Stop Chasing, Start Choosing: How to Create Demand That Lasts from Daniel Priestley

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There's a magical thing called with or without you energy.
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With or without you energy is I'm gonna be fine with or without you.
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And business owners that can get themselves into a place with with or without you energy, they tend to do well.
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In the digital world that's full of abundance, there is a hyper reaction to things that people can't have.
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Be sold out on things.
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Let people miss out.
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Hi, Daniel.
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I always start the podcast with what's your definition of success?
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Isn't that something that changes over time?
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Uh it can.
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It definitely changes over time.
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I was a very young guy, and I saw you uh in my hometown uh in the Sunshine Coast, and you had a yellow Ferrari.
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And at that point, uh that was my definition of success.
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But a yellow Ferrari.
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I remember that one.
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It was an F3 function, a Formula One list, and it saved a time.
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So that was the that was at one point the definition of the thing, dude.
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You're trying to make me feel a little movie.
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Yeah, you should claim that.
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That was a great car.
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Yeah, it was.
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Um yeah, obviously, look, today I got three beautiful kids and successors taking them to school in the morning, um, most mornings, and uh and and having a very happy home and having good food in the fridge and pricing it's having great activities.
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Well, I only take on 20 clients a year in a sensible way in a crazy world.
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Yeah, sensible way in a crazy world.
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How how did the definition shift for you?
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How did success sort of shift over time?
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Uh so for me, uh the big milestones obviously you know, you you get married, you have kids, all of those things.
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You become a completely different way.
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You know, you can't imagine what it's like to love someone more than you want to meet your wife, and then you can't imagine 10 to 20 years, it would be like to even go deep couples there and get other kids a hundred bucks for, you know, all of that.
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So kind of like you, you it's kind of like you're living in this in this house, and then suddenly you open up a door and discover there's this whole other side of the house, there's this whole other section of the house in there.
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Yeah.
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I think it's it's a wonderful thing how we as humans get to grow through our lifetime.
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It's it's really wonderful how we get to do that.
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But to do it consciously is sort of a big challenge in this day and age to consciously think about your growth and plan your growth and plan that sort of thing.
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Probably never had to be more aware of it because there's so many distractions.
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We live in this world where you know the average person in two weeks scrolls the height of TikTok, uh sorry, the height of the Eiffel Tower on TikTok um with their thumb.
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Uh, you know, so like Is that is that that's a thing?
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That's a thing.
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Holy heck.
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So uh if we take the most famous Peter on TikTok in the UK, the height of the Eiffel Tower every two weeks, but 364 days of the year you can add your name to the registration.
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And then when they get about 750,000 tickets registration list, we probably won't even have those.
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And a lot of people miss out, but they're not selling.
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I've got the meta glasses, and and you know, I get on the phone with people and I say, Oh, here's where I am, and they're gonna keep running the IPM and all that different stuff.
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The world is changing fast.
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Marketing, let's go to marketing.
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A little bit of the way of the world of marketing has shifted and it shifts every week.
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Basically, the algorithms change and that.
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But there's some key principles that I think stay the same.
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And one of them is about and you use the word oversubscribed.
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Maybe explain that concept to people first, and then we'll dive into it.
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So if you go to economics class 101, first lesson, first day, they're gonna talk about demand and supply tension, and they're gonna say this really simple idea, which is that if demand is high and supply is low, there's room for profit in there.
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And if supply is high and demand is low, then you're probably gonna make losses.
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And they often use the example of bananas.
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If you've got a hundred bananas and only 10 people want bananas, you're gonna sell them cheap.
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And if you've got a hundred bananas and a thousand people want bananas, you're gonna put the prices up.
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Um, we as entrepreneurs, we forget this lesson.
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We we forget that demand and supply tension is everything.
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We think that we have to do all of these things to be a successful business, but ultimately all of it's for nothing if you don't have maintain some demand and supply tension.
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And a great example of this would be airlines.
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So, an airline is probably one of the most valuable businesses on the planet to society.
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It's probably the one of the most complex, capital intensive, risky businesses.
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There's a million things that have to go perfectly every single day, and yet their margins are 7%.
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So they don't get great margins, and they do everything right.
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Um, and then you get a bit a weird business like Rolex.
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And Rolex has a product that hasn't really changed much in 50 years.
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It's not something people particularly need if they don't, you know, you can live without a Rolex.
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Um, it doesn't particularly open up humanity to a whole different, you know, range of experiences.
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Um, they don't do great customer service.
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You know, if you've if your Rolex needs fixing fixing, they'll take it, tell you when it's ready, three months later.
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Um and yet they make 70% margins.
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Yeah.
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But they maintain demand and supply tension.
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Yeah.
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So uh this is one of the key ideas that I try and rev uh get into entrepreneurs' minds around their marketing, that the purpose of the marketing is to create demand and supply tension.
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And that's that's that's strategically what they're trying to do.
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I love, you know, I when I look at oversubscribed, I almost always go back to jobs.
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Steve Jobs, when he the guy was an absolute genius at creating a demand six months before they're even gonna give you the products.
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Oh yeah, you know, and people wouldn't I don't think people today that buy an iPhone understand that people would cue around the blocks for these.
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Two like two days, people would line up.
