The way you become a millionaire, is by
losing money.
Hey everyone, I'm today I'm going to share with you,
how to become a multi-millionaire, by losing money. What most people
don't tell you is, in business, you got to optimize for Lifetime Value, also
known as LTV. What that means is, when someone's a customer, in many cases
they'll keep coming back and spending more money. Or you can up sell your
customers or down sell them, and generate more revenue.
In other words, whatever a customer pays you on day one, that doesn't mean that's all they're going to spend with you. They can keep buying more products, more services, different products for different services, they can refer friends, there's so many more ways to make money from each and every single customer.
Here's one of the best pieces of business advice
that I got from this friend. The difference between seven figure companies,
eight figure companies, and nine figure companies, is one thing.
Seven figure companies will spend money on things
like advertising and be like, hey I'm spending a dollar, I need to make back
two dollars right away. In other words, if I give you a dollar for advertising,
and you give me back two dollars, I'm happy. Because I just made a dollar
profit. Sure there are credit card fees, and maybe some other expenses, but in
general, it's profitable. As you scale it up, you keep making money.
Eight figure companies on the other hand believe
that, for every dollar I spend in advertising, I need to make back a dollar in
return. In other words, they want to break even. Because they know that over
the long haul, because customers keep coming back, buying more, they'll break
even.
And nine figure companies, for every dollar they
spend, they're okay if they lose money and they don't even generate a dollar
right away. Because those guys know, that in the long run, you'll keep coming
back, spending more, and generate even more income. In other words, they're
optimizing for the lifetime value of a customer.
Now if you want to be a millionaire, and lose money
up front, because you can still make money if you don't lose money, but it's
much easier, because it's easier to compete with other people if you're
optimizing for your lifetime value, versus you know, your short term income.
There are a few things you need to know.
Number one,
You need to have amazing tracking setup in place.
You can't just install Google Analytics. You need a custom installation from
tracking your conversions, your goals, what's driving revenues, what's not
driving revenue; you can use tools like Mixpanel to optimize your lifetime
value of your customers. Without it, if you don't know what a customer's worth,
how do you know how much you can spend to acquire a customer? Because marketing
is continually rising in cost, so the only way to grab the majority of the inventory
is to be willing to lose money in the short run.
Number Two is,
Provide amazing service that people aren't
expecting. For example, Amazon has prime, free two day air shipping. A great
many people didn't expect it when they discharged it. Now they're offering even
more, if you're a prime member, you get discounts at Whole Foods, you can get
deliveries for your food and groceries for free, you just have to tip, you can
get free video service like Netflix, they're going above and beyond by
providing amazing service that you're not expecting. Yeah, they're charging for
it, they'll lose money in the short run because they know they've knocked your
socks off so much that you're going to stick with them. In other words, by
providing a service that's so unique and amazing that people aren't expecting,
it builds amazing brand loyalty.
Number Three is,
Having up sells and down sells. By having them, what
you'll find is, you won't lose as much money up front, sometimes you can even
break money if not make money. A good example of this is Do you remember going
to McDonald's as a kid? Would you like fries with that? Would you like a Coke?
Would you like to supersize your meal? Those are all up sells and down sells. I
was a little kid they'd be like, oh would you a Happy Meal so you can get a toy?
I'm like, course I wanted it, my parents may not have wanted to spend the
money, but I wanted it, right? Those are all good up sells and down sells.
Number Four is,
In case you're attempting to truly develop, center on
improving your transformations. Advertising is continually going up in cost.
In
the event that you can get a greater amount of your guests to change over in
clients, you won't lose as much cash in the short run. You can utilize
instruments like Crazy Egg to run A/B tests, perceive how clients draw
in with your site. What's more, enhance and run A/B tests you can utilize
devices like HelloBar to gather messages when individuals are going to
skip away and leave your site. So that way you can email them, try to get them
back to your website, and convert them later on. There are so many tools out
there, you can even use SurveyMonkey, or you can use Qualaroo to
survey your audience to figure out what's wrong with your webpage, what changes
you need to make, so that way, again, you can boost your conversion rate.
Conculsion
So if you follow those tips, yeah you're still
probably going to lose money in the short run if you want to grow your business
fast and grow it into millions of dollars, but you'll be better off because you
have a much bigger company in the long run, and eventually you'll see the
profit. That's why Amazon operates at net zero, like; they don't care to make a
lot of money. They'll have very thin margins and they're okay with it, because
they just want to gobble up the market share and look at them, they're worth so
much money. Almost a trillion dollars, they're saying one day Amazon will be
worth over a trillion, and I believe that.
So that's it. Make sure you comment below if you have a question, I can help you
with strategies for your business. And of course, if you enjoy this article,
make sure you comment, share. Thank you very much.
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