How To Sell Services To The Ultra Wealthy | Ep 957

0:00 Welcome back to the game. In this episode, I had a conversation with two business owners. The first one is a membership business currently doing about a million bucks in revenue per year and looking to get to three. Her main problem was that it's taking about six months to make a customer profitable and adds.

0:13 So here's what we broke down on this call. Number one, how to structure membership offer and bonuses to significantly increase LTV. Number two, we work through how to do a mop up campaign so she can collect more cash up front from annual membership sales during her five day challenges, which is how she sells people.

0:27 My second conversation was with a service based business that sells to ultra high net worth families and family offices. They're currently doing 1.6 million in revenue and are aiming to hit 10 million by the end of the year. We broke down exactly how it would restructure their pricing and add on an annual retainer that would allow her to sell more to her customers while adding recurring revenue.

0:45 I hope this is super valuable for you. Enjoy. I'm a paid crafters. I'm mostly women 45 plus. You teach crafters for themselves. Crafters make stickers. Okay, love it. I love this. This is great. Okay. So making stickers for themselves for this and the ultra style. Right. So my business is made. It did all the sales figures last year.

1:08 Good for you. So all low tickets. Good for you. Thank you. Okay, so you made a million plus. Okay. Yep. Amazing. $27 and $207. Okay. And the main continuity I have is the membership. It's my main $27 a month or $270 per year membership. Okay. I really want to be at $3 million USD per year, but my constraint, I think, is 30-day cash.

1:37 So I'm a new member sits on all that I have for ads. I collect about $60 in the first 30 days per new member. Okay. But when I basically numbers on my past recent launches, it's probably costing me about $90 to require them with meta-amps. So I just feel like I can't scale profitably. What's churn? What's LTV?

1:57 What's churn? What's LTV? So churn is 93%, an LTV bound to the little bit, depending on launches, but it's around $300. Hold on. So $27 divided by 7%. Right? Okay. So $3.85 is true LTV. Okay. That's fine. So big picture just so we're clear, you're spending $90 and you're making $385, right? Well, $385 is across the entire, like all of my members.

2:30 So I haven't worked out the LTV specifically for the Amazon all. Okay. Are you on school? This membership is not on school, but I do have a small member that is on school. Okay, because on school, it does my cohort. So you can actually see cohorts by month. So you can see when you have your launch months and you can follow that cohort to see its churn.

2:46 Yeah. I need to start tracking this. I can vote for myself. I was covered. Yeah. It's a pay. I mean, we spend a zillion to do that on school. Anyways, not a school ed. Okay. So you're at $60 what you're collecting cash. It's costing you 90. You're not sure on LTV, but you feel comfortable saying $300.

3:03 Yeah. That's unfair. Okay. Got it. And the problem is that it takes you two months to break even rather than one. The way that I've worked it out, and I may not have all of my numbers here, but it takes longer than two months. Okay. Yeah. I trust you. I trust you. Yeah. It feels like, because I'm all good with, you know, paying an advance and taking a hit on ads to get like a recoup to cash, but it feels to me the more I've worked out, but it's probably more like six months.

3:29 Okay. Got it. So when you're making the offer and when you're running the ads finals, if running to a webinar or running to a five day event, what is it running to? Yeah. Okay. Well, three, four, five day event. Some lips. Maybe one right now. You're good. Okay. Okay. That's the, uh, what's the offer that you sell at the event?

3:48 Price point. The payment is $10. And the offer is the 27 a month for 270 a year. And then I kind of switched in and out different kinds of upsells to try and increase the car value. Okay. And so what percentage are taking the prepayment versus the 27? About 10% take annual. Yeah. It's because you're, I mean, if you, if somebody has the offer to the two and you're giving them 16% off, it's not a, what bonuses do you add to the 270?

4:17 Or is it literally the same offer with the discount? Well, previously, yeah, I've done zoning bonuses every day of the event. But I haven't restricted it to annual members only and I feel that I'm making a trick there and I've considered it because I'm in the middle of the lot right now. I could implement an annual members bonus right now, even for existing members to upgrade.