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It's like lining up for concert tickets, sort of.
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It was, yeah.
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Getting the iPad first, getting the the getting the phone first.
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He knew that he had to create that little bit of that moment, that tension.
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Um, he knew that that was everything.
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Yeah, that was that was so important.
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So let's learn the lessons right there, okay?
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Firstly, flipped it on its head, don't launch a product and then start marketing it.
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Oh, start marketing it.
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Like the movie business is probably one of the greatest examples of creating a demand before it comes out.
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Before it comes up.
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Tom Cruise Maverick.
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COVID hit, they decide let's not put it out, and then we've got another two years of to ramp up the excitement and that whole thing.
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How how do we get people to shift their thinking to a launch mode rather than a put it out there and then start marketing?
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Okay.
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So mindset number one is stop being supply-side focused all the time.
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Most entrepreneurs are just always thinking of supply.
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So just accept the fact that your job as an entrepreneur is to be manufacturing demand for what you do.
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No one will do that for you.
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You can't really outsource it easily.
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Um, you as the entrepreneur need to be hands-on with this.
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If someone could easily do this for you, they'd be doing it for themselves.
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Right.
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So that's a that's an important one to keep in mind.
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This the how to do it is things like waiting lists, discussion groups, um, pre-registrations of interest, all of those sorts of things.
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I'll give you some real examples.
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Um, so last year we launched a new software business.
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And rather than writing any code or doing any work on the product, we just simply launched a waiting list and said, we're going to be launching software.
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It does this.
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Here's what it, here's what it's up to.
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If you're interested in that, join the waiting list.
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So within a couple of days, we had, I think, about 750 people on there on the waiting list.
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To join, you had to say what you wanted to use it for, what outcomes you were looking for, what price you were willing to pay.
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All of those questions got answered.
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And we even had a question there, which is, would you like to see um the Angel Investor presentation?
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And about 130 people said, Yeah, I want to see the Angel Investor presentation.
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So a couple of weeks later, we ran the Angel Investor uh presentation with with certified angels.
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We had all the data to to show exactly what the software would do, what outcomes people wanted, and how much they're willing to pay.
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And then we basically said, We're gonna just gonna do a very small angel round.
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Um now we haven't done any lines of code, we haven't done any development on the on the UX or the UI or any of that sort of stuff.
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It was an idea, and a few weeks later, we've raised the money to get it launched.
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Uh, we've got a a growth by that stage we had 1,500 plus people on the waiting list.
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So by the time we launch, we've got all these people on the waiting list, we've got angel investors who are saying, I want to get in on this angel investment.
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We'd drawn a line in that.
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So we'd maintain demand and supply tension, and then we had a very successful launch with that software product.
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The word sold out, most business owners would let's say they got a restaurant, they'd squeeze another chair in if they've got another customer rather than saying I'm sold out.
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How do we teach people that sold out is actually a good thing?
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So there's a there's a word that I like to use called official capacity.
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And official capacity is the capacity your business has to leave people feeling delighted.
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So for example, if you're a restaurant, let's say you've got 50 tables and chairs in there, at that particular moment, you've got the capacity to have 50 people who are happy that they came to your restaurant that night.
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You start squeezing tables and chairs in, that capacity actually goes down, not up.
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So you think, oh, I'll know what I'll do.
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I'll squeeze 10 tables in now, I've got a capacity of 60.
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You don't have a capacity of 60 if you're measuring people who feel delighted that they made the choice to deal with your business.
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So your capacity to delight people dropped.
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So what we look for is protecting the experience, protecting the capacity uh of your business and being just owning it and saying my business has the capacity to look after this number of people.
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Now, the reason I say official capacity is because you should tell people.
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You should actually say the official capacity the capacity of our restaurant is 50 tables a chair.
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Um I know you want to come in.
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I'm really, really sorry.
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We're full.
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We'd love to have you in 10 days' time when we're not full.
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Um, let's book you in and we'll have a we you will experience what they're experiencing, which is a great night out.
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Um but our our we protect our customers' ability to have a great experience.
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Let's go into the planning of a launch marketing strategy.
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Okay.
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Uh you you just gave us an example of yours, but you've been doing it a long time, so it came second nature to you.
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Let's say I am launching a new product or a new program or a new service or something.
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How do I go T minus and start back at the beginning?
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Great question.
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So there's going to be a few phases.
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There's the planning phase.
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During the planning phase, you're going to map out your whole campaign and you're going to uh craft your official capacity and you're going to work out how many people do we need to get engaged in this in order for our official capacity to definitely sell out.
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So let's say your business can take on 22 clients.
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You say, okay, roughly speaking, we close one in 50 uh uh people who um who come through as a lead.
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So we're gonna need about eleven hundred people engaging there.
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So you're gonna have to basically that's the point where you hit demand and supply tension.
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That's where you go, okay, we've got 20 spots available, we've got a thousand people on the list wanting those 20 spots.
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It's it's a 50 to 1 ratio.
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That that that means there's definitely gonna be a moment where people miss out.
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So we've got a plan by knowing our numbers right in the beginning.
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That's the that's the beginning.
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Okay.
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Next phase is called the build-up.
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And the build-up is essentially we're going to campaign for signals, not sales.
