How I'd Build a Free Front-End With Paid Upsells — Transcript

Full transcript

1. 0:00This is an upsell offer. It can also be
2. 0:01used on the front end. This is called
3. 0:03free with alternate revenue stream. And
4. 0:05so you'll notice that I my name's the
5. 0:07names of the of the mechanisms in the
6. 0:09last chapters are not nearly as refined,
7. 0:12you know, win your money back. I think I
8. 0:13called
9. 0:14uh
10. 0:15I think it was like free deposit
11. 0:18with conditions or something is what I
12. 0:19called it. So I called these like really
13. 0:21technical things.
14. 0:22Um and then I came with like win your
15. 0:23money back and like pay less now pay
16. 0:24more later, which I used to call
17. 0:26invisible free, but no one would know
18. 0:27what that means. So I tried to make the
19. 0:28names more descriptive.
20. 0:30Um but without further ado
21. 0:32let us begin. All right. Um
22. 0:35let's do it. Okay, so 2019-ish.
23. 0:38The following is a rough paraphrasing
24. 0:39from a story a gym owner told me that
25. 0:41taught me number one, an excellent
26. 0:43downsell/upsell strategy, and number
27. 0:45two, a really nice way to graciously
28. 0:47exit anyone from a sales conversation
29. 0:49who doesn't want to buy your main
30. 0:50product.
31. 0:51So when someone walks in towards the
32. 0:53place and says no to joining, which used
33. 0:54to kill me, I had this realization.
34. 0:57Instead of awkwardly escorting out them
35. 0:58out of my gym, why not offer them
36. 1:00something free instead?
37. 1:01Instead I say, "No worries." And then I
38. 1:03hand them a USB drive. "Here's
39. 1:05everything you need to do this program
40. 1:06from home, absolutely free."
41. 1:08You should see their faces. In this
42. 1:10industry where everyone's trying to lock
43. 1:11you into contracts, they they think I'm
44. 1:13some kind of saint. But here's the real
45. 1:15move. After I give them the USB, I
46. 1:17simply add "To get you a head start,
47. 1:19let's just book you for a nutrition
48. 1:20consultation so you can see the results
49. 1:22you want. The orientation is on us. We
50. 1:25just want to get this community healthy,
51. 1:27and maybe when you can afford it you'll
52. 1:29think of us."
53. 1:30Okay?
54. 1:31So almost 100% of people who said no to
55. 1:34my gym membership end up in these
56. 1:36nutrition consultations. And guess what?
57. 1:38During these orientations, we sell them
58. 1:40supplements instead of workout programs.
59. 1:42The crazy part, these people who
60. 1:44initially rejected working out spend 50%
61. 1:46more on supplements than my regular
62. 1:48clients. I've basically created a no
63. 1:50prospect left behind approach, and my
64. 1:52sales team loves it because they help
65. 1:53everyone who walks in.
66. 1:55Everyone around here calls it the no
67. 1:56sale
68. 1:57Perfect name, right? I'm selling to
69. 1:59people who think they aren't buying
70. 2:00anything. And once I started doing that,
71. 2:02I thought to myself, "Why not offer this
72. 2:04free USB as my front end, just to get
73. 2:07people in?"
74. 2:08Then I can upsell them an in-person
75. 2:10version for money. Or they can keep
76. 2:12buying supplements from us every month
77. 2:13and not even use up gym space. Win-win.
78. 2:16So that's what I did, and it worked.
79. 2:18So it goes to show that people want the
80. 2:20same problem solved in different ways.
81. 2:23So offering multiple ways to solve their
82. 2:25problems gives you a few more at bats.
83. 2:27What's more, this strategy allowed him
84. 2:29and the gyms who subsequently modeled it
85. 2:31in our community a way to turn every
86. 2:33prospect into a sale.
