This series was born out of a desire to have something regular on my blog.
Since I often find myself thinking about and discussing my activities with friends, I decided to share the
most important lessons of the month, in the hope that they might be useful (or even just interesting) to
someone.
“Monthly Business Aha's” is just to make fun of MBAs.
To make decisions, you need data, and to get data, you need numbers.
At the beginning of January, I was working with a dysfunctional spaghetti funnel: it was impossible to
measure, wasted our energy, and was labyrinthine (we were moving people through 5-6 steps).
We transformed the funnel into three simple steps, and now the problem is measurable and actionable: we
don't have to feed three or four openings of the funnel, but only one.
In hindsight, it's a very trivial thing, and I'm surprised I didn't notice it sooner.
I mean: IT'S CALLED A FUNNEL, NOT A SPAGHETTI BOWL!
This is an interesting aspect of “doing business”: the fact that you have to make some mistakes in order
to
internalize them, even if they are absolutely trivial.
Exploring is important, but be prepared to trash projects and sacrifice time.
In the spaghetti funnel mentioned, we had a hypothesis: by inviting YouTube Shorts doom scrollers, we
would increase live viewers, newsletter subscriptions, and ultimately sales.
We tried online services that extract highlights from live streams, but they are too expensive and
create
low-quality shorts.
So I implemented an automation that took me
a month and costs much less.
After a couple of months, we concluded that the hypothesis is false: out of a dozen weekly shorts, we had
50K monthly shorts views and... 8 conversions per month to live streams.
It wasn't a failure: we explored and excluded this possibility.
But in hindsight, knowing that we could have discarded it, I would have spent less time and created a
less
perfect tool (more of an MVP), so that we could test and decide without investing too many resources in
something potentially useless.
(In my defense: it worked with Hormozi, so why shouldn't it work with us???)
Not those who derive value from the product, but those who decide to purchase it.
A friend and I are considering a product to sell to Italian doctors.
After a quick analysis, we identified three major competitors selling similar products.
BUT: they sell large packages to local government entities that manage doctors, while we would sell
directly
to doctors (who are self-employed but have a government contract... Italian bureaucracy, don't ask).
This is a basic lesson for startups, but I'm glad it came in handy and didn't remain in the hyperuranium of
business ideas.
There is a very simple way to identify your target audience: ask your target audience!
I was thinking about the ICP of a business I work with when I realized that two factors determine the best
type of customer: age and experience with competitors.
How did I realize this? By investigating current customers.
Once I noticed this, I had forms filled out for each customer in order to gather as much information as
possible.
And now we have a very clear ICP.
This is not an original idea: as often happens to me, I think I internalized it after reading a post by A Smart Bear.
I find it funny to think that before doing the obvious (talking to current customers), I was searching
for
who-knows-what strategy to identify ICPs...
I think I'm at the stage where I believe that since we're talking about business, i.e. “serious
stuff,” we
need serious solutions.
Are your clients fans or customers?
It all started with a very interesting post on A Smart Bear.
I have dealt with two businesses that have two different types of customers (according to the post):
“allies” and “value exchangers.”
The difference I noticed between these two (both in the coaching sector) is the type of value that
clients
receive: subjective and objective.
When you can say, “You give me X$ and with my knowledge you will make +Y%,” the customer pulls out
their
calculator, and if it’s worth it, they find out if they like the product, and then they buy it.
Marketing is
standard: you explain what you do, show social proof, do webinars...
It becomes an exchange of value, and customers are “value exchangers”: they expect +Y% in
exchange for
X$.
When you sell writing coaching (teaching a writing method), you encounter people saying “But author XXX
does the opposite! And he is wealthy and famous!” because we are not dealing with objective data.
Specifically regarding writing methods, the prevailing belief is that there is no correct approach (even
though the opposite can be demonstrated...).
In my limited experience, this greatly complicates marketing and makes it difficult to convert skeptics.
However, this situation creates a few big fans who buy and are VERY satisfied (ALL customers have told
us
that they got MUCH more value than the price, sometimes even 10 times more value!).
Essentially, you win by creating fans, not by attracting customers.
The problem lies in the fact that the game takes place on a subjective level, which makes it difficult to
manage.
In the objective case of “X$ in exchange for +Y%,” if a person does not trust the deal, they know
that
they are leaving “+Y%” on the table.
They can compare it with other similar (equally objective) products and can objectively decide whether
it is
a good purchase (“X$ is a fraction of what I earn, even if it doesn't work, it's worth trying if I could
earn +Y%”).
In the subjective case, however, opinion comes into play: products cannot be compared and it is difficult to
understand whether it's worth the price.
If they think, “That's not true! Stephen King writes in this other way...” it is VERY difficult
to change
their mind.
(Not impossible: behavioral change exists, but it takes time, money, and expertise.)
BUT!
There is a shortcut: bring the game back to an objective level.
There are writing coaches who make a fortune selling the promise of publication.
They show that many of their clients have been published (with publishers they work with...), so the
offer
becomes “X$ in exchange for (the possibility of) publication.”
Clients become “value exchangers” again, and the business dynamics become the usual ones.
(NOTE: promising to publish is almost always (in order to avoid being sued...) a lie, given how
publishing
works in Italy, so this is a path we are NOT taking).
Next month, I hope to be able to offer a lesson on “How to manage customer-fans,” but for now, I have
only
realized that there are different types of customers.