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So rather than signals, not sales.
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Okay.
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So rather yeah, teach me that one.
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So rather than saying there's something for you to buy, there's not something for you to buy, there's something you can signal interest in.
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So uh let's go back to the Ferrari dealership.
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So you can't walk into a Ferrari dealership and say, I'll have that one.
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So I'm sorry, that's not that's not for sale.
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You can signal your interest in that one.
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You can actually say, I would like one when one becomes available.
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So they will get you to join a waiting list.
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They will get you to fill in an application, a registration.
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So that's called signal collection, not sales.
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Um, if we take the most famous music festival in the UK, it's called Glastonbury, you can't buy a ticket, you can only register for a ticket.
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So for 364 days of the year, you can add your name to the registration list.
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And then when they get about 750,000 people on that registration list, on one day of the year, they make 136,000 tickets available.
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And a lot of people sadly miss out, but they're not selling, they're signal collecting.
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So on the build-up phase, we're just marketing for signals, not sales.
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We're not actually trying to get people to buy anything, we're just getting signals for for the interest in buying something.
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Discussion group, they could join a discussion group about it.
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Um, they could fill in a uh a wait list, they could uh join a um they could fill in an online uh assessment or a scorecard that says they need it but can't have it.
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So that's online assessment selling.
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So these are all things that you can get people to do as a strong signal of interest.
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Joining a webinar um would be, you know, that they downloading an e-book.
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Uh exactly any way that says I'm interested in this.
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I'm interested in something I can't yet have.
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So this is where we signal build.
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And but that can't yet have is massively important.
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Most people are like, well, if I've got them, why don't I just sell?
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That's it.
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But that's and and are most people profitable?
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No.
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So so we want the signal collection and we want the build-up phase.
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What we're trying to do is we're trying to build up to that point where the demand and supply tension is unbearable.
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There's now a thousand people who want 20 things, something like that.
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So at this point, we now need to create transparency.
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Transparency is the demand and supply transparency.
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It becomes uh apparent that there's plenty of people who want a limited number of things.
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So this is how do you do that in a way that's not, you know.
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Ethic.
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Well, how do you do it ethically?
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So there's a couple of ways.
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On social media, there's a lot of transparency.
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So for example, if uh if you saw a business coach who has 19,000 followers and everything they post is is thousands of people engaging, um, and they and you know they can only work with 20 customers, you would go, okay, that's that's a business coach that transparently is in demand.
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Um, I once saw a business coach step up on stage in front of a room full of about 300 CEOs, and at the end of the presentation said, if you're interested in working with me, here's a QR code.
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Um, fill in the application and I'll let you know exactly how that that works.
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And about half the room pulled out their phone and took a photo of the QR code.
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Now, the coach had said, I can only work with 12 clients here.
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And now there's 150 people in an audience with their phone out on the QR code.
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That was a moment of transparency.
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That was transparency of demand and supply tension.
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So uh now what you can do if people have been signaling using an online form is just simply tell people and be honest about it, because we you've got to be an ethical business person.
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So you say we've had 435 people uh who have registered.
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This experience is for 45 people.
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Um, unfortunately, some people are gonna miss out.
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Um and don't don't ever lie about that because it you will look like you've got egg on your face if if you then don't sell out, if you if it doesn't go.
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So you need to, but you can actually just tell people.
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You can just say, hey, look, uh some good news and bad news.
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It's a really popular launch, it's a really exciting time for us as a business because so many people, this many people have have registered, but we do only have to have this many people who can come in on on the on the next intake or whatever it is.
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So you in some way you need to be able to create a moment of transparency of demand and supply tension.
00:15:28.159 --> 00:15:33.759
And it can it can be subtle, um, and it can totally there's a dozen ways to do it very ethically.
00:15:34.240 --> 00:15:39.840
Yeah, I feel it's like okay, we're telling you in advance that some of you aren't going to get into this thing, sort of thing.
00:15:39.919 --> 00:15:41.440
It's it's it's that way.
00:15:41.679 --> 00:15:47.440
And it's like again, uh there's a nature of business people to fight that though.
00:15:47.679 --> 00:16:00.159
How when you're coaching something through that fight, how do you get them to realize just how important it is to stick to your guns and not go, well, we got a thousand, why don't we just sell a thousand of them, you know?
00:16:00.399 --> 00:16:01.600
Oh, yeah.
00:16:01.840 --> 00:16:07.519
Well, the the magic is in designing the year that they want, that they really want.
00:16:07.600 --> 00:16:20.000
Because I often start with the idea with business owners, I often start with how many customers would you need in order to have a really great year for you to have for you to look back on this year and say, This was great, we grew, we were profitable, what's the number?
00:16:20.159 --> 00:16:21.679
Um, so we might do that.
00:16:21.840 --> 00:16:25.600
We we essentially uh we you know, we start with that.
00:16:25.759 --> 00:16:29.200
The other thing we can do is at a later date we can expand capacity.
00:16:29.360 --> 00:16:32.080
So the official capacity is not set in stone forever.
00:16:32.399 --> 00:16:39.039
Um, you know, depending on what kind of business it might be, we might do a launch special, that is for the first 300 customers.
