
