Audio Overview

Audio Overview Transcript

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Angela: Welcome to The Deep Dive. We sift through the noise to bring you the insights you really need.

James: And today, we’re diving into a manuscript that looks really promising, Your Business Growth Playbook by Jeremy Shapiro.

Angela: Right. Our mission here is to give you, the business owner listening, a solid overview of what’s inside, what this playbook offers.

James: And, uh, maybe why you’ll want to get your own copy.

Angela: Yeah.

James: Think of it as a sneak peek.

Angela: Exactly. We’re not giving away all the secrets, obviously.

James: No.

Angela: Mm-mm.

James: No. But we want to pull out those key frameworks, the really practical strategies that Jeremy Shapiro includes. He’s taken years of actually doing this stuff, advising clients and put it all down.

Angela: And he seems to get that entrepreneurial mindset, doesn’t he? That balancing act between the big ideas and the, you know, the actual getting it done part.

James: Totally. This isn’t just theory. It feels very focused on the how. How do you actually implement these growth ideas?

Angela: Which is what you need when you’re running a business, right? Actionable steps, not just more concepts floating around.

James: Yeah. And he starts with a great little reminder, almost a disclaimer. The book’s a roadmap, it shows you opportunities-

Angela: Mm-hmm.

James: … but you have to do the work.

Angela: Ah. Like that old story, The Wagoner and Hercules.

James: Exactly that one. Cart stuck, praying for help. And Hercules basically says, “Get your shoulder to the wheel. You’ve got to put in the effort yourself.” It really sets the tone.

Angela: Okay. Good starting point. So where does the playbook begin in terms of strategy?

James: Well, one of the first big things it tackles is this really common idea.

Angela: Hmm.

James: This misconception maybe, that revenue is everything.

Angela: Oh, yeah. You hear that all the time. “If I just had more sales, more revenue, I could afford to market. I could grow, problem solved.”

James: It seems logical, right? But Shapiro uses some, uh, pretty stark examples to show why that’s flawed thinking. Revenue without profit. It’s like spinning your wheels.

Angela: Like WeWork.

James: WeWork is the prime example he uses. Massive explosive revenue growth, billions. But the losses, even bigger. They were losing more than they were making, even with all that activity.

Angela: And we know how that ended. Canceled IPO, bankruptcy. Not exactly sustainable growth.

James: Precisely. The insight here is crystal clear. Don’t confuse activity with achievement. Revenue’s just a speedo. Profit’s your fuel gauge. You need fuel to keep going.

Angela: So the book really hammers home that profitability is the foundation for real sustainable growth. It’s what you keep.

James: Yeah. And there’s another story in there, a car dealership. They were obsessed with hitting unit sales targets.

Angela: Oh.

James: So they offered these huge discounts, moved a ton of cars, hit their numbers, looked good on paper maybe.

Angela: Yeah.

James: But they were losing money on almost every single sale.

Angela: Ouch. So hitting the revenue target actually hurt them.

James: It did. It perfectly illustrates the danger of that single-minded focus. You can go broke hitting your numbers if those numbers aren’t profitable.

Angela: Which brings us to discounting. It’s such a tempting tool, isn’t it? Quick sales boost.

James: Super tempting. But the playbook warns it can become a, well, a death spiral.

Angela: Yeah.

James: Customers start waiting for the next sale.

Angela: Right. You train them to expect it.

James: Exactly.

Angela: Right.

James: And the financial impact. This is where the book gets really, really specific. It walks you through the math.

Angela: Okay. Let’s hear it.

James: Imagine a business doing okay. Four million dollars in revenue, $500k in revenue, $500k net profit. Healthy enough.

Angela: Okay.

James: Then they decide, “Let’s boost sales. 10% discount across the board.” Seems small, right? Just 10%.

Angela: Yeah. Sounds manageable.

James: But when you run the numbers, less gross revenue coming in, cost of goods sold stays the same in dollars but goes up as a percentage. Gross profit margin shrinks. You keep your operating expenses the same.

Angela: Right.

James: That $500,000 net profit, it plummets.

Angela: How much?

James: Down to $100,000.

Angela: Wow. From half a million to $100,000 just from a 10% discount.

James: Yep. An 80% drop in profit. That calculation alone makes you stop and think about every single promotion, doesn’t it?

Angela: It absolutely does.

James: Yeah.

Angela: Changes the whole perspective. And there’s the psychological side too, devaluing your brand.

James: Right. So the playbook basically says, “Hold on. There are better ways.”

