0:01

Today, I've got a special episode for you guys

0:03

on our $100 million leads podcast collab

0:05

between myself and myself. This

0:07

is the high leverage portion of the book. The first

0:10

four of the core four of the book are

0:12

about how one person can advertise to let other people know about

0:14

their stuff. Today is how we get other people to advertise

0:16

on our behalf. Many of you heard about the

0:18

book from someone else. And this is going to be key

0:20

because today we're talking about referrals. And

0:23

so the only way that other people find out about

0:25

stuff in a way that is viral is other people

0:28

letting them know about it for you. And so if this stuff

0:31

has proven valuable for you and you've already gone through

0:33

two, three, four, five episodes of this and you've not

0:35

chosen to share it, shame on you. All right, because

0:38

if you've gotten this far, it means you've gotten some value from this,

0:40

which means that someone else would get value too. All

0:42

right, so the very least, if you can leave a review so that someone

0:44

else can see it, because if you have no friends who are entrepreneurs, then

0:47

leave a review for someone you don't know. And

0:49

if you do know someone, send it to them. And if you're awesome, do

0:51

both. Enjoy the rest of the content.

0:57

Question four, get lead getters.

1:00

Get people who get you more leads. Give

1:02

me a lever long enough and a fulcrum on which to place

1:05

it and I shall move the world. Archimedes.

1:08

Building a $100 million lead machine is

1:10

all about leverage. An old

1:13

lady can lift a semi truck with a long enough lever. The

1:15

strongest man in the world without one can't. The

1:18

length of the lever determines how much someone

1:20

can lift. This is leverage. We

1:22

can use the principle of leverage in advertising. Let

1:25

me explain. Someone

1:27

with internet can send a message to millions of people at once.

1:30

Someone writing postcards by hand can't. The

1:32

internet allows us to reach more people for

1:34

the same time spent. So it's higher leverage.

1:38

That means leverage boils down to how much we get for the

1:40

time we spend getting it. So we want to use

1:42

higher leverage activities to get what we want. More

1:44

stuff we want, less time getting it. Good.

1:47

And we want leads. Lots of leads. Pro

1:49

tip, don't mistake leverage for speed.

1:52

One person can only move so fast. A

1:54

person a thousand times ahead of you isn't moving

1:56

a thousand times faster. They can't. They're

1:59

doing different stuff. So the future that feels so

2:01

far away with leverage is closer than you think.

2:04

Lead getters give you leverage.

2:06

Only two people can let strangers know about the stuff you

2:08

sell. You and other people. And

2:10

there are more of them than you. People

2:13

can find out about the stuff we sell from two sources. We

2:15

can let them know using the Core 4 or other

2:17

people can let them know using the Core 4. I

2:20

call these other people lead getters. When other

2:22

people do it for us, we save time. That means

2:24

we get more engaged leads for less work. Leverage,

2:26

baby.

2:27

Imagine four scenarios. Scenario 1.

2:30

You are the lead getter.

2:31

You do the Core 4 all day, every day by yourself. You

2:34

get enough leads to pay bills. Work, high,

2:37

leads, low, leverage, low.

2:40

Scenario 2. You get a lead getter.

2:43

You get a lead getter to do the Core 4 on your behalf.

2:46

Now the lead getter brings enough leads to pay the bills without

2:48

you advertising. You work less than scenario 1

2:50

and get the same number of leads. Work, low,

2:53

leads, low, leverage, high. Scenario 3.

2:57

You get lots of lead getters. You

3:00

spend all your time getting other lead getters. Your

3:02

leads go up every time you get another one. You work

3:04

all day every day, but you get way more leads than you did

3:07

when it was just you. You work more than scenario 2,

3:09

but get way more leads.

3:11

Work, high, leads, high, leverage,

3:13

higher. Scenario 4.

3:16

You get a lead getter who gets lead getters.

3:18

You recruit somebody who recruits other people to

3:20

advertise on your behalf. They get more lead

3:22

getters every month.

3:24

You only had to work to get the first lead getter once,

3:26

but his leads continue climbing without you working.

3:29

You work less than scenario 3 and get more

3:31

leads each and every month.

3:33

Work, low, leads, high, leverage,

3:35

highest. Now you've got the makings

3:38

of a $100 million leads machine.

3:40

Outline of the lead getter section.

3:42

The lead getters aren't part of the Core 4

3:44

because they're not things you do. You don't do affiliates

3:46

or do customer referrals or do agencies or

3:49

do employees, but you have to do the Core 4

3:51

to get them.

3:52

They come from warm reach outs,

3:54

cold reach outs, posting content, and

3:56

running paid ads. And once you get them, they

3:58

do it for you.

3:59

four stacks. One time to get them, and

4:02

a second time for when lead getters get engaged leads on

4:04

your behalf.

4:05

But it doesn't have to end there. In fact, it shouldn't.

4:07

The process repeats. Lead getters can go get

4:09

lead getters.

4:10

So we do something once, then lead getters can do it forever.

4:13

But wait, I thought this book was about getting leads. So

4:15

am I trying to get leads, or do I want lead getters? Answer?

4:18

Yes. Lead getters start out as leads,

4:20

then get interested in the stuff you sell and become engaged

4:23

leads like anyone else.

4:24

The difference is they get other people interested in the stuff you sell,

4:26

too. And ideally, every lead becomes

4:28

a lead getter.

4:29

The following chapters explain in detail how

4:31

to get other people to advertise for you. And if

4:33

you want to scale to 100 million plus, you have to understand

4:36

them.