00:16:39.120 --> 00:16:44.720
And then once those customers are on boarded, we might do the next campaign, which could be for 1,500 customers.
00:16:45.120 --> 00:16:52.159
So when I do software, obviously software is the type of product that as many people as you want can sign up, but we always have a beta group.
00:16:52.240 --> 00:17:01.039
And the beta group are our first 300 testers, and the first 300 people, and we're gonna give them special support and contact, but we can only do that for 300 people.
00:17:01.279 --> 00:17:03.840
So anyone beyond the 300 misses out.
00:17:04.160 --> 00:17:13.279
But though they will get to see what's happened with the 300, they'll actually because we we then share the results of those 300, and then more people come to the next uh next bit.
00:17:13.599 --> 00:17:17.359
Now you keep using a word that's one of my favorite marketing words only.
00:17:18.160 --> 00:17:23.680
You know, and I think a lot of people miss out on the fact that, well, I need two customers a week.
00:17:24.319 --> 00:17:28.559
Well, you can only accept two new customers a week.
00:17:28.720 --> 00:17:30.319
It's a bit great reframe.
00:17:30.400 --> 00:17:30.720
I love it.
00:17:30.960 --> 00:17:34.000
There's a there's a magical thing called with or without you energy, right?
00:17:34.160 --> 00:17:37.279
With or without your energy is I'm gonna be fine with or without you.
00:17:37.440 --> 00:17:37.759
Got it.
00:17:37.920 --> 00:17:43.839
And that's and business owners that can get themselves into a place with with or without your energy, they tend to do well.
00:17:44.160 --> 00:17:45.039
Fantastic.
00:17:45.359 --> 00:17:49.599
So we've we've done the planning, we've got the signals.
00:17:49.920 --> 00:17:50.160
Yeah.
00:17:50.240 --> 00:17:51.759
So we get transparency.
00:17:52.160 --> 00:17:54.079
Moment of transparency, and then the release.
00:17:54.319 --> 00:17:56.880
So the release is you give people a moment to act.
00:17:57.039 --> 00:18:02.079
This is where you say, uh uh the tickets go live, uh, or you can now apply.
00:18:02.799 --> 00:18:03.759
Count down to that.
00:18:03.920 --> 00:18:04.720
Do you just do it?
00:18:05.119 --> 00:18:09.200
Well, you can you well, if like for example, Glastonbury says tickets go on sale at 5 a.m.
00:18:09.359 --> 00:18:10.319
on Monday morning.
00:18:10.480 --> 00:18:18.400
Um, people wake up early, they set an alarm, they hover their finger over the over the the button, um, and they're I know, I've done it on different things.
00:18:18.480 --> 00:18:18.799
Yeah, yeah.
00:18:19.039 --> 00:18:19.440
Super excited.
00:18:19.680 --> 00:18:23.039
I've literally had two of my assistants sitting there ready to buy things.
00:18:23.119 --> 00:18:29.039
Yeah, like there's all of us are on different computers making sure we get that the those Disney tickets, they're wild.
00:18:29.599 --> 00:18:37.279
Yeah, when it's for your kids, trust me, you've got everybody involved to try and get that thing at uh yeah, craziness of of the world.
00:18:37.519 --> 00:18:39.279
So we go live.
00:18:39.599 --> 00:18:41.839
Yeah, we we do but that's not the end of it though.
00:18:42.160 --> 00:18:48.559
Well, you know, with many campaigns, look, the perfect result is that it all goes smoothly and everything goes off without a hitch.
00:18:48.640 --> 00:18:50.640
Um, nine times out of ten, that doesn't happen.
00:18:50.799 --> 00:18:54.160
What mostly happened is you get a great result, but you don't complete everything.
00:18:54.400 --> 00:19:05.119
So what's nice is that you've got the signaled interest list, and then you can elegantly go back to the list and say, um, hey Brad, I noticed that you've got uh that you signaled that you're interested.
00:19:05.279 --> 00:19:17.599
I've actually got most of those uh things that are available have gone, but I do have a couple available uh and we wanted to reach out to you first as someone who we know would make a great uh fit for this product.
00:19:17.839 --> 00:19:19.599
Um I just wanted to give you the opportunity.
00:19:19.759 --> 00:19:23.839
You may not have seen the the live, but I can give you an opportunity if you'd like to come through or not.
00:19:24.000 --> 00:19:25.680
So you can do some follow-up sales.
00:19:26.160 --> 00:19:28.319
Um that's a great way to do one-on-one.
00:19:28.400 --> 00:19:33.279
And that way that you know, a nice result might be hey, we we said that we had 90 spots available.
00:19:33.359 --> 00:19:37.519
We 71 people uh have already selected that they want to go ahead.
00:19:37.599 --> 00:19:38.640
We've got a few spots available.
00:19:38.720 --> 00:19:39.680
Do you want one of them?
00:19:39.920 --> 00:19:43.440
Um and you can also, once again, you can signal demand and supply tension.
00:19:43.519 --> 00:19:49.359
You can say we've got 18 spots left, but we do have about a thousand people on the waiting list, or a thousand people had signalled interest.
00:19:49.440 --> 00:19:54.400
So I'm just gonna go through and and uh you know it's totally fine with or without your energy, right?
