Today on the More Cheese Less Whiskers podcast, we're talking with Rene Floyd from Perris, California, and Rene has a wonderful business helping people make their beautiful, curly, wavy hair look even better.

Rene's a retired hairstylist who's developed her own products and methods to help people, and I love her single target market focus. She's got great products, and she has a great business, so we talked about overlaying the idea of a before, during, and after unit on to what she's doing, and found that a lot of her business is actually in the after unit.

That's really where a business like this is.

When you have a business where you solve an ongoing problem or provide an ongoing solution for someone, and you create an experience they love, they have an opportunity to come back again and again and again.

That's your great opportunity to build an amazing business.

We ended by talking about the before unit, acquiring brand new business and thinking about how much you would cheerfully pay to develop a new customer, and we had a great little breakdown of how to think about business in that way.

This is a great episode, especially if your business had the opportunity to build relationships with clients in this way.

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Transcript - More Cheese Less Whiskers 204

 

Dean: Rene!

Rene: Good morning. How are you?

Dean: I am excited to talk to you.

Rene: All right.

Dean: She's getting seated.

Rene: I'm excited to talk with you.

Dean: She's getting seated in my evil, scheme-hatching chair.

Rene: Okay.

Dean: There we go! So, where are you calling in from, Rene?

Rene: I'm in Southern California, in Perris.

Dean: Okay. I like it.

Rene: Yeah. In the IE.

Dean: Oh, okay, perfect. The Inland Empire.-

Rene: Exactly.

Dean: Okay. Not many people know that. Good!

Rene: Right!

Dean: So-

Rene: Yes.

Dean: ... I'm excited to hear the story of Rene, and what you're doing, and what we can focus on here.

Rene: Okay.

Dean: So, how did it-

Rene: What would you like to know?

Dean: ... all start? Yeah.

Rene: Okay. Well... Wow! My business is Beautiful Hair Products. And I am... It all started when I... It started years ago. My children were really small, and I wanted to do something that I was an expert in, and that is hair. And just to make extra money to help with the family budget and things like that?

Dean: Yeah.

Rene: And I was just trying something just to make a couple of extra dollars. And so, I used... I made a flyer to pass out to... I wasn't even into social media and all of that stuff at that time. And so, I... Like the old days, you make a flyer and then you pass them out to people.

And so, my children... I made a flyer, and my children, I took them with me to the mall, and I told them to hand them out to everybody that had hair that's in braids or that's in locks. I specialized in kinky hair, and kinky-

Dean: I love it!

Rene: ... curly hair.

Dean: Okay.

Rene: Yeah. And so... Excuse me. I just told them to take a flyer and, "Anyone that you see that has hair like us," to give them a flyer. So we went to the mall and these little faces looked up in people's faces, and they fell in love with the children, and they took the flyer, and before you know it, I had people calling. And that's how I actually started building my clientele.

Dean: I love that.

Dean: Yeah! And so, one thing led to another and my family, at the time, we all had our hair in the hairstyle called dreadlocks, and we used to always get attention. It was me and my husband and our four children. And so, I saw a lady at a hair show, and she asked if... She said that she had just opened up a salon, and she needed to... She was looking for stylists, and because I specialized in natural hair... I didn't do any perms or anything like that. She told me to come in and build up my clientele. I didn't have to pay rent for a good month.

And so, that's what I did. That's how me and my children built up our clientele. And then, before you know it, the clients started referring other people and I've-

Dean: Of course.

Rene: ... I've never paid for advertisement.

Dean: Right!

Rene: The customers were my advertisement, and I would give them a special discount just for referring other customers to me. And actually, that's how my business started. And then I ran out of flyers and so I went to Staples at the time, and I finished my copying, and I turned around and there was a black woman behind me. And I gave her a flyer and she said, "Well, isn't that something? I've been looking for someone in the community that I can feature in my magazine." So it was The Black Voice at that time - the newspaper.

And so, she allowed me to have free advertisement in the newspaper if I did the staff's hair for free. And that's how we exchanged services like that. And I think I serviced one person. No, and I serviced her son and another staff member in the seven years that I was actually able to advertise for free.

Dean: I love it. That is great.

Rene: Yeah. So-

Dean: So many things about this are just like textbook. We talked about, of course, one of the big advantages that you have is that you have selected a single-target market. Profit Activator Number One! That's exactly-

Rene: Yeah.

Dean: Yeah. And you've got a dream-come-true result that you've created for people. So when you book in a single-target market that's easily identifiable and they self-identify asset, and you've got an amazing solution for them, that's the match made in heaven. So that's great!

