Dan Martell - Copy This Strategy, It’ll Blow Up Your Business

00:00:00.000 What if I told you that your business could be worth two, three, even 10 times more without

00:00:04.940 adding a single customer? I've sold three companies invested in dozens more, and I've

00:00:09.500 seen the same revenue numbers get completely different price tags. And the truth is the

00:00:13.640 difference always comes down to one metric most founders ignore. By the end of this video,

00:00:18.460 you'll have the step-by-step formula to wildly increase the value of your business and set

00:00:23.660 yourself up to sell for way more when the time comes. Most founders think that the way to grow

00:00:28.380 their business is just getting more customers through the door. But let me tell you, that's

00:00:32.420 just simply not true. The real multiplier is how much you grow from the ones you already have.

00:00:38.640 Let's start with the question a lot of you might be asking yourself, why does this even matter?

00:00:43.180 Getting new customers is getting more and more expensive. And when somebody comes to buy your

00:00:48.820 business, they don't care how many like total customers you have. They care about how many

00:00:53.000 stay and how much they spend over what period of time. Here's the facts. It's five to seven times

00:00:58.700 easier to sell to an existing customer than to a new lead. People are willing to buy more of what

00:01:04.820 they've already bought. Trying to get somebody to buy from you for the first time, that's hard.

00:01:10.100 Think about it. Company A, obsessed with new customer acquisition. They're like the ultimate

00:01:14.840 salespeople marketing and they're just like, I'm the best marketer ever. And they're burning cash

00:01:20.200 on ads. The problem is they get high churn versus company B. Focus on getting the customers,

00:01:26.140 delivering value. Company A struggles to raise money despite growth. Company B gets acquired

00:01:32.060 at a premium. Why? Predictable revenue. Why is predictable revenue important to buyers? Because

00:01:38.580 when they buy your business, they're going to pay you money and they expect to make a return

00:01:43.360 on that money. So the probability of seeing a return is what matters most. When I'm buying a

00:01:49.420 business, I always look at the amount of risk I'm willing to take. If the business is small and they

00:01:54.300 don't have predictable revenue and they're not growing, there's a lot of risk in me buying that

00:01:58.380 business. If the business is bigger and the customers are happy and they buy more and more,

00:02:03.680 I have less risk that something bad is going to happen. That is why people pay more for companies

00:02:08.960 that have predictable revenue. And I know some of you guys are thinking, but Dan, I just want to

00:02:14.280 grow my business. Why do I have to care about exit valuations? Having a business that is valuable

00:02:19.780 to somebody else is a great business to run. You may never want to sell. That's great. A company

00:02:25.080 that could sell is a great company to operate. See, your best customer is the one already paying

00:02:30.780 you. So always try to find ways to serve them better so that they pay you more. Now, before we

00:02:36.220 move on to the next section, if you want to know the rough valuation of your business, just click

00:02:40.220 the first link in the description below to get access to my valuation calculator. Essentially,

00:02:44.660 you can input all your business metrics and get a rough estimate of how much your business is worth

00:02:49.260 to an investor. But what actually creates that predictability that buyers are willing to pay

00:02:54.060 10 times more for? You might want to grab a pen for this. It's called lifetime value.

00:02:59.320 Here's the best way to think about it. I have a customer. How much does the average customer

00:03:05.080 pay me over time? Is it a hundred dollars once? Is it $10,000 over 18 months? Here's the official

00:03:12.060 definition. It's how much money a business makes from a single customer during the entire time

00:03:17.220 they stay as a customer. So for example, if a customer buys a hundred dollar product every

00:03:21.640 month for 12 months, lifetime value equals 1200 bucks. If another buys once for 200 bucks,

00:03:28.640 lifetime value equals $200. The more each customer is worth over time, the more valuable

00:03:35.500 and predictable your business becomes. Now, this is a big concept. It's called expansion revenue.

00:03:41.880 Expansion revenue is the holy grail. Grow what you've got before chasing what you don't. And

00:03:48.400 we'll get into this in a second. Now, to really understand LTV, we need to know how to calculate

00:03:52.920 it. It's a simple formula. LTV equals the average order value, how much the person pays times the

00:03:59.720 purchase frequency monthly, maybe weekly, maybe yearly. I don't know. Multiplied by the customer

00:04:06.200 lifespan. How long do they stick around or do they cancel after six months? Maybe they stick around

00:04:10.720 for six years, maybe 10 years. I know some businesses, they've never lost a customer.