4:36

Number one, customers. They buy

4:38

your stuff, then tell other people about it to get you

4:40

leads.

4:41

Number two, employees, people in your business

4:44

that get you leads.

4:45

Three, agencies, businesses

4:47

with services that get you leads. Four, affiliates,

4:50

businesses who tell their audiences about your stuff to get you

4:52

leads. All four lead getters let other

4:54

people know about your stuff. In other words, all

4:56

four are higher leverage than doing

4:58

it on your own.

5:00

Once you understand the four lead getters, you can build

5:02

a lead getting machine for every company you start for the rest of

5:04

your life. I'll break down how I use all

5:06

four lead getters, how each is different, how to

5:08

work with them, when to use them, best practices

5:11

and how to measure your progress along the way. At the end

5:13

of this section, you'll understand how to get other people to

5:15

bring you more leads than you can possibly imagine.

5:17

And since we already use the core four to get customers, let's

5:19

start with something we can do right now. Get those customers

5:22

to refer more customers. Free

5:24

gift, advanced bonus. Get people to do

5:26

it for you.

5:27

That may have been one of my favorite chapters in the book. It

5:29

took me so long to figure out how to recombine everything

5:31

into a simple model. If you want even

5:33

more training on getting other people to get you leads and

5:35

how it applies to scaling, go to acquisition.com

5:37

forward slash training forward slash leads. As always, you can scan

5:40

the QR code below if you hate typing.

5:45

Customer referrals, word of mouth.

5:47

Best source of new work is the work on your desk.

5:49

Charlie Munger.

5:51

October 2019.

5:53

Layla and I sat together on her parents' living room couch,

5:55

the one she watched movies on as a kid. The

5:57

faded edges of the coffee table begged us

5:59

to

5:59

kick our feet up.

6:01

We bounced laptops on our thighs. Extension

6:03

cords snaked around the couch to the outlets down the hall.

6:05

Her stepmother clanged in the kitchen. This

6:08

was not a work environment, but we made do.

6:11

Two years earlier, I lost everything and met her parents on

6:13

the same weekend.

6:14

Hey dad, I met this guy on the internet. He lost everything

6:16

and has no money. But don't worry, I quit my job and

6:18

moved in with him to help him on his next big business

6:20

idea. By the way, can we crash here for a while?

6:23

Great first impression, Alex. But

6:25

a lot of change since then. We were multimillionaires

6:27

now. We made enough to buy her childhood home in cash

6:30

every week.

6:31

Layla reviewed reports from our department heads. Oh yeah,

6:33

we had executives now too.

6:35

Hey, sales numbers looked a little soft this week, she

6:37

said.

6:38

Really? How many did we close?

6:40

And sales started dipping last week too. Is

6:42

there anything different on your end? I don't know.

6:44

Let me check. I'll log into Facebook's advertising portal.

6:47

Red rejection notifications filled the screen. Well,

6:49

that'll do it, I said. What? What

6:51

happened?

6:52

All the ads got shut off.

6:53

Well, that's a problem. When do

6:55

you think you can get them back up? It'll take

6:57

a day or two

6:58

to get a new campaign started.

7:01

I squinted the screen.

7:02

Something even more alarming jumped at me.

7:05

Facebook rejected the ads two weeks ago.

7:07

I acted like nothing was wrong.

7:09

So we closed 15 this week. And how many

7:11

the week before, I asked?

7:14

Well, I've got good news and I've got bad news. OK,

7:17

she said. The bad news is the

7:20

ads got shut off two weeks ago. So that explains the

7:22

dip. The good news is our product is so good, we're

7:24

still doing $500,000 a week from word of mouth alone.

7:26

You ignored the ads for two weeks? She had, oh,

7:28

no, you didn't, written all over her face. I

7:31

shrugged with a sheepish grin. Still love me, right?

7:33

We busted out laughing at the absurdity of it all. Those

7:37

two years were insane. The amount of money we were

7:39

making didn't make sense. We didn't comprehend

7:41

how much it was until years later. We

7:43

were just grateful to be doing it together, flaws

7:45

and all. And this accidental stretch without

7:48

running paid ads made something very clear.

7:50

Our customers were telling their friends.

7:53

A few months later, I

7:55

stood on stage and looked over the 700 plus

7:57

gym owner audience. Everyone paid $42,000 to be paid.

7:59

be there. I'll wear black gym-lord

8:02

t-shirts and stick-on mustaches. It

8:04

was nuts.

8:05

I was mid-presentation explaining how excellent service generates

8:07

leads through roto mouth.

8:09

All the while I obsessed over whether the money

8:11

we made during the two weeks without running paid ads

8:13

was a fluke.

8:14

Feeling confident, I paused the presentation. Time

8:16

to find out. All right,

8:18

just to show you how I'm bored in this is, who here

8:20

learned about gym launch from another gym owner?

8:23

Raise your hand.

8:24

As soon as the words left my lips, I felt instant regret.

8:27

What if no one raised their hand? What if our growth

8:29

was all forced? I'm such an idiot.

8:30

I looked around the room with my arm raised like a monkey.

8:33

The room stood still. Oh no.

8:35

Then a few gym owners raised their hands. That

8:37

doesn't look great, but it could be worse. Then

8:39

more, thank God. Then more. Then

8:42

a wave of hands. Holy cow. People

8:44

looked at their sides and behind them. It was almost the

8:46

entire room. I let the moment sink in

8:48

for all of us. I'll never forget it.

