Dan Martell - How To Create a Limited-Time Offer To Boost Cash (5 Key Strategies for SaaS)

00:00:00.120 Hey there, Dan Martell here,

00:00:01.160 serial entrepreneur, investor, and creator of SaaS Academy.

00:00:03.880 In this episode, I'm gonna share with you

00:00:06.040 how to create a limited time offer.

00:00:09.960 Maybe you've got a Cyber Monday,

00:00:12.120 a Cyber Monday Black Friday sale

00:00:14.280 that you're trying to figure out,

00:00:15.080 or you're trying to sell kind of like a launch

00:00:17.280 or pre-sell your product,

00:00:18.320 or maybe it's just an end of year campaign you wanna crush.

00:00:22.400 That is what I'm gonna dive into

00:00:24.040 and be sure to stay at the end

00:00:25.080 where I've got an exclusive download for you,

00:00:27.080 which is essentially my limited time offer builder worksheet,

00:00:31.120 where I go into the characteristics,

00:00:32.760 how to define it and really package it

00:00:34.960 so you don't blow up your business.

00:00:37.600 Trust me, do this wrong and you will fail.

00:00:40.080 Let's get into it.

00:00:41.240 The offer, how do you create a limited offer that explodes,

00:00:58.720 gets you high quality customers,

00:01:00.760 generates a cash injection into your business

00:01:04.340 and doesn't cripple it?

00:01:05.680 Because the challenge I've discovered,

00:01:07.480 I coach a lot of software founders

00:01:09.940 that do Black Friday, Cyber Monday,

00:01:12.800 you know, end of year offers,

00:01:15.240 pre-sell their next big launches.

00:01:17.500 And the truth is, is for many of them

00:01:20.000 that don't understand the frameworks

00:01:21.340 I'm gonna share with you in this episode,

00:01:24.120 they create a situation

00:01:25.840 where they literally break their business.

00:01:27.720 How does that happen?

00:01:28.740 Well, they pre-sell their software.

00:01:31.640 I've seen people do, you know,

00:01:34.660 what are those called?

00:01:36.380 Not limited, but lifetime offers.

00:01:38.320 lifetime offers, or it's like a fixed price forever. Well, there's a lot of things wrong

00:01:44.540 with that. One, those people are definitely not looking to solve a problem. They're just looking

00:01:50.040 for a good deal. Many of them are going to not be willing to invest the time and energy to deploy

00:01:54.860 your software and ask your support team to do all the heavy lifting. A lot of them are going to

00:01:59.000 complain over time that the product isn't meeting their needs, but they're not even paying for the

00:02:04.100 products. So what I want to share with you today is kind of five key strategies that you need to

00:02:08.860 consider when designing your limited time offer so that it not only is successful, but also doesn't

00:02:16.520 break your business. Here's what I got. Number one, know your COGS. COGS stands for cost of good

00:02:22.900 sold. So most entrepreneurs, when they're busy selling, if they're lucky enough to market and

00:02:28.000 get the product being bought, they never even think about asking themselves, what's the unit

00:02:33.200 economics. When I sell one software license and they think, well, software is free. It literally

00:02:38.680 costs me pennies to deliver more software. No, it's not true. You have other costs. You have

00:02:43.900 support costs. You have infrastructure costs, et cetera. So you need to understand that if I sell

00:02:48.940 one new customer and they pay me a hundred dollars a month, what amount of money do I need to spend

00:02:53.540 per month to support that customer? That's your cost of goods sold. Most software companies,

00:02:58.960 If you're good, most people aren't, okay?

00:03:01.560 If you're good, you're at about 80 to 90%

00:03:03.700 what's called gross margin or 10% cost of goods sold.

00:03:07.800 If you do this wrong, you may end up like my buddy.

00:03:10.780 I'm not gonna call him out.

00:03:11.820 I almost called him out.

00:03:12.620 I should hold myself back, but, and it wasn't his fault.

00:03:15.260 He worked at a company that sold jewelry.

00:03:16.940 This is just a fun story.

00:03:19.040 Worked at a company selling jewelry.

00:03:20.860 They had Walmart as a big customer.

00:03:22.900 They did this multi-year contract.

00:03:25.240 They were all exciting, high five.

00:03:27.060 It was a multimillion dollar deal.

00:03:28.960 you know, they ramped up production,

00:03:30.740 they got lines of credit from the bank

00:03:32.300 and, you know, really worked with Walmart

00:03:33.920 to deploy their jewelry line.

00:03:36.740 And then the price of gold went up.

