Helping a $1M Agency Hit $10M (17% Monthly Churn) — Transcript

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1. 0:00Not much. Hey, first and foremost, I
2. 0:02just want to say Vantage has been an
3. 0:03absolute game-changer. The AI The AI is
4. 0:07uh to put it in Justin's words,
5. 0:09disgusting. It's given us so much
6. 0:10clarity on our business, and just like
7. 0:13the last guy said, like the community is
8. 0:15just such high-caliber people. It's made
9. 0:17such a big difference, so thank you.
10. 0:18>> I appreciate it.
11. 0:19>> Um
12. 0:20>> [clears throat]
13. 0:20>> Here in my situation, so I'm like the
14. 0:23seventh guy to say the same, but I'm 24.
15. 0:26My wife and I, we just learned we have
16. 0:27to pay for IVF treatments, which are
17. 0:29really expensive.
18. 0:30>> Sorry.
19. 0:31>> Um and my 23-year-old business partner
20. 0:33and his wife are pregnant as well.
21. 0:35>> It's like a baby's in the air.
22. 0:37>> Yes. Yes. We basically have a 9-month
23. 0:40time
24. 0:41clock going to solve our biggest
25. 0:43constraint, so we can obviously make
26. 0:44enough money to support them and be
27. 0:46present with our kids as we're having
28. 0:48them.
29. 0:49Um so for context, we sell done-for-you
30. 0:51content marketing marketing services to
31. 0:53door-to-door and life insurance
32. 0:54salesmen.
33. 0:55We do content and ads for them. We make
34. 0:57a million dollars per year, and we want
35. 0:59to be at the $10 million per year mark,
36. 1:01but our churn averages at 17% per month.
37. 1:05I don't know. I think it's an issue of
38. 1:07being too far down market, um and so I'm
39. 1:09I'm wondering how do I create an offer
40. 1:11and marketing that will attract upmarket
41. 1:13people and decrease our churn.
42. 1:16>> Yeah. So, um okay. So, you're doing
43. 1:19done-for-you
44. 1:20done-for-you for door-to-door right now.
45. 1:21Are you helping them attract sales
46. 1:22people or are you helping them attract
47. 1:23uh like home homeowners?
48. 1:25>> Sales people. Helping them grow their
49. 1:26teams, yeah.
50. 1:27>> Yeah. Yeah, got it. Okay. Um
51. 1:29All right. So, when you're saying so the
52. 1:32Okay, so what's
53. 1:34Are you just doing just doing lead gen,
54. 1:36and then All right, let me reverse.
55. 1:38Which avatars are working out?
56. 1:42>> Really just the higher-earner guys. Um
57. 1:45but and that that are getting recruits.
58. 1:49What's really hard about the industry is
59. 1:50like we can get people to get recruits
60. 1:52in their downline, but then when they're
61. 1:54not like
62. 1:54>> Mhm.
63. 1:55>> high-enough-level people to train them,
64. 1:57then on the back end they don't actually
65. 1:58make any money off
66. 1:59>> Okay. Yeah. No, that tracks. So, what
67. 2:02So, then if you were to say, what are
68. 2:03the requirements in terms of revenue
69. 2:05uh for somebody to like or or team size
70. 2:08for someone to like to be a high likely
71. 2:11candidate of not churning?
72. 2:13>> Yeah, our best best clients make over
73. 2:17800k a year in in personal commissions
74. 2:19and plus how much they make on their
75. 2:21their downlines. Team size, it kind of
76. 2:23varies by industry how big your team
77. 2:25needs to be, um but yeah, like around
78. 2:27the 30-person mark on their sales team
79. 2:29is is a good indicator.
80. 2:31>> Okay. So, to me I hear call it 750
81. 2:36750k plus is qualify number one.
82. 2:39Number two is you have to have a
83. 2:40training system.
84. 2:43And number three is you need to have at
85. 2:45least call it 10 plus guys.
