One Step Away From Collapse (Here’s How We Fixed It) | Ep 960

This is Joel. He runs a coaching and course business that teaches people how to basically use credit cards to get sweet vacations. The problem is that he's dependent on one platform. If that platform goes away, his business could die basically overnight. I'm Alex Amusey, founder of Acquisition.com, which helps businesses scale. And so, let's meet Joel. Hey Alex, I'm Joel McDonald, founder of Just Get Out of Town, also known as Jegut. Tell me about the business. But we help travelers turn everyday expenses into multiple bucket list vacations every year. Our largest audience is retirees, empty nesters, and business owners. I would not have guessed that. That is really interesting. Okay. The way we help them is through something we call travel hedging, not travel hacking. We differentiate ourselves there. This allows travelers to stretch their vacation budgets three to 10 times farther. So what's the difference between hacking and hedging? Travel hacking basically requires that you turn 10 to 20 credit cards a year. And that's why it has such a bad association. Travel hedging is choosing the two or three best cards for your individual spending profile and learning how to effectively use them. So what's the currency of the business? Our trailing 12-month average is 6.4 million. Got a 1.9 profit margin. That's about a 30% profit margin. Roaz is 4.5 to 1, and then our LTV to CAC is very skinny. 1.4 to 1. We'd like to change that. Yeah. So what do we want to happen? We've got about 12,000 clients that we've put through either our mini memberships or our high ticket coaching program. Our goal is to have 10,000 more in the next year. We'd like to diversify our advertising channels and start to include a lot more affiliate partnerships and charities. I've got a goal of a million donated through partnerships with charities in the next year. Oh cool. So that we're going to need to double our revenue. So now tell me about how you get customers. Basically, like I said, it's a book funnel and 85% of our customers come from buying the book. I'm familiar with book funnels. Another 10% comes from conferences, meetups, guest podcasting. We're beefing that up. We're trying to diversify our channels. And then right now, affiliates and charity partnerships are kind of in their infancy, but we do get about 5% of customers there. What are the problems right now? So our biggest problem right now, single channel advertising. We're heavily dependent. Like I said, about 85% on meta. We're kind of hit in a ceiling at 100 grand a month. I spent 150 grand last month and it got 10% extra book sales. It is a lost leader. It's currently taking us about six months to break even with the backend. Yeah, second problem. A lot of skepticism in this industry, largely because we are associated with travel hacking. A lot of people assume this is a lot of trouble to save 10 or 20%. The actual savings when you travel the J.G.A. is more like 70 to 90%. When people plan a trip, the odds of them getting a great deal on that trip. And they've already painted themselves into a corner, say they want to go to Italy and June. The odds of that being a good deal is kind of like placing a chip on roulette. Yeah. Most times it's going to be very expensive. Every once in a while, like one in 20 times they get lucky. The J.G.A. of travel is you find the good deals. There are thousands of them out there. You plan your vacation around them. And it's like placing a chip on the roulette table after the marble drops. Anything else to you have? So knowing that you probably have more points than you know what to do with, but not enough time to figure out what to do with them, we put a little itinerary together. That includes Singapore Suite. That typically goes for five to ten grand. Partement. It's another five to ten thousand dollar flight one way. And we basically put an itinerary around the world that would normally cost about $70,000 for the five countries that we found. And we showed you how to do it on points for $1800 out of pocket. Love this for us. So basically we're going to send you from Vegas to San Francisco, to Singapore, to Abu Dhabi, then to London, and back home through Mexico City-Great Images. And all of these are first class flights that would have normally cost either $70,000 or seven million points, and we put them together for about a million points. It's a clear savings prop. You have to spend money in order to, yeah, spend money to save money type thing. What percentage of your sales right now are outbound versus inbound? Right now. So we just implemented some aggressive outbound, like within the past month. It's been probably 60, 40, 60% inbound, 40% outbound. We'd like to really ramp that up. That'll probably be a central feature of what we're talking about. What do you want to have happened with the business? You want to double it? You want to sell the business, simply just want to make money with it. And zero interest in selling this business. Great. Well then this makes it way easier. I'd just like to impact twice as many people's lives. So now that we've gone through Joel's business, I'm going to work through core areas where he's stuck and what we can do to fix them. And for each area, I'll break down the exact principles and tactics Joel can use to scale, which are likely going to apply to your business as well. So let's get started with number one, which is being clear whether Joel has a supply constrained business or demand constrained business. I have a bunch of ideas. You want to come on this side and we'll utilize this brand new beautiful paper desk that my team made for me. Very