Channelone.TV: Roundtable Chronicles for October 6, 2013

Monday, October 7, 2013

Roundtable Chronicles for October 6, 2013

Mel,

This week I hosted my Roundtable meetings in Chicago. Roundtable is Planet Perry's Fight Club for entrepreneurs, where we all pound the slag off each others' ideas. Mr. D had his turn on the hot seat.

Mr. D is the marketing director of a high-end design school. College tuition is $60,000 per year and he's got 100 students. It's an organization of A Players and he has surpassed all his direct competitors. He's at the top of the heap.

On a consulting call I used the 80/20 Curve to show him how much money he's still leaving on the table.

"Go to www.8020curve.com. Go to "Rack the Shotgun" and enter 100 members total, 100 responded and "Value of output" is 60,000. The tool spits out a graph, like this:

80/20 Curve applied to college tuition

"The red part, that's the dinero you're getting now - about $6 million a year. A small, boutique niche business."

I said, "Everything between the upper curve and the red, that's money that your customers are fully capable of spending, that you are NOT getting. But they WOULD spend it, IF you offered them something that thoroughly scratched their educational itch in every possible way."

He says, "So you're saying I've got 20 customers who would spend $240,000 or more on tuition, and $60,000 isn't enough??? We're already at the top of our market."

"Yes," I said. "They would spend it if you put the right upgrade offer in front of them. They not only have the money but also the desire. It's practically a law of physics."

He asks, "This is also showing me that the #1 family would pay $3.169 million per year. How is that even remotely possible?"

I say, "Remember German Chancellor who wanted to send his daughter, but you turned him down because you couldn't guarantee absolute security and protection from the paparazzi?"

"Yeah, I remember that."

"Could his family afford to pay you $3 million a year if you give her ALL the perks that come with your school AND completely assured her dad that his security concerns would be met?"

"Absolutely they could."

"Plus you could easily afford the extra measures you'd have to take. And then how 'bout the arab sheiks who send their kids to your school? If you guaranteed to safely land their kid in Harvard's grad program, would they pay a million dollars?"

"Yep. A handful of our parents absolutely would do that."

That wasn't all. Matt Gillogly jumped in.

"You know what you need? You need a FOUNDATION."

"Why do I need a foundation?"

"Because parents BELIEVE in your school's mission. Even people who wouldn't pay a penny more than the standard tuition, would still donate a million dollars to the school. Why? So underprivileged kids can go too. Or they might donate $3 million so they can have their name on a brand new arts building. That's the easiest way to get that $3 million."

Matt continued: "You've got parents who would be *delighted* to be the chairman of your foundation, fly around in their corporate jets and solicit other, multi-million dollar donors."

In Planet Perry we teach the Power Triangle of Traffic, Conversion, Economics, with 80/20 in the center. The conversation you just eavesdropped on is the ECONOMICS conversation.

Certainly in our Mastermind Group you can get a bunch of geniuses to critique your landing page. But we also craft HUGE plans that grow into multi-million dollar corporations. Including the details that make them work.

We also maintain confidentiality, which is why the details of this story have been tweaked. The principle remains unchanged.

Do YOU crave an informal Board of Directors, men and women who will challenge you to the highest levels of excellence, call you out on your BS, and support you through your trials?

I would not be caught dead *not* in a high level mastermind group.

I'm taking applications for Roundtable 2014. Tuition is 19.9K, with extra options for those who wish to work more closely with me. First meeting at the end of January in Orlando. To submit your application, contact matt@perrymarshall.com.

Perry Marshall