4:35 So otherwise, apart from the two months, they get nothing else extra. I honestly think you could, you can very easily solve this with two steps. All right. So here they are. Number one is that when you're doing a five day selling event, you need to sell the expensive thing. Yeah. So your fear is, I'm going to, I want to sell this recurring thing because I don't want to lose anybody.

4:56 But the reality is that if you have five days with people, you get to a consumer audience is what you're selling to. 300 to 600 is the impulse purchase window for a consumer. Yeah. 300 to low end 600 is the high end. That's your range. You could probably go up a little bit and you'd still probably, you'll make more money at five or 600.

5:11 I'm just telling you right now, if you wanted to go crazy, I'm just telling you, you would. But you need to sell the annual upfront. All right. That's number one. And what I want you to do is come up with one to two big bonuses that are going to be annual exclusive. Okay. Yeah. Now, after the event is over, what you're going to do is you're going to do a scoop up campaign.

5:30 So it's five days and you're going to retarget everybody who saw the ads directly to your $27 purchase page. It's 27 per month. And you're just going to remove the bonuses. Yeah. That's it. That'll fix your cash. I got one. You can do it. Yeah. I like that plan. It's something that I haven't done enough before.

5:51 And I have started increasing the pint a few times to a bit higher, not even in the 300. It picks up for twins. But I feel it because I haven't offered a big enough bonus package. That's definitely it hasn't helped. So I can absolutely do this. I love this for you. Now, let me give you a little, a little something else.

6:10 There's probably some sort of what I call physical product premium that you can add to this. So are there any thing? Is there like a kit? You can't do it for this one, but for next one. Is there any kind of like physical thing that you can give them? Like the paper, the printer, the, you know, that kind of stuff?

6:26 There are so many things, basically, that I could put together. There are so many things that have no clue about doing this. Maybe Vampage is a good place for me to ask, because it's something that I know is worth well. Otherwise, in the create stage with friends. So I'm sure that's something I could do.

6:42 I just wouldn't know why. Yeah. So I would say this. If I were you, what I would end up doing is I would sell them the printer with the paper. You can't do it by this time because you're like two days away from pitching. So do what I said first. You know, add the annual with the bonus. But you will dramatically increase your conversions if you add a physical product that makes that makes this pitch tangible.

7:00 Because the thing is, is people need people. Have you ever heard like people need a reason but have an excuse? All right. The idea is that like these ladies, I'm assuming they're ladies 45 plus, want to, they want to buy it. Right. They have a reason, but they need an excuse. The excuse to legitimize the person they can go to their husband or their spouse, whatever, is they say, hey, but I got this thing, which I'm going to use to generate money or like they get something, not just like a login.

7:26 So a consumer's willingness to purchase goes up dramatically if it's physical. And so I think you'd actually be able to push a thousand dollar price point if you included the physical thing. Yeah. My head is swelling now. It's so many different physical things. Yeah. I put together. Even if it's only a one thing to test first, like, yeah, I've never even considered doing that.

7:46 So step one, step two, because I don't want to overwhelm. Step one, add the annual, make that the only offer available. I want to be clear, the only offer available is the annual with the bonuses. You cart close. After the cart closes, then you do a mop up campaign. That's the $27 a month thing, but it doesn't have these two key bonuses.

8:03 Okay. So annual only at the next launch. Yes. And then after the launch complete, then I offer monthly as well, but within one of the bonuses. So basically do two car closes. Car close one. And then you do car close to. Yeah. Yeah. Okay. Yeah. And you can sit like, let's say there's three bonuses. You remove two.

8:22 You keep one at the 27. So that allows you to car close the second one. And then you have your normal everyday activities that don't include those three bonuses. Yeah. Cool. Okay. And if people ask them monthly, because they would, do I, do I just say no? Right. Just say like, I would say like, we have options for monthly, but you're not going to get these bonuses that I just mentioned all this time talking about.

8:41 And they're going to be like, I like that. Fuck. Yeah. Yeah. I'm really going to be open and honest. Yeah. No, of course. No, do not lie. But you can make it less convenient to purchase the thing you don't want them to purchase. Yeah. Cool. That helps. Okay. That's really awesome. Thanks so much. You bet.

8:58 Talk soon. I'll see you inside the group. All right. Cheers. Cheers. Cheers. Johnny like that. Cheers. It's one of your people. I know. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah.