00:19:54.640 --> 00:19:57.119
It's totally fine if you want to go ahead or not.
00:19:57.279 --> 00:19:59.599
Um, but uh we do have some spots available.
00:19:59.759 --> 00:20:05.839
So a little bit of sales follow-up at that point um typically completes the campaign, puts the icing on the cake.
00:20:06.240 --> 00:20:19.440
Marketing planning wise, I I my challenge when I teach this to people is that it's changing from you've got to be marketing all day, all day, all day, all day, all day, to no, you don't need to market all year round.
00:20:19.680 --> 00:20:26.960
You might need to market three times a year or twice a year or whatever it is to become full, or even once a year.
00:20:27.119 --> 00:20:27.440
Yeah.
00:20:27.599 --> 00:20:35.039
I I with my business coaches, I tell them, listen, I want you to do marketing twice a year and fill yourself up.
00:20:35.200 --> 00:20:39.839
And then you don't need to, you don't need that tension of doing marketing for the next.
00:20:39.920 --> 00:20:48.720
Yes, you're gonna do your social proof marketing and keep the social media running and keep the content, keep that key person of influences you teach uh going.
00:20:49.039 --> 00:20:56.160
But your real marketing for customers doesn't have to be 24 hours a day, seven days a week.
00:20:56.480 --> 00:20:58.079
Especially for a business like coaching.
00:20:58.160 --> 00:21:01.599
You know, a lot of the best coaches, they don't have huge capacity.
00:21:02.000 --> 00:21:09.920
You know, they might like what are you what would you say is the a typical coach who's making great money, how many clients can they juggle at any time?
00:21:10.480 --> 00:21:11.759
20 is a big number.
00:21:12.000 --> 00:21:12.880
Twenty is a big number, right?
00:21:12.960 --> 00:21:15.119
So it's like I was thinking somewhere between 10 and 20.
00:21:15.279 --> 00:21:24.400
So realistically, if you did the right speaking engagement in the first half of the year and the right speaking engagement in the second half of the year, you're not gonna be able to take on any additional clients.
00:21:24.640 --> 00:21:24.880
Correct.
00:21:25.440 --> 00:21:29.200
You could literally be in front of a couple of hundred people twice a year.
00:21:29.359 --> 00:21:38.960
And but even like the clothing business has changed, selling in drops rather than you know, you know, you produce a thousand of that sweatshirt.
00:21:39.119 --> 00:21:39.759
That's it.
00:21:39.920 --> 00:21:40.559
That's it.
00:21:40.880 --> 00:21:42.400
Be sold out on things.
00:21:42.640 --> 00:21:42.960
Yes.
00:21:43.200 --> 00:21:44.240
Let people miss out.
00:21:44.400 --> 00:21:44.640
Yeah.
00:21:44.799 --> 00:21:45.920
People want what they can't have.
00:21:46.079 --> 00:21:54.960
In the digital world that's free that's full of abundance, there is a hyper uh reaction to things that people can't have.
00:21:55.359 --> 00:22:00.319
It's it's it's so rare in today's world for something to exist that you can't get hold of.
00:22:00.559 --> 00:22:02.720
But we see it now with burger chains.
00:22:03.119 --> 00:22:05.920
They bring a certain burger back for one month and then it's gone.
00:22:06.240 --> 00:22:06.720
And that's it.
00:22:06.880 --> 00:22:08.799
And and you're like, but I want that burger again.
00:22:08.880 --> 00:22:11.759
Well, you'll have to wait till next time we bring that burger back out.
00:22:11.920 --> 00:22:16.400
I think there's a lot of businesses starting to get the understanding of sold out.
00:22:16.720 --> 00:22:22.880
Now, what you can do with a bigger business is you can have your always available range and then you can sit drops on top.
00:22:23.200 --> 00:22:25.440
So you can have special offers and special things.
00:22:25.519 --> 00:22:27.119
We call these spotlight campaigns.
00:22:27.279 --> 00:22:29.440
So it just puts a spotlight on the business.
00:22:29.680 --> 00:22:35.839
Um, you can buy, let's say, like a Ralph Lorenz, you know, you can buy the Ralph Lorenz shirts any day of the week.
00:22:36.000 --> 00:22:52.400
You can get your the standard line of Ralph Loren, but there's certain things like this jacket or this, you know, coat or whatever, you know, that there's certain things that happen that do sell out, and that creates that same energy for the business while also having a day-to-day line that you can sell.
00:22:52.720 --> 00:23:00.720
Yeah, it's crazy that we still are in a world where it's it's sell as much as you can.
00:23:00.880 --> 00:23:02.319
Like you would get this.
00:23:02.400 --> 00:23:15.839
I ask the question to business people all the time: how many customers, like if they're doing a marketing plan, how many new customers do you want that you can handle and sustain on a daily, weekly, monthly basis?
00:23:16.160 --> 00:23:20.559
If we know how many customers you need to buy, we also know how many conversations you need to create.
00:23:20.799 --> 00:23:22.160
You can work backwards from there.
00:23:22.400 --> 00:23:28.880
The other thing that's a real head flip for a lot of business owners is that their business would make more money with less customers.
00:23:29.039 --> 00:23:29.200
Yeah.