And now you've retired from doing the hairstyling. And-

Rene: Yes.

Dean: ... Now, tell me about what's happening now, then.

Rene: Okay. So, yeah. I did hair, specialized in sister locks, dreadlocks, brother locks, braids, and twists and things for over 17 years. And I was looking... You know how you feel like it's time to go to the next level?

Dean: Yes.

Rene: And so I was feeling like, "Okay. So I've made a name for myself, a brand, in terms of the way I did hair. It's quality that I give in my skill." And so I... But all along, I always wanted to do online business. I wanted to have an online business. And so, back when, while I was doing hair, I created my hair products. And that was out of a need that I had because I had got a bad batch of haircare products-

Dean: Oh, no.

Rene: ... from a company that I trusted. And my scalp was damaged, and to heal my scalp-

Dean: Oh, no!

Rene: Yeah. To heal my scalp, I created some herbal tea. And so, I just rinsed my hair with that tea, and then I said, "Obviously, I can't go back to using those products." So, I just started... I've always been a naturalist, so I started mixing and putting ingredients, natural ingredients, together along with this foundational conditioners and things, and adding essential oils and things like that. And I came up with a wonderful recipe, and started just making a basic set of products that I personally use and my family before I introduced them to my clients.

And so, we used those products for about six months, and I was all along telling my clients about them, and they wanted to try them, and so-

Dean: "Oh, let me try!" Yeah, of course.

Rene: Yes! Exactly. So, after I finished their hair, then I would spray their hair and put the conditioner in, and they loved it. And so I said, "Okay. Well, let me go ahead and launch these products."

And, at the time, I didn't know about... I don't even know if Shopify was around but I created a website via WordPress. And I'm telling you, they just took off. I started selling them online and I was... So, as I was selling my products and working on my clients, I said, "You know, I want to do this full-time," so when I finished doing hair for the day, I would go and work on my website. And after I did that for... Gosh, I think I was selling my products for about five years or six years before I actually retired.

And since retiring, I just... Now I sell my products full-time online, and it's -

Dean: How long has that been, now?

Rene: I've been online now for six years. I've been... No. Actually, I've been online for ten years, but then full-time e-commerce for six years, since retiring.

Dean: I love it.

Rene: Yeah. And it's just going wonderful. Wonderful. Now I want to teach others how I did it, how I did it. So now, I'm going into another level in my business.

Dean: This is so great! So what... Is there still room for growth in the primary business?

Rene: Yes. The haircare - business?

Dean: You've capitalized on everything or is it you've still got room to grow with that?

Rene: Oh, I still have room. I mean, I've barely scratched the surface.

Dean: Okay. Well, let's talk about that! Sure.

Rene: I've barely scratched the surface. Okay. Okay.

Dean: Well, let's talk about that first because that's kind of the... You've got lots of opportunity there. How many customers do you have? Or how... Do you overlay... I'm not sure how familiar you are with all the things we talk about here about the before unit and the during unit and the after unit.

When we look at that, I imagine that people repeat-buy your products. How-

Rene: Yes.

Dean: ... frequently do they buy?

Rene: I have a faithful few that just... I mean, buy over and over and over. And I have a list. I do have a list of people that are subscribers. And so, I have about... Wow! As consistent customers online, it's like maybe 60 or more? You know?

Dean: Okay. Oh, so you've got so much potential here then because there's way more than 60 people with the hair. Now, is it just for black hair? Or is it every... Are there...

Rene: Well-

Dean: ... Anybody who has kinky hair? Or is it primarily...

Rene: Oh, yeah. It's any. So, my tagline is, Beautiful hair products are specially formulated for those who were born with kinky, curly, wavy, beautifully textured hair. Right?

Dean: Okay, great.

Rene: So, whoever falls in that line.

Dean: Yes! Okay. So that's perfect.

Rene: It's the hair that I'm going after, not necessarily the race because-

Dean: I got it!

Rene: ... You have-

Dean: Okay.

Rene: Yeah. So, it's the hair type. So the hair type that's curly likes moisture, you know? It likes moisture. And so, our hair -

Dean: So I have-

Rene: ... more.

Dean: When I had hair, I had beautiful curly hair. And that was... It was when I went to college, I was dating a girl who introduced me to Infusium, and that was a life changer for me. I mean, I remember how just when you put in this leave-in conditioner that it was a... just what a dramatic difference in how soft my hair was. Because normally sometimes curly hair, of course, gets dry. So, yeah. You're right.