Angela: Yeah.

James: And it promises to show you how to increase both sales and profits without just slashing prices.

Angela: Okay. So if discounting isn’t the answer, what is? This sounds like where customer lifetime value comes in. CLV.

James: Exactly. This is fundamental. Acquiring customers costs money, right? Marketing, sales efforts.

Angela: Hmm.

James: It all adds up.

Angela: Sure does.

James: So the more value you get from each customer over time, the better. And actually having healthier profit margins from the start, it means you can afford to spend a bit more to acquire the right customers.

Angela: Ah. So margin enables acquisition, which leads to lifetime value.

James: You got it. The insight is, think of every customer interaction as an investment. Maximize their lifetime value, not just that first transaction.

Angela: Makes sense. The book uses a restaurant example, right? Getting someone to come back again and again.

James: Yeah. A simple, relatable one. Each repeat visit adds to their CLV. But then it gives this classic example, King Gillette.

Angela: The razor guy.

James: The razor guy. Sell the razor cheap, maybe even at a loss.

Angela: And make money on the blades, the recurring purchase.

James: Bingo. The razor blade model.

Angela: Hmm.

James: Genius, really. An early masterclass in maximizing long-term value through consumables.

Angela: And that model is absolutely everywhere now. The playbook points out examples like…

James: Cable companies, those DVR fees, add-on channels. Peloton with the bike and the monthly subscription for classes.

Angela: Gaming consoles. Sony, Microsoft, they make the real money on the games and online services.

James: Keurig, the coffee maker is just the start. It’s the K-Cups that keep you coming back.

Angela: So it’s about locking customers into an ecosystem where they keep spending.

James: Essentially, yes. And the book shares a client story, a small business doing $5 million revenue, but with a staggering 47% pure profit margin.

Angela: 47% profit. Wow.

James: Yeah. Imagine the freedom that gives you to innovate, to serve customers better, to invest in growth without being desperate for the next sale.

Angela: That’s powerful.The playbook also mentions Costco, right? Their membership fee model.

James: Good example. The membership fee itself isn’t a huge slice of their total revenue-

Angela: Mm-hmm.

James: … but it’s a massive chunk, like 73% of their profit.

Angela: Because it’s almost pure profit, and they retain customers so well.

James: Over 90% renewal rate. It shows the incredible power of retention and that recurring commitment.

Angela: And it’s not just retail. Financial advisors, insurance brokers.

James: Right. Their models are often built on assets under management or policy renewals. Long-term relationships are baked in.

Angela: Okay, so CLV is crucial. How does the playbook suggest you actually calculate it or think about it? What are the parts?

James: It breaks it down to key components. First, frequency of transactions. How often does a customer buy from you?

Angela: Okay, frequency.

James: Second, the average amount of each transaction. How much do they typically spend each time?

Angela: Amount. Got it.

James: And third, critically, churn. What percentage of your customers stop buying from you over a certain period, like a leak in the bucket?

Angela: Frequency, amount, churn. FAC. Doesn’t quite roll off the tongue-

James: Mm-hmm.

Angela: … but okay. How do they fit together?

James: Huh. Maybe not. But the formula Shapiro gives is simple. CLV equals frequency times amount divided by churn rate.

Angela: Frequency X amount churn.

James: Yep. And there’s a clear example.

Angela: Yeah.

James: 1000 customers, they buy 10 times a year on average, spend $97 each time, and you lose 15% of your customers each year. That’s the churn.

Angela: Okay.

James: Plug that in. 10 by $97, one on one, the formula gives you a CLV of $6,467.

Angela: So on average, each customer is worth over $6,000 to that business over their lifetime.

James: Exactly. But… And this is important.

Angela: It’s not static.

James: Definitely not. The playbook stresses that CLV changes. You need to track it. And anything you do to reduce churn, keep customers longer, has a massive positive impact. They buy more often, stick around longer, CLV goes way up.

Angela: Right. Reducing that leak in the bucket makes sense. Okay, so don’t just chase revenue or understand profit, focus on CLV. What’s next?

James: Next, the playbook introduces what it calls the three big levers to scale revenue. Or maybe more accurately, the FAQs to more profit.

Angela: FAQs, like frequently asked questions.

James: Or mnemonic. It stands for the three drivers we just touched on with CLV. F for frequency of transactions.

Angela: How often they buy.

James: A for the amount of each transaction.

Angela: How much they spend.

James: And Q for the quantity of customers you have.