87. 2:35There are a few ways to use it, so let's
88. 2:36dive in. As a downsell, like in the
89. 2:38story, or as a primary offer, which he
90. 2:41alludes to at the end. We'll dive into
91. 2:42both.
92. 2:44So here's the description. This is an
93. 2:46offer that depends strongly on the types
94. 2:47of monetization {slash} revenue streams
95. 2:49available to a business. In the simplest
96. 2:51terms, we're providing one type of
97. 2:53service or product for free, and then
98. 2:55upselling something else.
99. 2:57You can upsell something as a one-time
100. 2:59service or product to offset advertising
101. 3:00costs. Or you can make the upsell
102. 3:03recurring.
103. 3:04Or you can plan your entire business
104. 3:07around giving one thing away for free
105. 3:08and monetizing with another. In other
106. 3:10words, it works for one-time services or
107. 3:13even recurring services, provided the
108. 3:15alternative revenue stream has
109. 3:16sufficiently high margins to afford both
110. 3:18fulfillment types. Both uh but most
111. 3:21variations chunk up to two larger
112. 3:22buckets.
113. 3:23So either you do this one, which is
114. 3:25called a paired upsell, so I give you
115. 3:28thing A for free in exchange for buying
116. 3:30thing B,
117. 3:32or an independent upsell. So I give you
118. 3:34thing A for free, and I will encourage
119. 3:37you to buy thing B. So those are
120. 3:38slightly nuanced ways of expressing the
121. 3:40same concept or offer, but they'll
122. 3:42hopefully generate some ideas for you on
123. 3:44how to use this in your business or your
124. 3:45clients' businesses. So I'll give you
125. 3:46some examples.
126. 3:47So if you had a storage business, the
127. 3:49offer might be you get a free month of
128. 3:51storage. The paired upsell would be, do
129. 3:53you want to buy a lock for your storage
130. 3:55unit? The The only locks that fit our
131. 3:57doors are the ones we sell and cannot be
132. 3:59purchased elsewhere. So, I'm going to
133. 4:01give you this, but you got to buy that,
134. 4:03right? Um weight loss clinic. So, a free
135. 4:0628-day program. The independent upsell,
136. 4:09so the different version, at nutrition
137. 4:10orientation, a kickoff program after the
138. 4:12first sign up, you're going to want this
139. 4:14$400 supplement package to get the best
140. 4:16results for the free 28-day service. So,
141. 4:18think about it like this. It's like you
142. 4:20Someone comes in and says, "Hey, I I'm
143. 4:22going to weight loss clinic." And I say,
144. 4:23"Hey, we're going to have all these docs
145. 4:25on staff and you know what? We're going
146. 4:26to help you for free." They're like,
147. 4:27"What?" It's like, "Yeah, but on the
148. 4:29next consultation, we'll tell you the
149. 4:30supplements and the meal plans and all
150. 4:31that stuff you're going to need." At the
151. 4:33next consultation, you then upsell all
152. 4:35the meals and all this other stuff
153. 4:36that's going to go with it. But you give
154. 4:38the service for free. So, this is kind
155. 4:40of like that,
156. 4:41um
157. 4:42either paired or independent, but it's
158. 4:43The core of this is that you've got two
159. 4:44things and the margin from one covers
160. 4:47the delivery of the other. So, usually
161. 4:48it's like one that's way cheaper and one
162. 4:50that's more expensive, but you give this
163. 4:52thing for a for free to attract people
164. 4:54in the front end, but then you basically
165. 4:55pair it or make it so they have to or
166. 4:57they should or most likely will buy this
167. 4:59thing on recurring. And by doing that,
168. 5:01it makes it a super sexy offer. So, I'll
169. 5:03give you physical therapist example. So,
170. 5:05let's say the offer is four free
171. 5:06treatments, which would be a crazy front
172. 5:07end offer. The independent upsell would
173. 5:09be, you're going to need these
174. 5:10orthotics, these bands, these braces,
175. 5:13these oils and athletic tape to maximize
176. 5:14the effectiveness of the free
177. 5:16treatments. And so, it's like we're
178. 5:17going to do these free treatments no
179. 5:18matter what. I was like, "But here's the
180. 5:20stuff you're going to need to get the
181. 5:21most out of it, right?"