Rene: That's right.

Dean: That... Yeah, so again... Okay. So, if we look at... If I'm overlaying now, this is how we take the approach here, is look at it and say, "Of your entire business, of all the revenue that came in, in the last 12 months, how much of your business came from people who had already purchased from you in the 12 months previous?" So, let's say we went back to... Today's October 1st, so we go through end of September last year and say, "Of all of the people that bought from you in the last 12 months, how much of your business is from your after unit?"

Rene: Okay.

Dean: Do you track it like that?

Rene: Yes. Yes, I do. Excuse me. Yes. I do, sort of, kind of.

Dean: Okay.

Rene: I do. So, are you saying how many repeats? Like what's the percentage-

Dean: Yeah.

Rene: ... amount? Okay.

Dean: I'm saying like whatever you want to note, this is where driving your growth of your business is primarily about awareness and knowing your numbers, right?

Rene: Right, exactly.

Dean: So what we look at is the revenue, and the number of customers that that is, and we get those ratios, right? So if you say of all, 100%, of the revenue that came in, in the last 12 months, if you were to look at it, what percentage do you think would have been people who have already purchased from you?

Rene: Oh, I see.

Dean: Versus people who bought for the first time-

Rene: I see.

Dean: ... in the last 12 months? Right.

Rene: Okay! Okay. So, I would say like 45% are repeat customers that repeated their buying, and I have a lot of new customers. And so-

Dean: Yeah.

Rene: ... Yeah.

Dean: And now, somebody is a natural. Like if you say they are a repeat buyer, if somebody is a regular user, how often would that require that they buy the products? Like how-

Rene: So-

Dean: ... frequently would people be going through it? Is it like-

Rene: I see.

Dean: ... a shampoo and a conditioner? Or is it a... What would be the natural frequency if you're on the system kind of thing?

Rene: Okay. I see. So I have... So it would take, if it... Actually, it depends on the length of their hair and the amount of hair that they have, in terms of how much they would use.

So a person with like shoulder-length hair like mine? It would take them, for a complete set, which would include the shampoo, the spray, the conditioner, and the oil, it would take them a good, I would say a good 40 days to... Especially if they shampoo once a week, you know?

It would take them a good, I would say a good 40 to 45 days to go through the whole set. Now, if-

Dean: Well, they would have a chance-

Rene: ... they would have oil -

Dean: ... to go through... They would have a chance to go through sort of eight cycles-

Rene: Exactly.

Dean: ... in a year. Okay.

Rene: Yeah.

Dean: So that's what we want to look at, right? So, somewhere around that would be useful information for you to know how many people are doing at that level of... that are the eight cycles a year.

And then, how many are less than that? Some people may... You start to look for the patterns, right?

But the goal of your after unit is two things. Two of our profit activators are after-unit focused, meaning Profit Activator Seven is about nurturing lifetime relationships with the people who come into your business. And then, Profit Activator Eight is about orchestrating referrals.

So, just in the after unit of your business there's lots of opportunities for focusing on expanding your business and expanding the relationship that you have with people.

And do you measure referrals?

Rene: No, I don't.

Dean: Okay. Okay.

Rene: I do not measure referrals.

Dean: Okay. And so, do you... But you get referrals, you said. Like you must, right?

Rene: Yes. Yes, I do. Not as... Well, because I don't really measure like that?

Dean: Yeah, right.

Rene: Yeah. I don't really know those numbers, honestly.

Dean: But okay, you could. And there's the thing, right? Like when you look at it, this is taking an intentional approach to this. How many, if we were to look at the first thing that you want to kind of look at is, of all the people that you know who are associated with your business, meaning you've got their... They're either a prospect or a client. How many people are in your universe there? How many do you have?

Rene: Right.

Dean: Names and email addresses and physical addresses for?

Rene: Well, on my list, I have over 500. Socially, online, like for my Facebook, I have like 1800, almost 1900 followers. Excuse me. So-

Dean: So, here's what we want to do with your list of the 500 right now, because those are what we call visible prospects or your clients, right? As you want to have a distinction between... We want to divide these 500 into customers and non-customers yet, unconverted people yet, right? Would some of these 500 be leads? Or would they, all 500 of them, be people who've bought at least one time from you?

Rene: Oh, yeah. Most of them are leads, about 40% are customers.

Dean: Okay, great! So there we go. So now we're getting to the point there. So, we're looking at 200 of them are customers is what you're saying?

Rene: Yeah, about.