Angela: Frequency, Amount, Auantity. Okay. FAQ. That’s clever.

James: These are the core things you can influence to grow revenue and profit. The basic equation is just F times A times Q equals your sales volume.

Angela: Simple, but powerful if you think about actively managing each one.

James: Incredibly powerful. And the book uses this great analogy, the British cycling team.

Angela: Oh, yeah, I’ve heard about them. They were pretty average for a long time, right?

James: Decades of mediocrity. Then they brought in this philosophy of the aggregation of marginal gains. Tiny improvements, 1% better across everything.

Angela: Eh, bike seats, tire grip, nutrition, handwashing technique. Everything.

James: Everything. And those tiny gains compounded. They became dominant. Won Tour de France multiple times, Olympic golds galore.

Angela: It’s like compound interest for business processes.

James: Exactly. Warren Buffett’s eighth wonder of the world. The playbook makes the point that you don’t need a home run in every area. Small, consistent improvements in frequency, amount, and quantity, they add up to significant growth over time.

Angela: Okay, I’m sold on the concept. So how does the playbook suggest we actually pull these levers? Let’s start with F, frequency. How do you get customers to buy more often?

James: Right. This is where the book gets really tactical, teasing specific strategies you’ll find inside. The core idea, it costs way less to keep a customer than get a new one.

Angela: Makes sense. So what kind of strategies does it hint at?

James: Well, a big one is recurring revenue models, subscriptions, SaaS, software as a service, membership sites.

Angela: Like Salesforce shifting their whole model years ago.

James: Exactly. Predictable income. And the book notes how no-code tools are making things like membership sites, paid newsletters, even app subscriptions much more accessible now. It’s a huge trend. The subscription economy is projected to be massive, like $1.5 trillion.

Angela: Wow. Okay, subscriptions. What else?

James: Continual product launches. Keep giving your existing customers new reasons to buy. There’s an e-commerce example in the book. A client grew significantly just by regularly releasing new products to the same niche audience.

Angela: Keeping it fresh. Smart.

James: Then you have things like upsells and add-ons right at the point of sale. Think about theme parks.

Angela: Right. The ticket is just the start. Parking, food, skip-the-line passes.

James: Exactly. A huge chunk of their revenue comes after the initial purchase. The playbook also mentions a membership site adding a high-end, done-for-use service. Same audience, different need, higher price point.

Angela: Tiered offerings too.

James: Yep. Tiered products or services, like the Financial Times with different subscription levels, or Disney have got basic park tickets, Genie+ for faster lines, maybe cheaper tickets for off-season, catering to different budgets and needs.

Angela: Even experts selling courses alongside their main consulting.

James: That fits too. Other tactics teased include affiliate offers, recommending related products, bounce back offers, giving an incentive during a purchase for the next purchase, like a coupon for your next visit.

Angela: Loyalty programs.

James: Definitely. Zappos’ VIP program gets a mention as a great example making people feel special. Tangible benefits like free shipping. Think airline miles, tiered statuses.

Angela: What about consumables, like the razor blades again?

James: Still relevant.

Angela: Yeah.

James: Coffee pods, CO2 canisters for sparkling water, even things like structured journals you need to repurchase.

Angela: Huh. And repacking or reformulating?

James: Yeah, the Alka-Seltzer example is classic, suggesting two tablets instead of one, supposedly double sales. Or changing packaging, like making the holes bigger on a shaker container.

Angela: Planned obsolescence or upgrades, like new car models every year.

James: That’s the historical example. Or software updates before everything went SaaS. Customer appreciation events are mentioned too, exclusive experiences to build loyalty.

Angela: And importantly, strategies to reduce churn, to stop people leaving in the first place.

James: Crucial. The book outlines common reasons people cancel subscriptions and offer solutions, citing a client who successfully saved many cancellations.

Angela: Okay, that’s a lot of ways to potentially increase frequency. What about the second lever?… amount per transaction, getting people to spend more each time.

James: Again, the playbook outlines several tactics, obvious ones like strategic upsells and cross-sells.

Angela: Do you want fries with that?

James: The classic cross-sell.

Angela: (laughs)

James: But also things like revisiting your pricing strategy, maybe simply charging more.

Angela: That’s often a scary one for business owners.

James: Yeah, it is. The book acknowledges the mental hurdles. It talks about differentiation, making your offer unique so you’re not competing just on price. There’s a great story about a client who 10x’d their price by shifting to value-based pricing for teaching their specific business model.

Angela: So focusing on the outcome or value delivered, not just the service itself.

