My Hair Pills Taught Me More About Business Than an MBA

Most companies optimize for the sale, and the really smart companies are optimizing for what happens after the sale. And there's a really big difference: it's the difference between running a healthy business and running a hamster wheel. And actually, I figured this out or I was reminded about this buying hair pills. I—stick with me here—I'm 45, hair's thinning a little, so I did what a lot of guys do, you know, I started looking at solutions for it. I'm looking at Hims, and Keeps, and Roman, and Locklab, and all these programs, and I noticed something really interesting as I—as I'm looking at them all: they all basically have the same requirement. You can only buy in five or six-month blocks. So you—you can't just pick up one month's supply to even start; you're committing to that five months or that six months to get going. And I thought, "Why is that? And why do all of them have the exact same rule?"

And here is why: it's because that's how long it takes for the stuff to actually work, right? And they know the psychology of—of somebody buying this. You're—you're going to buy a month's supply, you're going to take a pill for a week, for two weeks or a month, and no matter how many times they say on the label, "you know, allow five to six months for results," people get impatient. Like waiting six months to see results from something is like a lifetime when it comes to—to products and services, and people are going to cancel, right? And if they let you cancel after month one, their churn is going to be catastrophic; it's going to fall off a cliff because most people, again, no matter how many times they say it and put it on the box or in the commercial or whatever, like most people are going to bail before they ever got a chance to see results.

So they built their offer around the experience, you know, like around the timeline of the actual transformation that they're delivering. They said, "We know it takes six months, so six months is going to be the minimum." You don't get to leave before this thing is actually getting results. And the thing is, most companies actually do the opposite. Like they—they know a shorter commitment gets you more "yeses" in the sales process, so they lower the bar, right? Like one month, two months, whatever it is, you know, they offer no contracts, cancel anytime—they try to make it as flexible as possible in the initial offer to optimize for "yeses." And what happens is people leave, they bail before the thing actually works, before they're actually getting any results, before they become a believer in the product, because they haven't experienced any transformation yet.

And you see this a lot, like, take like marketing agencies. You know, like you see big, bold promises, they've got short commitments, and then, you know, month two rolls around and month three rolls around and clients are going, "Hey, what's going on?" And the marketing agency knows, "Well, dude, there's some foundational stuff that has to go on, there's some, you know, strategic stuff, we've got to clarify ICP, we've got to, you know, these systems we're putting in place, you know, there's a little bit of a ramp here, blah blah blah." And they know that, but that's not the way they sell it. It happens in the MSP and the IT services world, it happens in, you know, professional services all over the place, because they're building their process around the sale instead of keeping the person that they sold.

And—and what you get is you get churn, you know, like constant, brutal churn. And the—this machine where you're grinding for new customers all of the time because you're losing all the old ones. And it's—it's exhausting, it's inefficient—like getting new customers is the hardest thing to do. And if you've optimized for maximizing the number of "yeses" but have an issue where you've got a ton of churn, what you're going to run is a really, really tough business because you're going to be stuck doing the hardest part all the time just to stay afloat, which is get new clients and get new customers.

And the better play is: you may get fewer "yeses," but you get more people who stay, right? More people who actually get the result. They achieve that transformation that you promised them to begin with, and more people get to that renewal point and they don't think about leaving because they actually experienced it. They got the win that they wanted, so when you come back and ask for more money or ask for the renewal, it's—it's an automatic "yes," like, "Sure, I'm getting results."

And the simplest growth insight that I know is: the easiest way to grow revenue is to stop losing the people that you sell. Not build a more complex acquisition strategy—like just keep the people that you actually sold. And the way to do that is by engineering the offer around the transformation that you're delivering, right? Like recognizing how long does it actually take for someone to get results here, and then make that the minimum commitment. And yes, you'll get fewer people that initially say "yes," like I—I get that. But over the lifetime value of the people that stay, the people that do say "yes," like that goes exponentially higher.

And, you know, I had this whole realization just like kind of shopping for these hair pills, you know, noticing the structure of the offer and how consistent it is across all the companies, and then actually living it as a customer, right? Like month one, month two, month three, nothing obvious—and even though I know what they told me to begin with, decent chance that I would have said, "Ah, this isn't working." But month four, month five, and I started noticing, I was like, "Hey, hair feels a little bit thicker here. Oh my gosh, like this thing is actually working." Then the renewal hits and I don't—like obviously I don't hesitate. Like, "Oh yeah, we were just having this conversation," you know, me and my wife 30 days ago, "yeah, absolutely, let's keep it rolling." And that's what a well-designed offer does, right? Like it keeps you in long enough to actually win. And when you win, they win. So, you know, build the offer around the experience. Know—know the transformation that you deliver, understand what the timeline is for that, and then make sure your customers can't leave before they get there, and I promise you it'll be easier to get that renewal or keep them once they do. Adios.