00:03:39.880 Well, what they didn't consider when they sold the product

00:03:42.580 was that their contract had a fixed price per piece

00:03:46.260 to Walmart and they didn't think,

00:03:49.040 well, could the price of gold go up 3X?

00:03:51.660 Well, here's what happens.

00:03:52.960 All of a sudden now they have to fulfill

00:03:54.740 on Walmart's contract or they're gonna get sued.

00:03:57.200 They tried to go find new contracts

00:03:59.560 that were higher gross margin,

00:04:01.780 higher, like, you know, that was more profitable

00:04:03.920 because now all of a sudden they weren't profitable.

00:04:06.040 And then the banks,

00:04:07.120 because they lent the line of credit to the business,

00:04:09.500 are monitoring essentially their inventory levels.

00:04:13.360 And the bank at one point,

00:04:14.840 because Walmart got so much product,

00:04:17.060 they didn't have enough inventory

00:04:18.200 to essentially secure the line of credit.

00:04:21.240 My buddy came in to his job.

00:04:23.720 He was working there as essentially the marketing director.

00:04:25.580 and there was, I think it was like Accenture,

00:04:30.520 one of the big accounting firms

00:04:31.660 literally took over the business.

00:04:33.400 The CEO was kicked out.

00:04:35.080 I mean, the bank called in their loan

00:04:36.320 and took over the business

00:04:37.360 and all they did was start liquidating

00:04:39.340 whatever assets they could sell from the business

00:04:41.860 to be able to cover the extended line of credit.

00:04:44.200 And that is an extreme case,

00:04:46.360 but I just want you to know

00:04:47.720 that I've seen this happen over and over and over

00:04:50.380 with software founders that do not understand

00:04:53.720 that selling lifetime deals

00:04:56.400 and not understanding the cost of that customer

00:04:59.060 over the next five years

00:05:00.320 and the cost of your brand,

00:05:01.500 the cost of your pricing shred,

00:05:02.680 the cost of your engineering team is expensive.

00:05:05.860 So number one, know your cogs.

00:05:07.540 Number two, pay more, not less. 0.68

00:05:10.660 So what a lot of people do when they do a deal,

00:05:13.180 they do an offer,

00:05:14.100 they wanna give like this incredible irresistible offer,

00:05:16.800 they take something really expensive

00:05:18.680 and they discount it because it's easy.

00:05:20.680 Literally, I sell something for 250 bucks a month,

00:05:22.800 I'm gonna discount it to $50 a month.

00:05:24.940 It's five times less if you buy

00:05:26.940 during this time period, et cetera.

00:05:29.120 Here's why that totally fails,

00:05:30.940 is what you're trying to do with a limited time offer

00:05:34.660 is actually increase what's called the average order value.

00:05:38.240 That means that the amount of money

00:05:40.520 that would normally be spent, let's call it 250, is increased.

00:05:45.080 So how do you increase the AOV?

00:05:47.680 How do you increase that first time purchase?

00:05:50.200 How do you, you know, put stuff together to figure out,

00:05:53.980 like, instead of somebody paying me 250,

00:05:55.640 how do I get them to spend 500?

00:05:57.540 And there's a bunch of cool ways to do that.

00:06:00.400 But that is the big idea is don't discount.

00:06:04.300 It's like in my sales team, right?

00:06:06.500 People, you know, we used to allow for discounting.

00:06:09.300 And what I said instead is like, no, don't discount.

00:06:11.600 Let's just add more value.

00:06:12.680 Instead of discounting the price by 20%,

00:06:14.660 why don't we throw in something

00:06:16.340 to keep the price what it is, but create more value?

00:06:19.880 That to me is more interesting, it's more creative,

00:06:23.120 and it's actually gonna net out

00:06:24.580 that your business is gonna win bigger

00:06:26.260 because you did the effort, you went through the exercise

00:06:29.260 to figure out how to get them to pay more,

00:06:31.160 not less on that first time purchase, okay?

00:06:33.600 Average order value, Google it, search it,

00:06:36.140 figure out how to increase it for your offer

00:06:38.000 because that's where the unlock is gonna come from.

00:06:40.180 Number three, bundle the outcome.

00:06:42.320 So bundling means kind of,

00:06:44.780 and that's why I didn't talk about it

00:06:46.020 when I said increase the average order value.

00:06:48.440 But think of this,

00:06:49.160 You wanna ask yourself,

00:06:50.500 what is the outcome somebody's buying?

00:06:51.840 If somebody's buying your software or your service

00:06:54.160 or whatever it is you have for sale,

00:06:55.800 they're actually not buying that.