9:36 Yeah. Too much. Okay. Sorry. So in true design and wellness advisory services, to ultra-high net worth families and family offices. Okay. Love this. I am, I am that. Yeah. And that. Exactly. You are my avatar. Yeah. Okay. What's revenue? It's currently at one point six. Okay. And I'm looking to be at 10 million by end of next year and then scale this to 250 million in the next 10 years all right. Let's rock. What's the problem?

10:11 So it's a little bit of a van western door issue where I'm building out this ladder and I have a question about the pricing structure. Basically, would you or Tony Robin buy this ladder? Okay. Kind of the constraint right now. I wanted to look before we scale it. Okay. So I'm have three tiers. The first one is the lowest and it's $80 a square foot for renovating or building a new home and that includes all of the construction selections.

10:43 The drawings, the furniture layout and selections. We incorporate about a dozen different layers of wellness and we collaborate with the builder and architect. So that's tier one $80 a square foot and the whole vacation is that we convert their home into a wellness sanctuary so they don't have to leave to go to a wellness retreat.

11:04 Okay. And tier two is a seven to 10 year commitment across their whole real estate portfolio. And it's $100 a square foot because we do everything that's included in the first tier. We also added strategy across the residences of a plan for sequencing the rates are locked in across that time period and we do like a property review to make sure every function of each property is an alignment.

11:33 And then the final tier, tier three is the other two tiers plus more of their whole ecosystem. So we advise on their yacht. They're playing their offices and they get curated annual experiences like we'll go to Italy and pick out their slab for the countertop will meet the artist and Vienna, whatever it is, they get priority placement, they get a 15 year road map.

11:59 And they get annual council reviews where they've had a life event, a baby, an injury, and we're presenting to the board about, you know, what we'd recommend. So they get priority. What's the price on that? That one is $100 a square foot as well, but there's a 200 K stewardship retainer annually. Okay. Have you sold many of these?

12:29 Well, short answer, the top two tier two and three are what we're adding the tier one we've been doing for 20 years. So that's what I'm saying like, I don't know, I've run this through the AI like different ways. I just don't know how to build this ladder. Yeah. Well, I'm not actually sure if a ladder is the approach I would use with the business you have.

13:00 Because when you talk to me through all three of those, the first one made a lot of sense. And the other two I was like kind of squinting a little bit. Because fundamentally, let's say you did tier one and then I said, hey, can you do my yachts too? You'd probably be like, yes, sure. Right. And it would just be like at tier one. And so for fractal pricing to really work, it needs to be like five times the price.

13:20 And so like going up by like 20% it's like, it's too, it's too undifferentiated. Does that make sense? Yeah. And also for me, 10 year, 15 year commitment sounds very heavy. Okay. Like I think the richest people in the world will flexibility. We want options and we want speed. And we want to make sure that it's very easy. And then when I pay you, I don't have to redo it.

13:42 Because then I would hate right. Right. So and the goal is like I want to be working with families through all their generations. I want to be doing all their properties. So rather than them hiring a designer in Spain and Dubai in New York, I'm doing all their properties. So here's what I think you should do. I actually think your annual retainer should be diminimous.

14:05 It should be like a rounding error in this project. And the reason for that is I'll explain why. So we do this in home services a lot. And the way that it works is like, if I sell you a hundred thousand dollar thing, right. I would say, hey, you know, we do a maintenance plan for five hundred dollars a year.

14:21 And it's again, it's a tiny percentage of the thing. And it's because you don't care about the money. And it should be positioned as insurance like I'll come by once you're just to make sure everything's working the way it should. All that kind of jazz, right. And it's like that's what most people do anyways.

14:36 And so what it does is it gives you an excuse to always meet with them every year. And as soon as you walk into which person's house and you're an established vendor, they're going to have shit for you to do. Okay. So to me, that's probably need more continuity or want more continuity and guessing in the business.

14:50 Yes, but I want to help people at a deeper, more integrated level, almost like a fractional board advisor for their properties. So like we don't replace their state manager, we partner with them. I guess my concern that makes me nervous is that I don't want to be like just doing, oh, we're going to, you know, will you help us refresh our bathroom or redo the kitchen and like small renovation projects.

