Assemble a money model from four prongs

1. The definition

A money model is a series of offers. That is the whole of it. One offer is a unit; a money model is those units put in a deliberate order.

A good money model is narrower. It is a series of offers structured to do three things at once: bring down what a customer costs you to win, raise the gross profit that customer produces, and collect that gross profit inside the first 30 days. The third is named as the point of it: the offers are put in a series deliberately, to get the gross profit collected inside that window.

A second account of a good money model is given beside that one. There, a good one returns more profit on a customer than that customer costs to win and to serve, inside the first 30 days, and that is named as the bare minimum. A further tier sits above it: one where a single customer's profit covers the winning and serving of many. This page does not settle which reading is right.

The reason the clock matters is not decided here; grading advertising against a fixed window is SOP 58 — Work the three levels of advertising and the thirty-day window, and the clock itself is SOP 57.

2. The four prongs

Four kinds of offer, each with one objective:

Prong	Objective, as stated	Restated
Attraction	Liquidate what it cost to get the customer	Turn strangers into customers
Upsell	Maximize profit	Get customers to spend more
Downsell	Maximize conversion	Get a yes where there would have been a no
Continuity	Stabilize cash flow	Keep them buying

The prongs are not a requirement. The claim made for them is observational: across one set of businesses, the ones that made a lot of money had these, roughly in this order. Some businesses do it with one offer. Some raise outside money and do not need the customer to pay for the next customer at all. You can build an excellent business on one or two prongs, and keeping it at that is sometimes worth doing.

Attraction offers, specifically, are the ones that turn advertising into money by offering something free or discounted. Free and discounted sit on one continuum, from 100 percent off to nothing off, with demand highest at the free end and lowest at full price. The reason given for why a discount works on a stranger is that a stranger can only take your word about value, and understands price exactly.

Five attraction offers have their own pages: SOP 60 — Design a win-your-money-back offer, SOP 61 — Run a giveaway as an acquisition offer, SOP 62 — Design a decoy offer, SOP 63 — Design a buy-X-get-Y-free offer, and SOP 64 — Design a pay-less-now-or-pay-more-later offer. A sixth, SOP 65 — Convert a free consumption asset, is named as sitting outside the original set.

3. Building one

Four steps, in order.

1. Start with an attraction offer. Always. The sequence begins with getting a lead to engage.
2. Pick one upsell for whoever comes in on it.
3. Pick the downsell — what you offer if they say no.
4. Pick a continuity offer.

The stated result is that your cash comes back inside thirty days, you get more customers, and you make more money.

Four notes on assembly travel with those steps:

• Perfect one at a time. Attempting four or six at once is named as something that will break the business. One is enough; there is already enough complexity in doing anything you have not done before.
• Simple scales. The stated preference is the fewest offers that still collect the most gross profit in the shortest time, because fewer pieces means fewer things that can break — the same operational-drag argument that orders SOP 11.
• There are no rules about which prong an offer belongs to. An attraction offer can be used as an upsell; a continuity offer can be used to attract. The ordering given is the one that has been used, not a constraint.
• Start low and raise in stages. The recommendation is to open at a lower price, get people saying yes, then raise.

Two devices for filling a gap. An offer you cannot operate yourself can be run on somebody else's product, which gets you the cash with no delivery load — best used on complementary things rather than on anything competing with your core offer. And any attraction offer becomes a continuity offer by adding a clause that rolls it into ongoing billing when the term ends.

The order a model grows in. A model grows with the business rather than arriving finished; the view here is that an owner starting alone from nothing with a complete model will be buried by it. One practice here runs the stages in this order: win customers reliably; make each customer reliably pay back what winning them cost; make each one reliably pay for winning more; raise what each is worth across their whole time with you; and only then spend as much on advertising as you can. Each stage funds the next, and you keep working a stage until it is reliable in cash and in how the operation runs. Grouped more coarsely, attraction offers bring in cash, upsells and downsells bring in more, and continuity brings in the most. Expect the operation to strain as soon as the model begins to pay; a suggestion here is to plan for a person able to build the team and run it.

4. The price points, told as one model twice

The same business is worked twice: the way the trade did it, and the way it was rebuilt. This is the monetization structure that SOP 11 defers to, and the figures are the ones it defers to.

The old way. A cheap trial — $19 a month, $21 for 21 days, $29 — with nothing behind it. Of ten people through the door, two do not buy; eight start a trial; a stated trade average of 35 percent of trials converts, giving three. Thirty days later the figures are $600 in total, $60 per person through the door and $75 per trial.