00:04:15.100 This is completely different for every business. I mean, if you have a plumbing company, that's

00:04:19.840 to have a different customer profile in regards to lifetime value than potentially an ai software

00:04:25.280 product that's my world that pays every month but they might only stay for 18 months or 24 months

00:04:30.720 so for example if you have a media agency and right now customers are buying up front maybe

00:04:35.600 25 grand for a project that's cool but maybe customers buy on average 1.2 times in their

00:04:42.960 lifespan so it's not just 25 grand it's 25 grand multiplied times 1.2 so a customer is worth a

00:04:49.360 little bit longer see that's what i'm looking for it's like every customer buys once but maybe some

00:04:54.160 customers buy two or three times that's the average purchase frequency over that customer lifespan

00:04:59.520 to really bring this home bad situation hundred dollar average spend purchase one time once a

00:05:05.760 year that's a hundred dollar lifetime value of a customer which some people have and they don't

00:05:09.760 even know and they think it's like oh my god we're doing so great no you're not example number two

00:05:13.920 this is great average customer spends a hundred dollars but they buy every month so that's 12

00:05:18.480 purchases per year. But on average, they stick around for three years. That's a lifetime value

00:05:23.280 of $3,600. That's a 36X difference in value without adding a single customer. Those are

00:05:31.280 wildly two different businesses. But what's actually considered good? Is it good that a

00:05:36.700 customer's worth $25,000? Or what if they should be worth $100,000? You don't know, right? Because

00:05:41.960 you might be pumped. $25,000, that's awesome. That's profit. I can live with that. But what

00:05:45.880 if your potential is four times more that's what we need to figure out so just so you understand

00:05:51.400 i've been involved in buying over probably 35 companies in just the last five years alone

00:05:57.660 i've exited several companies myself i've invested and helped those companies exit so i want to give

00:06:03.860 you a ratio that'll help you understand what great lifetime value is the truth is though is it does

00:06:09.520 vary depending on industry so instead of asking is my ltv good or bad compare it against customer

00:06:16.080 acquisition costs essentially how much does it cost you to acquire a new customer because once

00:06:20.800 i understand my lifetime value and my cac ratio then i create a new formula that puts it all in

00:06:26.320 the perspective the reason you want to calculate the cost of acquire customer over the ltv is

00:06:31.040 because when you are doing marketing you want to be efficient and you want to be able to grow so

00:06:36.160 So you want that ratio to be as good as it possibly can.

00:06:39.360 So if you spend a lot of money to get a customer

00:06:40.900 that's not worth a lot, business isn't a great business.

00:06:43.100 If you spend a little bit of money

00:06:44.200 to get a customer's worth a lot,

00:06:45.620 that's a winner-winner chicken dinner.

00:06:47.400 Here's a rule of thumb.

00:06:48.460 I'm gonna just assume, on average,

00:06:50.540 you have 70 to 80% margin,

00:06:52.780 meaning that it costs you $20 in cost

00:06:54.780 to get a $100 customer.

00:06:56.180 With that in mind, let's talk about some ratios.

00:06:58.380 If your ratio is less than three to one,

00:07:00.740 meaning that if a customer's worth $300,

00:07:03.540 you're spending $100 to get them,

00:07:05.380 then you're probably in trouble.

00:07:07.360 You're spending way too much to get a customer

00:07:09.820 compared to what they're worth.

00:07:11.180 If your ratio is between a range of three to one

00:07:13.840 to five to one, then you're healthy.

00:07:16.020 You're essentially making good returns on every customer.

00:07:18.260 If ratio is more than five to one,

00:07:20.220 you're getting into the world-class territory.

00:07:22.360 That's when buyers and investors will pay premium

00:07:25.120 on the multiples for your business

00:07:26.960 because that means that they can grow your business easily

00:07:30.120 and it's generating more profit.

00:07:31.600 See, strong lifetime value is the backbone

00:07:34.680 of all valuations.