15:17 I want to do the whole home. I think that that's all going to come down to like the, how rich the people that you were talking to are. You know what I mean. And as much as I may, you may hate to hear this like the big, the small jobs get the big jobs. Yeah. You know what I mean? So I do hate to hear them.

15:39 Yeah. But the thing is, it doesn't mean they're less profitable, right. And if you think about it as like, this is me maintaining the business so that in three years or one, because the thing is is rich people buy houses and yachts and planes all the time, right. And so like every year, they're going to buy something every other year, they're going to buy something.

15:53 So if it's an off year, you still make money, you still keep the relationship, you're still top of mine. And then I would like, when I go there, I'm like, hey, what else do you have in the pipeline of acquisition that we need to be looking at. And then you can price that way. And fundamentally, you're pricing already scales with the size of the thing, right.

16:09 So you could have like a yacht pricing, a jet pricing and a house pricing. That would make more sense to me than having these tiers. And then, and then the maintenance plan out weave into it. You don't call it maintenance, call it stretchy, whatever whatever you want. It's, I'm coming by once a year.

16:23 I'm going to make sure you're sure it's not fucked up. But then when I'm in there, I'm going to ask you what other shit you got going on in a machine worship. Okay. So it's more of, here's my core offer. And then I have a continuity plan that it's just included. And it's like an annual retainer. And, okay.

16:41 And then I can figure out some really great inclusions to include with that. Do you think that the $80 a square foot for the core offer, if figure we typically do 10,000 square foot. I literally did the math of my head. I was like, yeah, I was like, yeah, it's an undergrad. It's funny because when you said the $80 a foot, I wrote it down.

17:00 And I was like, the first thing I'm going to tell her is that this number means nothing to me. Yeah. And what I mean by that is like, I don't know what $80 a foot is. The likelihood is most, especially new customers, this will be, they're either going to only buy from you because you're a referral, right?

17:16 Or they're pricing out three different people. And at the end of the day, if you come up more buttoned up, more professional, better finishes, better look and aesthetic, you'll win the business. Right. Because they're coming in, not because they're trying to save money. They're coming because they want, they want that best shit.

17:34 Right. And we've geek commoditized ourselves by saying we're a wellness advisory, which positions us really as a only one in the world at this point, that deals at the level of wellness that we do and interior design. So we're not a commodity and they can't really prices out apples to apples. So it's opened a lot of doors, including with like the Rockefeller family office, but I just want to get, you know, the pricing dialed in.

18:00 So you're saying that if I were to pound a family office like their CEO, if you said $100 a foot or $80 a foot, I have no clue. They're just going to do the math and just figure out how much it costs. You know, I mean, like, it means it's whatever. But giving them that formula is okay. Yeah. It's like, it's okay.

18:17 They're just going to do the math. So it doesn't like, you could have that be internal and just price the job and send it to them. Well, yeah. Yeah. I want to like give them something so that when they get on the call with me, they're not completely blindsided. Like, I'm trying to set the expectation of, yeah, we do $20 million minimum for the value of your home and, you know, I think if you set that up front, again, I don't think the $80 really does much.

18:47 But if you set that expectation up front that it like we only deal with ultra high net worth and family offices and it's $20 million plus, you know, a state's minimum, they're arguing against it. Yeah. You're more than on a grant, right? Yeah. Right. Okay. So I would not do this ladder. I would have maybe, I don't even really care about the ladder in general.

19:06 You're going to price your job because you're so bespoke anyways. You're bespoke. And so I think the key point is like, sell whatever you can get away with. A lot of people, like if you're a soul at the table, as long as you give them exactly what they want, they'll love you, add in the continuity so that you can keep getting business from them and it'll stack a year for year.

19:23 Okay. Okay. Well, I'll just go $100 a square foot and the continuity and you're out some awesome features for that. Hundreds of nice, simple numbers, right? Very easy to do the math. Yeah. Super easy. Do it in your head. I love that. Okay. Amazing. Thank you so much, Alex. And I'm coming to L1 in March.

19:41 So I will see you soon. Appreciate you. Appreciate you. Appreciate you. You bet. All right. Let's go. Let's rock and lock and load, baby.