James: Exactly. And niching down helps here too. A wedding-specific venue can often charge more than a generic hall. Specialization commands a premium.

Angela: What else increases the average spend? Bundling.

James: Yep, bundling, putting several things together for one price, often increasing the perceived value so you can charge more than the items individually, like an event ticket that includes books or resources.

Angela: Payment plans, does that increase the amount?

James: It doesn’t increase the total price necessarily, but it makes a higher price more accessible. It overcomes sticker shock. The book shares how offering a simple two-payment option boosted course sign-ups for a client.

Angela: Ah, lowers the barrier to entry for a higher-priced item.

James: Right. And related to that is using third-party financing partners for really big-ticket items. The financing company takes the risk, you make the sale.

Angela: Smart. Any other tactics for amount?

James: Tiered bonuses based on how much someone spends, like free shipping over $50 or maybe an extra gift over $100, offering expedited shipping for a fee, installation or setup fees as optional add-ons, and volume discounts, encouraging larger quantity purchases.

Angela: Okay, that covers A. Now, the third lever, Q, quantity of customers, how does the playbook suggest getting more customers?

James: The focus here is getting more qualified prospects into your funnel and converting them. It’s not just about volume, but the right volume, and also fixing leaks in the funnel you already have.

Angela: So widening the top and plugging the holes?

James: Pretty much. One specific tactic mentioned is down-sells. If someone balks at your main offer, have a lower-priced alternative ready.

Angela: Like the Financial Times offering digital only if you don’t want print, or a standard version of a course if the premium one is too much.

James: Exactly. Another interesting idea teased is working up your supply chain.

Angela: How does that mean?

James: The example is Zingerman’s Deli. They started roasting their own coffee then making their own cheese, even importing coffee beans. It gave them more control over quality and cost and potentially opened up new revenue streams. The book prompts you to think if similar opportunities exist in your industry.

Angela: Interesting angle. What other acquisition strategies are mentioned?

James: It gives a whole list, kind of as conversation starters to explore further in the book, things like direct mail, but done smartly with targeted lists, SEO, both general and local, content marketing, pay-per-click ads-

Angela: Affiliates and partners?

James: Yep, building those relationships, cold outreach, both email and phone calls, social media, but focusing on engagement and moving people to your own list, PR and getting media attention, traditional ads.

Angela: Referrals seem key too.

James: Absolutely, both formal referral groups and just actively asking satisfied customers. And again, niching down or exploring adjacent markets to find new customer pools.

Angela: Okay, so lots of ways to potentially bring people in, but you mentioned plugging leaks.

James: Yeah.

Angela: Fixing the funnel.

James: Yes, this is a huge point in the playbook. Sometimes optimizing the process you already have gives you a way better return than just trying to stuff more leads in the top of a broken funnel.

Angela: Makes total sense. So it’s about tracking.

James: Tracking everything. You need to know your numbers at each step-

Angela: Yeah.

James: … how many people see your ad, how many click, how many opt in with their email, how many schedule a call, how many actually show up, how many buy-

Angela: And the costs at each step too, cost per click, cost per lead.

James: Cost per acquisition-

Angela: Yeah.

James: … return on ad spend, all of it. The book gives a clear example funnel and the specific metrics to watch.

Angela: And it makes a point about conversion rates being too high. How can that be bad?

James: Well, if, say, almost everyone who gets on a sales call buys, maybe your price is too low, or maybe your qualification process before the call is so strict you’re turning away perfectly good customers earlier in the funnel. It indicates a potential bottleneck or missed opportunity.

Angela: Ah, okay. So you need to understand what good looks like for your specific business at each stage.

James: Precisely. And the playbook offers common fixes if a stage is underperforming, things like better lead nurturing with emails, using testimonials more effectively, clarifying your marketing message, refining ad targeting, optimizing your landing pages, analyzing traffic sources, lots of potential tweaks.

Angela: And it shows the impact of fixing things.

James: Yeah, there’s a data example maybe from an image in the manuscript showing a hypothetical funnel’s numbers. Then it shows what happens if you improve just one step, like the opt-in rate, by 50%.

Angela: And the result?

James: Sales and return on ad spend basically quadruple. It really highlights how powerful optimizing just one conversion point can be. The value per lead goes up. Cost per sale goes down.

Angela: So the processes, know your numbers, calculate the conversion rates and costs, find the weak spots or maybe spots that look too good, and apply targeted fixes.

James: That’s the gist of it, yeah, a clear three-step approach.