86. 2:47So, if every person that you signed up
87. 2:48had a training system, had over 10 guys
88. 2:50in their downline, and was doing 750 a
89. 2:51year, would you say that that would be a
90. 2:52good avatar to work off of?
91. 2:55>> Yeah.
92. 2:55>> Okay. So, that's number one.
93. 2:58Now, um what's the price point right
94. 3:00now?
95. 3:02>> Uh it is We have two packages. Our top
96. 3:05package was 39.95 a month. Our lower
97. 3:07package is 3,000 a month.
98. 3:10>> That's weird. It's the same price. Um
99. 3:12what's
100. 3:14That is the by the way the same price.
101. 3:16Um from a buying like a buying bucket
102. 3:17perspective, it's same same.
103. 3:19Um so
104. 3:21of these call it three and four K a
105. 3:23month uh customers
106. 3:27do you have any idea what the churn is
107. 3:29amongst these more qualified people?
108. 3:33>> A lot lower. Uh I I can't say like
109. 3:35>> say it's five? Would you say it's 5%?
110. 3:37Would you say it's 10%? Would you say
111. 3:38it's half?
112. 3:40>> I can say that these people will stay
113. 3:42for like over a year. Other people will
114. 3:45stay for like three months.
115. 3:46>> Yeah, game over. Okay, this is great.
116. 3:47So, what's CAC right now?
117. 3:50>> Uh including the sales commission, it's
118. 3:51like 2,100.
119. 3:52>> Dude, hold on. So, is the only reason
120. 3:55you haven't scaled this up um well,
121. 3:57okay. Let me ask the other question.
122. 3:58What percentage of customers are the ICP
123. 4:01or this good person versus the bad
124. 4:02person?
125. 4:02>> Oh, so low. We have like six uh six out
126. 4:06of the 40 that we manage that are the
127. 4:08ICP.
128. 4:09>> Okay, got it. So, I think what you're
129. 4:11going to need to do is this I'm going to
130. 4:13give you a short-term and long-term,
131. 4:14okay? Cuz we got to make money today,
132. 4:16but like So, what I want you to do is I
133. 4:19want you to have um
134. 4:21basically 5K
135. 4:24um as your price to the uh to the
136. 4:26minnows who are coming in.
137. 4:29>> Okay.
138. 4:29>> Five or six. I I'm kind of agnostic
139. 4:31there. Uh for minnows and just say that
140. 4:34it's billed quarterly.
141. 4:36So, that's actually a price drop for
142. 4:38you, but I think if it's billed
143. 4:39quarterly, it'll give them more runway
144. 4:40to actually like get going and whatnot
145. 4:42and it'll have a little bit bigger
146. 4:43commitment for you and you can still
147. 4:44generate some cash. This is short-term.
148. 4:47Long-term, what we need to do is we need
149. 4:48to change all the messaging
150. 4:51to the avatar, to the correct avatar.
151. 4:54And so, if you only talk to the correct
152. 4:56avatar like whenever you talk to a a
153. 4:58slice of the audience, everything
154. 4:59underneath always applies and it
155. 5:01basically cuts off around what you're
156. 5:03talking. So, if you're if I say, you
157. 5:05know, million-dollar-plus business
158. 5:06owners, um like obviously we qualify
159. 5:08everyone for you know, a million plus um
160. 5:11minus the people we grandfather from the
161. 5:12launch.
162. 5:13Um but
163. 5:15there's we get tons of people who are
164. 5:16below that who apply, right? And so, we
165. 5:19just have to qualify the people that we
166. 5:20sell. And so, if the messaging doesn't
167. 5:22say this, then you're not going to
168. 5:24attract them.
169. 5:26>> Yeah.
170. 5:27>> Right?
171. 5:27>> Okay.
172. 5:28>> Now, how much does cuz you might be a
173. 5:31little mispriced because I kind of like
174. 5:34I kind of like like 5K a month and 5K a
175. 5:37quarter.