8:50

I knew we had good word of mouth, but not this

8:52

good.

8:53

That, I said, is the power of word of mouth.

8:56

I know you weren't there when Layla and I realized we're making 500,000 plus

8:58

per week from word of mouth.

9:01

I know you weren't there to see $30 million in customers

9:04

say someone referred them. The first time I

9:06

realized the power of referrals, it was by accident. Seeing

9:08

how much it made me, I studied what had gone right. I

9:10

wanted to make sure I could recreate it on purpose. For

9:13

me to transfer that ability to you, I have to transfer the beliefs

9:15

that created it and these experiences form those beliefs.

9:18

This is why I share them.

9:20

People copied our offers, ads, and lead magnets.

9:22

They copied our landing pages, emails, and sales scripts.

9:24

They copied everything they could, but they did it

9:27

with little success.

9:28

They think it's about advertising, and it is.

9:30

But the best advertising is a happy customer.

9:33

An amazing product turns every customer into

9:35

a lead-getter.

9:36

The world loses trust by the second.

9:38

Every day more customers do their research. They

9:41

arm themselves with information to make purchasing decisions,

9:43

as well they should. So to play at higher levels, we

9:45

need our product to not only deliver, but delight.

9:48

Customers must get so much value, it compels them

9:50

to tell other people about us. The good news

9:52

is, once you know how, it's easier than you think.

9:55

In this chapter, I explain how to get the lowest cost, highest

9:57

profit, and best quality leads out there, referrals.

10:01

How referrals work. A referral happens

10:03

when somebody, a referrer, sends an engaged lead to your business.

10:06

Anyone can refer, but the best referrals come from your customers.

10:08

So this chapter focuses on getting more referrals

10:10

from your customers.

10:11

How referrals grow your business. Referrals are

10:13

important because they grow your business in two ways. Number

10:16

one, they're worth more, higher LTGP.

10:18

Referrals buy more expensive stuff and buy it

10:20

more times. They also tend to pay more

10:22

in cash upfront. Lovely.

10:25

Two,

10:25

they cost less, aka lower-cac.

10:28

If one customer sends you another customer because they

10:30

like your stuff, that new customer costs you nothing, and free

10:32

customers are cheaper than customers that cost money. So free

10:35

customers equals good.

10:36

But what does this stuff really mean?

10:38

Check this out.

10:39

Imagine you had an LTGP to CAC ratio

10:41

of 4 to 1. That means it cost you 25% of

10:44

your lifetime gross profit of one customer to get another. Not bad.

10:46

But

10:48

now imagine if every customer brought you two more customers. You

10:50

now have an LTGP to CAC ratio of 12 to 1.

10:54

You'd use just over 8.3% of your lifetime gross profit to get a new

10:56

customer. So

10:58

you'd get three customers for the price of one. Now

11:01

we're talking. Hooray. What a

11:03

deal. On top of that, referrals are

11:05

exponential.

11:06

Let me explain.

11:08

The number of engaged leads you get from the core four depends

11:10

on how much you do them. The inputs

11:11

to outputs have pretty linear relationships. If you do 100 reach outs,

11:14

you get engaged leads. If you double it, your leads roughly

11:16

double. If you spend $100

11:18

in ads, you get engaged leads. If you double it, your leads roughly double.

11:21

So no matter how well you advertise, how much

11:23

you get depends on how much you do. And that's great. But

11:25

with word of mouth, we can do even better. With word of

11:27

mouth, one customer brings two. Two brings

11:29

four, four brings eight, and so forth. It's not linear.

11:32

It's exponential. Nothing scales

11:34

like word of mouth. Want to know why so few

11:36

people scale by word of mouth? They lose customers

11:38

faster than they get them. Look at the referral

11:40

growth equation to see it in action. Referrals

11:43

in minus churn customers out.

11:45

So the visual is percentage of clients referred monthly

11:48

minus percentage of clients churned monthly

11:51

equals percentage monthly

11:53

compounding growth.

11:55

If referrals are greater than churn, you

11:57

grow without any other advertising. Yay.

12:00

If referrals are equal to churn, you need

12:02

other advertising to grow your business. Meh.

12:05

If referrals are less than churn, you've got

12:07

to advertise to break even. Boo. That's

12:10

most folks.

12:11

This gets nutty when you look at percentages. If

12:13

the percentage of referrals every month is bigger than the percentage

12:15

of customers who leave, your business compounds every

12:17

month. You'd have to spend that much more

12:19

money on ads, do that many more reach outs,

12:22

or post that much more content just to maintain that growth.

12:25

You eventually hit a wall. But with referrals, you

12:27

can maintain growth no matter how big you get. This

12:29

is how companies like PayPal and Dropbox exploded

12:32

into multi-billion dollar businesses. I'll

12:34

break down their exact strategies later in the chapter. On

12:37

the other hand, small businesses barely scrape by

12:39

because they have about the same customers exiting as they

12:41

do entering. A hamster wheel of death. Here's why.

12:44

Two reasons most

12:45

businesses don't get referrals.

12:48

Most businesses don't get referrals for two reasons. First,

12:51

their product isn't as good as they think it is. Second,

12:53

they don't ask for them. You're

12:55

not making as much money as you want because you're not as

12:57

good as you think you are.

12:58

Problem number one. The product isn't good enough. Everyone

13:01

loves our stuff. We just need to get the word out. It says

13:03

every small business owner with a product that's not as good as they think it

13:05

is. I'm going to

13:06

take off my nice guy hat for a second. If your

13:09

product were exceptional, people would already know about it and you'd

13:11

have more business than you could handle.

