Tanner Larsson 0:00
After David Archer spoke yesterday, talking about zero to 10 million in nine months and running ads and how it was just they scale like crazy. I got a bunch of people coming up and asking me how to do that? Like, it wasn’t just the ads, because they were saying, it’s not just the ads, there was a whole bunch more to it. I changed their presentation to talk about something that everybody needs, it does have an e-commerce slant to it. But it’s applicable to everything. And that is the fact that most businesses don’t really have true LTV. They don’t know their Lifetime Customer Value. And there’s statistics that back it up. And they also don’t know their own retention times. They don’t know things like that. So we’re going to talk a little bit about that and how you guys can automate that so that you can actually scale because that’s what everybody wants. Obligatory family pic. That was us during Halloween. We were a skeleton family. I got to wear a tie. So it’s kind of cool.

Tanner Larsson 0:54
And that is a mermaid skeleton. My daughter wanted me to tell you that it is a mermaid skeleton, not just a skeleton because she has no legs. So that was important. And that’s a T Rex. Alright, so the real secret to scale. Alright, so everybody wants to scale, actually, our name is Build Grow Scale. Everybody asks me if I sell pot do we grow? And I’m like, No, that’s just one word out of three. Like we have nothing to do with cannabis. But that’s what people ask me. Jed put us into high risk processing because he thinks we sell drugs, you know, but that you know, then we got scale and out of everything that our company does building growing and scaling. Everybody wants to scale. That’s the sexy word. Everybody thinks, oh, man, I registered my LLC. I’m ready to scale. It’s like, Well, what about the building in the growing part? Now, let’s get that. Right? So there’s actually one real true secret to scale before you can scale. And that’s the that you need to optimize before you maximize, okay? What’s the point of putting a high-performance engine into your car, if it doesn’t fit, and your tires are flat, maybe air up your tires first, right? Yet, everybody wants to just jump to the front of the line and start trying to dump more money into marketing. Your clients do the same thing, right? Yet, everything under the hood is broken. Now, the most common reason that businesses fail to scale is not that they’re not adding the new enough new customers, okay? It’s that they suck with the customers that they do have. Right? You’re not keeping the customers in the e-commerce space, it’s really bad. Roughly 90 plus percent of e-commerce stores sell to their customers only once. Okay, now in the e-commerce space, that really sucks because most AOV Average Order Values are below 100 bucks. Well, if your average order value is 100 bucks, and you sell to your customers once what’s your lifetime customer value 100 bucks, well actually less than that, because you have a lot of money that has to come out of that front end right? Now, other businesses are just as bad and just as guilty of this. They works with a lot of coaching people, they sell one info product to the guy. And then that’s it, they have to go find new people to sell to instead of building out the ascension funnel and actually leveraging and moving people up the ladder, right. So when you have a business like this, this is what your business looks like on the teeter-totter. Your cost to acquire a customer is higher than your monetization. This is your daughter’s problem. That’s why she’s capped out she can’t scale. She’s still stuck in a growth phase but she’s hit a threshold right. Her cost to acquire is high she has a low AOV, which is not bad for her product. But it’s just it’s a problem force growth when you don’t have money coming in. You can’t afford to acquire a customer. The loss of traffic the loss of customers like Dan Kennedy says he who can afford to pay the most to acquire customer wins, right? Well, if you if you look like this, you can’t afford to pay for the customers you’re already getting. That’s why you’re stuck. Okay, now 80% of ecommerce businesses, or I’m sorry, most ecommerce businesses spend 80% of their budget on acquisition 42% of e commerce businesses have no clue or way to measure their actual Lifetime Customer Value. They don’t know what it is. And it’s not just ecommerce businesses. Before I really did, exclusively ecommerce, I worked with funnel businesses, service businesses, everything, I built a massive service business and sold it. None of these people know their lifetime customer value. They don’t even know their retention period. They don’t know their average repeat purchase rate. They don’t know any of this stuff. They just know. top line, right? Why is this the case? Well, it’s because you’re too busy doing a bunch of other shit not paying attention to what’s important. But in a picture, it’s this. We all know that. The real things that move a business are underneath the surface right? But what we focus on top line you focus on the front