excited. Let's do my first trash question that I'm most thinking through is this is a supplier to man constrained business. So this is demand constrained business. Like you can handle more customers. So there's two ways we can think about this. So if we have this from a decision tree perspective, right? It's like, okay. So this is a demand constrained business. Got it. So in order to fix demand, we can go new channel. I know that you're considering doing like the second channels. I feel like there's a lot more that you can look on the existing one by like a lot. Just because the nature of this offer is so broad, this is the type of offer that can probably scale to like 100,000 plus a day and spend. But it's like, okay, so we have a new channel. We have lower pack, which underneath of this we can do through a CRO, so conversion optimization, or we can do the better creative or offer. So this is, this is me just kind of sharing how I'm thinking through this. So we can get that or you can just spend more. Right. Just always a fun one. But given the fact that you said you've had these constraints on whenever you do spend more, you like quickly hit a wall, which is fairly common, then it's going to probably be a combination of one of these three things. I'm basically when he's focused on those pieces, because these are basically the three things that are going to unlock that. So right off the bat with better, where are you getting your UGC? So you use your generator content because you have the most visual type of product. The image that I saw was just like you and the team, my God, people take pictures on their vacations, and I feel like your groups probably have crazy, you know, them in front of the Taj Mahal and, you know, whatever else. I feel like if you have that kind of like a tick tock style, like check out this trip that I just booked for under X, I think that would destroy. So like video. Oh yeah, content. Yeah, like selfie style, like, I mean, I'm sure you probably get all these, like think about these Instagram pages that just show like trips and like all these kind of like hacks and stuff. And a lot of them have like one million, two million plus, and like they're very active, like super engaged. I would model those style videos. Like, can you just try and pull up a good travel page on Instagram? So this style, just like this, okay, with your real, like, and that's a real person, you can tell. She's not some model. It's like a real person. And if just had a pin thing on the top, that was like I did all this for under $1,800, I think it will work really well. And just run all of it, test it all. I mean, again, we can run it organic. Like this, I'd so visual. This is so visual. And people wash these so they can just fight courage, they live through it. And it's like, you don't have to live through this. You can do this. Okay, that's compelling. The highest point of leverage that I think in this business, I'm gonna change some back and stuff too. But like, if you unlock the UGC loop, this thing will approach. And so I think, are you one tock talk? Embarrassingly low following these. Okay, there's some businesses that it's tougher. If I have a tax savings business, it's like, maybe I'll have a business center talk about it's tax savings. It's not very visual, right? Maybe get some emotional about the story and things like that. And that's how the angle would have to take there. This is so visual. What we need to do is, number one, we need to incentivize people to post the reals inside of the story. And when they do that, they get to unlock some sort of checklist that you hold back. And people are like, how do we get access to that? So, post a montage of your trip that you're able to do in under 60 seconds. And here's how you do it. And you can show how to put it together. And a lot of people would want to do that. And you would probably have a ton of them anyways. But just ask for permission to use them. And then you can get the, basically, an exchange for permission they get this extra training or they get this extra thing. I think that what we'll unlock this is a decentralized content machine. So instead of you trying to be like, okay, we have to go make more ads. It's like every week we have 20, 30 videos that are coming from our company. And every week we blast all 30 videos up there. And we see where the winners are. And then boom, once we have the winners, then we just do so. And then we try and cut them a bunch of different ways. Okay. So the second thing said that you just see loop. Right. Oh, I know word to tell a second. But that's kind of like the big thing of one. Second one is something I call kaleidoscope. But basically, I know you have one piece of creative. Do you want to pull it up, Michael? The highest converting one of all time. So one of the interesting things is that you have to do it. So one of the interesting things we can do here is like, so this image, it's like there's 20 ways to Sunday we can do this. So like you had the AI versions of me that you did in all those. I want you to take this image and then AIFI, a bunch of different versions of this. It's like, okay, how do I make this black and white? How do I do with a set of filter? We could take this and put it into AI and say, make a three second video of this image, which it would then just make a three second video of it, even though it's just an image. Let's do a cartoonized version and let's do cartoon in this version and Ghibli. And let's do it like, because right now that's trending. And so that will give you 20, 30 variations of whenever you do have your winner, blast the hell out of how many more slices and angles that you can take on it. In