If you’re like me, in the last 12 months, you’ve heard about Alex Hormozi’s book “$100M Offers” at least half a million times. It sounds like all business coaches say the same thing, “You have to have an irresistible gift, or you’ll never sell anything, die and be buried in a pauper’s grave.”
In fact, it annoys me every time I hear it. It is not because of disrespecting Hormozi’s work. It just reminds me of an investment heuristic called the barbershop fallacy, which says that you should never take stock tips from your barber because, possibly, the advice is too common and generic, oversimplified, or misunderstood.
Why the obvious answers are hurting your business
I Barbershop trickery isn’t just about taking advice from the wrong people. It’s about the seductive dangers of obvious answers. That barber gives you investment tips without understanding or paying attention to your goals, risk tolerance or portfolio strategy. They are pointing out what is obvious, not what is best for you. And finally, taking their advice can be very dangerous.
For example, in 2013, fitness startup ClassPass fell for its own version of the barbershop scam. It introduced what seemed like an obvious homework assignment — unlimited access to in-store fitness classes for just $99 a month — an absolute steal when individual classes typically cost $20-$35 each. And it was marketed to fitness enthusiasts in big cities for whom this level of access to top studios would be a dream come true.
The value proposition and target market were clear. The promise was truly “unstoppable”, and the expansion was intense. However, it was completely unsustainable.
ClassPass has attracted “heavy users” — customers who take 20+ classes per month. While these users seemed fair on the surface, they caused ClassPass to lose money because the company had to pay the studios for each visit. The problem was exacerbated by marketing strategies that emphasized value and variety, attracting bargain hunters instead of a sustainable customer base that enjoyed the core offering of fitness tests.
High cost of marketing to the wrong crowd
What seemed like a clear marketing victory ended up causing great instability and almost sinking the company. Within three years, their excessive marketing efforts and unsustainable business model forced them to raise prices, change to a tiered pricing structure and remove their “unlimited” classes option. These changes caused massive customer uproar and massive public backlash.
ClassPass was able to recover because it was big enough to adapt. But how many other companies have been thrown into an advertising-driven competition they couldn’t escape?
Focus: Why keeping a customer beats getting a new one
How marketing leverages customers
As marketers, we often say, “I’m just bringing in leads. Sales qualify them and close the deal, while performance and customer support keep them happy.” But look where that mindset led ClassPass. It’s like a chef saying, “I just put food on the plates.” This ignores the responsibility to serve the right food to the right customer, avoid wasting ingredients and maintain food quality — which ultimately protects the restaurant’s reputation and long-term success.
Business is a complete, symbiotic system. The actions of one department affect everyone. As marketers, our actions can have a significant impact on our company’s rating, and we may not even realize it.
How do we avoid being another cautionary tale? By delivering the right leads. Delivering the wrong lead is as bad as delivering no lead. Marketing anything but the right thing to the right person adds to the conversation with your customer – including any mismatch between your promises and what you actually deliver. It all sets your company up for failure.
3 ways marketers can fix customer churn
Specifically, there are three things you can do to reduce customer churn due to marketing.
1. Define your customer
This may sound simple, but the basics win football games. Unfortunately, many sales teams do not take the time to investigate and find their true customers in depth. Instead, they fall back on the thinking and understanding of executives – people who are far removed from customer insights. Talk about the blind leading the blind.
In a previous article, we talked about the most common customer profiling mistakes that sales teams make and how to fix them. It starts with looking beyond vague demographics and digging into the benefits of your customer base. It also involves segmenting your customers into an ecosystem of payers, check writers, users who use your offering and who decide who chooses to hire you.
2. Let customers define value
In organizations, it’s easy to take our cues from the development team or operations when explaining why our product is great. But your customer doesn’t care if your pocket knife has a corkscrew unless they need to open bottles of wine. Your business exists at the mercy of your customers – it’s about see.
If you want to know why your offering is all that and a bag of chips, stop listening to engineers who think “what could be better” and listen to your customers and needs. That will point you to what you can promote.
In the end, it’s not about creating an offer that makes customers say, “Hey, yes!” That’s what ClassPass did and it almost killed them. It’s about creating an offer that helps your customers and makes them say, “That’s exactly what I needed!”
3. Use your product
Marketers often visit a website once or twice, briefly test the product, and watch someone else use it, then think they fully understand it. That’s like thinking I can play Vivaldi’s Summer or Gershwin’s Rhapsody in Blue* because I watched a performance — it doesn’t work that way.
Instead, play the role of a customer. Imagine yourself trying to achieve something specific and using your product or service to do it. This is immersion in your customer experience. Keep your eyes open to what frustrates you, is unclear or meaningful. This will guide you in what your product does and who you should sell it to.
Dig deep: How to identify top prospects in B2B and reduce their risk
Churn is not just about sales
As marketers, we can’t just focus on generating leads and hope someone else picks up the slack. ClassPass shows us the cost of getting it wrong, no pun intended. Customer churn is everyone’s problem, but it often starts with us.
Are you targeting the right or most obvious customer? Don’t guess — investigate. Talk to your customers, and test your thinking with data. The answers are there, but only if you dig deep.
But the good news is that the juice is worth the squeeze. When you bring in the right customers who value your offering and stick around, you reduce customer churn and strengthen the entire organization. That’s not just good marketing – it’s good business.
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