Drill the eight ways to raise what customers are worth

1. The eight ways, in order

They are called the crazy eight: eight routes to more money. Some of you will have met them before; the aim here is different: to show how to think with them rather than what they say. In order:

1. Increase prices.
2. Decrease costs.
3. Raise how many times they buy.
4. Cross-sell something different.
5. Sell more in quantity.
6. Sell more in quality.
7. Sell fewer.
8. Sell worse.

The bottom two, selling fewer and selling worse, are the downsells.

The two downsells. They work only where both converting buyers and delivering to them can be automated and a very large number of people qualify for them. The fuller case for when a downsell pays, and when it does not, is on SOP 228 — Weigh a downsell against raising the core price, section 7.

No ninth way. These are the only ways to raise lifetime value, a point stressed here.

The same eight are also listed in section 1 of SOP 72 — Generate tiers and downsells from the quality vectors, with the first four worked through in its section 2; its table runs in the order used here. A chair seller and a marketing agency are taken through all eight in section 3 of SOP 152, the page on adding a second product.

1.1 Flag: when a downsell works

• This page: the two downsells work only where selling and delivery can both be automated and a very large number of people qualify for them.
• SOP 228, section 7: fully automated selling and delivery is one case; a high-ticket main offer beside a low-ticket second offer that converts very many, at five or ten times the volume, is another.

They give different answers on whether a downsell can work without automation. This page does not settle which reading is right.

2. How the exercise runs

• The aim. Get to where you can run all eight over any product or service at all. The goal is to be able to glance around a room and run the eight on whatever you see. Some of the answers are obvious, the price for one.
• The time. One pass, by the estimate given, will probably take you two minutes.
• The order used here. A warm-up question, then a smartphone, then a table, then your own service, with five minutes to go through all eight.
• Keep two of them apart. Selling more in quantity and increasing the number of purchases are different: one is how much a customer buys, the other how many times they buy. Telling them apart is sometimes a little harder, but one practice here is to keep the two distinct.
• For your own business. Take each mechanism in turn and think it through.

3. The warm-up: how would you charge ten times as much?

The question comes up for a physical therapy practice. There are many ways. You could put more services into one bundle. You could include supplements. You could bring in somebody else to handle one or two small extra services inside the bundle.

Then turn it around: stop selling the therapy itself. Sell the end result, an outcome or wellness, and treat the services as the components that get the patient there. A person in real pain will pay anything to be rid of it. Selling the same treatments at ten times the price is what does not work: the example is 10 adjustments from a chiropractor at 10 times the price. What sells for ten times more is a back that no longer hurts, or being able to pick up your children. How the provider delivers that, the buyer does not care.

4. A smartphone, run through the eight

An everyday object shows the drill on something that is not yours.

The way	Suggested move
Increase prices	Raise the price; an obvious one
Decrease costs	Buy raw materials in bulk; integrate vertically along the supply chain. Physical products are a little harder here: the levers are manufacturing, supply chain and raw materials
More purchases	A family plan, offered as the answer to getting people to buy more phones
Cross-sell	Probably cases, probably insurance, probably better coverage; and apps sold inside the phone
More quantity	The family plan again; and you could probably sell to companies so they buy every phone for their staff, called B2B or wholesale
Better quality	A standard model and a ladder of upgraded versions above it. Some companies, reportedly, set different price points for different customers
Fewer, worse	Going fewer in quantity and downselling quality are named, and left to you

Planned obsolescence is also offered, and called a great one. Which of the eight it falls under is not said. Not established on this page.

5. A table, run through the eight

Take metal tables as an example.

• Increase prices. Charge more for the table. Or give it a story that carries a higher price: say it was salvaged from a pirate ship, sealed under a glaze with small seashells still in it, so the buyer can see it came up from the seabed.
• Decrease costs. Lower what it costs to make the table.
• Sell worse. You could sell a lower-grade version, a plastic one, say.
• Sell better. You could sell a nicer version, in wood.
• More purchases. They bought this one for the kitchen; what about the other rooms? Each piece is one of a kind, but you get them to buy others for elsewhere in the house.
• Cross-sell. They probably want chairs made from the same ship, and there are matching table sets and bowls for the middle of the table in the same wood.

Quantity and fewer are not run for the table. The point is that you should be able to think through every element of anything this way.

6. More purchases, for a service

Now a service, and more purchases. There are two ways: lower churn, since a customer who stays longer buys more times; or sell them more, either more at one time or by getting them to come back again. That gives three frameworks for thinking it through: lower churn, more at one time, and coming back again. Another set of routes for this way (recurring offers, lower churn, following up) is on SOP 72, section 2.