182. 5:23Uh if you had an education business or
183. 5:25software. So, um I will coach or onboard
184. 5:27you for free indefinitely on your agency
185. 5:30or your XYZ as long as you use our
186. 5:32software.
187. 5:33It's an example of that. So, paired
188. 5:34upsell would be, we monetize inherently
189. 5:37on the software itself. So, this is
190. 5:38literally what I did uh for Alan. So,
191. 5:41Alan was our software company and so,
192. 5:42what I did was I I basically helped
193. 5:46agencies scale for free. I gave them all
194. 5:49the education, gave them everything as
195. 5:50long as you used our software. And so
196. 5:52the software, because of the nature of
197. 5:54how it worked, basically had I don't
198. 5:55want to say a revenue split, but it had
199. 5:57a percentage of
200. 5:59it backed into a cost a cost
201. 6:04I want to get into the the economics.
202. 6:05Basically I would say it backed into a
203. 6:07kind of like a royalty or rev share on
204. 6:08on the agency that was using it
205. 6:10functionally as a CRM.
206. 6:11What's up, sweetie?
207. 6:13I'm going to finish my chapter. We're
208. 6:14all we're all hanging out. We're
209. 6:15reading. Okay. So, let me give you a
210. 6:17real example.
211. 6:19So free book on real estate, okay? So,
212. 6:21upsell number one
213. 6:23hold on.
214. 6:26There we go. Make sure I didn't my pages
215. 6:27were stuck together. Free book on real
216. 6:29estate. So upsell number one would be
217. 6:30shipping cost. Upsell number two would
218. 6:31be the audio version. Upsell number
219. 6:33three would be the deal contract
220. 6:34templates. Upsell number four would be
221. 6:35where to find deals, which would be a
222. 6:36training. Upsell number five, how to
223. 6:38find financing if you have no money.
224. 6:40Note, each of these are things necessary
225. 6:43for being successful using the
226. 6:44strategies outlined in the book. The
227. 6:46hardest sale is the first sale, the
228. 6:48opportunity vehicle, the book. The rest
229. 6:50of the upsells are things that they need
230. 6:51along the journey. So you can give the
231. 6:53free book away, but then along the path
232. 6:55they have these other things, right? So
233. 6:57for me, a version of this and the reason
234. 7:00I think I I pulled this out of the Money
235. 7:02Models book
236. 7:03is that it was a little bit similar. But
237. 7:06obviously the use cases that I showed in
238. 7:07here are a little bit different than the
239. 7:08the the core one that I have inside of
240. 7:09Money Models, but I included in here
241. 7:11because I thought it would I think it
242. 7:12would it'll jog different people's
243. 7:13memories in a different way. So
244. 7:16couple details. So you want to use a
245. 7:17multi-step sales process with this
246. 7:19offer. If you're marketing thing A for
247. 7:21free, then you have to be able to give
248. 7:23thing away for free. So he was giving
249. 7:24out actual USB things to anybody even if
250. 7:26they didn't want to buy anything. So if
251. 7:28you want to advertise compliantly, you
252. 7:29have to like if you're going to say
253. 7:30something's free, you have to give it
254. 7:31away for someone to get it for free. All
255. 7:33right. Um
256. 7:34Now, that being said, you can give
257. 7:35something away for free as and then
258. 7:37encourage people to buy stuff. I mean
259. 7:38that's the nature of capitalism. Like
260. 7:39you come in for the free drink and then
261. 7:41we say, "Hey, don't you want, you know,
262. 7:42a a bigger drink with that? Don't you
263. 7:43want to Don't you want a sandwich with
264. 7:45that?" Like that's just marketing.
