00:00All right. Welcome to Upsells. So at this point in the journey, if you go back to that initial
00:09sort of overview, you know, we're now on to everything over here. Selling is still not
00:17even a final version of it, but you know, basically we've completed that first customer journey.
00:29We got them from point A, not a paying customer, to point B, a paying customer. We've looked at a
00:37lot
00:37of these different formats, right? Add to BSL to checkout, add to advertorial to BSL. I mean,
00:42I won't do the whole recap. I'll probably have done that in a different video, honestly. I don't
00:45record it yet, but I will. So I'm trying to be where I have it. I think it's down, where's
00:53the
00:53second journey? I think I have it down here more. Right? Like, okay. We got them to buy. That was
01:02journey number one. Now journey number two is like, how do we keep them buying? How do we keep them
01:06a
01:06customer for life? Right? And the first and most obvious type of thing would be upsells, right?
01:14Some of these things, ignore them, their notes. We'll look at sort of email sequences, promotions,
01:19things of that nature, and then get the bonuses. So we're on upsells. This is the new journey.
01:25Journey one from A to B is complete, right? Now, I mean, technically, this is still the same at the
01:31very end of journey B. Like they bought once. Basically, they bought once. They just bought.
01:37They got from point A to point B. When is the number one time that you're likely to get them
01:44to buy again?
01:46It is moments after they just bought, right? They're already in buyer mode. They've already
01:50committed. They pulled out their credit card. They've already made the mental leap of, I'm going
01:54to give this company money or this person money or this brand money or whatever it is. So being like,
01:58well, I'll give them a little more money is never going to be easier than it is right then and
02:05there.
02:05And that's with upsells, right? And we're going to go through all this here, but it's sort of like
02:09there's a, I'm trying to think of how I could explain this. With a good brand, your time horizon
02:22is like, I hate how the formatting of this is. Whatever, just have to deal with this, right?
02:29Kind of long. All right, you've got, I should obviously just like a whiteboard almost, but it's
02:35fine. Like, right? Like, it's sort of like, I'll probably do like an intro video, this sort of part
02:59of RMBC and then repeat what I'm doing here. But essentially like, okay, say here's where they
03:07make their first purchase. Okay. Terrible graphic, right? So if you make a really good brand
03:22brand and you build a good relationship with them, give them to buy again here and here and here and
03:30here and here and here is totally possible and doable, right? But the future is uncertain.
03:40And if you don't build a good relationship or things in the market change or whatever it is,
03:48it may be that all of your sales kind of come here. For people who do like ClickBank offers,
03:57like really aggressive offers, don't build relationships with their customers, aren't
04:01building brands, all of their money is being made here. And this includes first purchase, but then,
04:06you know, upsells, email list, et cetera. And then it kind of dies out. Maybe,
04:13maybe they randomly get one here. Maybe, maybe they get one here, but like less likely.
04:23But even if you do have a great brand and they're going to buy here, here, here, here,
04:31here, here, don't mind the length, right? Okay, cool. Great. You still have to contend with your AOV.
04:39And by that, right, it's sort of like,
04:46essentially, your CAC or CPA, where you're paying to acquire a customer,
04:53and then your AOV, and then your margin, right? I'll do another train on funnel economics, right?
04:59But I'm going to put it here because it sort of sets up what we're doing with upsells and the
05:02logic
05:03and thought process, right? So,
05:05So, let's say you pay $100 to acquire a customer. Without upsells, let's say your average order value
05:16is $80. And let's say your margin, say your COGS are like $20, right? So, basically your margin
05:28is like negative $40, right? Does this make sense of all the players? COGS, $20, right? So,
05:42you basically lose $20 between, you know, your AOV is essentially synonymous with revenue, right?
05:51Okay. So, I pay $100, I get $80 in revenue, right? Which means I've lost $20. My COGS are,
06:08you know, $20, which means I've lost another $20. So, then my margin is negative $40, right? Or it's $60.
06:25Fine.
06:28But, basically, I think negative $40 makes more sense, right? It's minus $20, so $100, minus $20, minus $20,
06:34it leaves $60, and I've lost $40, right?