Dean: So that's the big picture of your after unit. And what we look at there is, of those 200 people, how much revenue do they generate? The customers?

Rene: Oh. Probably... Wow. About 40,000 a year?

Dean: Okay.

Rene: Right now. But these are -  low. They're not high-ticket-

Dean: Right. I get it.

Rene: ... items.

Dean: I get it. So right now, if we look at that, that they're about $200 a year per customer sort of thing. That makes sense? Yeah, 200-

Rene: Yeah.

Dean:... times $200 is $40,000. Okay.

Now, what we look at is the goal of the after unit would be to expand that, right?

So, is there... It feels like people with curly hair, with kinky, curly hair especially like that who have done something like what you offer, would probably get bulk limits on something like that, right? Like they would... If there would be... It would create a noticeable difference for people.

And that would probably come, in some percentage I think, from other people that they know with curly hair.

Right? That would be a great referral opportunity there. So, when I look at this, what I would look at is, is there a way for you... Do you manufacture your own stuff? Or do you outsource to it? Are you private labeling or what-

Rene: No. I manufacture.

Dean: Okay, great. So you've got an opportunity to... Do you ever put... Do you do sample sizes? Or things...

Rene: No. I had in the past. But no, I just felt... I've done that in the past, yes. But I just have the full size, and I have a YouTube channel where I show them how to use it, and that kind of thing.

Dean: Right. So part if it... The reason I'm asking about that is, that would maybe be the perfect opportunity for those existing people to be able to introduce you to people who also have curly hair. That, when they're talking about it... Because all referrals happen as a result of conversation, and that your customers are in conversation with people, and odds are, if they're talking with somebody else with curly hair, that the topic of, "You're hair looks great," or curly hair is going to come into the thing.

And what we want to do is, whenever that conversation happens, we need to trigger three things, that number one, that they notice that the conversation is about curly hair. And number two, that they think of you. And then, number three, that they introduce you to the person that they have the conversation with.

And so, if you were to program your customers to think like that, and give them an opportunity to be a hero. Right? If you were to say... And this is where I would say like, "Gift a friend," or, "Bring a friend," is more compelling than, "Refer a friend." Right? So if you were to say, "Just a quick note in case you hear someone talking about struggling with their dry, curly hair, especially as the winter is arriving now," or whatever. Worse in the winter or worse in the summer, whatever would be timely for the thing, right?

And to say, "If you hear someone talking about this, give me a call or text me and I'll get you a sample size of our Beautiful Hair Products to gift to them." Now, that may... Part of when you look at the mass of it, that may be the least expensive customer acquisition strategy that you could have because how much in the before unit now, how much does it cost to acquire a new customer? And I know it's difficult because you never... You don't do any advertising, right?

Rene: Right, yeah. I don't -

Dean: Have you done any advertising in the past? Or...

Rene: You know, I've tried it with the Facebook, but I-

Dean: Right.

Rene: Yeah. I have never been successful at it. The most success that I have is relationship marketing, so I like to talk to the person one-on-one-

Dean: If you could-

Rene: ... a lot of times.

Dean: If you could, Rene. If you know that on average that a customer is worth $200 a year to you, right? That's on average.

That each time you bring a new customer in, that they're going to be worth $200, because it would be easy to assume that, if you had 400 customers right now, that that would equate to $80,000. Right?

And 1,000 would equate to $200,000. Okay. So it's just a linear path to that, right? What would be your aspiration? What do you think is your capacity for it? How much could you handle?

Rene: How much can I what? I'm sorry.

Dean: How much could you handle? How many more customers could you-

Rene: Oh, I see.

Dean: Or would you want to have?

Rene: Yeah. That would be great to increase it at least by 30%. You know? Yeah, that would be... to acquire, I guess, for the number to have about another 100 consistent clients?

Dean: Yeah.

Rene: Customers. Yeah, I can handle that at this point.

Dean: Okay. And then, why-

Rene: Yeah, before I'd have to-

Dean: Before what? Before what?

Rene: Before I'd have to hire someone else to help me make the product.

Dean: Oh, yeah, yeah. Are you open to that?

Rene: I am. My son and granddaughter, I'm training and teaching them. You know, they are the ones that make the product for me. Now, I trained them to know how to make it, and I still have to be there with them. But they're teenagers, so this is something that they do.

I pay them a little bit, but to actually have a... going to be working in terms of helping make the product as well. So, it's really I'm trying to keep it in the family?

Dean: I get it.

Rene: But if I have to hire someone else, yes. I'm open to hiring someone that's specifically trained in manufacturing hair products.