Angela: This is really comprehensive. Does the playbook offer anything else beyond these core strategies? You mentioned bonus sections.

James: It does. It revisits the discounting topic with even more financial detail, like showing the brutal math of a 15% discount or even a big 40% discount that doubles sales volume but still crushes net profit-

Angela: Reinforcing that point strongly.

James: … and offering alternatives, again, exclusive gifts, personalization, private communities, using scarcity and waiting lists effectively to maintain price integrity without discounts.

Angela: What about the other bonus section, expenses?

James: Right, expense reduction, often overlooked but another direct path to boosting profit. It references another author, Mark Friedman, who specializes in this.

Angela: And gives some common areas for savings.

James: Yeah, for smaller businesses.

Angela: Yeah.

James: Health insurance, payroll, and workers’ comp, suggesting pay-as-you-go options-

Angela: Right.

James: … rent negotiations, shopping around for utilities like energy, simple, practical stuff.

Angela: And warns against just sticking with long-term vendors without checking prices.

James: Exactly. Complacency costs money.It suggests reassessing expenses regularly, maybe every one, two years, and trying to lock in good rates for two, three years. There’s even a personal story about negotiating a lower merchant account fee.

Angela: Useful practical tips. Anything else before the action plan?

James: One more tool. The Eisenhower Matrix for Prioritization.

Angela: Ah, the urgent/important grid.

James: That’s the one. To help combat that feeling of being overwhelmed with all these potential strategies, it breaks tasks into four boxes: important and urgent, do now, important but not urgent, schedule it…

Angela: That’s the growth stuff, usually.

James: … often, yes.

Angela: Yeah.

James: And not important but urgent, delegate if possible. And not important and not urgent, delete, just don’t do it.

Angela: A framework for deciding where to focus your energy.

James: And it makes the point that if you’re constantly living in the urgent/important box, putting out fires, it probably means you’re missing systems or haven’t delegated effectively.

Angela: Good insight. Okay, so after covering all this ground CLV, the FAQ levers, funnel fixing, bonuses, how does the playbook help you actually do something, the action plan?

James: Yeah. It’s just to… empowering you, the owner. Reminding you that you get to decide. The root of decide means to cut off. You have to choose what to focus on.

Angela: So it provides prompts.

James: Exactly. High-level questions tied back to the FAQ levers. Things like, could a subscription model work for you? When was your last product launch? Are you systematically upselling? Have you tested pricing? What new customer acquisition channel could you test?

Angela: Getting you thinking specifically about your own business.

James: Right. Specific prompts on payment plans, tiered bonuses, personalization, volume discounts, cross-sells. It asks you to reflect on your CLV, your funnel metrics. Where are the drop-offs? It prompts you to look at expenses like office space and software.

Angela: And the final step?

James: A fast action plan. Basically, identify your top five priorities based on everything you’ve just considered. What will you tackle first?

Angela: Making it concrete. And does it offer any support beyond the book itself?

James: It does. It mentions the value of community and directs people to yourbusinessgrowthplaybook.com, where there’s an online community, and it wraps up with encouragement.

Angela: And it highlights specific sections in the book.

James: Uh-huh. It mentions a glossary and that there are sections tailored for different business types, subscription/saas, high-ticket, B2B, so you can find the strategies most relevant to you.

Angela: That sounds really helpful.

James: There’s also a mention of an Impact at Scale section, looking beyond just your own profit.

Angela: How so?

James: It talks about the ripple effect of entrepreneurship, creating jobs, supporting communities. It shares an inspiring story about someone named Helen from Village Enterprise, an organization that helps people start businesses in extreme poverty.

Angela: Connecting business growth to a wider positive impact.

James: Yeah, and it notes that Jeremy Shapiro has a background helping entrepreneurs and that buying the book actually supports causes like Village Enterprise.

Angela: So overall, it sounds like a really practical, action-oriented guide for business owners serious about growth with a nice positive message waving in.

James: That’s definitely the impression. Packed with strategies, frameworks, examples, and importantly, prompts to get you thinking and acting. Seems like a valuable resource if growth is your goal.

Angela: Well, hopefully this deep dive has given everyone listening a good feel for what Your Business Growth Playbook offers and maybe sparked a few ideas already.

James: Yeah, maybe given you a couple of things to chew on for your own business.

Angela: Absolutely. That’s all the time we have for this deep dive. Until next time, keep exploring, keep learning.

James: And maybe consider grabbing a copy of the playbook to really dig into those strategies yourself.