00:23:29.359 --> 00:23:34.880
You know, so we did some research into um audiences and buying power within the audience.
00:23:35.039 --> 00:23:45.279
And essentially, to to oversimplify it, if you imagine like a your audience, the top 1% of people in your audience have 15% of the spending power.
00:23:45.440 --> 00:23:52.480
The next 9% have 45% of the spending power, which means 60% of the available budget is just 10% of the people.
00:23:52.720 --> 00:23:57.440
And then the uh remaining 90% of people have 40% of the budget.
00:23:57.759 --> 00:24:18.640
So where most entrepreneurs and business owners make a big mistake is they go for the noisiest, largest group of people who have the least money to spend, rather than having systems and processes for identifying the Cinderella in the ball, you know, that one in a hundred who is actually got 15% uh of the budget.
00:24:19.119 --> 00:24:21.119
Brings me to the question, pricing.
00:24:21.279 --> 00:24:23.680
Why does everyone do cheap?
00:24:23.839 --> 00:24:29.440
I mean, it it annoys me that people go for the, you know, they think they've got to be cheaper than the others.
00:24:29.599 --> 00:24:30.319
Why does that happen?
00:24:30.400 --> 00:24:32.240
And then how do we get to the other side?
00:24:32.559 --> 00:24:34.799
Yeah, I think it happens by default.
00:24:34.880 --> 00:24:37.359
It's kind of like why do everyone work on walk on the earth?
00:24:37.440 --> 00:24:40.240
Because that's kind of where gravity, gravity moves you there.
00:24:40.559 --> 00:24:47.519
Um, and and it takes a bit of planning to get off the earth, you know, it takes a bit of planning to to to get above the clouds, but but it can be done.
00:24:47.839 --> 00:24:51.759
So um, you know, so it's a it's beating market forces.
00:24:51.839 --> 00:24:52.960
You have to beat market forces.
00:24:53.039 --> 00:24:54.799
Market forces want price at zero.
00:24:55.119 --> 00:24:58.559
You know, that's that's where markets want you to price yourself at nothing.
00:24:58.799 --> 00:25:02.720
So ultimately you have to uh beat the market forces through planning.
00:25:02.960 --> 00:25:16.160
Um the the thing to know is that there are three but going back to that audience size, we call those three audiences the mass market, the niche market, or niche market, depending on which side of the pond, and the luxury market.
00:25:16.480 --> 00:25:23.839
So the luxury market responds to pedigree, uh exclusivity and experience, and then the sky's the limit.
00:25:23.920 --> 00:25:26.160
Um but it's very hard to tick those boxes.
00:25:26.319 --> 00:25:28.079
You can't just say, Oh, I've got pedigree.
00:25:28.160 --> 00:25:29.519
No, you've got to win the major awards.
00:25:29.599 --> 00:25:37.359
You have to have the Emmy, you have to have the the BAFTA award, you have to have been referred to by you know Tatler magazine or whatever it is.
00:25:37.680 --> 00:25:39.519
So you have to have the pedigree.
00:25:39.680 --> 00:25:43.119
Um, and you have to be able to live up to the experience and all of that sort of stuff.
00:25:43.200 --> 00:25:49.039
So a few companies can do luxury, but one thing that all small businesses can do is niche or niche.
00:25:49.200 --> 00:26:04.160
Um and that is where you're looking for a particular type of person who is so interested in a thing that they would attend an event, join a discussion group, read a book, follow a guru, uh, join and subscribe and watch videos on YouTube.
00:26:04.559 --> 00:26:09.759
They're there's they're they're actually irrationally engaged in this, they're passionately engaged.
00:26:10.000 --> 00:26:10.960
I'll give you an example.
00:26:11.119 --> 00:26:13.680
There are normal gyms and then there's CrossFit gyms.
00:26:14.079 --> 00:26:21.119
And CrossFit is just basically doing gym stuff to music and faster with a group with a group.
00:26:21.519 --> 00:26:28.240
You know, but it's for some reason it's 300 bucks a month, you know, to join a CrossFit gym, and all the other gyms are$33 a month.
00:26:28.559 --> 00:26:31.039
You know, and it's kind of like, well, why?
00:26:31.200 --> 00:26:35.279
Because they're just doing it's the same footprint, it's the same equipment, it's the same stuff.
00:26:35.440 --> 00:26:37.839
Like, why is it 10 times more expensive?
00:26:38.160 --> 00:26:46.559
Because this is a group of people who want to join a group, they want to be part of a community, they want to have an ideology, they want to watch videos, they want to follow Instagram accounts.
00:26:46.720 --> 00:26:48.799
So they've figured out a niche market.
00:26:49.200 --> 00:26:57.119
A great question that all uh uh entrepreneurs, business owners should ask is who gets the most value from what I do?
00:26:57.839 --> 00:27:03.839
Now, this is not what do I need to do to provide more value, it's who gets the most value from what I do.
00:27:04.640 --> 00:27:06.240
Great example, Esther Perel.
00:27:06.720 --> 00:27:08.720
So Esther Perell was a couples therapist.
00:27:08.960 --> 00:27:16.400
She was in Belgium, then New York, and she started to notice that most people wanted to pay about$100 for a uh couples therapy session.