Dean: Yeah. And I mean, imagine that there would be a certain level where you would reach a... that a cofactor would be able to manufacture it for you.

Rene: Exactly.

Dean: Right? Where that way you've got unlimited scale-

Rene: Exactly.

Dean: ... possibilities. So, that's all there. It's just all the economics of it, right? Once you-

Rene: Exactly.

Dean: ... get to the right level there. Do you have a unique formulation that-

Rene: Yes, I do.

Dean: Okay. So you've got the only product like it.

Rene: Exactly, yeah.

Dean: Up there, and if you've got to-

Rene: I made the recipe up.

Dean: Okay. And that's like a secret formula that nobody would be able to copy, so that's an advantage.

Rene: Yes. Proprietary, yeah.

Dean: Right! Okay. So, when you look at it now, if you were saying that every time somebody comes in that they're worth $200 to you, that's going to be $200 a year per customer that you're bringing on with you. And do you find that once somebody comes in and gets established that they stay with you for years? Or is it something that they try for a little bit and then move on to the next shiny object kind of thing?

Rene: I would say maybe 25% of the customers that come on, they stay. The rest, a lot of... In this industry, in the haircare industry, especially the black haircare industry, you have a lot of people, they call themselves product junkies.

Dean: Yes, right! "Oh, you've got to try this one"!

Rene: So they're not... Yeah, yeah. They're not loyal to any particular one brand.

Dean: Got it!

Rene: They... Whatever sounds good to them or smells good or... So, you have those that just like to have a lot of different products.

Dean: I got it, yeah.

Rene: But the ones that really stick with me are the ones that they're looking for something simple, effective, and natural.

Dean: I like that.

Rene: And handmade. And normally my customers tend to be those who have problem hair?

Dean: Yeah.

Rene: Who have fragile hair, so... Yeah, those are my faithful customers.

Dean: I got it! And that's so fantastic. When you look at it then, because you're not doing any advertising, what would you say... Like if I said to you, "Listen, I can bring you new customers," and he's willing to bring 100 new customers, how much would you cheerfully pay to have a new customer?

Rene: Cheerfully? I'm-

Dean: Yeah! That's a great word, so-

Rene: Yeah. Yes, it is. I never heard it like that, but that's the... I like that analogy. To acquire a new customer... I mean, the only reason why I don't advertise... And like I said, I haven't even really scratched the surface, and I know that I'm coming to that part of going to the next level, is advertising.

And I... Cheerfully, I think $5 per customer is the max that I would think about at this moment to-

Dean: But tell me why-

Rene: ... to - Yeah.

Dean: ... how you think about that? Tell me how you think about that and came to that calculation. Because this is-

Rene: Oh-

Dean: ... It's an interesting -

Rene: Okay. I just... Because I'm very intentional. I just don't feel-

Dean: I am too.

Rene: ... like it should cost even that much to acquire a customer. Ideally, for me, because my niche is so intentional, I think even maybe $1.50 to acquire one customer is good enough. And like I say, I'm not an expert in advertisement, and how that all works, but financially... But $5.00, if I was to get a highly targeted customer that's actually looking specifically for what I have, I would pay $5.00, yeah.

Dean: Okay.

Rene: I would pay that. But on the norm, I think $1.50 would be the max for what I can handle, I guess, and for what it would take to attract the type of customer that I need.

Dean: So, say that, what you mean by that, that $1.50 would be the max you could handle? Say what you mean about that.

Rene: Okay. So, financially, I'm one that looks to having as little expense as possible going out because my products are low-ticketed. A full set of my Peppermint Collection, that includes the shampoo, the spray, the oil, and the conditioner, it's $65.

Dean: Okay.

Rene: And so, then I have to subtract the cost that it costs me to-

Dean: Yeah. What-

Rene: ... make the product, so-

Dean: What kind of margin do you have on that?

Rene: So, to make a complete set, it's like $15-

Dean: Okay. So you've got-

Rene: ... after you -

Dean: Yeah. So, four times your... You've priced it at four times what it costs to you. Right? So-

Rene: That's my labor and everything.

Dean: Right. So, for that one kit, it costs you that, right? But your-

... So I get the feeling a few things are... And this is completely the way that everybody thinks about it, so I'm not singling you out on this. But this is-

Rene: Sure.

Dean: ... sort of thing... That's why I was exploring about your mindset about it, okay?

Is that your... Right now, for a new customer, you would make 45$ on that first sale, right?

And that you're saying that you would cheerfully pay $5 to get $45, right?

