June 10, 2019

One Fundamental Business Decision That Many Founders Forget

Patrick Lee Scott

Patrick Lee Scott
CEO/Unbounded, LLC

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Learn the fundamental question every business owner needs to answer before they can succeed

A few weeks ago I was in an advisory meeting with the Co-Founders of a private jet company.

They are great salesmen. Super cool dudes?—?one of them is literally married to a supermodel and friends with all sorts of eccentric millionaires.

However, they were having trouble bringing in as many qualified leads as they’d like. Most of their sales were word of mouth and straight phone call hustling. They knew the needed marketing to bring customers to them but their investments into it thus far had been unsuccessful.

“It’s hard to market private jet ticket sales” an Instagram marketer whom they decided did not work out told me. “It’s too expensive for people to move straight to buying tickets for filling a whole private jet at $7–10k per seat.”

Yes, it is.

That’s why you probably shouldn’t do that.

Just cause you’re selling private jet tickets doesn’t mean you need to market private jet tickets.

It’s kinda like if you are fishing and your goal is to eat a fish… you don’t use a grill—you use bait.

Moreover, if you’re serious, you know what fish you are trying to catch, and you use the right rod, reel, bait, and take your boat to the right location in order to most effectively catch that fish.

Here’s was this company’s biggest problem: They didn’t know what fish they wanted to catch.

If you don’t know which fish, you don’t know where to take your boat. You don’t know which rod to use. You don’t know which bait to pick.

Once you define it is WHO you are serving, then the way to attract that person can become clear.

So many companies miss this fundamental step: Who are you serving!?

How can you have a go-to-market strategy when you haven’t even decided whom you are serving?

If you haven’t gotten clear about where this person is, where they want to go, and where you can take them it’s gonna be hard to figure out how to reach them.

Which leads me to point number two—a single product does not equal an entire business.

“Amateurs focus on the frontend”—Russel Brunson

When we are speaking about businesses this is another huge mistake that limits companies’ go-to-market strategies. It’s one I’ve fallen victim to before in the past as well.

Several years back I had a failed startup of my own — in general, we were lacking everything marketing related, which is why I made it a goal of mine to master marketing. (Read more about my story on my website?—trying to not get too distracted here)

One of our major flaws was that we had a product, not a business.

?meaning to say, multiple products and services to serve your dream customers.

The frontend of a business is just what you see.

A real business has levels. At each level, you can serve your customers at a higher level. This is known as a value ladder.

And as a literal billionaire told me, the most profitable thing you can do is sell more to your current customers.

Advice from Seth Merrin, a literal billionaire:

https://youtu.be/TXI7XVTu4QM

This means as a business selling private jet seats, for example, you are not just selling private jet seats. You are serving a dream customer who among other things, finds value in flying private.

If you are having trouble nailing down just exactly who your dream customer is, a good place to start is the three major markets, and niche down from there. Those three major markets are Health, Wealth, and Relationships.

NOTE: I’ve also heard them defined as four major markets during the Accelerator I participated in as a CTO of a machine learning project: Made, Paid, Laid, and Afraid (insurance)

For example, if that dream customer is a CEO, then you are probably in the wealth market.

Let’s take a look at what a value ladder might look like when selling private jet tickets in the wealth market, with CEOs as a dream customer.

You can start by making content for CEOs. Free content is the first level of your value ladder. The first way you are able to serve your dream customer. In this stage, you are just trying to build rapport and introduce them to your world. These pieces of content are the bridges into your world.

A second rung on your value ladder might be a concierge service. These are busy people, their time is very valuable. Saving them time with booking restaurants or hotels still serves these customers, at a lower level than booking private jets, but you are also eliminating non-buyers earlier in their journey. If they aren’t even willing to pay extra for the time savings of a concierge service to book a nice restaurant reservation, do you think they’d be the type of person whose time is valuable enough to book private jets? Probably not.

Marketing is as much about repelling the wrong people as it is about attracting the right ones.

Maybe the next level of your value ladder is full vacation planning. Now the people in your pipeline are traveling, are buyers, and you know saving time is very important to them.

Think someone who is in this situation is more likely to want a private jet than someone you’ve never dealt with before? Perfect time to ask them.

There may even be additional premium value tiers beyond this.

Depending on the dream customer you’ve decided on, the value ladder, and thus the strategy might look pretty different. If the person you are serving is taking the private jet for relationship reasons?—?the strategy is different. If that person is taking the private jet because of health reasons, the strategy is different again.

Until you decide whom it is that you are serving though, none of these paths reveal themselves.

So before you get too deep building some product, make sure you know who it is that you really want to serve.

Comments? You can contact me directly via my AdvisoryCloud profile.

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