end of your business, the acquisition of customers because that sexy it’s something you can you can control and the other stuff takes a whole lot of work and you don’t feel like you guys can do it or know how to do it. So you just ignore it. Right. And that leads to treading water, right? You gain a customer, but you also lost a customer, because you didn’t do anything with the customers you already had. Okay? So you basically get tired, you tread water, and you go nowhere. And that’s why you’re stagnant 50k a month, right? The way to solve this, okay? Is by focusing on the other thing, you could also call this the Pareto principle 80, 20, the golden rule, whatever, focus on the biggest part, okay, which is the back end of your business, the magic of a back end, okay? Not just a nice sexy butt,

Tanner Larsson 5:35
but like the actual back end of a business. And yes, I want you guys to look at my butt because I have very sexy butt, but I’m talking about doubling and tripling the size of your business in a matter of weeks. Oops, let’s go back in a matter of weeks, without generating more traffic, without new customers, and with only a marginal increase in your operational costs. How? Think about this? What if every one of your customers that you’ve ever sold in your lifetime, bought one more time from you tomorrow, boom, your business doubles. Right? This can happen obviously, not every customer, but a percentage of your customers. Also, a percentage of your customers will escalate. roughly one-third of each customer level will ascend to the next highest level in pricing that you want to sell them. That’s why Dave is talking about 100k programmes and 50k programmes because you have to keep escalating your customers. That’s why continuity is so powerful, because it gets them on a subscription model that gets them to keep paying you constantly. Now the key to maximum backend return on investment. Is that you got to learn how to do it automated because let’s see what was Ronnie is making fun of Bart trying to be everywhere, right? Was that Ronnie making? Yeah, you can’t be everywhere, right? You also can’t do everything in your business on an active basis. If you don’t have some automation help, like Ge was talking about, right? You got to automate, then you’re not going to be able to do it. So in our case, working with e commerce businesses, you got they got enough to do just like you guys do. So what we’ve done is how do you work on developing an automated process through multiple modality communication that will allow you to maximize back end revenue without having to do the active work to get it. So you set it up once? It comes in over time, right? So automated visitor and buyer segmentation is key, I’m actually not talking anything about BGS. Today, I just wanted to teach you guys something. So I’m gonna use up all my time doing this. So this is the customer lifecycle. And you’ve already seen a graph like this before, right? Most of you guys should have if you don’t know your customer lifecycle, that’s a real problem. So the customers are always in the act of either coming in or going out. Once they reach the top of that bell curve, it’s, you know, it’s a slippery slope one way or the other.

Tanner Larsson 7:48
The thing is, you’ve got prospects, new customers, existing customers, and lapsed customers. Along that bell curve, you also have 12 opportunities for automated well actually more than 12. But 12 basic campaign types that can be automated, in your customer and prospect follow up to generate massive, massive revenue. Just like anything, though, not all visitors, not all customers are created equal. And they also have different needs, wants desires, right? So you need to communicate to these people individually in different ways. The dots at the top are the 12 campaign types, then you

Tanner Larsson 8:24
see the different phases of the lifecycle, and then the type of segmenting that they’re in. So that allows you to go from that from low monetization high acquisition cost, to where your acquisition cost is low, and your monetization is high. If you want to scale a business, this is what your business needs to look like. Why? When you start scaling, what happens to your acquisition cost? It goes up, it never goes down does it? Because you keep having to cast wider and wider and wider rings to get more and more traffic, right? Doesn’t matter if it’s offline or online businesses, your acquisition costs will never go down once you start scaling. So if your acquisition goes up, your monetization better be bigger than enough to cover it. One of the rules of thumb in terms of online advertising is that you should be able to spend up to your 60 day LTV on the front end acquisition of a customer at a minimum. The companies that can do more are the ones that kick ass who guys who knows Guthy-Renker if you heard of them kind of big right. One of our clients Guthy-Renker used to own Proactiv, which was the largest acne subscription company in the world. Why did they do so? Well? Well, because they went negative nine months on every new