Every Dollar Saved Might Cost You a Million

You're not Warren Buffet, and why I won’t charge nor pay less.

It took me years to get this, and I wasted time playing a small game because of it. Hopefully, by the time you get to the end of this letter, I’ve helped you collapse the time frame between today and your next biggest milestone. 

Recently, a business owner booked a call with me to discuss their ad strategy. He’s in a niche where I’ve helped clients produce multiple 8-figures over the years. 

We spoke a year or so ago. 

He asked for a price reduction. 

I said no and moved on.

Since then, my price has increased due to demand and the focus it takes me to help companies reach the heights my clients are after. 

Well, he reached out again, said he was ready to go, and then no showed our call. Two red flags I can’t and don’t compromise on and typical behavior I see from discount and get rich quick without risk seekers. 

However, I understand why he did it. 

He did save some money. He would have also saved money on the transaction if I had given him a discounted price. 

BUT in that time frame, he waited around saving money; I was able to onboard and produce the exact outcome he wanted for countless others, which he still has not achieved a year later.

I don’t negotiate because I don’t wish to save; I wish to generate the desired outcome. 

At a restaurant, for example, I don’t want a discount. I don’t want to be your lowest-paying customer. I want to be your BEST customer. 

Discounts put unnecessary strain on a business, and no matter what they say, being the lowest-paying customer plays into the bias and performance of team and service. I want companies and their employees to hop up with excitement when they see me or hear my name, just like my employees do for my clients! I just want the experience I’m paying for. Most can barely provide that as it is, let alone when you steal money from their margins.

As you can imagine, undercharging also has many downsides.

This is why I don’t entertain negotiation of my prices. I refuse to let that virus run rampant in my mind or anyone else’s who works for me. I want my team to focus on performing their best with the help of management systems and incentives. 

Some of the lowest-performing teams I've encountered have had poor incentives. There's no ladder for them to climb. I've also experienced advisory clients sharing their disdain for their vendors due to their lack of proactiveness or showing of care. When I dug deeper, having consulted for various companies, I found out these vendors could barely afford to operate their businesses because of what they charged. 

In other cases, when there were incentives, the business owner would always find some way to move the goalpost or not pay them on some kind of technicality. You can’t want performance and quality but also be a cheap ass. I don’t want anyone to be my cheapest paying customer, and I don’t want to be one. If anything, I want to pay more and get higher priority. That's how this game works.

Too many entrepreneurs try to play the saving game in many ways. The guy who tried to negotiate and then came back around and ghosted me a year later is a great example. Somewhere along the way, he was taught to reduce risk by saving. 

Reward is a consequence of risk. When you reduce risk too much, you strip most of the reward out of it. It’s like trimming every little bit of fat off of a steak. You don’t have to do that if your affairs are in order in other areas of your life.

It’s like having a boxing match where no one hits each other because it’s too risky. Ticket sales wouldn’t be the same, crowd attendance and participation wouldn't be the same, and pay wouldn’t be the same. Most of all, you wouldn't experience the same thrill and reward of winning or even showing up and losing. 

There are no participation trophies in business. You must take calculated risks and incentivize the people around you to grow your business rapidly.

People addicted to the payoff they get from saving will put their business and relationships in circumstances that always reduce to saving the company, saving money, and saving the relationship. 

If everything is going well, they will make decisions subconsciously that put them in a situation where they end up with their back against the wall and have to cut back. It's a one-way street to the same place almost every time. 

It's pretty common for me to hear that a business paid a cheap price for their last five hires who promised a huge too-good-to-be-true result from them that ended in disaster. If your program is 10k and the media buyer promises a 1k cac at scale, you know that sounds like an unrealistic promise. If you buy that, then you kind of deserve what you get.

I’m not saying to spend frivolously or pay any price someone lies before you. 

Instead, get very clear on what you want. This is why I always start with my client complaining about what they don’t want or didn’t get, and I invert it into clear outcomes and characteristics of their next move or hire.

There’s nothing wrong with complaining once or making a mistake once as long as you can transform it into a move that gets you what you want in the long run. 

Listen to the thought processes and philosophies of the potential team member or vendor in question. Listen for lack of tangible results when they talk about past experiences. Understand their process for writing and managing ads. If it's a salesperson, take a look at their stats. Do multiple interviews with whoever you hire. 

Everyone you work with should be able to share how they do what they do and address nuances applicable to your specific situation. If you don’t think you can get the outcome you're paying for, keep interviewing until you can. 

There's no reason to focus on a discount if you think you can achieve the results.

Put your energy into precisely what you want, and don’t settle until you get it. There’s nothing wrong with that. There’s nothing wrong with being rich.

If you want to be like Warren Buffet and drive a boring old car, go for it. Don't forget he purchased a jet and spent years buying, investing, and failing.

Here’s a quote from his partner: A great business at a fair price is superior to a fair business at a great price.” Charlie Munger - Rest In Peace

And Warren Buffet himself: 

“It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

–Lance C. Greenberg