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    Stop Trying to Get Rich. Get Better | Ep 733

    enJuly 05, 2024

    Podcast Summary

    • Improving business modelFocus on improving business model for long-term success, rather than solely increasing revenue or output. Simplify model and focus on back end to make front end easier and effective.

      Focusing on improving yourself and your business model, rather than solely on increasing revenue or output, is key to achieving long-term success and wealth. Most small business owners are preoccupied with finding cheaper leads and scaling their business in the wrong way, which often involves constantly chasing new customers and sales. Instead, building a business with the end in mind, simplifying the model, and focusing on the back end can make the front end easier and more effective. As John Paul Diorio said, aim to be in the reselling business, not the selling business. Thinking two steps ahead and addressing the root causes of any business challenges can help avoid calamity and lead to sustainable growth.

    • Product improvementFocusing on product improvement is crucial for long-term business success, as it leads to customer loyalty, referrals, and overall growth. Investing time and effort into refining your product or service can lead to significant progress.

      Focusing on improving the quality of your product or service is crucial for long-term business success. The speaker emphasizes that while getting new customers is important, it's equally essential to keep them coming back and referring others. This is achieved by delivering an exceptional experience that meets and exceeds their expectations. The speaker shares the example of a friend who spent a year perfecting his cookie recipe and opened a successful business as a result. He also mentions the importance of building a community to reinforce customer loyalty and improve overall business growth. The speaker encourages business owners to invest time and effort into refining their product or service, rather than solely focusing on acquiring new customers. Delaying immediate rewards for the sake of long-term product improvement is a valuable skill that can lead to significant progress and growth.

    • Product developmentFocusing on sales or leads without a strong product will result in high customer acquisition costs and limit long-term growth. Prioritizing product development and delivering on promises can decrease customer acquisition costs through referrals and increase customer lifetime value.

      Focusing solely on improving sales or leads for a small business won't lead to long-term success. Instead, building a strong product that creates customer value and generates referrals is essential for achieving significant growth and profitability. The unlimited traffic in the world means there's never a shortage of leads, but affordability becomes an issue when the product doesn't meet customer expectations. By prioritizing product development and delivering on promises, businesses can decrease customer acquisition costs through referrals and increase customer lifetime value. Additionally, product is the foundation of a strong brand, and consistently delivering on promises is crucial for long-term success.

    • Brand building, customer acquisition costsBuilding a strong brand through high value and consistent delivery on promises can decrease customer acquisition costs by leading to positive word of mouth and fewer negative referrals.

      Keeping your promises and building a strong brand can significantly decrease your customer acquisition costs (CAC). This is because positive word of mouth leads to more conversions and lower CAC, while negative referrals can increase CAC. To build a strong brand, focus on delivering high value and charging a premium price, while keeping your costs as low as possible. This requires a lot of effort and attention to detail, but the payoff is a loyal customer base and higher profitability. The inverse is also true - if your CAC is increasing faster than the cost of CPMs, it may be due to negative word of mouth or a weak brand. To combat this, focus on becoming a world-class marketer and building a strong brand through positive associations and consistent delivery on promises. The long-term benefits include higher ROAS, lower CAC, and a loyal customer base.

    • External influences on business successBusiness owners should question internal assumptions, gather data, and recognize external factors to gain valuable insights and improve customer experiences, leading to better decision-making and business growth.

      Understanding the reasons behind both successes and failures is crucial for business owners. Many business owners attribute their success to internal factors and fail to recognize external influences. By asking questions, challenging assumptions, and gathering data, business owners can gain valuable insights and improve customer experiences. Additionally, recognizing the importance of external factors and being open to learning from competition can lead to better decision-making and business growth. As Professor Bergelman from Stanford said, "it's better to know why you have failed than to succeed and not know why." Ignoring outside influences and relying on gut feelings or unproven narratives can hinder progress and limit potential success.

    • Product ImprovementFocus on improving product/service in early stages for superior customer experience, leading to referrals and a strong, compounding customer base. Delay gratification and endure failures for product perfection sets successful entrepreneurs apart.

      Focusing on improving your product or service is the most effective way to grow a business, rather than relying solely on marketing and sales. The speaker emphasizes that in the early stages, the goal should be to learn and get better, not to earn a lot of money. This approach allows you to create a superior customer experience, leading to referrals and a strong, compounding customer base. The willingness to delay gratification and endure failures in the pursuit of product perfection sets successful entrepreneurs apart from their competitors. Ultimately, a high-quality product or service is the most valuable asset for a business, as it not only attracts and retains customers but also increases in value over time.

    • Customer Activation PointsAnalyzing and optimizing customer experiences and behaviors at key points in the customer journey can lead to increased retention, recurring purchases, and long-term success

      Understanding and focusing on activation points in the customer journey can significantly improve retention and recurring purchases in a business. This involves analyzing the experiences and behaviors of customers who do not cancel or churn, identifying the variables that distinguish them from other customers, and then optimizing the onboarding process to drive customers towards those activation points. This approach can lead to increased sales, customer loyalty, and long-term success. For instance, in the case of a book series, identifying and focusing on the activation point of customers who buy the second book after enjoying the first one can lead to continuous sales and growth, even years after the initial product launch. Ultimately, the goal is to create a positive experience for customers that encourages them to continue engaging with the business and making repeat purchases.

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