customer. What competitor can keep up with and with that? None. They knew their numbers. They knew their LTV, and they knew they could go negative on every customer for nine months to win that customer. That is when their company looks like this. They can afford it. They know their numbers. So the true asset is the customer. Why do you guys all ignore your customers? Right? Very few businesses are actually really good at getting their customers to buy again. Okay, here’s the thing your customers want to consume, they’re going to consume, so they can buy from you, or they can buy from someone else might as well buy from you. Plus, you all know that it’s cheaper to resell to an existing customer than it is to try to acquire a new one, right? It’s actually five to seven times more expensive to acquire a new customer. The thing about your back end follow up is that you need to be focused on customer centricity looking after the right customer, the right way, okay. So how most brands do it and this is being generous, they have a cart abandonment or a Hey, come back, we’re leaving. And usually it’s whatever the platform they’re on. It’s an automated system that’s not optimized and it just sucks, but they do it. They also do an abandonment, like, hey, come back opt-in for our newsletter, or send them a campaign saying come back to our website or on a newsletter. And then they say, welcome your new customer. Thank you, we love you so much that we’re promised to ignore you forever after that. And that’s what you do, unless they come up they write into you or they call you or something else. All right. Now, you’re completely ignoring where the real money is made. Seth Godin or gardener however you pronounce his name right says that real businesses know that profit is generated not on the first sale, but on the second and third sale and beyond. The second and third sale, meaning repeat additional purchases by the existing customers. So how do you do it right? First thing is behavioral segmentation, based on how the customer are and where they are in the lifecycle, behavioural remarketing, how you’re going to follow up with those customers based on where they are in the lifecycle and their needs. Multiple modality follow up. Who did the call centre talk yesterday? Yeah, right, you’re talking about SMS being huge drop in videos. Massive multiple modality is huge. SMS is actually our biggest thing in ecom as well applied to all 12 campaign types. Alright, so the four behavioural segments you have to worry about are recovery, re-engagement, retention, and release. Now within the recovery segment, there are different types of actions that your people are taking, right, you have a browsing visitor, generic, this is someone who just hits the site and then leads, these people should be retargeted, you have an interested visitor, which is specific, someone who maybe visits your product page or your offering page or your opt in form or something like that, then you have a purchase intent prospect, prospect, someone who actually adds the product to cart, or starts the purchase process or fills out the form, then you have buyer intent, which is the people who actually start giving you money. And then they realise that Jed does the processing and they leave the checkout, right? Those kind of customers. And then you have reengagement, new customers, you send the welcome message. What else do you do, you know that 15% of your customer base is willing to purchase from you again, even before receiving the service or product they purchased. So if you ship them, you buy a new purse, we ship it to you, you’re 15% of the people who buy that purse are willing to buy another purse before they even get the purse they ordered. Okay, why not offer that to them? VIP customers, you have your whales, make them bigger whales, okay,

Tanner Larsson 13:11
get them to continue to raise the AOV of your company retention, referral, and and rewards customers, okay? Getting your customers to feel special, make them want to feel like you actually care about them. And then they’ll buy more from you. Okay, this is huge, who has the Starbucks app on their phone? You’re in a rewards programme, right? We’re all in those programmes. There’s a ton of different ways to do in your business. But a lot of you guys leverage referrals. Who pays a referral commission if someone hooks them up? Okay, you’re doing it, okay? Do it more. Then you’ve got release inactive customers. Okay, inactive customers, they’re on the end of your life cycle. There’s two things that can be done there though. Some customers a percentage of them, the longer you wait, the longer it’s gonna take, or the harder it’s going to be. But a percentage of them can be reactivated in the product lifecycle, you can restart their customer journey with you by sending them the right series of messages where it’s like they didn’t they’re not lapsing because they don’t like you. They’re lapsing because life got in the way or you suck at following up with them. But you can have a chance to restart that one message seven messages, whatever