13:12

So if you sell direct to consumers and they are not bringing you more

13:14

customers, your product has room to improve. I

13:17

like to ask myself, why are my customers too embarrassed

13:19

to tell everyone they know about my product? It may

13:21

be okay, but it's unremarkable, as in

13:23

not worthy of remark. In fact,

13:25

most of the stuff I pay for kind of sucks. My

13:27

pool guy forgets stuff half the time. My landscapers

13:30

make a ton of noise at the worst hours. My cleaners routinely

13:32

put my clothes in my wife's closet. I guess that's what I get

13:34

for extra medium t-shirts. The list

13:36

goes on. Business owners wonder why they

13:38

don't get referrals. The answer is right in front of them. They're just not good

13:40

enough. Let me show you how I think

13:42

about it. Price is what you charge. Value

13:45

is what you get. The difference between price and

13:47

value is goodwill. This

13:49

means that the price not only communicates value,

13:52

but is also how we judge value. Economics

13:54

dorks call it customer surplus, but I'm just going

13:56

to call it goodwill.

13:57

You want lots of goodwill. Lots of goodwill creates

13:59

value.

13:59

word of mouth. Word of mouth means referrals.

14:02

There are two ways to build goodwill with your customers. You

14:04

can lower your price or you can give more

14:06

value. After all, if you lower the price of

14:09

your product enough, people would line up to get it,

14:11

but you'd probably lose money. So lowering the

14:13

price is, at best, a temporary solution. You

14:15

can only lower the price so much for so long.

14:18

And as marketing legend Roy Sullivan says, any

14:20

fool can sell something for less.

14:22

So to build goodwill to get referrals, the

14:24

question isn't how do we lower our price, but how do we

14:27

give more value?

14:28

Six ways to get more referrals by giving more

14:30

value. There are six ways I get

14:32

referrals by giving more value. And it just so

14:34

happens to map to the parts of an ad. Neato.

14:37

One, call outs, sell better customers.

14:40

Two, dream outcome, set better expectations.

14:43

Three, increase perceived likelihood of achievement.

14:46

Get more people better results.

14:48

Four, decrease time delay, get

14:50

faster results. Five, decrease

14:52

effort and sacrifice, keep making your stuff better.

14:54

Six, call to action, tell them what

14:57

to buy next. So let's start with the first.

14:59

Call outs, sell better customers.

15:02

We want to sell better customers because they get the most value from

15:04

our products. Customers who get the most value

15:06

have the most goodwill. And the customers that have the most

15:08

goodwill are most likely to refer. Yes,

15:10

it's that simple. Let me give you a real life example.

15:13

We have a portfolio company that did public relations for small

15:15

businesses.

15:16

They had a lot of sales, but they had a lot of churn. So

15:18

they plateaued. They didn't grow for years.

15:20

To see what we could do, we looked at their lowest churning customers

15:23

to see if they had anything in common. They did. They

15:25

were all in a specific niche and looking to raise funding from investors.

15:28

So the solution looked obvious. Get more of them.

15:30

But the founder had a big worry. These customers

15:33

were only 15% of his business.

15:35

If he changed his targeting and it failed, he would

15:37

lose 85% of his business.

15:39

But the business wasn't growing anyway. A tough situation

15:41

for any entrepreneur. But after reviewing the data

15:43

many times, he agreed to change the advertising call outs

15:45

to match his narrow, perfect fit customer.

15:48

The results.

15:49

The company broke through its plateau. They grew

15:51

for the first time in years and now we're on track to adding millions

15:53

per month. Plus, their cost of advertising,

15:56

a huge expense for their stagnating business, went down.

15:58

They got even cheaper leads. since they

16:00

could be more specific with their messaging. But not only

16:02

that, the cheaper leads got even more value from the

16:04

product because it was meant for them, and those customers, because

16:06

they had more goodwill towards the business, started referring

16:09

to the clockwork.

16:10

Action step.

16:11

Increase the quality of the prospect and you'll increase the

16:13

quality of the product. Figure out what your most

16:15

successful customers have in common. Use

16:17

those similarities to target a new audience that has

16:20

the greatest chance of getting the most value who are just like them.

16:22

Then, sell only people who meet those

16:24

new criteria.

16:25

Set yourself up to build more goodwill. More

16:28

goodwill means more referrals. Two.

16:30

Dream outcome. Set better expectations.

16:33

The fastest, easiest, and cheapest way to make your product

16:36

remarkable is make it better than they

16:38

expect.

16:38

And that's easier than you might think because you set the expectation.

16:42

Pro tip. Dating advice. On first dates,

16:44

I like to set the bar as low as possible by admitting all my

16:46

flaws. After telling my now wife

16:48

all my flaws, I joked, I can only go up from here.

16:51

Have you ever had a stranger tell you a new movie was awesome,

16:54

then you go see it and think, that wasn't as good as I expected?

16:56

On the flip side, have you ever had someone tell you a movie was terrible,

16:58

then you ended up seeing it anyways and thought, that wasn't as bad

17:01

as I expected? Our expectations of an experience

17:03

can dramatically affect the experience itself. We

17:05

can increase goodwill by lowering expectations. It

17:08

gives us room to over-deliver. In the beginning,

17:10

I promised everything in the kitchen sink to get people to buy.

17:13

Fulfilling on that turned into a nightmare. So,

17:15

I began inching down my promises while maintaining quality.

