Clipping: $100M Offers (Alex Hormozi)

Takeaways

• A great offer is the fulcrum to business success.
• Charge high price and provide high value.
• Remove all the obstacles to purchasing.

Book Notes

My notes are in the form of clipping that summarizes a book in the author’s own words. I have organized the excerpts from the book in a way that I find most digestible. Hope you enjoy it!

All quotes are from the original author.

A New Business Model

“I believe no one is coming to save us. It’s up to us, as entrepreneurs, to innovate our way into a better world”

“Typical models … were designed by companies who have boatloads of funding and can operate at a loss for years. When these models are used in the real world, business owners… essentially ‘buy themselves a job’ and work 100 hours a week to avoid working 40.”

“The two main problems most entrepreneurs face: Not enough clients. Not enough cash… It costs more money and time to get more clients, thereby solving issue one, and that money is coming from the profit margins, which creates problem two!” (See Alex’s business model)

The Right Market

Massive Pain

“They must not want, but desperately need, what I am offering.”

“‘The pain is the pitch.’ If you can articulate the pain a prospect is feeling accurately, they will almost always buy what you are offering.”

“The point of good writing is for the reader to understand. The point of good persuasion is for the prospect to feel understood.”

Purchasing Power

“Don’t be romantic about your audience. Serve the people who can pay you what you’re worth”

“Your audience needs to be able to afford the service you’re charging them for. Make sure your targets have the money, or access to the amount of money, needed to buy your services at the prices you require to make it worth your time.”

Easy to Target

“Make sure you can target your ideal audience easily”

“If our potential customers are all gathered together somewhere, then we can market to them. If searching them out, however, is like finding needles in a haystack, then it can be very difficult to get your offer in front of any potentially interested eyes.”

Growing markets

“Growing markets are like a tailwind. They make everything move forward faster. Declining markers are like headwinds. They make all efforts harder.”

“There are three main markets that will always exist: Health, Wealth, and Relationships… there is always tremendous pain when you lack them.”

(Further on examples of finding the right market)

Making Profit

“Getting people to buy is NOT the objective of a business. Making money is.”

Starving Crowd (Market) > Offer Strength > Persuasion Skills

• “Even if you have a bad offer and are bad at persuasion, you’re going to make money if you’re in a great market.”
• “If you are in a normal market and have a Grand Slam Offer (great), you can make tons of money even if you’re bad at persuasion.”
• “Let’s say you’re in a normal market and have a normal offer. In order to be massively successful, you would have to be exceptionally good at persuasion.”

It Takes Resilience To Succeed

“All businesses and, all markets, have unpleasant characteristics. The grass is never greener once you get to the other side.”

“You must stick with whatever you pick long enough to have trial and error. You will fail. In fact, you will fail until you succeed. But you will fail far longer if you keep changing who you market to, because you must start over from the beginning each time. So, pick then commit.”

Riches Are In The Niches

“For most, if you are under $10M per year, niching down will make you more money. After that, it will depend on how narrow the niche is, or, what is called TAM (total addressable market).”

People Want To Buy Expensive things. They Just Need a Reason.

“Never raise your prices without letting people know.”

“When you raise your price, you increase the value the consumer receives without changing anything else about your product… the higher the price, the more allure your product or service has.”

Those Who Pay The Most, Pay The Most Attention.

“More engaged customers create better results which lead to higher customer satisfaction. And that is the competitive advantage having nothing to do with your services. And these customers are people who wants you to win.”

The Value Equation

“The top side of the equation..is where beginner marketers make bigger and bigger claims. It’s easy, and it’s lazy… The best companies in the world focus all their attention on the bottom side of the equation. Making things immediate, seamless, and effortless.”

Dream Outcome

“The dream outcome that most directly increases a prospect’s status will be the one they value most. As such, a prospect may value that entire category of vehicles that satisfy one desire more than another category that satisfies a different desire.”

“Our goal is to accurately depict that dream back to them, so they feel understood, and explain how our vehicle will get them there.”

Certainty

“When comparing two products or services that satisfy the same desire, the value from the dream outcomes will cancel out.”

“Increasing a prospect’s conviction that your offer will “actually” work for them, will make your offer that much more valuable even though the work remains the same on your end.”

Time Delay

“The only thing that beats ‘free’ is ‘fast’.”

“The thing people buy is the long-term value, aka their ‘dream outcome.’ But the thing that makes them stay long enough to get it is the short-term experience.”

“Always try and incorporate short-term, immediate wins for a client. Be creative. They just need to know they are on the right path and that they made the right decision trusting you and your business.”

Effort & Sacrifice

“In an ideal world, a prospect would want to simply “say yes” and have their dream outcome happen with no more effort on their behalf.”

“This is why ‘done for you services’ are almost always more expensive than ‘do-it-yourself’ because the person doesn’t have all the effort and sacrifice.”

(See also engaging customer)

Crafting Your Offer

“I didn’t have to be skilled… or even any good. I just had to come up with things that anyone would say yes to.”

(See Alex’s example, and delivery cube)

Solve Psychological Problems

“Most people naturally try and solve problems using logical solutions. But the logical solutions have usually been tried…because they’re logical. All that’s left are the psychological problems.” (Further on psychological solutions)

People have deep, unchanging desires.

“Our goal is not to create desire. It’s simply to channel that desire through our offer and monetization vehicle.”

You can either be right or you can be rich.

“You can either sit there and make ‘complain’ posts about how people ‘ought’ to be a certain way. Or you can take advantage of the way people are and capitalize.”