265. 7:46That's fine.
266. 7:47Um you just can't say, "Come in for a
267. 7:48free thing and I won't give you the free
268. 7:50thing. You have to buy this." That's the
269. 7:51no-no. Okay. So, um
270. 7:54I covered that. Great. Um and so the key
271. 7:56is that if you give something away that
272. 7:57has low incremental cost, as in adding
273. 8:00another unit doesn't cost much. That's
274. 8:01why That's how this free thing works.
275. 8:03Like a book
276. 8:04um
277. 8:05has a lot of costs into the developing a
278. 8:06book, but the actual like cost of
279. 8:07printing a book is low compared to some
280. 8:09of the other things that might might
281. 8:10that you might upsell. Now, if you're
282. 8:12using this as a front end, you want to
283. 8:14make the next thing you are selling or
284. 8:15upselling them uh to be the next natural
285. 8:17thing that the prospect would need. All
286. 8:19right. So, it's key to understanding the
287. 8:20prospect's problems and solutions um
288. 8:22better than they do. And so that's where
289. 8:24the good money model design becomes
290. 8:25really important. Like you should know
291. 8:28all the things that a customer is going
292. 8:30to need to uh accomplish
293. 8:32what basically every I've talked about
294. 8:34the problem-solution cycle. Your first
295. 8:37thing will solve a problem, even if they
296. 8:38haven't used it yet. But in their mind,
297. 8:40because they made the purchase, they've
298. 8:41solved that problem. So, now
299. 8:44you're like, "Hey, but now that we fixed
300. 8:45your teeth or now that we whitened your
301. 8:47teeth, your teeth are crooked as hell.
302. 8:49And so we got to fix that too now. And
303. 8:50now that they're Now that we fixed your
304. 8:52you know, crooked teeth and now they're
305. 8:53white and they're aligned, they're not
306. 8:55healthy. So, now we got to do the
307. 8:56reinforcements and we got to coat your
308. 8:58teeth, right?" And so every new solution
309. 9:00creates another problem that we can then
310. 9:02solve with another upsell. And so we
311. 9:03have to think about this ahead of time
312. 9:05because they
313. 9:06fortunately, unfortunately, most people
314. 9:07only think one decision ahead of time.
315. 9:09And so we should just think three
316. 9:10decisions at a time and then reverse
317. 9:12engineer our offers uh to accommodate
318. 9:14that.
319. 9:15Now, in the examples that I gave, the
320. 9:17money model does not end there. So,
321. 9:18there's still more upsells that occur in
322. 9:19each of the scenarios. So, storage, the
323. 9:22one I said earlier, will upsell boxes,
324. 9:23larger storage units, and commitment.
325. 9:25Weight loss clinic would upsell
326. 9:26continuity of service, continuity of
327. 9:27supplements, done-for-you meals, bars,
328. 9:29home and treatment, etc. Right? They'll
329. 9:30also likely close a card for the
330. 9:32continuity of service to the free
331. 9:33service is also a free trial plus
332. 9:35penalty. This way you're capturing
333. 9:37multiple streams of revenue. Physical
334. 9:38therapists will probably also upsell a
335. 9:40long-term treatment bundle after or
336. 9:42during the four treatment plan, right?
337. 9:44And so, the effectiveness of this play
338. 9:46is based on number one, the prospect's
339. 9:47perception of uh of how essential or
340. 9:49required the next thing is. So, kind of
341. 9:51like the lock uh in the storage thing
342. 9:53where you can't really have a a storage
343. 9:54unit without a lock on it, rather than
344. 9:56the whole point is that it's it's safe,
345. 9:57right? Uh but the thing is is when you
346. 9:59go into storage unit, you don't you
347. 10:00probably if you've ever done this
348. 10:01before, you go there and then you're
349. 10:02like, "Oh yeah, I forgot. I guess I'm
350. 10:03going to have to have a lock." Like most
351. 10:04people don't come in prepared with like,
352. 10:06"I've got a lock. I've got these boxes."