00:27:16.799 --> 00:27:24.880
But the uh ultra high net worth individuals, they placed a disproportionate value on what she was doing for them.
00:27:25.119 --> 00:27:28.400
So she was doing the same couples therapy for them that she would do for anyone else.
00:27:28.559 --> 00:27:31.440
But when she would ask them, was that worth it?
00:27:31.759 --> 00:27:34.799
They would say, Well, you just saved us millions and millions of dollars.
00:27:35.119 --> 00:27:36.559
Like we were about to get divorced.
00:27:36.640 --> 00:27:43.599
That was going to cost us two million in legal fees, and that was going to cost us five, fifteen, twenty million in capital destruction.
00:27:44.000 --> 00:27:48.319
And then they go, you know, you're you're you saved us from this million.
00:27:48.400 --> 00:27:54.880
So then she ended up pricing accordingly and saying, Well, I only take on ten to twenty clients a year and it's a quarter of a million per per client.
00:27:55.279 --> 00:28:03.519
Um, and she said, It's not that she does anything different, she just runs a campaign to say I exist for this type of person.
00:28:04.240 --> 00:28:11.920
Um, and she makes two and a half to five million a year with 10 to 20 clients doing couples therapy that other people pay a hundred bucks for.
00:28:12.000 --> 00:28:12.240
Yeah.
00:28:12.400 --> 00:28:14.960
You know, yeah, she's definitely at that luxury end that needs to be a good thing.
00:28:15.200 --> 00:28:16.079
She's at a luxury end.
00:28:16.400 --> 00:28:30.319
Yeah, it it's interesting because I look at at for us, and there's a lot of business people out there that that need coaching and need assistance, but we get we give the most value to families, you know.
00:28:30.400 --> 00:28:39.839
When it's a husband and a wife and uh and they have kids, and you know, if you're a business person and you have kids, the value of a coach goes up.
00:28:40.000 --> 00:28:44.960
It it doubles and triples because your value is I now get my time back.
00:28:45.119 --> 00:28:45.279
Yeah.
00:28:45.519 --> 00:28:51.200
And I can actually go to my kids' game or my kids' recital or I'm not risking the most important thing in my life.
00:28:51.519 --> 00:28:51.920
Yeah.
00:28:52.160 --> 00:28:53.920
So it's very much a thing.
00:28:54.160 --> 00:28:57.599
So this is this goes to this idea of ICP, ideal customer persona.
00:28:58.000 --> 00:29:00.319
Ideal customer persona is really important.
00:29:00.400 --> 00:29:02.640
It's basically who has the most to gain.
00:29:02.799 --> 00:29:10.400
Um, one other quick example was a health and safety guy that I worked with, um, and he he did health and safety in manufacturing environments.
00:29:10.559 --> 00:29:16.000
I asked him, is there any particular manufacturing environment that's particularly dangerous, always lawsuits?
00:29:16.079 --> 00:29:17.359
He said, Oh yeah, this type.
00:29:17.519 --> 00:29:23.440
And I went, okay, why don't you run a campaign to position yourself as the health and safety for that type?
00:29:23.599 --> 00:29:26.799
Uh his rates went from two grand a day to 20 grand a day.
00:29:26.880 --> 00:29:27.119
Yeah.
00:29:27.279 --> 00:29:36.480
Um, just simply same stuff, same posters on the wall, same training with the team, but he made a few little adjustments to be number one for that type.
00:29:36.559 --> 00:29:40.880
Um, and his value went through the roof, not because he changed what he did, but he changed who it was for.
00:29:41.039 --> 00:29:41.440
Yeah.
00:29:41.680 --> 00:29:49.279
Yeah, it's that old joke of you know, a bottle of water is 50 cents in the in the grocery store,$2 at the thing and$7 at the airport.
00:29:49.359 --> 00:29:54.400
It's the same bottle of water, it's just different different people you're putting in front of in a different environment.
00:29:54.720 --> 00:29:59.680
So let's actually just then look at the we we touched on being more expensive.
00:30:00.160 --> 00:30:05.680
How does one go about actually raising their prices in an in a normal day-to-day business?
00:30:06.079 --> 00:30:07.759
Because we've got to know how.
00:30:08.079 --> 00:30:10.640
Yeah, demand and supply tension, you need a bigger audience.
00:30:11.279 --> 00:30:19.839
So you you you you know it's very, very hard to like ultimately things are priced based on demand and supply tension.
00:30:20.160 --> 00:30:29.039
Um the markets there is no intrinsic value, there's no objective value, it's totally subjective and it's it's based purely on market forces.
00:30:29.359 --> 00:30:32.480
Um, why is a Bitcoin worth what a Bitcoin is?
00:30:32.640 --> 00:30:34.720
Because demand and supply tension says so.
00:30:34.960 --> 00:30:37.039
Um why is a diamond worth what a diamond is?
00:30:37.200 --> 00:30:38.400
Demand and supply tension.
00:30:38.559 --> 00:30:42.000
The answer to everything around price is just demand and supply tension.
00:30:42.079 --> 00:30:47.039
Uh my prices went through the roof when I got on some big podcasts.
00:30:47.359 --> 00:30:48.799
And I'd done nothing different.
