The magic of a better offer

This post would not be possible without the amazing content on this topic by Alex Hormozi . So, I’d like to give him credit at the outset. His book $100 Million Offers is one of the best business books I’ve ever read.

I hit my breaking point earlier this year.

It was not an easy market to acquire customers.

Microsoft and Google were making email marketing harder.

And while our churn was not killing us…

The pressure I felt to deliver for our (100+) clients was starting to feel unbearable.

I decided to take a walk with my brother…

And we prayed about how to solve this business problem, that was quickly becoming a PERSONAL problem for me!

What hit me was some wisdom that I’d already been exposed to with Alex Hormozi:

“Flip the script. Design a better model.”

Nothing novel, I realize.

But what came next has turned out to be…

For years at Veth Group, we made our money doing flat-fee retainers.

The client would pay us $3,000/month with easy cancellation…

And we’d target getting 10-20 meetings/month, with our main motivation being that we didn’t want to get fired.

My thinking was simple: “half the cost of an SDR, lower risk, better numbers.”

But even with the “no contract lock”…

It was getting harder and harder to sell.

We could show a Founder or VP of Sales that we generated over 25,000 meeting requests in 2023…

And explain all of our “little hacks” that helped us pull off these types of numbers…

But more and more buyers were TERRIFIED of making a wrong decision, and many were so risk-averse they weren’t seriously willing to consider the idea of deploying us. No matter what we showed them.

On the Customer Success side, things weren’t all rainbows and butterflies either.

When Microsoft and Google started to apply their AI gains to stopping marketing emails…

They created a lot of hiccups in our campaign performance.

And suddenly clients that were used to seeing 50 meeting requests for $3,000/month were only seeing 10…

As you can imagine: not good.

Our pricing model also had the added issue that customers who were getting normal results were still continually sending us requests for more meetings, more campaigns, more one-offs…

Even though we were well over our “targets.”

While we could, in theory, say 'no' to these requests, they were hard to refuse when our revenue was light.

So even the good projects were quickly feeling less and less good! (or profitable)

THE SOLUTION: a totally different way of pricing.

I immediately called our amazing accountant Rex Biggs, CPA to get his thoughts…

“Rex, I think I’ve got something here. Tell me what you think.”

He quickly responded: “Yes. This is what you’ve always needed. And we’ve always wanted as your customers.”

So instead of charging the full $3,000/month upfront…

I started to cut our fee to a dramatically lower “base cost”…

With a “per meeting request” bonus that the customer would have final authority over.

A few things quickly happened:

1. Unhappy retainer customers were thrilled to hear of our new model, and committed to continuing to use our service.
2. Complaints went WAY down. Which has been a big blessing.
3. Happy customers that had always been begging to pay us more finally could, because we’d only be getting paid higher fees if our performance matched them.
4. We regained leverage over difficult customers. If we decided it was time to walk away, we were walking away from a much smaller amount of guaranteed revenue.
5. (Most interesting) Our new sales shot up because prospects were no longer being asked to take all of the risk!

Win. Win. Win. Win. Win.

Here is our updated standard pricing, if you’re interested in seeing it. We charge extra for additional senders and no two projects are exactly the same in our world, but this is a good baseline of what we’re going out the door with in 2025!

PHASE 2: re-thinking all of our offerings.

Our performance-driven cold email business was slightly easier to adjust to this type of model…

Because it’s easy to quantify.

And “meeting requests” are in very high demand compared to, for example, “LinkedIn likes.”

But, as we’re moving forward into 2025…

I’m also thinking a lot about how we can modularize our personal branding and newsletter content services to similarly reduce risk, increase buy-in, and minimize churn.

For example, right now, we’re charging $800/month for 2 posts/week on LinkedIn.

These are a mix of videos, graphics, carousels, etc.

Based on client preference. And our input.

And don’t get me wrong, I am proud of the content we create…

It’s high quality.

But what if, for example, we broke out the pricing based on the style of post?

And we could offer 4 Tweet-style posts for only $200/month.

Or weekly videos for $400/month. (videos are obviously harder)

By giving the customer more of a choice…

And offering a lower-risk option…

We’d get more sign-ups.

But the sign-ups would also be better!

Because we’d be more closely aligning prospect desires to our costs…

They would be less likely to cancel.

Similarly, we write two long-form newsletters each month for $800…

What if we instead offered one newsletter each quarter for $400? But required a year-long commitment.

Interesting, right?

KEY THING TO REMEMBER:

I realize that it might sound crazy to be deliberately reducing our costs, and turning away $5,000/month of business in favor of smaller retainers…

But we can’t forget that a customer paying $800/month for 5 years is $48,000.

And a customer paying $4,000/month for 3 months is only $12,000.

Also, in terms of sign-ups? It seems like you get 5x the amount by sharing the risk with the customer.

I’ve seen it this year.

CONCLUSION:

I’d love to share more about this strategy if you’re interested.

DM me any time on LinkedIn.