176. 5:39So, 5K a quarter for the minnows
177. 5:41>> tiers.
178. 5:41>> Yeah, cuz they're they're too close. 3K
179. 5:43and 4K is the same number.
180. 5:45>> Yeah.
181. 5:46>> So, I want to take the lower one, make
182. 5:47it lower.
183. 5:49I wanted it closer like $1,500 a month,
184. 5:51is what I'm thinking. And then for the
185. 5:52higher tier, it's like those guys, the
186. 5:545K a month is nothing for them.
187. 5:57Right?
188. 5:59>> Yeah, but they think it's a lot often
189. 6:01times, but
190. 6:02>> Yeah, but I mean No, but like every
191. 6:04They're sales people. Like I mean,
192. 6:05everyone's going to negotiate. Like
193. 6:07every vendor I have is charging me too
194. 6:08much.
195. 6:09Like [laughter]
196. 6:10Like whatever.
197. 6:12What we care about is their behavior.
198. 6:13Are they canceling? No. So, it's not too
199. 6:16much. Right?
200. 6:17>> Yeah.
201. 6:17>> And are they buying? Yes, when you get
202. 6:19them on the phone, right?
203. 6:20>> Yes.
204. 6:21>> Right. So, I I mean, I think and this is
205. 6:23you're going to you're going to you
206. 6:24know, [ __ ] your pants when I say this. I
207. 6:26think you're probably going to be in a
208. 6:27world um where you might be at the 5 to
209. 6:3010,000 a month in the not too distant
210. 6:32future. Cuz remember, 750K is the
211. 6:33minimum, right? People above that, you
212. 6:36know, 60K, 80K, it's not going to make a
213. 6:39huge deal cuz if they're going to get
214. 6:40all the sales people they need to triple
215. 6:41their income,
216. 6:43like what are we talking about? You know
217. 6:44what I'm saying?
218. 6:45>> Yeah.
219. 6:46>> Right?
220. 6:47>> So,
221. 6:47two questions with that. The first one
222. 6:50being So,
223. 6:52how we get our leads right now, I do a
224. 6:54little bit of paid ads, but mostly like
225. 6:56organic content. And I just feel like
226. 6:58the the amount of people that are in the
227. 7:01ICP from a content perspective is so
228. 7:04small. Like I don't know what the total
229. 7:06TAM is, but it's not I don't feel like
230. 7:08it's enough to if I'm making organic
231. 7:09content, it'll actually perform well
232. 7:11enough to
233. 7:11>> Dude, welcome to my world. Do you know
234. 7:13what percentage of businesses are uh one
235. 7:16There's 9% of people who own a business.
236. 7:17Of the people that own a business,
237. 7:18percentage of people that are over a
238. 7:19million is like 5% of that 9%. That's
239. 7:22just a million. Forget 10.
240. 7:25Right? Just a million. So, we're already
241. 7:27like half a percent of all people. So,
242. 7:30like there's nothing wrong with saying
243. 7:32I'm skimming from the top and I'm
244. 7:33serving it. Because what Here's the
245. 7:35thing that that that that if I could
246. 7:36show you a map visually, did you watch
247. 7:38the um the YouTube video I made that was
248. 7:40like the 5111 rule? Did you see that
249. 7:42one?
250. 7:42>> I haven't seen that one, no.
251. 7:44>> Watch it, okay?
252. 7:46So, that video basically I put this map
253. 7:48out where I put 100 circles to represent
254. 7:50100% of people, right? And if you draw a
255. 7:53line in the middle, if you look at all
256. 7:55wealth,
257. 7:5650 of those dots have $2.
258. 8:01And then the next like 40% have like
259. 8:04$25. And then the next 9% have like $36.
260. 8:10And then the top 1% has like $32.
261. 8:15And so if you look at that map, the fact
262. 8:17that you can only serve this tiny amount
263. 8:18is not a tiny amount of the money.
264. 8:21>> Mhm.