00:30:48.880 --> 00:30:50.799
I just more people knew who I was.
00:30:51.119 --> 00:30:54.799
Um so you know, it was just one of these things of demand and supply tension.
00:30:54.880 --> 00:31:06.720
So you've got to be in front of more people, you've got to be in front of the right people, and you've got to have a way of uh detecting who is uh who is the person who's got the budget to go to a higher price.
00:31:06.960 --> 00:31:16.400
So in um in the story of Cinderella, uh, you know, he's looking for Cinderella, he's got this device, this glass slipper, and he, if the shoe fits, that's Cinderella.
00:31:16.559 --> 00:31:24.400
So you've got to figure out what's your criteria that if someone meets those criteria, that's my Cinderella client, that's who I can charge a higher price to.
00:31:24.640 --> 00:31:33.839
So a real life example, uh, I know someone who works with families and uh and they set up an online assessment about kids' behavior.
00:31:34.079 --> 00:31:37.920
And one of the questions they threw in there is, does your family have a nanny?
00:31:38.079 --> 00:31:41.599
And it's no nanny, part-time nanny, full-time nanny.
00:31:41.920 --> 00:31:43.599
And it was very simple.
00:31:43.839 --> 00:31:47.039
All of her top-paying clients have full-time nannies, all of them.
00:31:47.279 --> 00:31:52.640
So when people fill in the online assessment, they answer all the questions, they get a great response, they get a report.
00:31:52.799 --> 00:31:56.640
But if they ticked a box that says full-time nanny, they get a phone call straight away.
00:31:56.799 --> 00:31:58.240
Um, and guess what?
00:31:58.480 --> 00:31:59.359
Prices went up.
00:31:59.599 --> 00:32:01.200
Yeah, yeah, wonderful thing.
00:32:01.359 --> 00:32:03.119
Uh, always finish with this question.
00:32:03.359 --> 00:32:09.759
Best advice you ever got on success, and who was it from, and and why was that the best advice to you?
00:32:10.000 --> 00:32:13.279
There's been so many best advices uh along the way.
00:32:13.440 --> 00:32:27.200
I like um environment dictates performance as a really good one, um, which uh is this idea that we tend to behave uh in accordance with the people we spend time with, the places that we show up, um, the environmental cues.
00:32:27.279 --> 00:32:31.279
Uh I do a bit of work with uh young men in prison who are coming out.
00:32:31.440 --> 00:32:35.839
Um we go in and we, you know, we talk to them before they're coming out and all of that sort of stuff.
00:32:35.920 --> 00:32:45.839
And one of the things that we know about young guys who deal drugs, for example, is they're young entrepreneurs, they're entrepreneurial people, but the only entrepreneurs in their environment are drug dealers.
00:32:46.240 --> 00:32:58.079
So when they're shopping around their network and saying, hey, I want to make money and I want to do something, I'm really energized for getting ahead in life, their their environment channels them towards this particular opportunity.
00:32:58.559 --> 00:33:04.720
And when we have that conversation with them and say, look, if you go back to that environment, you're gonna re-offend.
00:33:04.799 --> 00:33:09.519
You're going to have to get yourself around a different group of people who run legal businesses.
00:33:09.680 --> 00:33:13.039
Um, and that is one of the biggest things that we can change with in their life.
00:33:13.119 --> 00:33:24.640
If they can spend time with landscape gardener, they go, Oh wow, this guy's making just as much money as some dealers I know, you know, and they go, but he's but he's not having to go into jail for it.
00:33:24.720 --> 00:33:24.880
Yeah.
00:33:25.200 --> 00:33:27.839
So they they go, oh, okay, I get it.
00:33:28.000 --> 00:33:33.920
Um I find, you know, I actually had a feeling of this when I saw you yesterday.
00:33:34.160 --> 00:33:37.440
Um, we were talking about some of the things you've achieved and all that sort of stuff.
00:33:37.519 --> 00:33:45.759
I find that often I'm the most successful entrepreneur in a room, of a group of entrepreneurs, right, by by revenue or by profit number of businesses.
00:33:46.000 --> 00:34:00.559
And then I'm sitting next to you having a conversation, and immediately I can feel the energy in me rising, going, okay, like I just there's just a natural tendency to go, I can up my game a bit because I'm I'm I'm around someone who's doing a bigger thing.
00:34:00.799 --> 00:34:05.440
And we had Gary V in with before there, and it was like, okay, Gary's dragging all of us to this.
00:34:05.680 --> 00:34:10.559
Yeah, well, he's he's saying, you know, I'm pretty proud of the fact I'm posting on social media once a day.
00:34:10.719 --> 00:34:13.119
Gary's saying three or four times a day is normal for me.
00:34:13.360 --> 00:34:16.239
Like, okay, all right, you're dragging me upper upper gear.
00:34:16.400 --> 00:34:18.480
So environment dictates performance.
00:34:18.639 --> 00:34:21.199
Really, really good um one to play with.
00:34:21.519 --> 00:34:23.280
You're on the big success podcast.
00:34:23.440 --> 00:34:26.559
Hit those show notes, follow, learn, listen, read all the stuff.
00:34:26.639 --> 00:34:29.199
We'll be back next week with more of your success.