00:07:36.160 If your customers stick around and they spend more,

00:07:38.360 that's where the magic happens.

00:07:39.640 So the obvious question,

00:07:41.140 how do I actually increase my lifetime value?

00:07:43.780 There's only three ways that you can increase

00:07:46.200 the value of a customer.

00:07:48.420 The first one is you gotta keep the customer for longer.

00:07:52.000 What I always do when I sit down with a founder

00:07:54.420 is I'm looking at how long customers stick around.

00:07:57.720 And I have to increase that.

00:07:59.940 I have to improve it.

00:08:01.200 Because you've done all this work to get the customer

00:08:04.140 and then they leave.

00:08:05.620 To fix that, it's kind of simple.

00:08:07.400 Look at why they left.

00:08:08.880 I had a friend that had this software

00:08:10.340 and he had all these signups,

00:08:12.000 all these people became customers,

00:08:13.340 but then he had 10% every month leaving.

00:08:16.640 If you're losing 10% of your customers every month,

00:08:18.900 that means every 10 months,

00:08:20.580 you lose 100% of your customer base.

00:08:23.600 He didn't get the customer

00:08:24.960 to what I like to call core value.

00:08:27.060 They were promised something on your homepage,

00:08:29.000 they bought from you

00:08:30.180 and you didn't get them that value.

00:08:32.560 as fast as humanly possible.

00:08:34.480 So you have to nail the onboarding, design it, okay?

00:08:37.140 Think about like the effort that Disney goes through

00:08:39.660 for a new customer experience.

00:08:41.040 Man, that whole thing is dialed in

00:08:42.860 from the phone call to the app, to the park experience,

00:08:46.740 to the music they play in the parking lot.

00:08:49.900 Not only is it designed to get you in the right headspace,

00:08:52.980 but then all of the signage, all of the details,

00:08:56.320 the railings, they're all custom

00:08:58.140 for the situation you're in, the park you're in,

00:09:00.400 it's all themed.

00:09:01.200 they nail that experience that essentially gets you time to first value of experience disney

00:09:07.240 soon as you walk out of your car and then you have to look at stickiness right how easy is it

00:09:12.980 for somebody to leave if you don't make it sticky then some person that's better at marketing

00:09:17.860 selling a bigger dream will get them to switch so i always ask myself like what integrations into

00:09:24.520 their life into their habits can i create that makes me top of mind have them think about me

00:09:30.360 and make it a little harder for them to swap.

00:09:33.100 Could be the data I've collected

00:09:34.560 when they became a new customer.

00:09:35.920 I call this the octopus method,

00:09:37.620 where I've got my tentacles and they're sticky, pow and pow.

00:09:42.000 Not from a place of like trying to make it hard 0.95

00:09:44.060 because I suck and I want them to stick around,

00:09:45.780 but just don't make it too easy 0.97

00:09:47.420 for somebody to go click, click, swap.

00:09:49.060 And then finally, be proactive in your customer success,

00:09:53.380 meaning that if you know somebody is not using your product,

00:09:57.860 they haven't been to your gym in a while,

00:09:59.220 they haven't logged into the software you sold them,

00:10:02.080 have somebody reach out.

00:10:03.420 To me, this is a no-brainer.

00:10:05.000 In this world of technology,

00:10:06.480 it's actually quite simple to set up sensors

00:10:09.140 where you can monitor the customer's usage

00:10:12.020 or consumption of what you have

00:10:13.700 and have a report pulled every day

00:10:16.160 to tell you in the last 30 days of your total customers

00:10:19.000 which ones are red, yellow, green, or purple.

00:10:22.980 Purple are your super fans, okay?