265. 8:23So you So you think putting out content
266. 8:25as the main source of getting the leads
267. 8:27like it in terms of
268. 8:29>> Content and ads. Content and ads. All
269. 8:31the messaging through the funnel and the
270. 8:33offer needs to apply to this avatar. Cuz
271. 8:36you're going to spin your wheels forever
272. 8:37at 70% churn, you're not going to grow.
273. 8:39>> Yep.
274. 8:40>> Right?
275. 8:40>> Yep. That's how it's been the last year
276. 8:42and a half.
277. 8:43>> So you're going to still get middos and
278. 8:45that's fine. We're going to put them
279. 8:46into a lower price at a less frequent
280. 8:47billing cadence to hopefully give them a
281. 8:49little bit more on-ramp time without
282. 8:51them having to make another purchasing
283. 8:52decision to hopefully get kind of
284. 8:53upskilled enough to make it work. Inside
285. 8:55of that middos thing, I would probably
286. 8:56include a training on how to build a
287. 8:58training or just build a [ __ ]
288. 8:59training and then give it to them and
289. 9:00then have them execute it. Some of them
290. 9:02are going to do it, some of them are
291. 9:03not. This is short-term cash flow, but
292. 9:05the long-term play and I need you to do
293. 9:06this in terms of your data tracking,
294. 9:08separate out your ICPs from non-ICPs and
295. 9:12then track that churn separately.
296. 9:14>> Okay.
297. 9:15>> That's the churn I care about. If we can
298. 9:16get that churn to sub 3% a month, we're
299. 9:18[ __ ] killing it. All right?
300. 9:20>> Okay.
301. 9:20>> That's the game.
302. 9:21>> Amazing.
303. 9:22My second question is
304. 9:25in terms of what that lower so for 1,500
305. 9:27a month, we have our our like costs to
306. 9:30deliver for delivering everything.
307. 9:32>> Do less.
308. 9:33>> Just do less.
309. 9:34>> Yeah.
310. 9:34>> Less pieces of content per month or less
311. 9:37>> Yeah.
312. 9:37>> I mean, realistically, you need to use
313. 9:38AI more and automate a huge portion of
314. 9:40that.
315. 9:41>> Yeah, yeah, yeah.
316. 9:41>> only way to be real.
317. 9:42>> Recently I learned that. Yeah.
318. 9:44>> Yeah.
319. 9:45>> Okay.
320. 9:45>> Like we have a we have a YouTube channel
321. 9:47that we just started that with one guy
322. 9:49and we're putting out 20 videos a day.
323. 9:52>> That's crazy. Yeah, that's crazy.
324. 9:54>> Right. So like it's you you have to lean
325. 9:56into this and if your team's not like
326. 9:58the biggest thing out of all this is you
327. 10:00like your your cost basis and your
328. 10:02pricing is based on your old delivery
329. 10:04model. We need to change the delivery
330. 10:05model so that you can have significantly
331. 10:06higher gross margins. That's like big
332. 10:08flashing Vegas signs. Beyond that is
333. 10:12change the avatar to 750. They have to
334. 10:14have training and at least 10 sales
335. 10:15guys. We can split the pricing for
336. 10:17minnows and whales. Minnows get 5K per
337. 10:19quarter. Whales get 5K per month.
338. 10:21Messaging has to now match this new
339. 10:23avatar. We need to segment turn. Number
340. 10:25four, segment turn between
341. 10:28the ideal customers and the minnows so
342. 10:30that we can actually track. Once you hit
343. 10:32I'll just call it 5% a month turn with
344. 10:34the correct avatar, scale it.
345. 10:37>> Nice. That's amazing. Thank you so much.
346. 10:39Yes, super cool. Appreciate it.
347. 10:41>> Appreciate you.
348. 10:42If you like this video and you're
349. 10:43business owner who wants to break
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351. 10:45distilled every lesson from scaling 10
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357. 10:56can click here and you can check it out.
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360. 11:01enjoy.