17:17

It gave me more room to over-deliver and I netted a major

17:20

benefit. Referrals. Customer expectations

17:22

are fickle. That's why we set expectations for

17:24

them. And if we set those expectations, we can exceed

17:27

them.

17:28

Action step.

17:29

Slowly lower the promises you make when

17:31

making offers. Keep lowering them until your

17:33

close rates lower. At that point, stop. This

17:35

maximizes how many customers you get and the goodwill

17:37

you build with them. Maximize customers and more

17:40

goodwill means more referrals.

17:42

Three.

17:43

Increase perceived likelihood of achievement.

17:45

Get more people, better results. The

17:47

customers with the best results get the most value from a

17:49

product. Figure out what they do to get the most

17:51

value and you can help other customers do the same. Two

17:54

steps ago, to sell better customers, we figured out who

17:56

the best ones were. So now, to get

17:58

everyone the best results, we figure out what the best ones

18:01

did.

18:02

Let me show you what it looked like at Gym Launch.

18:04

We started by tracking customer activities. Speed

18:06

to running their first ad, speed to their first sale,

18:09

their attendance on calls, et cetera. Then

18:12

we compared the activities of our average customers to

18:14

the activities of our best customers. We found

18:16

out something huge. If a gym owner ran paid

18:18

ads and made a sale in the first seven days, their

18:20

LTGP tripled. Once

18:22

we realized this, we focused on getting everyone

18:25

to launch ads and make sales in the first seven days.

18:27

The results of our average customers skyrocketed.

18:30

More customers, more testimonials, and more referrals

18:32

followed. Here's the process I use to get more

18:35

people better results. Step one, survey

18:37

customers to find the ones who get the best results.

18:40

Step two, interview them to find

18:42

out what they did differently. Step three, look

18:45

at the actions they had in common. Step

18:47

four, force new customers to repeat

18:49

the actions that got the best customers the best

18:51

results. Step five, measure

18:53

the improvement in average customer results, speed

18:56

and outcome. Step six, match

18:58

the conditions of your guarantee to the actions

19:00

that get the best results to get more people to do

19:02

them. Pro tip, make

19:04

the success activities the conditions of your guarantee.

19:07

Do not do this if you hate money and

19:10

helping people. As soon as

19:12

you start getting customers results, note what

19:14

they did. Then start guaranteeing

19:16

new customers those results, but do

19:18

it on the condition that they do what the best

19:20

customers did. The guarantee sells more

19:23

people, the conditions get them better results.

19:25

You win, they win.

19:27

Action steps,

19:28

figure out what the best people did, then get

19:31

everyone to do it. Make your guarantees around the actions

19:33

that create the most success, more success, more

19:35

goodwill, more referrals.

19:40

Hey, I hope you're enjoying the book chapter that you're

19:42

listening to right now of $100 million leads. I took

19:44

a long time putting it together for you. And

19:47

so my only ask is that you just take a quick second

19:49

and leave a review for the book on

19:51

Amazon. It's the number one way that people find

19:54

books. And

19:56

this is a way of getting more people into our world. And so our mission at acquisition.com

19:58

is to make real business. education

20:01

accessible to everyone and I need

20:03

your help. And so if you could do that, just at

20:06

one small action and it has a trade

20:08

for the two years that I took putting this book together for you, it

20:10

would mean the world to me. So thank you. Number

20:14

four, decrease time delay.

20:16

Make faster wins. I define

20:19

a win as any positive experience a customer has.

20:21

Faster wins increase the perception of speed, increase

20:24

the likelihood they'll stick and increase how much they trust

20:26

you. Triple win. To make wins

20:28

feel faster, we give them wins more often. Let's

20:31

imagine you have a product that takes a week to deliver. The

20:33

customer can get one win at the end of the week or win

20:35

every day with daily progress updates. Same

20:38

amount of progress, seven times the wins. On

20:40

top of that, if someone said seven things would

20:42

happen and all seven do, I trust them even more.

20:45

Referring a friend is now a lower risk since seven

20:47

promises were made and all seven were kept. Here's

20:49

five ways I make wins happen faster in the real

20:51

world.

20:52

One,

20:54

if I have seven small things to deliver, I

20:56

deliver them at shorter intervals rather than all at

20:58

once.

20:59

Two,

21:00

updates are wins. If it's a bigger project,

21:02

I share updates as frequently as possible. You

21:04

can never give someone too much good news and regular

21:06

updates, progress or not, is better than leaving your

21:08

customers hanging.

21:09

Three,

21:10

customers form their lasting impression of a business within 48

21:13

hours after they buy. Force a good impression.

21:16

Force as many wins as you can in that window. Set

21:18

many expectations, meet many expectations,

21:21

repeat.

21:22

Four,

21:23

they should always know the next time they'll hear from you. I

21:25

got a slick saying from a public CEO friend of mine,

21:28

bam fam,

21:29

book a meeting from a meeting.

21:30

Again, never leave a customer no mincelet.

21:33

They should always know what happens next.

21:36

Five,

21:36

never expect customers to forgive you,

21:38

ever.

21:39

So act like it. For example, you

21:41

can deliver early but never late. I add 50%

21:44

to my timeline so I always deliver early. That makes

21:46

on time for me early for them.

21:48

Action step,

21:49

break down outcomes into the smallest possible increment.