terms of the copy, what I found in scaling like a campaigns is that when you do have copy that wins, you don't need to change it nearly as often as you think. So like when we ran this school games all last year and pushed it really, really hard. We had one version of the copy that we ran for six months and then a second version of the copy that we ran for three. In a different company that we own, we spend gosh, a couple hundred thousand a day and after five years, there's three hooks. When you find the winners, you just run them. And so I think so part of it is just like putting your mind at risk of like, what do we need to do this difference? Like no, you found your winner. So now we just need to like create different versions of the creative on the other hand. That changes all the time. But with the copy and the messaging, it's like, we just leave that. If it's if it's working, it's like, you can just keep using that over and over again. But I do think this UGC loop will be really big. And then once we have the winners, we kaleidoscope the hell out of them, which is like how, which is like AI, we have filters that we can do. We have, you know, remakes, which is, can we take this video and then just refill it? Because these are a lot of these are going to be video based. And so it's interesting about video versus static is that statics work better for a lot of businesses because they suck in video. Not because video doesn't work. But good video beats images. Yeah. Good video beats images, but images be bad videos. And so most people are like, oh, statics work. Like we can't give it his work only statics work. It's just because the videos were good. And it's the same thing as people who make content like, oh, content doesn't work. It's like, no, good content works. But bad doesn't. Do you make shorts or anything like that? Very painful and slow growth. But you need to just get one hyper caffeinated 20 year old who lives and is brain-rotted. Gen Z. I'm using the, I'm using the slime, right? Who just really is native. They're plugged into the platforms because they'll be able to look immediately at your stuff and be like, oh, this was not working. It's like, okay, it looks off. Like you're not using trending audio. You're trying to make these like professional, but they just need to be like iPhone selfie style. And we can use like a pinned comment on the top of the video. There's so many like meme versions of this. It's like you can travel around the world for less than a thousand dollars, proof me wrong. And then it's like, and then you'd have troll city. Right underneath it. Like there's so many different contextual like trending things that are happening right now. I would say that the number one biggest thing that's limiting the business is better creative. So typically when there's a cap, sometimes it's a money cap, which is like, we just can't afford to spend more and I'll cover that in a second. But like the creative unlock is usually why someone gets limited. We've scaled to $10,000 there. Whatever it is. And so go, okay, say $10,000 is all we can spend based on how good this creative is. And so the easiest because I know you can from an ad background. So if you're familiar with the old spice commercial guy in the horse, my theoretical view of the world is that if you have a product that everyone could buy, then there is one ad that is good enough that could convert everyone. So that ad took old spice from a small player in the men's body wash into the majority of the market with one campaign. That campaign literally took the entire market for them. And it's because it was so good that it could convert everyone. Typically the limits are just that as if you think about how Facebook or Meta were spends, it's like they're going to go to the most interested people first because you're optimizing for conversions. And they'll be like, okay, these are probably a little bit less interested, but still kind of adjacent. And then this is like your CPA starts going up. Okay, now there's this way bigger market over here. And then as soon as you hit break through this wall, your CPA goes up because the creative is not good enough. This UGC loop plus 20 year old crack addict, who lives on his phone or her phone is probably the unlock here because the best way to test this out is start getting more aggressive with your short form content. They can make these as obviously like organic posts. And then when you find your winners, just take that same post out of five seconds CTA at the end and then run that as an ad. It crushes. It's a double dip because you're posting content and they don't have to waste any money. And then when I want to crush this, you take that boom, post it and then run it. So that is the content winners. Also, I'm going to bet something interesting here. This is Alex just making it bet with no informative part of the reason that you have avatars that are retirees and business owners is that you are a retiree business owner. And they see your ads and also Facebook's AI reads who's in the ad and then displays the ads, whether or not you choose to target them based on who is most likely to convert. And likeness is one of the strongest predictors of conversion. It doesn't take an AI genius to be like, Oh, we've got an Asian lady. Let's show this to Asian ladies because Asian ladies are more likely to convert. But they do it through the algorithm. So it's not racial profiling. But if you want to have more diversity in terms of the types of customers, and this is also like you think about this little loop here. Well, there's another one of these that's for Asian ladies and another one of these that's for each of those