it takes restarts that customer buying process, and now you’ve saved a customer who will then buy from you more instead of having to go try to acquire a new customer from cold traffic behavioral remarketing. Now you got your segments taken into the remarketing Okay, effective communication based on the segmentation that we just laid out. Okay. So you need to market to each segment differently. So you’re obviously prospects are different than new customers versus existing customers versus lapsed customers. Each of these little remarketing segments you want to break down into further segments based on purchase behavior. key customers interested in metrics so purchase behavior would be maybe your customers who buy a specific item From you are more likely to do, I don’t know, they’re more likely to lapse 60 days later, so we want to treat them slightly differently. This is again, knowing your data, we’re gonna treat them differently than their customer buys product B, who lapses, you know, in your traditional lifecycle of 90 to 180 days. Okay, now the centricity metrics that you want to focus on per segment, obviously conversion rate, every one of those segments will convert differently. They’ll also each have a different average order value and or cart value. They also have different latency and frequency of purchases. your highest level people have a much shorter latency and a higher frequency of purchase, then your lowest level customer. Okay, they also have the highest AOV, and the highest LTV. There is a test that we did I’m trying to think of which company it was, I can’t remember. But anyway, basically, they did they did random random data tests. And they found out that the customers that it’s the whale one, which one, remember, they showed that like, less than a fraction of 1%? What was the So basically, they found out out of all these 270 someone 1000 transactions, less than 1% of the transactions made up over 45% of the revenue. That’s a big deal. Right? But they’re not speaking to those people special those people deserve makes me should be mailing them shit in the mail, you should be visiting their house, you know, giving them back massages, like you should be taking care of those people because they will buy even more. I’ll find the stat and share it in the group because it’s actually a really cool test. Anyway, there’s 12 campaign types. All right, browser abandonment, cart abandonment, new subscriber, checkout abandonment, welcome. upsells, latency, frequency, cross-sells VIP, reward, winback, inactive. Okay, all of those are automated, they can be set up via email, text, and even Facebook Messenger. Okay, you can even tie in a phone call, right? You can have all different types of modalities going on. Email is not enough anymore. Okay, not enough at all. But the combination of the three gets really, really powerful. And you can layer the messaging to make sure you’re hitting the people when you need them. Okay? The reason I’m even talking about this sounds like a hell of a lot of work. And it is. But all you have to do is set up one, and then get that one going. And when you have more time, he’s hit the next one. And then the next one. And the cool thing is that this creates leveraged growth, because every time a new customer comes into your funnel or a new prospect, they’ll eventually go through all of that. So whereas right now you have none of that your LTV is let’s say 100 bucks, you get another campaign set up now your LTV is 150, 160 every customer that comes through following that will have that higher LTV average, okay. It creates basically, you know, geometric growth. So it can be super, super powerful. And what’s even crazier is your upsell, your latency frequency your cross sell your VIP your rewards that doesn’t have to just be one campaign. If you have multiple products, you can have multiple cross-sell campaigns,

Tanner Larsson 18:07
you can have different upsell campaigns, you can have your promotional campaigns based on holidays, Black Friday, Cyber Monday is coming up. Actually, I’ve got a cool gift for you guys related to that. So the thing is, this can really build out massive. Alright, I mean really massive. Okay, so these are the modalities you should be using at a minimum. And I mean SMS, if you really want to get fancy talk to these guys about phone and having a team call because that’s even better, especially your whales, get on the phone with your whales. They are worth bank, and they will spend more money with you. And they deserve to be treated good. There’s Archer looking pretty with his girlfriend. He didn’t date he broke up with this one a married a really pretty girl. So this was his ex-girlfriend. Um, but anyway, so Archer and David actually implemented everything that we’ve said, okay, they were getting 18% of their daily revenue from our automated flows. You guys got higher than that though, once you’ve set them all up, right? Yeah. Now email alone can actually account for as much as 30% of your ongoing daily revenue. If you get it set up correctly. Most people don’t even get 5% though.