Rene: Yes, yes.

Dean: That's what you're saying?

Rene: Yes.

Dean: And I think that there's not a person in America who wouldn't be excited about putting $5.00 in a vending machine and getting $45 back. Right? That everybody-

... would do that. It's really... It's an interesting thing. But the more important thing is that that customer, potentially, is going to get eight more purchases over the course of the year. If 25% of them, like you say, are going to turn into people who are going to purchase from you again and again and again... And so, when you're talking about $1.50 as acquiring a customer, that that's... You were talking about the... On average, your customers are worth $200, which would be on $150 dollars gross profit for you, right? Gross margin for you. And so, you're really spending... You're saying, "I would cheerfully spend $1.50 to get $150. I would cheerfully pay 1/100th of what the value is. And the way that you frame that as an expense is... That's what it's kind of saying, right? That your mindset is that it's an expense as opposed to a capital investment.

Rene: Investment, yeah.

Dean: Like when you look at it, if you had $1,000 that you could invest in a mutual fund, or in a stock, what would be a super return on that money in the course of a year?

Rene: Wow!

Dean: Do you follow mutual funds-

... and say, from the top, chippy top mutual funds, will return 13 or 15% a year. So that means that you put in $1,000 into a mutual fund and you get back $130 or $140, right? It grows by that much over the course of the year, right? And that's winning on the investment front.

So, if you were to think about investing capital in finding these customers, which are essentially a $200-a-year annuity... Right? What would it be... You know, and think about this again. If I were to just bring you customers... Do you ever work with distributors or partners who sell your products or affiliates or...

Rene: No, I have not yet. No, I haven't yet.

Dean: Right. So if I were, that would be like the equivalent of you saying to me, "If I..." Because you're not doing hair now. But if I were a stylist and I fell in love with your product, and I said, "Would you let me sell your product?" And you said, "Yeah, I'll give you $1.50 per sale," does that sound like a reasonable thing?

Rene: No. No.

Dean: No. And that's why I'm saying like because the certainty of it, right? Like if you... How much would you pay a distributor? Or an affiliate? Or... Like if somebody said if you were to sell it... Do you ever do any wholesale?

Rene: Yes. And that's 30%. Yeah, we give 30%.

Dean: Okay. So, there we go. So you've already established that you're willing... You cheerfully pay 30% for a new customer. Right?

Rene: Yeah. Yeah.

Dean: For ongoing, that customer, right? Because you're paying them 30% every time they purchase. Right. So, when you look at it right away, that fee, why would you treat yourself worse than you would treat a wholesaler? A wholesale customer.

Like you're willing to... You're cheerfully will take the 30% out discount for the wholesaler.

Rene: Yeah.

Dean: Yeah. And so, you start to think about... What if you were to think about yourself, or your before unit, whose whole job is to bring in new people, right?

And you had... You were to think about it as being willing to pay, invest, up to whatever the amount is, you know? But you look at it, and-

... It's just a different way of thinking, right? Could you, if you were to look at it costs you $15 to make the full-size... the package, if there were a way of giving somebody a one-third sample sizes of the things, enough for... Are the products that they work the first time that you use them that you would notice the difference? Or is it the cumulative effect over time of using it?

Rene: No. You notice it. You notice the difference-

Dean: Okay.

Rene: ... right away.

Dean: So all somebody needs is the experience of it, and they're going to know, "This is great!"

Rene: Exactly.

Dean: Right. So, everybody... Because people with curly hair have had the problem of dry and not satisfactory product for years, ever since haircare products came into existence, right?

So they've heard everything, and they've tried everything. And, in their mind, you're just another product with promises, right?

The best customer is somebody who has had an experience of that. And so, when I look at... Even if you were to start with your existing customers, and start it as a referral-based thing, where people were able to bring in... to refer their friends by giving them a sample kit, that lets them... They get the benefit of being a giver to their friends. And so, it's much easier for them because they want to get the glow, the shine, the appreciation that they get from being thoughtful enough to give somebody a gift, to introduce them to something, rather than... So, it's you're turning your customers into gift distributors rather than turning them into salespeople.

Because, otherwise, the way it is now, what they have to do is, "These products are so good, you need to try them." They need to convince them to buy the product. That's how their referrals that you're getting are happening, right?

Word of mouth?

But imagine if all they had to do was get them to try the product for free! And now you've got some percentage of them have done... 45% of them hooked on the full system every... eight times a year for years. That's a really valuable way to think about it, more than thinking about it as an expense. You think about it as a capital investment in more... It's like buying instruments that... financial instruments that mature in a year type of thing, you know?