06:43So, how do I fix that? Well, one of the ways is getting your AOV, your average order value,
06:49up here in the first purchase. So, let's say my CAC CPA is $100 still. So, my AOV is now
07:01$160,
07:05okay? Which means I've made $60, gross. Let's say COGS
07:18COGS are now $40 to get that AOV up, okay?
07:32So, I've lost $20. Now, my margin, my extra net, like this.
07:45Okay, so, $160, minus $100, right? This was $80, minus $100, negative $20. $160, minus $100,
07:57is positive $60, minus $40, I don't know. See, this is almost confusing, right?
08:10Now, my net profit margin is $20, okay? There's a huge difference between negative $40 and $20.
08:23I don't know. Difference between an eight-figure business and either a business that fails,
08:31or that takes a really long time to scale, because you can go negative sometimes when
08:36you're doing subscription. And again, I'll do another training on Funnel Economics. I know I'm kind of like
08:41riffing on this, but I think it's kind of important to understand it. So, the big difference is,
08:45if this is true, then what can I do with that? I can either make more money and go get
08:54my Lambo
08:54faster, or I can apply that to my CAC CPA. So, then I spend,
09:07let's say, $120. My net profit is zero, but I'm not losing money on customers.
09:17Why would I do that? Because maybe now I can acquire
09:27twice as many customers. Maybe if I, by unlocking 20 additional dollars in a Lambo CPA,
09:33I can get double the customers. Maybe it's just like, you know, 1.3x the customers. But either
09:39way, I get more customers. When would that matter? If I'm on subscription, if I'm going to have,
09:44if I have a brand where they're going to buy here, here, here, here, here, here, here, whatever it is,
09:57then I don't really care if I break even here. I'm not losing money. I don't care because I'm going
10:01to make money here, here, here, here, here, here, here. And when I'm doing that,
10:11my CAC is going to be zero, right? So, even if I'm paying COGS, my margin is to be way
10:16higher for
10:17all of those places. And by the way, this is why subscription businesses are really nice too,
10:21because in a subscription business, you know, guess what? Like, basically, if you keep someone
10:28on retention, they buy here, break even, they buy here, here, here, here, here, here, whatever it is,
10:36right? One, two, three, four, five, six, three, both cycles. Maybe they, maybe you get them here,
10:40and they just buy one, two, three. But either way, there's no CAC those additional times,
10:46so you make all your money back, which is also why going negative to acquire customers is actually
10:53a totally fine model if you know what you're doing, right? But if you don't know what you're doing, or
11:02even with like your early on, and yes, you have a subscription business, and you like wanna,
11:07you don't mind going negative, but like right now, you also don't have the money to just
11:11go at a loss constantly, then one of the most obvious things you could do is get your AOV up,
11:17right? And the most obvious way to do that is through upsells. So that's sort of your setup
11:24for upsells. I'm gonna take this. I'm gonna not, I'm deleting it, don't freak out. That can go away.
11:35Go down here, basic economics.
11:43Are important.
11:48Okay, so that's down there.
11:51It's really important because again, a lot of people don't have the money starting out to just
11:55go negative a ton, knowing that they'll eventually get rebills. It's the same reason I've talked about
12:00with like GLP-1s, the space I'm in, telemedicine, one of the spaces I'm in. I think it's virtually
12:06impossible for somebody else to come in. I made a YouTube video and I think I'll, I might include
12:10that as a funnel economics video. I gotta go back and look at it and double check. If not, maybe
12:15I'll
12:15put it somewhere else. People always ignore this, but it's like, I don't know how you could do marketing
12:18without thinking about this stuff to be completely honest with you, right? And even with Opal Beauty,
12:24you know, we've lost, we put $600,000 more than that at this point into the brand. And it's really
12:29just in the last like month that we started being profitable every day. And part of that's because
12:33we've rebranded and all these other things. But even when we were losing money figuring it out,
12:44I was like, well, at least we're have a high subscription take rate. The problem was our
12:48products were not good enough. So our subscription take rate was good, but our rebills were bad. And so
12:52one of the reasons I basically redid everything to get better products. Okay. We're 12 minutes and I
12:59haven't barely even talked about upsells, but hopefully you understand why I shared this and why
13:03it's valuable. Okay. So let's go to actual practical stuff with upsells. And then we're going to do some
13:11shopping with Stefan. You know what I'm going to do?
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