21:52

Communicate it as often as reasonable even if there

21:54

is no progress. Update them. Set timelines

21:56

with Breathing Room, deliver early, more

21:59

customer wins, meet some customers. more goodwill and more

22:01

goodwill means more referrals. Decrease

22:04

effort and sacrifice. Keep making your stuff better. If

22:07

the customer does less stuff they hate to benefit

22:09

from your product, you've made it better. If the

22:11

customer gives up fewer things they love to benefit from your product, you've

22:13

made it better. And there's no such thing as a perfect product.

22:16

You can always make it better. And the easier you

22:18

make it for them to benefit, the more goodwill you get and

22:20

the more likely they'll refer. Here's my process

22:22

to keep making my stuff better. Step 1.

22:25

Use customer service data, surveys, and reviews to find the most

22:27

common problem with your product. Step 2.

22:30

Figure out your fix. To get a head start, get feedback from the customers who made your

22:32

product work despite the problem it has.

22:35

Step 3. Use that feedback to improve your

22:37

product. Step 4. Give the

22:39

new version to a small group of your struggling customers.

22:41

Step 5. Get your next round of feedback. If

22:43

you solve the original problem, then roll it out to all customers.

22:46

If it didn't, go back to step 2. Step 6.

22:49

Move on to the next most common problem and repeat the process. Do

22:51

this until the end of time. Action

22:54

step. Keep making your stuff better. Survey, make changes,

22:56

implement, measure, repeat. I run this process every

22:58

month. Set this as a recurring monthly process

23:01

in your business. A product that takes less effort

23:03

and has fewer sacrifices means more good will. And

23:05

more good will, you guessed it, means more referrals.

23:10

Call to action. Tell them what to buy

23:12

next.

23:14

If you have an amazing product, they'll want more.

23:16

You have to satisfy their desire to buy. If you don't,

23:19

they'll still buy, but from someone else. Don't

23:21

let that happen. Sell them again.

23:24

You can either sell them a new thing or more of the thing they

23:26

just bought. In either case, you'll get even more good

23:28

will and extend the lifetime of the customer. And

23:30

besides, the more stuff they buy, the more stuff they

23:32

can refer their friends to. For example,

23:34

in a weight loss company we know, lots of customers

23:36

referred friends to their first year product. But

23:38

some didn't. A lot of those customers who didn't refer

23:40

to the first product when they bought their more expensive

23:43

thing, referred their friends to that.

23:44

So you just gotta keep selling.

23:46

In my experience, people obsess over their front end offers.

23:48

And that makes sense. But then they neglect the back end

23:51

and customers fall off. And customers that fall off your

23:53

product are unlikely to refer. So keep

23:55

selling them so they don't. Action step.

23:57

Treat every customer like it's the first time you've sold them. Make

24:00

sure your next offer is more compelling than your first. Remind

24:02

them to buy more after each big win. More

24:05

things to buy means more opportunities to add even more value.

24:07

More value means more goodwill, and more goodwill, you

24:10

guessed it, means more referrals.

24:12

One question to rule them all.

24:14

Let's consolidate these six steps into one thought experiment.

24:16

I encourage you to try it out with your team.

24:18

Here it is.

24:19

You've lost all your customers but one. The

24:21

gods of advertising ban you from doing the core four

24:24

and decree.

24:25

All customers must come from this one customer.

24:27

Violate our terms and we will destroy your business

24:30

and every other business you start for eternity.

24:32

Tough break.

24:33

But the question remains, how would you treat this customer?

24:35

What would you do to make their experience so valuable they would send all

24:38

their friends? What kind of results would they need to get?

24:40

What would their onboarding be?

24:42

What type of customer would you pick? Think about

24:44

it, write it out. Your business depends on

24:46

it. Then do it.

24:48

Start acting like the advertising gods will revoke

24:51

your core four privileges at any moment.

24:53

Soon you'll see you have no choice but to start

24:55

adding more value to get more customer referrals. Now

24:58

that we covered that, do you want to know how you can get even more referrals?

25:01

Ask for them. Referrals.

25:04

Ask for them.

25:05

Do you know why businesses have so few referrals compared

25:07

to what they could have? They never ask for them. Your

25:09

customers like any audience can only know what to do if you

25:12

tell them. Now I've tried a lot of referral strategies.

25:14

Most failed and I struggled until I had this epiphany.

25:17

Asking for referrals only works when you treat it

25:19

like an offer.

25:20

The referrals come when you show the value the customer

25:22

gets when they refer their friends. Let me

25:24

give you two quick case studies to show you the power

25:27

of asking for referrals. Case study number

25:29

one.

25:30

Dropbox gave free storage to customers and

25:32

free storage to their friends they referred.

25:34

The referral program went viral and they

25:37

39x'd their business in 15 months.

25:40

Case study two.

25:41

PayPal gave $10 in credit to customers

25:44

and $10 to the friends they referred. Within

25:46

two years, the program helped them reach a million

25:48

users and six years later, they hit 100

25:51

million users. They still use it today.

25:53

So how do we harness the same viral growth in our

25:56

own small business?

25:57

We do what they did. We ask for

25:59

it. Seven ways to ask for referrals.

26:02

There are three components to a referral program.

26:04

How you give the incentive, what you incentivize

26:06

with, and how you ask. Rather

26:08

than give you 100 variations that may or may not work,

26:11

here are the seven combos that worked best for me.

26:13

Number one,

26:14

one-sided referral benefit. I'd rather

26:16

pick customers than a platform any day of the week.

26:19

Pay your average cost to a car customer, AKA,

26:21

CAC, to the referral or the friend.