353. 10:08Like they just don't think about it,
354. 10:09right? They go get the storage unit and
355. 10:10then they get upsold all the stuff.
356. 10:11Now, number two is
357. 10:13what makes this effective is how how
358. 10:14seamless the upsell process is for the
359. 10:16prospect. So, if you make it
360. 10:18frictionless,
361. 10:19and this is the key, you can get like
362. 10:2090% plus take rates on these offers
363. 10:23because they should feel like it makes
364. 10:25total sense to buy. Again, this isn't
365. 10:26guaranteed it's going to happen for you.
366. 10:27I'm just saying like it you should shoot
367. 10:29for that.
368. 10:31Now, the biggest benefit of using this
369. 10:33offer as a free front end is being able
370. 10:35to liquidate acquisition cost, meaning
371. 10:36cost of getting the person in the door.
372. 10:38If you make $0 on the free thing,
373. 10:40obviously, but you know 80% take a $300
374. 10:43upsell with 80% margins, then you know
375. 10:45that you're making 300 * 80% * 80%,
376. 10:48which is $192 per free thing that you
377. 10:51give away. And that's just the first
378. 10:53upsell. And so, there will and always
379. 10:55should be many others. Now, but since
380. 10:58the take rate is so high and it is up
381. 10:59front, this is one of the easiest ways
382. 11:01to generate cash up front with little to
383. 11:03no operational drag. And this is what
384. 11:05this what makes this kind of attractive.
385. 11:06Physical and digital products pair very
386. 11:08well with services for this specific
387. 11:10money model. So, he was giving a digital
388. 11:12workout plan
389. 11:13with a USB
390. 11:15in person because it was still some free
391. 11:17value that he could give somebody and
392. 11:19say, "I did say that I could give you
393. 11:20this free workout stuff." They'd come in
394. 11:22and they'd say, "But you probably want
395. 11:23the in person stuff, so let me upsell
396. 11:24that."
397. 11:25Um and again, this is for people who
398. 11:27said no. So, you can use this as a
399. 11:28downsell or you can use this as a front
400. 11:29end. Both of those work.
401. 11:31Um
402. 11:32so, we use this all the time for
403. 11:34internal stuff. And what I mean is using
404. 11:36it to market to an existing audience.
405. 11:37So, you can encourage them to bring
406. 11:39friends for a free thing
407. 11:41and so they'll be excited to do that
408. 11:43and participate. So, I'll tell you an
409. 11:44example. So, in the Fast Cash um
410. 11:47Playbook, which is uh one of the is in
411. 11:49the uh Profit Implementation System,
412. 11:50which is one of the free things you get
413. 11:52when you donate 200 bucks. Um so, in the
414. 11:54Fast Cash uh Playbook
415. 11:57one of the one of the biggest, most
416. 11:58successful places we did at Gym Launch,
417. 11:59which honestly the foundation of this
418. 12:01play is what built Prestige Labs, my big
419. 12:02supplement company.
420. 12:03And the way it worked was this.
421. 12:05So, we would we would advertise a 28-day
422. 12:08free transformation. And we would say,
423. 12:11"Anybody who's a member of the gym can
424. 12:13participate in this free, you know,
425. 12:15transformation." So, they get a little
426. 12:16bit more accountability, a little more
427. 12:18help, etc. And they could bring a friend
428. 12:19to do it, too. And so, people would
429. 12:21bring one, two, three friends cuz it was
430. 12:22free. But here's how it worked. So,
431. 12:25let's say you've got 100 members, just
432. 12:27for simple sake. So, we would email this
433. 12:29thing and we would get like 30, 40, 50%
434. 12:32people to take the offer cuz it's free,
435. 12:34right? It's just like let's just like
436. 12:35get you into gear for the holiday
437. 12:37season, whatever. But here's the key.