Where you're not... You don't need to recoup the cost of the first try with something because you know that then the ongoing customers, there's no cost in maintaining them. Does that make sense?

Rene: Right, yes.

Dean: Yeah. And that's what we want to do is grow that list that way.

If you've got something that's great, you just need to be able to shout about it from the mountain tops, and get it in the hands of people with curly hair to experience it and try it.

Rene: Right.

Dean: And that's where the great thing is, is rather than trying... This is one of the greatest lessons that I've ever discovered is... And I've tried everything in terms of getting new customers, and if there's any way possible to incorporate a free trial into something, that's my go-to thing. Because I look at it as the biggest lesson I've learned is that sometimes it's less expensive to get somebody a result than it is to convince them to give you money to get the result. It's less expensive for you to get somebody with curly hair to try your product at your expense than it is to convince them that they should give you money to try your product.

Rene: That's true.

Dean: And winners are magnanimous. When somebody tries something, and they like it, and it works, now they're convinced that this is the right thing for them. And they continue using it again and again and again. And that's where your real value is, right?

Like I think-

Rene: Yeah.

Dean: ... that's the... I think that the sampling idea would probably be the least expensive way for you to grow your customers. Especially if on these samples you had a QR code that people could activate and watch you, as they're trying it, or they're about to try it, you can explain with a whole video, future pacing what they're going to experience and what to watch for, and how to get the thing. So you get their attention in a way that's adding value to them, and you get to future pace what they're going to experience. It's pretty neat, you know? And that way you've got... Then, you've got the opportunity for them to... You make an offer for them to buy their first order.

Rene: Yeah. That's great. I like that.

Dean: Because you've got so much potential there, you know?

Rene: Yeah.

Dean: Yeah.

Rene: Yeah. Yeah, that's great information, good advice.

Dean: And that's also part of the thing that you've got. Do you have excess inventory? Or do you make it on demand? Do you-

Rene: Oh, yeah. I have... I make it up and then I make it up and have the inventory, yes.

Dean: You do? Okay.

Rene: I have.

Dean: So that would just be about... But you keep it in bulk batches?

Rene: Yes.

Dean: And then you-

Rene: Right. Yes.

Dean: ... So, filled up the product.

Rene: Yeah.

Dean: If you think about how you could present a 45% scaled, maybe a... How many uses would... There would be 40 days worth in your $60 package? If they do it-

Rene: Yes.

Dean: ... once a week kind of thing? Is that what-

Rene: Yes.

Dean: So it would be six servings, or six... we'll call it.

Rene: Yeah, six-

Dean: So if you were to have like two... You have two servings trial package, right?

Where they could try it twice. Try it, and then, "Wow! That was really great," and then try it again. "This really is great!" And now, the opportunity for them to repurchase... I think that's a pretty... That would be a really good, least expensive, growth strategy for you.

Rene: I like that idea. Yeah, I love... I do. I like that idea.

Dean: And that way... You know, the other way you could do this is offer a gift card. We've been doing on Facebook. You can introduce a product and offer a $30 gift card for somebody, which allows you to maintain the price integrity kind of thing, you know?

Without doing the discount, but it's a new customer gift card that they can apply to your products to introduce people to it. Yeah.

Rene: That's great information as well. Yeah, and I offer gift cards on my website.

Dean: Okay, perfect!

Rene: You know, electronic gift cards.

Dean: Yeah, yeah.

Rene: Yeah. Yeah. So I know I need... That's the next step, is to go ahead and put like an advertisement budget and campaign together. I know I need to do that.

Dean: Yeah. Yeah. But I would start - with your after unit. I would start that way, and say... Especially because the holidays are coming. If you were to package up a little gift pack, you know?

That somebody could give as a stocking stuffer or a nice little gift thing for their friends with curly hair?

That's a nice thank-you. Especially to your... The top 60 customers that you talk about, you know?

You've already made a lot of money from those relationships. They're the core of everything. So, to have that as a way of... You know, both a thank-you for them, but also a way to help spread the love over the holidays. That would be a great thing, you know?

Rene: Yeah. That's a good idea. I wrote some of these things down.

Dean: Oh, good! Well, that's good.

Rene: Yeah. Take notes. I'm a note-taker.

Dean: Ah! But now we're going to find out, are you an action-taker?

Rene: Yes, I am that as well.

Dean: Anybody can take the notes, Rene. That's what we need is the action!