26:24

Make them aware of the incentive.

26:26

Example,

26:27

imagine it costs $200 to get a customer. Ask

26:30

the current customer to make an actual three-way introduction

26:32

to a friend via call, SMS,

26:34

or email. Not just to name a number.

26:37

Also, ask them to do it right when they buy.

26:39

Don't wait. Then write them a check for $200

26:41

when their friend signs up, or give

26:43

their friend $200 off.

26:46

Example two,

26:47

this works great for spouses because they both

26:49

basically get the benefit. Always ask for the

26:52

spouse and give a household discount. Two,

26:55

two-sided referral benefits.

26:57

This is what dropbacks on PayPal used. We

26:59

pay our CAC to both parties.

27:01

Half goes to the referrer in credit or cash, and

27:03

half goes to the friend in credit.

27:05

This way, they both benefit. Example,

27:08

we sell $500 programs. Our cost to

27:10

get a customer is $200. For every friend someone

27:12

refers, we give them $100 in cash and

27:14

give the friend $100 off signing up.

27:17

Good for up to three friends.

27:18

This worked really well for my local businesses.

27:21

Pro tip,

27:22

run your paid ads for free.

27:24

In our service businesses, we routinely

27:27

get an additional 25 to 30% of signups as referrals. If

27:30

we ask for a referral right when they signed up. So,

27:33

if we sign up 100 clients for a promotion, we'd

27:36

usually get another 25 to 30 clients from referrals.

27:38

And since we always operate above three to one, LPGP

27:41

to CAC ratio, the cash from referrals

27:43

often cover the cost of ads and some. Bingo,

27:46

bingo.

27:47

Number three, ask for a referral right

27:49

when they buy. On the sales contracts

27:51

or checkout page, ask for some names and phone numbers

27:54

of people they'd like to do this with.

27:56

Show them how they will get better results

27:58

when they do it with a friend. Example. I

28:00

had a new salesman come into one of my portfolio companies and shatter

28:02

all the sales records for an upcoming event. We

28:05

didn't know what was going on. So I hopped

28:07

on the phone with him. How are you selling more tickets than everyone

28:09

else? He shrugged and said, I'm doing

28:11

the same thing as everyone else. I just make sure I asked them who

28:13

else they'd want to have come with them. Then asked them to

28:15

introduce me.

28:16

Half his sales were from referrals. So

28:19

simple and yet no one does it.

28:21

Scripting example. People who do our

28:23

program with someone else tend to get three times the

28:25

results. Who else could do this program with you?

28:27

Very simple.

28:28

Pro tip.

28:29

Not if but who. Once

28:32

someone is a customer be more direct with your ask.

28:34

Don't ask if they know someone. Ask who they

28:36

know.

28:37

Four.

28:38

Add referrals as a negotiation chip.

28:41

On top of that, you can ask for referrals

28:43

as a way to negotiate a lower price.

28:45

In other words, if someone wants to pay $400 and your

28:47

price is $500, you can give them

28:49

a discount in exchange for an introduction to three

28:51

friends. You can ethically charge a different price

28:53

for the same thing because you've changed the terms of the sale. Example.

28:56

I can't do anything less than 500 down, but if you make

28:58

a three-way text introduction to a few friends right now,

29:01

I'd be happy to cut that initiation fee. And

29:03

to address the question you didn't ask, if a full-price

29:05

customer finds out you gave someone else a discount, which

29:08

I've had happen, here's all you say. Yeah,

29:10

Stacey got $100 off because she referred three friends.

29:12

I'm happy to give you $100 if you refer me three friends.

29:15

Who do you have in mind? They

29:16

either back off or they give you three friends. Win-win.

29:20

Number five, referral events, where people get

29:22

points, credits, dollars, or even just bragging

29:24

rights for bringing friends within an explicit time

29:26

period. Referral events typically last from

29:28

one to four weeks. Whenever you run one of these

29:30

events, sell everyone on the benefits of working with others.

29:33

Use some stats, internal or external, to show high

29:35

success rates and the selfish benefit of bringing friends.

29:38

I use names like bring a friend promotion, spouse

29:41

challenge,

29:41

accountability buddy,

29:43

coach challenge, promotion, where you

29:45

create teams with your employees and customers. This

29:47

works well in coaching style businesses.

29:50

Six, ongoing referral

29:52

programs. Instead of running a limited duration

29:55

referral promotion,

29:56

you talk about the benefits of doing things with others

29:59

all the time. in your free content, outreach,

30:01

paydads, etc. After a buddy

30:03

did this, he saw a 33% boost in total

30:05

signups. For context, he had a million customers

30:07

buy tickets to his virtual event, and 250,000 of them were referred.

30:11

This stuff works.

30:13

Seven,

30:14

unlockable referral bonuses.

30:16

Create bonuses for people who one, refer,

30:18

and two, leave a testimonial. A few examples,

30:21

unlock VIP bonuses, courses, tokens,

30:24

status, training, merchandise, service levels,

30:26

premium support, additional hours of service,

30:28

etc. Unlockable referral bonuses

30:31

work well if you don't like paying out cash. The

30:33

bonuses can also be for both parties if you

30:35

like, since they cost you less than cash. Visit

30:38

the lead magnet section for some extra inspiration.

30:40

As always, the more insane you make the offer, the

30:43

more people will refer. If you want them to refer,

30:45

make it so good they'd be stupid not to.

30:49

You're only limited by your creativity. Here's what it

30:51

looks like to combine a few of the strategies above into a

30:53

Keilor referral promotion.