438. 12:39When they'd come in to say they want to
439. 12:40sign up for it, we'd say, "Awesome.
440. 12:41We'll set you a nutrition consultation.
441. 12:42Bring your friend." And then when they
442. 12:44come with their friend on the second
443. 12:46meeting
444. 12:47then at that meeting, we would then sell
445. 12:49both of them the supplements that went
446. 12:51with the free 28-day uh transformation.
447. 12:53And so, this is a classic example of
448. 12:54kind of a free with a second revenue
449. 12:56stream. And so, we would generate two,
450. 12:58three, $400 in supplement sales per
451. 13:00person even though it might have been
452. 13:01harder for us to sell $400 of service to
453. 13:04somebody who's already at the gym. But
454. 13:06because they were doing a program or
455. 13:07following some specific thing, they're
456. 13:08way more likely to do it. So, it's a
457. 13:09really good reactivation campaign. It's
458. 13:11really good for referrals. And this is
459. 13:13why I include this in the Fast Cash
460. 13:14Playbook because
461. 13:15um I I would slot this in on like one of
462. 13:18my four big promotions or six big
463. 13:20promotions that I would do per year. And
464. 13:21so, just having this on a regular basis
465. 13:24um like the thing is is like it's all
466. 13:26fundamentals. Like doing this stuff is
467. 13:28just doing the fundamentals consistently
468. 13:30in the business. And what makes a
469. 13:31business owner advanced is
470. 13:33their ability to do the fundamentals at
471. 13:35scale and do it consistently. So, I'm
472. 13:37getting looks from Leila. So, I'm going
473. 13:38to throw this out for a bit. Okay.
474. 13:40Um
475. 13:42I think I just gave the I think I just
476. 13:44literally just described the example.
477. 13:45It's freaky. It's like I wrote this
478. 13:47book. Um okay. So, I think I covered the
479. 13:49main things there. Okay.
480. 13:50Um
481. 13:51And uh I added one little pro tip in
482. 13:53here, which is that uh if you do that
483. 13:55kind of bring a friend thing or
484. 13:56reactivation thing where someone comes
485. 13:58in for that free 28 deal, you really
486. 14:00have to
487. 14:01casually but uh succinctly get a good
488. 14:04percentage of people take that upsell.
489. 14:07And we have found that if someone does
490. 14:08not take the upsell, even the small
491. 14:10little like hey just buy a supplement
492. 14:11when you do the 28 day thing, the likely
493. 14:13that they then convert into a customer
494. 14:15or member or upsell later drops
495. 14:17precipitously. So, all your focus should
496. 14:18be on that free to first upsell
497. 14:20conversion. Everything else after that
498. 14:22makes it way more likely. Okay.
499. 14:24If you were the best salesperson in your
500. 14:26company, then your company will be
501. 14:28always capped by you. And this is what
502. 14:31the two-day workshop is for. Now, I want
503. 14:32to be clear before I get into what it
504. 14:33is. This is for million-dollar plus
505. 14:36businesses that are trying to scale
506. 14:37their sales team, where you are still
507. 14:39probably vast majority of the magic.
508. 14:41Either you're literally taking calls or
509. 14:43you are a big percentage of the revenue
510. 14:44or you have to be constantly on the
511. 14:46sales team in order to get this to work.
512. 14:48If you're in any of those settings, then
513. 14:50this is absolutely for you. And so, if
514. 14:51you are tired of your sales relying on
515. 14:53you and want a sales system that scales
516. 14:55beyond you, then apply. That's the deal.
517. 14:58And so, if it is a fit, we look forward
518. 14:59to seeing you out here and it's a great
519. 15:00time. We're talking about sales stuff.
520. 15:02Like how could you have a better time?
521. 15:02Don't take my word for it. Here's what
522. 15:04other people are saying about our
523. 15:04workshops. They're
524. 15:06premo. And uh yeah, looking forward to
525. 15:08seeing you out there.