Which Should You Sell?

Summary

• A client had two offerings: a business coaching service for $15,000 and a hairstyling course for $2,000.
• The hairstyling course had an LV to CAC ratio of 30:1, while the business coaching service had a ratio of 12:1.
• The hairstyling course had a much larger market than the business coaching service.
• Focus on the product with the higher LV to CAC ratio and larger market, as it’s easier to sell and more profitable.
• Use the easier-to-sell product to acquire customers profitably.
• Once customers are acquired, shift focus to getting them to buy the higher-ticket item.

Video

How To Take Action

I suggest starting by identifying the product or service that has the highest LV (lifetime value) to CAC (customer acquisition cost) ratio and targets a larger market. This product, being easier to sell, will help you acquire customers more profitably. For instance, if you offer a low-cost service with a high LV to CAC ratio like the hairstyling course, prioritize this offering.

Action Steps:

1. Identify High LV to CAC Product:

   • Look at your existing product or service offerings.
   • Determine which one has the highest ratio of lifetime value to customer acquisition cost.
   • Assess the market size; choose the product that appeals to a larger group.

2. Use Easier-to-Sell Product to Acquire Customers:

   • Focus on marketing and selling the easier-to-sell product first.
   • Optimize your sales funnel to attract as many customers as possible for this product.
   • Keep costs low by using social media, word-of-mouth, and other cost-effective marketing strategies.

3. Plan for Customer Ascension:

   • Once you have customers through the lower-cost offering, develop a strategy to upsell them to higher-ticket items.
   • Create compelling value propositions for the higher-cost services or products.
   • Maintain engagement with your customers through email marketing, special offers, and excellent customer service.

4. Track and Measure Results:

   • Regularly review the performance of your lower-cost product sales.
   • Measure customer engagement and upsell conversion rates.
   • Optimize your strategies based on these metrics to continue improving profitability.

By focusing on the easier-to-sell product with a higher LV to CAC ratio, you'll efficiently build a customer base, making it simpler to upsell and maximize revenue in the long haul.