00:06:57.560 They're buying the solution to a problem.

00:07:00.520 So for example, if I'm selling tents, okay,

00:07:03.940 what else do you need to go camping?

00:07:06.400 Because you're not buying a tent to not go camping.

00:07:08.360 You're buying a tent to go camping.

00:07:10.320 So if I sell you a tent,

00:07:12.440 can I bundle other stuff to make it more attractive?

00:07:15.360 Can I add a free burner so that you can cook on,

00:07:20.640 a cook burner?

00:07:21.560 Can I add, what else?

00:07:23.580 If I'm buying a tent, maybe I want a light.

00:07:25.580 I can add on a bundle.

00:07:27.120 I can put the light in there,

00:07:28.320 the light that goes inside the tent.

00:07:29.760 If I'm buying a tent,

00:07:30.380 I probably need a light for at nighttime.

00:07:32.040 Think about, the way I think about software is software really,

00:07:35.260 SaaS should stand for software as a service.

00:07:38.360 Instead of software as a service,

00:07:39.380 should stand for success as a service, okay?

00:07:42.600 So SaaS to me is success as a service.

00:07:44.780 What's the outcome they wanna achieve

00:07:47.400 and how can I bundle more stuff, okay?

00:07:50.000 And I'm gonna tell you how to get access to my worksheet

00:07:51.540 that covers the four key areas that you need to understand

00:07:55.580 to find those bundling opportunities.

00:07:57.760 But one of them is templates.

00:07:59.840 If I invest in your software, if I wanna buy this offer,

00:08:04.040 what is something I'm gonna be missing

00:08:06.840 to actually get even more success out of it?

00:08:09.200 And for a lot of software products, it's best practices,

00:08:11.700 it's templates, it's scripts,

00:08:13.480 It's, you know, whatever it is.

00:08:15.620 It's the thing that's gonna go into your software.

00:08:18.080 It's the schedule.

00:08:20.100 If you have a project management software,

00:08:21.980 it's, you know, if you sell HR software,

00:08:23.980 it's the job posting template structure.

00:08:27.840 Whatever it is, ask yourself that question.

00:08:30.260 How do I bundle a better outcome as a success outcome

00:08:33.960 to make my offer that much more desirable?

00:08:37.420 Number four, R&D copy.

00:08:39.580 So R&D stands for most people, research and development.

00:08:42.920 I like to think of it as a rob and duplicate.

00:08:44.880 Now, I'm not advocating you steal other people's stuff.

00:08:48.460 I'm advocating that you try to do it ethically

00:08:51.340 in a way that you can model.

00:08:53.000 If you've never written copy

00:08:54.580 and you're trying to create an incredible offer,

00:08:57.280 you could literally have the most amazing bundle,

00:09:01.100 price point, like just crazy amazing value.

00:09:04.920 And because you can't write the copy to communicate it,

00:09:07.340 it's gonna fall off, like it's just gonna fail, okay?

00:09:11.400 So what I wanna encourage you to do

00:09:13.120 is go find people today that are in your market

00:09:16.940 that are doing offers and understand

00:09:19.280 from a copy, a positioning, a benefits point of view,

00:09:22.800 how did they structure it?

00:09:24.160 Now, that could take time.

00:09:26.040 If you're in for speed,

00:09:27.260 I'm a big fan of investing to go fast.

00:09:30.440 If that's you, then go check out funnelscripts.com.

00:09:34.200 I am not getting any affiliate, no association.

00:09:36.860 You can literally Google it, go click directly.

00:09:39.340 Here's why I like it.

00:09:40.320 One, I coach the team at ClickFunnels.

00:09:42.760 They're the creators of funnelscripts.com.

00:09:45.220 I bought the product myself.

00:09:47.440 It is jam packed with examples of not only sales letters

00:09:52.320 and offer templates and Facebook ads

00:09:54.700 and literally email scripts,

00:09:56.400 everything that you could possibly want

00:09:58.820 is just gonna allow you to get there faster.

00:10:01.220 So I don't care if it's Funnel Scripts

00:10:02.700 or another product or whatever,

00:10:04.880 you need to find people, model it, or what I call R&D,

00:10:09.880 Rob and duplicate, but really just be inspired.

00:10:13.020 Tweak it for your own case.

00:10:14.700 You don't wanna literally copy paste.

00:10:16.120 People do this and you will get called out

00:10:17.580 and it's unethical.