00:10:25.320 Those ones you want to like acknowledge and reward,

00:10:28.100 But the people that are red and yellow, that's where you want to be proactive in reaching out

00:10:31.740 to them to make sure that they understand they're not upset with you. I taught this to one of my

00:10:36.320 coaching clients and he had an HR software. His biggest reasons for customers churning

00:10:40.960 was the person that worked there took a new job. And I said, hey, why don't you set up a monitor

00:10:46.600 of your customers on their LinkedIn account? When you notice somebody updates to a new position,

00:10:52.120 you have your team reach out to their old team and other people on the team to figure out who

00:10:55.380 the new person that took over and then reach out to the person that went to the new company and

00:10:59.120 see if they won't want to buy your software at the new company. So that's how we keep customers

00:11:03.140 longer, also known as retention. Number two is get them to buy more often, essentially the

00:11:07.780 frequency. When I think about it, it's like somebody's bought from me, but maybe they're

00:11:12.920 using more of what I sold. So I want to create like usage-based pricing. So for example, if they

00:11:18.080 come to the gym, I might say, okay, you're allowed to come to the gym five times a week for that

00:11:21.480 membership. But if they come in more, then they pay more for the more times they come. If I have

00:11:26.160 storage on Dropbox, I'll pay more the more storage I put there. Or the other thing is to think about

00:11:32.300 what are other ways to increase the spend per purchase? You know, in the software world, we

00:11:37.020 have this thing called implementation fees, which is essentially a way to charge to help the customer

00:11:41.480 onboard. For example, I built a company called Flowtown. There was a social marketing platform.

00:11:46.620 And then I was asking, well, what do customers do before they come in to use the software?

00:11:49.620 well they go and they buy templates from other people to use to get ready to use my software

00:11:54.360 why don't i sell those templates inside my software so they don't have to leave that way i can

00:11:58.700 increase my share of wallet there is so many opportunities in your business to look to sell

00:12:04.600 higher price things i like to think about it like a garden is that i could want to have this like

00:12:09.920 luscious garden and i keep planting seeds and planting seeds and planting seeds but if i don't

00:12:14.260 pay attention to current plants and seeing if they're getting all the nutrients they need

00:12:17.640 or check the soil quality

00:12:19.720 or even make sure where I'm planting the seeds

00:12:21.800 is actually gonna grow,

00:12:23.140 then I could do a lot of work

00:12:24.620 that doesn't get me this lush garden.

00:12:26.720 So now that you know all the moving parts,

00:12:28.960 here's where it all comes together

00:12:30.540 and 10X is the value of your business.

00:12:32.560 You have to take action.

00:12:34.260 Now that you know like all the different things you could do

00:12:36.500 to increase the value of a customer,

00:12:38.440 I want you to pick one.

00:12:40.380 What is the thing that you're gonna focus on?

00:12:42.400 Because you can do it all,

00:12:43.520 but it would just become overwhelming.

00:12:44.940 Is it how much they're paying?

00:12:47.080 Is it how often they pay?

00:12:48.840 Which one has the highest potential return

00:12:51.260 for the least amount of effort?

00:12:52.740 That's what you wanna look at.

00:12:53.820 Pick that one for the next quarter and execute.

00:12:56.400 And remember, if you want access to my valuation calculator,

00:12:59.380 just click the first link in the description below,

00:13:01.600 plug in your metrics

00:13:02.280 and see how much your business could be worth.

00:13:04.420 This is business.

00:13:05.940 If you have a business,

00:13:06.760 you probably wanna make the most amount of profit

00:13:08.920 for least amount of effort.

00:13:10.140 Trust me, customers being worth more in your business

00:13:13.360 makes more profit,

00:13:14.400 means you have more resources to invest

00:13:16.440 and buying back freedom.

00:13:17.940 But more importantly,

00:13:19.280 most people look at their life

00:13:21.220 through the lens of cashflow.

00:13:23.060 How much money do they make every month?

00:13:24.640 Because they think, okay,

00:13:25.480 that's what I can afford to pay for my life.

00:13:27.740 I'm more interested in increasing

00:13:29.640 the potential for your net worth.

00:13:31.600 See, the moment you start treating your business this way,

00:13:34.280 then the business becomes valuable.

00:13:36.260 And if you look at your personal net worth sheet,

00:13:39.240 which the banks ask you to submit

00:13:40.460 every time you wanna borrow money,

00:13:41.560 having that number go up

00:13:43.060 because the business is worth more because you've done these things to make a customer worth more

00:13:47.780 is probably the biggest opportunity for you to create massive wealth in your life now if you

00:13:52.340 want to learn how to get ahead of 99 of the people that are already using ai but you want to be

00:13:57.060 better, click here and I'll see you on the other side.

Dan Martell - October 21, 2025

Copy This Strategy, It’ll Blow Up Your Business

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