30:55

Give everyone a gift card for one third the cost of their

30:57

program. Tell them they can give it to

30:59

a friend of theirs if they sign up with them. Give

31:01

the gift card an expiration date within seven to 14

31:03

days from the date you give it to them. It'll force them

31:05

to use it. This gives the referrer status

31:08

when they give it to their friend. Rather than saying, hey,

31:11

join this program for $2,000 off, they

31:13

say, hey, I got this gift card for $2,000. Do

31:15

you wanna use it? I don't wanna waste it. It's seen

31:17

as a much bigger deal for them and you. You

31:20

can still use the three-way introduction with this tactic.

31:22

Then text a picture of the gift card. Bonus

31:24

points if you write the friend's name on it before

31:27

texting the picture. It makes it feel personalized

31:29

and gives you a legitimate reason for asking for the friend's name,

31:31

Wink.

31:33

PS.

31:34

You can also sell the gift cards at 90% off as

31:36

purchasable gifts only for friends of customers.

31:39

The referral looks like they spent a lot of money and you

31:41

get paid to get new customers. I can

31:43

hardly think of a better way to make money. Again, the

31:45

only limit is your creativity. Pro

31:47

tip, match the thing you give with the thing you

31:50

sell. If you don't wanna give away money,

31:52

try to match the referral incentive with the core product you

31:54

sell. For example, if you have a T-shirt

31:56

manufacturing company, give away free T-shirts makes a lot of

31:58

sense because your incentive will attract. people who actually

32:00

want t-shirts, and they're more likely to become paying

32:02

customers. Hint, that's why the gift card works so

32:04

well. On the other hand, if you give away

32:06

an amazing limited edition t-shirt for your IT

32:09

services business, it may or may not attract

32:11

people who want IT services. So

32:13

try to match the thing you give with the thing you sell.

32:16

Conclusion.

32:17

Referrals aren't an advertising method you can do. It's

32:19

not one trick or hack, although we learned some of those. It's

32:22

a way of doing business, and it starts with you. After

32:24

all, referring is always a risk for the customer. They

32:27

risk their goodwill with their friend in the hopes

32:29

of getting more by showing them something cool, your

32:31

stuff. So customers only refer when they

32:33

think it's very likely their friend will have a good experience.

32:37

In other words, when the benefits to them personally outweigh the risk of

32:39

hurting their relationship with that friend. So we add benefits

32:41

for them and their friends with incentives and we lower

32:43

the risk by building goodwill, showing we deliver

32:45

on our promises. And we do that by using

32:47

the six ways to give your customers more valuable. Now

32:50

don't get me wrong, building goodwill does a fantastic

32:52

job of getting referrals on its own. But if we're

32:54

smart, which we are, we capitalize on that goodwill, so

32:56

we get even more referrals by using the seven ways to ask

32:58

for them. So give more than

33:01

you get and you'll never go hungry again. This

33:03

is how we treat our customers. Do this and you

33:05

can monetize goodwill forever. To keep this

33:07

in perspective, I always remind myself,

33:09

I am compensated tomorrow for the value I provide today.

33:12

Action items. Figure out your referral percentages

33:15

and churn percentages to set a baseline. Implement

33:17

the six giving value steps to build goodwill. Then

33:20

capitalize on that goodwill using one or

33:22

more of the seven ways to ask for referrals. Next

33:25

up. So now we have to figure out how to

33:27

scale a team. It looks like we'll have

33:29

to call out potential teammates, show them the

33:31

value of joining the team, then ask them to join. Wait,

33:33

that sounds familiar. But seriously, if

33:35

you really want a $100 million leads machine, buckle

33:38

up. The most valuable chapter in the book is coming up next. Employees.

33:41

For real. This isn't a boring chapter and you're going to need

33:43

them if you want to make the big money.

33:45

Free gift. Bonus. Customer

33:47

referral frenzy.

33:48

If you want to know more ways to use the highest

33:51

leverage, most profitable ways to getting customers, I just

33:53

made a training for you.

33:54

You can get it here free. acquisition.com forward

33:56

slash training forward slash leads.

33:59

the customer referral section, I feel like it wouldn't be complete without

34:02

me asking you to refer a friend to

34:04

this podcast or the book. And if you want to read

34:06

while you listen, which is actually how

34:09

I prefer to consume content, it'll store the book

34:11

in more places. I just want you to win so that ultimately

34:13

one day I can invest in your business. And that is my selfish

34:15

attention. That being said, next we

34:17

have employees and agencies. And

34:20

this one is one that's going to be a sleeper. This

34:22

is going to be a dark horse. And this is the one where

34:24

the big business owners are nodding their heads and they're like, can't

34:26

wait to get to this one. The small business owners don't get it yet.

34:29

And so I've broken down two huge

34:31

parts. One is that I learned

34:34

every new platform that you have seen me on

34:36

first by using an agency and an entirely

34:39

unique method that I don't see anyone else talking

34:41

about. And it's how I engage with every single agency.

34:43

And I'll give you the script and how to negotiate

34:45

it, everything down the T in the next episode. On

34:48

top of that, I'll show you how I've leveraged employees

34:51

in order to get more people to find out about my stuff without

34:53

spending more minutes on it.

34:57

This has been 100 million dollar leads written

34:59

by Alex Formozzi, read by Alex

35:02

Formozzi, copyright 2023, acquisition.com,

35:05

audio production, copyright 2023, acquisition.com media.