men. So like you could probably get to kind of saturation on each of the circles, even with your existing quality of creative by just having a diversity of avatars in the ads themselves. And so even though we're we could still target the exact same audience, but the algorithm will go target subjective. Yes. Yes. Because they're the most likely to convert. And they're the most likely to keep spending because it's converting. So I'm going to write a bunch of these down and then we're going to just prioritize which one is the most likely. But AI avatars right now are just about good enough to be used. And so you can have these kind of like tick tockified AI videos that are 15, 30 seconds of like guys you won't believe it. I just went around the world for under $1200. And the craziest thing is it did an injection number one, objection number two, objection number three. And the best part is I got it with this book. And I found it on a random ad totally changed my life. That's it. And they go straight to the book. I think that'll crush all of this means we don't have to do all of that other stuff more. Yeah. More and better. First, if we can. It's just the nature of what you sell is so visual. And people naturally take lots of pictures. They want to share food and travel. This is super visual. Tons of people post about this stuff. Travel tons of people post about this stuff. And I would look at the top travel pages, look at the most viral content they have and model that for what I had seven hidden gems that you've never heard of before. And it's it shows these like crazy lotages. And those things get like gazillions of views. All we have to do is just weave the fact that we have a pin. How do you see the seven gems for under $1,000? Right. Just we just have to just layer a filter of like our offer in front of it. And I think it will. I think you have so much created like if this is the creative that's been running the business, there's so much room. I think it looks authentic. But again, this is where I think the UGC loop will be big. So one is you can use it with avatars. You know, you have to ask for it. But I think the UGC loop is like probably the faster, easier, immediate thing that you can do with how you learn new stuff. I think that this is really the front end stuff. Like this is how do we lower cack with just better creative? So this gives us more from the customers. This expands and multiplies that even more. This gives us a content loop that the 20 year old crack addict is going to be to make by modeling travel pages. Real quick, I'm going to show you the exact 10 stage roadmap from zero to a hundred million plus that less than 1% of companies finish. I've now done multiple times. And so I can say with a lot of confidence that these are the stages as headcount increases that you need to get through. And I broke each of these down by eight different functions of the business. What the constraint feels like? Like what are the symptoms of it when you're going through it? And then what steps we actually took to graduate? And we've done this across software, physical products, service businesses, brick and mortar, all of this, and it works. And it's my gift to you. It's aptly free. And so the links in the description, but you just go acquisition.com/roadmap, just enter info and it'll spit it right back to you, offering. The meat of this is still going to be the sales team. So the fact that you started the last month, I think, is encouraging. I do think that we can improve diolar pickup rates. What's the benefit of the on the call? We want to make them help them get as much out of the book. Or the people who don't qualify, like if they spend less than 5,000 a year, they just aren't going to have the muscle memory to learn these strategies. And so when you're saying, when you said the 5,000 or thing, you're saying if they spend 5,000 year on their vacations, that's too strong. On travel in general. Yeah. Okay. Pre-year. Interesting. Okay. Does anything do with their credit cards, Ben? Yes. Those are the two most important factors. Okay. So also 5,000 a month. So remember when I was asked at the very beginning, like are there specific factors that qualify the avatar? So those are the two factors that are most important for the sale. Then those are the two things that I would want to weave into the funnel that we could get. Now, wait, it's like if your team's going to make the op-unk dials and your dialer probably can score leads or should be prioritizing the leads, then it's like, well, then we're going to start with all the people who are spending over 5,000 on their credit card. And then 5,000 year on their vacations, then it's like 3, 2, or 2. Call those first. And if it's a 1 out of 2, call them second and 0s, it's like maybe we'll get some of them for work. So I think lead score, which is then add credit cards spend and what was the other one? And then vacation spend to opt-in. All right. One of the things that you brought up was that the big list of excuses that come up when you do the pitches. So one of the things that I want to do is we need to call it out before they do. So on the sales call, I want to basically front load all of our damaging admissions. Because you said it's too good to be true. And when you even offer this too, you're going to be true. You make it less good so that it's more important. That sounds counter-tuitive. No, basically we have to do this, but it's like our testimonials are often accused of being fake generated AI. Sure. How do you? 53. Yeah, you could be like, listen, I'm 53. I don't even know how to work AI. Like these are real. No, but what I would do with the damaging mission