The new way. The same ten people, fewer closed immediately, but sold to the goal rather than to the trial: one person on a $2,000 package, most of the rest on a program around $500, and one between the two. Then meals. Then supplements, at an average $85 of gross profit per person — named as gross profit rather than revenue. Then two people committing to a year, and then prepaying that year at a further discount. Thirty days later the total is $9,644, with $960 per person through the door and $1,928 per close.

Line	Old way	New way
Entry offer	$19, $21 or $29 trial	Sold to the goal: $2,000, about $500, or between
Thirty-day total	$600	$9,644
Per person through the door	$60	$960
Per trial, or per close	$75 per trial	$1,928 per close
What follows the entry offer	Nothing	Meals, supplements at $85 gross profit, a year's commitment, prepayment

Flag: the advantage claimed does not follow from the two totals. The claim made is that a business on the rebuilt model could outspend the old one by twenty-five to one. The two thirty-day totals, $9,644 against $600, are a ratio of about sixteen to one, and the two per-person figures, $960 against $60, are the same sixteen. No pair of figures on either side produces twenty-five. This page does not settle which reading is right.

Flag: the same total is labeled gross profit and then divided into revenue. Both columns name their total as gross profit, and both then divide it into a figure called revenue per person, so the label changes across the division. In the old column the two divisions come out exactly. In the new column $9,644 across ten people is $964.40, and the per-person figure is $960. This page does not settle which reading is right.

Flag: the window is given as thirty days and as twenty-eight. The whole comparison is set against thirty days, and the per-close figure is given as being in the first twenty-eight. This page does not settle which reading is right.

The downsell ladders, in order, with each rung tried only after the one above is refused:

Offer	The ladder, in order
Service	Sell to the goal; a smaller package; a free trial with a penalty; a free trial with no commitment; a free orientation
Supplements	The full bundle; a four-pack with extras; the four-pack alone; on continuity; off continuity; extras only
Meals	Largest to smallest
Continuity	Sell to the goal; a smaller package; month to month
Prepayment	The whole package; prepay for a discount; prepay the next month; commit to continuity

The free orientation at the bottom of the service ladder is the one to note: people arrived for it having bought no service at all, and $300 of product was sold inside it. A no on every offer still had a way to become money.

The timings in this model: the upfront sales inside 48 hours, then the later rungs falling in the day 14 to 21 and day 21 to 28 windows.

5. What a finished model measured

One model's stated figures, and the arithmetic they carry:

Measure	Figure
Cost to win a customer	$500
Gross profit in the first 30 days	$6,000
Thirty-day ratio	12 to 1
Gross profit over twelve months	$48,000

Six thousand against five hundred is twelve, and the ratio is stated as twelve to one. What that ratio is graded against is SOP 58; what the cost side contains is SOP 56; what the twelve-month figure means is SOP 55.

The conclusion drawn from it is the one that matters for planning: a structure returning this much this fast makes a monthly advertising budget beside the point, because the constraint stops being money. What the constraint becomes instead is not decided here.

6. Three finished models

Model	Attraction	Upsell	Downsell	Continuity
A fitness business	Win your money back	Buy X get Y free, as prepaid time	A free trial with a penalty, then a menu upsell on product	The continuity bonus, named as the rollover upsell
A licensing business	A decoy offer — the strategy call; given also as a free consumption asset, depending on the reading	A classic upsell, then a menu upsell on levels of service	A payment plan, a feature downsell, a free trial	A back-end level of service
A newsletter and consulting business	A free trial	Pay less now or pay more later, carrying back issues and a lower lifetime rate	—	The subscription itself

Two things are worth taking from the third. Its attraction offer is a free trial — normally a downsell — which is the point about there being no rules. And its cash came from the pay-less-now option, which is itself two structures put together: a continuity discount and a pay-now choice.

The addition suggested for that third model is a buy-X-get-Y-free on top of the subscription, worked first as buy seven, get five and then as buy six, get six. It carries its own condition: it is worth doing where customers stay about three months, because buy six, get six doubles the lifetime and pulls the cash forward, and it is not worth doing where customers already stay two years.

7. What a stacked sequence looks like from the customer's side

One rental transaction is worked as the example of prongs stacked into a single conversation: a reservation at $19 a day, upgraded to $69 a day on the stated grounds that the reserved vehicle was unavailable; a late-return option; an insurance upgrade, declined, with the minimum package taken instead; prepaid fuel; and damages as an implicit charge. The booking was $19 a day and the receipt was $400 for three days.