Rene: Yeah. Yeah, that's it!

Dean: Yeah, you strike me as an action-taker, so that's good.

Rene: Yes, definitely. Yes. I will definitely put some of these things into play. I'll just go back to what I used to do, and that is have the little free samples, the trial.

Dean: Oh!

Rene: But I do like the little gift pack, and I still have some containers, the gift-size containers that I can fill up, and-

Dean: Oh, perfect!

Rene: ... and start right away. Yeah. So, I'm an action-taker. I've done this before, but you have to keep doing what was working.

Dean: Are you interested in expanding your wholesale? Like to get stylists onboard? Or-

Rene: Yes, I am. Yeah, I am. I just recently... The reason why I said I haven't even really scratched the surface is because I am restructuring how I do business, and all of that. So all of this is on the horizon.

Dean: That's great.

Rene: And I do have one distributor so far. But I haven't... I know I have not advertised like I could, and like I am. So everything, I'm just... I am talking to you right on the cusp of making major changes with how I do-

Dean: That's good.

Rene: ... business-

Dean: I like that.

Rene:  .. and that kind of thing. So-

Dean: Yeah.

Rene: Yeah. So, now-

Dean: What-

Rene: ... hopefully-

Dean: I think that's exciting. How did we get connected? How did you end up on More Cheese Less Whiskers here? How did you discover me?

Rene: Well, Dean - mentioned you.

Dean: Okay.

Rene: And I'm a KBB member.

Dean: Okay.

Rene: It's the Knowledge Business Broker business. And he mentioned Dean, and so I Googled you and found you, and you've been sending me emails and everything since then.

Dean: Yes. Yes! Of course, I-

Rene: And I have done your nine-word emails before, and I haven't done it consistently, but I did it a couple of times. And one of them really did work.

Dean: That's great. I love it.

Rene: I did one. One worked, so... And he has that nine-word email sequence in his Business Broker Lesson. So, it's... Yeah, it's very effective. You know, it's very effective, so-

Dean: That's great.

Rene: ... I used it a couple of times. So yeah, that's how I learned who you were and that's-

Dean: That's great.

Rene: ... how I connected to you.

Dean: And here we are!

Rene: Yeah!

Dean: That's great.

Rene: Yeah. Yeah, and then you sent - the email out about being on the podcast too, so I just responded, and didn't think it was coming up right now, but this is a good time.

Dean: That's perfect! That's awesome. You know, that's a funny thing. I was thinking back about it now, that I was at Dean Graziozi's house in February, in Phoenix. That was the last trip I've taken this year. Isn't that funny?

Rene: Yeah.

Dean: I mean, that's... So I was out in February in Phoenix, and then when I got back from Phoenix, March of course was when they shut everything down. I haven't been anywhere since. So that's why.

Well, Rene, I really enjoyed that. I think you've got so much opportunity there. And we didn't even get to talk about your information business, but you've got so much opportunity within your haircare business. I'd love to stay connected and see how you're implementing. That would be a great thing.

Rene: Yes, it would. I would definitely like to do a follow-up in a few months.

Dean: Yes, absolutely!

Rene: That would be great.

Dean: Awesome!

Rene: That would be -.

Dean: Well, thank you for playing. That was fun. I can't wait to see it all unfold.

Rene: Yeah. Well, thank you! I appreciate the time you've taken, and it was fun too. I did take some good notes, and I will-

Dean: Awesome.

Rene: ... be implementing a lot of this stuff, yes.

Dean: Awesome.

Rene: It makes sense to me.

Dean: Thanks, Rene.

Rene: Yeah. Thank you.

Dean: Okay. I'll talk to you soon.

Rene: Okay. Bye-bye.

Dean: Bye.

And there we have it. Another great episode. Thanks for listening in.

If you want to continue the conversation or go deeper in how the Profit Activators can apply to your business, two things you can do. Right now, you can go to morecheeselesswhiskers.com and you can download a copy of the More Cheese Less Whiskers book, and you can listen to the back episodes, of course, if you're just listening here on iTunes.

Secondly, the thing that we talk about in applying all of the Eight Profit Activators are part of the Breakthrough DNA process, and you can download a book and a scorecard, and watch a video all about the Eight Profit Activators at breakthroughdna.com and that's a great place to start the journey in applying this scientific approach to growing your business. That's really the way we think about Breakthrough DNA, as an operating system that you can overlay on your existing business and immediately look for insights there.

So, that's it for this week. Have a great week, and we'll be back next time with another episode of More Cheese Less Whiskers.