species, say, listen, before I tell you about the good, let me tell you about the path. And then I would just start listing off all the things that suck about this. It's like, listen, if you want to only go on a specific day per year, stock and order for you. If that's a problem, then like, I want to tell you that these are some of the issues. If you want to go to top shelf places, that we're good. So you can have what you want, just not when you want. And so that's the trait. Now, if you're at a different point in your life, you're like, you know, I can take off whenever I want. They don't mind if I take two weeks in the little September versus the middle of, you know, October or June to your point with Italy, you can backpedal. It's almost like selling off the back. If you're like, hey, if you, that's a problem for you, then this isn't going to work. So it's like telling them all the reasons it's not going to work up front. So that they're like, okay, so then they can sub-poly. Okay. - Yeah, versus I refuse to do that. - There's no way it's too good to believe. There's tons of other things that suck about this. So let me tell you about the things that suck. No, but good thing is is that after you put all that damaging mission, so now when I tell you what's good about it, you're gonna believe me. But we have to, I think you frontload, you wanna take all the wind out of their sales and give them all of the reasons that, and then oh, you can weave in over comes obviously, but you can do it from the position of like, here's all the reasons it won't work, but a lot of people are like, oh, I don't mind that. There are self-pollifying, because everybody still wants the benefit. They just don't believe it, they want it, they just don't believe it. So damaging admissions, frontloaded, we went through all of this, but I'm gonna simplify this into really just two steps. If that works for you. - That sounds great. I'm the master of over complicating that. (laughing) I think big picture, this right here, is thing number one. And I'm actually just gonna go this way. Dialer, lead scoring, and I think you need to increase your number of salespeople. If we added this all up, we've got, call it 250 book sales a day, and then you said you have 40 a month who joined the $99 thing, before you week. - Well, we're averaging about six, 700 a month. - Okay, 700 a month. So, divided by 30 to 20 ish per day, and then book, which is free-worship, man. Something like that, I'm guessing. And then Facebook group, you said was 1500 per month? - Yeah, a thousand to 15. - Okay, so we got 30 here. - 30 new Facebook members, we probably get 10% of them to give a phone number. - Okay, we could just make it required if we wanted to, and I think the reason they would do it is because you say we include a free travel assessment. So I think that's the nugget that we give, and I think you do that for both of these. But here, I'm just gonna just use Rothmath here, obviously, to put a little bit of it. But we have about 300 prospects per day that are coming in the funnel. If you have 300, I would probably be thinking like, gosh, you're gonna need a bigger team. Like, if you really wanna work the leads, you'll probably need six guys with a power dialer. They're a KPI, I should be like, 300 dollars a day age. And you can use something about a parallel dialer, what it does is it calls 10 numbers at once for each of them. You have five percent pickup rates. So you definitely need something like this, but let's just say two people pick up here. It'll automatically connect this, one of them in that person, and one person in this person. So basically the bigger the team, the better works. - That means they're right, 'cause they're a little bit small to exactly whatever. - And so now you just have massive amounts of dials that are happening, and what you do is you're maximizing talk time. Instead of them just spending a lot of time just waiting for a connection, they're gonna be like connected. And so the efficiency seems also gonna go out a lot. And I think you can actually work these leads, 'cause I think that the two doubles, probably more than one double in the business. This is a multi-X unlock, and this is a multi-X unlock. And I don't think there's anything else you have to do. And I think these two things, the nice thing is that like, they all will work off what your existing spend is. But this will drive down CAC, all this. This will also drive down CAC. So you'll see if the CAC ratio will improve, so profitability, but then what it'll do, and the main long-term benefit is that it'll break you through this barrier into this much bigger pool. And then you'll be able to continue to spend and scale. - Yeah, and that's something that I've written off. I started the company for this bigger pool. - Yeah. - I started the company because I was broke. I had no business traveling, but I discovered it, and it was only by getting past assumptions. - Yeah. - And I can't advertise it, and I'm advertising to those people. - Yeah. - 'Cause they'd pay the bills, and I'd love to impact them. - Yeah, and I think this solves that problem. - Yes. You have a demand-constrained business. So these are the paths. We can spend more, which we tried. New channel, a little too hard for right now, in my opinion. Can we lower cost-acquired? Yes, we're gonna do that through better creative, conversion optimization. We could have tweaked the offer, but the offer's already converting, so I don't really wanna mess with it. These are the two angles that we attacked it from. This is the outside, this is the conversion side. - Love it. - Rock 'n' roll. Easy. - Sajr, thanks to Alex. - Yeah, yeah. (upbeat music)