00:10:18.820 Tweak it, change it,

00:10:20.460 and know that that's a better place to start

00:10:22.900 than for you to sit down to try to come up with great copy.

00:10:26.340 Because if you don't know how to do this,

00:10:27.980 your offer can be the most incredible thing

00:10:29.840 and fall flat because of the way you've positioned it

00:10:32.480 on with words online.

00:10:35.060 Number five, promote the deal.

00:10:37.120 So there's this great saying in content marketing

00:10:39.880 that 20% should be around production,

00:10:42.220 80% should be around promotion.

00:10:44.440 I believe this is the same

00:10:45.860 for creating a limited time offer,

00:10:48.480 creating a Black Friday, Cyber Monday offer,

00:10:51.700 an end of year offer.

00:10:52.980 If you wanna do a lifetime offer,

00:10:54.640 you just gotta price it right.

00:10:56.020 Those are all things that require you to promote the deal.

00:11:00.260 So in the retail world,

00:11:02.140 when you go to a retail store to buy some jeans

00:11:06.420 or buy some clothes or whatever,

00:11:07.960 you're out to buy some sunglasses,

00:11:09.840 they typically have a promotions rack, okay?

00:11:12.700 A promotions rack is stuff that they're trying to clear,

00:11:15.860 they're trying to move and it's discounted.

00:11:17.780 It's last year's, it's great product,

00:11:19.700 it's just not the current season stuff.

00:11:23.560 My question to you is where is your sales rack?

00:11:27.280 Where online are people aggregating deals, okay?

00:11:31.340 Because I know when there's a Black Friday,

00:11:32.800 Cyber Monday deal, there's literally lists

00:11:35.200 and communities and marketplaces and websites

00:11:38.720 dedicated to aggregating different bundle offers

00:11:43.120 and limited time offers and all these different deals, right?

00:11:46.400 There's a deal site for it.

00:11:47.920 If you're not spending time trying to figure out

00:11:49.820 who's got one, can I partner with somebody?

00:11:52.400 Can I create my own?

00:11:54.240 Can I, you know, how do I promote this?

00:11:56.800 How do I get other people involved?

00:11:58.080 What's my paid ad strategy?

00:12:00.140 If all you do is create the offer, put it online,

00:12:03.440 send an email to your current list

00:12:05.340 and think that that's a good idea.

00:12:08.420 It's gonna fall flat.

00:12:09.540 You literally need to think about

00:12:10.800 what is the effort and promotion I'm gonna put into this

00:12:12.800 so that I can succeed in creating a limited time offer

00:12:17.380 that creates a cash injection into your business.

00:12:20.900 So five strategies to create

00:12:22.680 an irresistible limited time offer.

00:12:24.540 Number one, you gotta know your cogs.

00:12:26.080 Number two, pay more, not less. 0.68

00:12:28.260 Get them to pay more.

00:12:29.040 Number three, bundle the outcome for success.

00:12:32.220 Number four, R&D, your copywriting skills.

00:12:35.660 And number five, promote the deal.

00:12:38.720 So as I mentioned at the beginning of this episode,

00:12:40.960 I wanna share with you the limited time offer builder.

00:12:44.040 This is the worksheet that I use with my clients, okay?

00:12:46.680 So watch the episode again or listen to the episode

00:12:50.380 and go through the worksheet, answer all the questions,

00:12:54.040 design the perfect limited time offer using that.

00:12:57.980 You can click the link below to grab a copy

00:13:00.020 to make sure you don't break your business, okay?

00:13:03.380 I'm gonna ask you the questions

00:13:05.060 to make sure that you can get clarity,

00:13:06.600 talk to your team, talk to your accountant,

00:13:08.520 figure out what you've got.

00:13:09.920 Maybe you have other partners you can pull in

00:13:11.620 to create a really compelling bundle

00:13:14.140 to ensure that the customer gets even more success.

00:13:16.860 Just click the link to download

00:13:18.440 that limited time offer builder worksheet.

00:13:20.780 It's my gift to you.

00:13:22.200 And if you found this episode value,

00:13:24.580 be sure to subscribe to my channel,

00:13:26.900 share it with somebody that you care about.

00:13:28.860 And as per usual, I want to encourage you

00:13:30.940 to live a bigger life and a bigger business.

00:13:32.980 And I'll see you next Monday.

00:13:35.460 One thing I noticed in my videos

00:13:36.720 is I always got my neck up.

Dan Martell - March 22, 2021

How To Create a Limited-Time Offer To Boost Cash (5 Key Strategies for SaaS)

Episode Stats

Summary

Transcript