Three observations are drawn from it and each one is a design instruction.

The fees were invented by somebody. Late return exists because a return time was set and anything past it was named late. The instruction is to see the rules as having been made rather than as given.

Naming does the work. A package called the minimum reads as something you have to take. Ninety percent of people might take it for that reason, where a package called economy would not read the same way.

Making more offers has a price and it is small. The cost named is that perhaps one customer in twenty is annoyed, against nineteen who are not, and the trade is taken deliberately.

Flag: the late-return option is described as taken and as declined. In the account of the transaction the offer of flexibility on the return time is accepted. Where the same offer is analyzed, it is described as declined. The design point drawn from it — that the fee exists because somebody set a time and named everything after it late — holds either way. This page does not settle which reading is right.

Flag: the per-gallon arithmetic in that case does not reach its own total. The premium is stated as twenty-five cents a gallon, the tank is put at about twenty-five gallons, and the prepaid tank is $93 — which is consistent with the stated per-gallon rate. The premium over pumping it yourself is worked out as two dollars fifty, where twenty-five cents across twenty-five gallons is $6.25. This page does not settle which reading is right.

8. Two figures to keep apart

Customers were being moved to a level of $3,200 a month, which is $38,400 over twelve months. A three-year licensing arrangement ran at $42,000 a year, which is $3,500 a month. Whether the two are one arrangement is Not established on this page.

A supplement business did $1.7 million in its first month. Among several businesses, one climbed from nothing to $1.7 million a month over six months. Whether it is the supplement business is Not established on this page.

9. What this page does not decide for you

• How many prongs your business needs. One is granted to be enough.
• Which attraction offer to start with. Five are named and each has its own page.
• How far to raise the price in each stage. The direction is given and the size is not.
• What becomes the constraint once cash stops being one. Not established on this page.
• How long a prong takes to build. Expect quarters rather than weeks; no closer figure is given.

10. The checklist

Question	The answer
What a money model is	A series of offers
What a good one does	Lowers acquisition cost, raises gross profit, collects it inside 30 days
The four prongs	Attraction, upsell, downsell, continuity
Attraction's objective	Liquidate the cost of getting the customer
Upsell's objective	Maximize profit
Downsell's objective	Maximize conversion
Continuity's objective	Stabilize cash flow
Are all four required	No — one or two can carry a business
Step one	An attraction offer, always
How many to build at once	One
The order a model grows in	Customers reliably; each pays for itself; each pays for more; lifetime value; then advertising at full stretch
Price direction	Start lower, raise in stages
Filling a gap you cannot deliver	Someone else's product
Turning an attraction offer into continuity	A clause that rolls it over at the end of the term
Old-way thirty-day total	$600, from a $19 to $29 trial
New-way thirty-day total	$9,644, sold to the goal
Trade trial conversion	35 percent of trials
A measured model	$500 to win, $6,000 in thirty days, 12 to 1
Upfront sales, in this model	Inside 48 hours
What a budget is worth against a model like that	This page gives no figure for it.

11. What this page does not cover

The five attraction offers are SOP 60 to SOP 64, with SOP 65 — Convert a free consumption asset beside them. The upsells are SOP 66 — Run the classic upsell and choose the moment, SOP 67 — Run the menu upsell, SOP 68 — Run the anchor upsell and SOP 69 — Run the rollover upsell. The downsells are SOP 70 — Work the payment-plan downsell ladder, SOP 71 — Run a free trial with a penalty and SOP 73 — Feature-downsell customers before they cancel, with the tiers they are cut from on SOP 72 — Generate tiers and downsells from the quality vectors. Continuity is SOP 74 — Price continuity against upfront cash, SOP 75 — Apply a continuity discount and the three-plus-twelve rule and SOP 76 — Design cancellation terms and the waived-fee offer.

The three figures this page's model is graded on are SOP 56, for what a customer costs, SOP 55, for what a customer returns, and SOP 57, for how fast. The thirty-day tests themselves are SOP 58, and the longer ladder of advertising capability is SOP 54. Refreshing a promotion without touching this structure is SOP 11 — Refresh a promotion in order of operational drag, and choosing between doing more, doing better and doing something new is SOP 40 — Choose the next growth move. Teaching any of it to somebody else is SOP 43 — Document, demonstrate, duplicate.

Legal compliance and hiring are not covered on this page.