Then take five minutes to run all eight on your own service.

7. A worked pass: a physical therapy business

In one example, the eight are run for a physical therapy business. Each answer is followed by a review, which gives the view here.

The way	The answer	Review
Price	A 12-week program at $27,000	Approves
More purchases	Cut churn, or get them back again, or more at a time	Tied to the annual discount
More quantity	Two free checkup sessions six months later, for buying now	Liked, but not called checkups: make them sound better, a tune-up that includes something they want, maybe a massage or something like it. A further suggestion: tell them they can bring a friend free, which becomes a referral opportunity and a chance to cross-sell
Better quality	Sessions with the clinical director, at a higher price	Agrees
Lower costs	Sell virtual sessions, or pre-made books, guides and courses	Agreed, with home-use products added for some of their therapy, such as massage rollers, massage guns, pads and orthotic-type items. They would probably be bundled and sold as kits, because a bundle's perceived value is harder to compare on price
Cross-sell	Programs for specific problems: parent training versus in-person sessions	Not wanted: technically correct, but doubtful whether it is appealing enough. The view here is that the cross-sell would probably be products: supplements that help them heal, or whether they could be got on peptides to heal faster; the direction to look would probably be that one
Fewer	No example	One example: take the $27,000 program; if it is maybe six months, you can offer a smaller version of three months priced at $12,000 or whatever
Worse	Remove particular touch points, the parent consultation for one	Agrees

8. Pair physical products with a service

From the cross-sell line comes a wider habit, called a great way to think things through: you have services, so ask whether there are physical products you can put beside them. The view here is that it is one of the big openings owners miss, most of all in brick-and-mortar businesses, though really anywhere too; whether the physical therapy business in section 7 is brick and mortar is Not established on this page.

The reason is where the work falls. People who sell services are used to the sale being only the start: once they sell, the work begins. With physical products, the sale is most of the work. In one example, an owner first selling physical products in person found that a training package usually took a lot of effort to sell, and then the whole package still had to be delivered. The supplements sold alongside it earned almost half the profit, and once they were handed over, the job was done. It is left as a thing to weigh, if you have the chance.

9. Why the exercise ranks so high

The view here is that working through the eight is arguably among the highest-return moves open to a business, since this is literally where a business earns its money. Consider the fractal nature of customers: if there are ways to reach the 20 percent, and the 4 percent, who will bring in half or more of your profit, the advice is to put these things in place. The fractal shares, and how to price tiers for them, are on SOP 224 — Set fractal price tiers and read price off the close rate.

10. What this page does not decide for you

• The program's length. The price answer is 12 weeks at $27,000; the fewer-quantity example supposes the $27,000 program is maybe six months. Not established on this page.
• Where the family plan belongs. It is given under more purchases and again under more quantity. This page does not settle which reading is right.
• The home-use products. They are added to the cost-line answer without saying whether they cut cost or are a cross-sell. Not established on this page.
• Planned obsolescence. Praised, but not placed among the eight. Not established on this page.

11. The checklist

Step	What to do
1	Write the eight down in this order: price, cost, number of purchases, cross-sell, quantity, quality, fewer, worse
2	Warm up on something that is not yours, a phone, a table, anything around you; a pass probably takes you two minutes
3	Keep quantity (how much they buy) apart from purchases (how many times they buy)
4	For a hands-on service, ask how you could charge ten times as much: sell the outcome; you could bundle more services, supplements or another provider's small extras into it
5	Run all eight on your own service; take five minutes
6	For more purchases in a service: lower churn, sell more at one time, or get them to come back
7	Test each answer for appeal, as with the checkups: rename a plain item as something people want, and consider a bring-a-friend referral
8	Look for physical products to pair with the service; they would probably be bundled as kits
9	Treat fewer and worse as downsells, used only where conversion and delivery are automated and very many people qualify
10	Put what you find in place; working the eight rates as arguably among the highest-return moves you have

12. What this page does not cover

Raising the price at length is not covered on this page; that is the subject of SOP 233 — Become the most expensive and stop selling a commodity. Cutting what delivery costs is worked through on SOP 234 — Audit delivery by who values what, then cut its cost, and further levers are set out on SOP 127. Getting customers to buy again belongs to SOP 235 — Get customers to buy again: make it good, onboard, remind. Selling more of the same and selling a better version, including the tactics for quality in a service, sit with SOP 236 — Upsell more of it, more help with it, or better.

Health claims and supplement rules are not covered on this page.