Don’t sell the plane flight, sell the vacation.

“It’s a new level of frustration when you can’t even give your services away for free to people.”

Solve every problems prevent our clients to say “yes”.

“Think about what happens immediately before and immediately after someone uses your product/service.”

Changing the wrapping paper.

“Once you’ve monetized an offer, rarely should you change it. Just rinse and repeat over and over and over again.” (Further on offer variations)

Enhancing Your Offer

Scarcity

“Desire is a contract you make with yourself to be unhappy until you get what you want.” It follows, therefore, that we only want things we do not have.”

“We must endeavor to keep our supply (and satisfaction of desire) under the demand that we are able to generate. This maximizes profits and keeps desire ravenous in our customer base.”

“If you satisfy all the demand, you will kill your golden goose, and not know where your next meal will come from.”

“Demand for services is non-linear. Instead, one fifth of the prospects are willing to pay five times the price (or more).”

Urgency

“Scarcity is a function of quantity. Urgency is a function of time.”

“It would be a lie to say that if you own a roofing business you won’t service them if they buy after the date. But, if you talk specifically about the promotion you can often elicit the same urgency on buying in the prospect while maintaining your integrity — win-win.”

Bonus

“A single offer is less valuable than the same offer broken into its component parts and stacked as bonuses.”

“You can get other businesses to give you their services and products as a part of your bonuses in exchange for exposure to your clients for free. This is free marketing for them, and high value products for you at no cost.” (Further on offer bonuses and communicating bonuses)

Guarantees

“The single greatest objection for any product or service being sold is…risk. Risk that it doesn’t do what it’s supposed to do for them.”

“The key is to identify a client’s biggest fears, pain, and perceived obstacles. “What do they not want to have happen if they pay you? What are they most afraid of?” Reverse their fears into a guarantee.” (Further on communicating guarantees)

Four Types of Guarantees

• Unconditional: a trial where they pay first then see if they like it.
• Conditional: include “terms and conditions” to the guarantee.
• Anti-guarantees: “All sales are final.”
• Implied guarantees: if I don’t perform, I don’t get paid.

“Bigger broader guarantees work better with lower ticket B2C businesses… The higher the ticket, and the more business oriented it is, the more you want to steer towards specific guarantees.”

Caveats

“Guarantees … can enhance the magnetism or attraction of any offer, but they cannot make a business. If a guarantee is used to cover up a poor sales team or a poor product, it will backfire into lots of refunds.”

“While guarantees can be effective sellers, people who buy because of guarantees can become very shitty customers. A person who only buys because of a guarantee is a person who may not be willing to put in the work necessary to see success with your product or service”

Naming

“People do judge a book by its cover. Half-ass naming your product or offering can ruin conversions.”

M-A-G-I-C Headline Formula. “Should answer one or both of the following questions:”

• Why are they making this great offer?
• Why should I respond to this offer?/What’s in it for me?
• Who you are looking for and who you are not looking for as a client. You want to be as specific as possible. (Further on local business)

Rhymes

• “Good rhymes stick in people’s minds. Rhyme your program name to win the game.”
• “An alternative approach to rhyming is to use alliteration when naming your program.”

Alex’s Example

Business Model Breakdown

It is simple, just like the four-piece pyramid logo:

• Provide value at no cost far in excess of what the rest of the marketplace charges for.
• Have entrepreneurs use materials that actually work and make money helping more folks
• Earn the trust of the hyper-executor business owners who use the frameworks to scale their businesses to $3M-$10M per year and beyond
• Invest in those businesses to make more impact at scale while helping everyone else for free.

If you look carefully, the process reverse-engineers success. I think it’s pretty cool. Here’s how:

• I know these business owners can execute the frameworks I have without hand-holding, and therefore, would be very likely to succeed with the next set of frameworks
• we operate on shared trust - I trust they can execute, and they trust that our stuff works

So it allows me to preemptively avoid failures and dramatically increases success likelihood.

Find The Right Market

“So if I were a relationship expert trying to find my avatar, I’d rather focus on “second half of life relationship” coaching for old timers than helping college students in relationships. Why? Because senior citizens who are alone are likely suffering more pain as they are nearer their deaths (pain), have more buying power (money), and are easy to find (targeting). Lastly, at the time of this writing, there are more people turning 65 each year than turning 20 (growing).”

Engaging Customer

“In theory, we’d all love to fly out and live with our customers to fix their problems. In reality, that wouldn’t make a very scalable business. We need our offer to be incredibly attractive and profitable.”

“We went on to sell 4000+ more gyms over the next few years (and counting) using a done-with-you rather than a done-for-you model.”

Psychological Solutions

• London Tunnel System
  • Logical solution: make trains faster to increase satisfaction
  • Psychological solution: decrease the pain of waiting by adding a dotted map
• Elevator
  • Logical solution: make elevator faster
  • Psychological solution: add floor to ceiling mirrors so people are distracted staring at themselves and forget how long they were on the elevator
• Selling
  • Logical solution: make it cheaper
  • Psychological solution: make fewer of them and raise the price which causes people to want it more.

Grand Slam Offer

• Pay one time.
  • (No recurring fee. No retainer.)
• Just cover ad spend.
  • I’ll generate leads and work your leads for you.
• Only pay me if people show up.
  • And I’ll guarantee you get 20 people in your first month, or you get your next month free.
• Provide all the best practices from the other businesses like yours.
  • Daily sales coaching for your staff
  • Tested scripts
  • Tested price points and offers to swipe and deploy
  • Sales recordings . . .
  • and everything else you need to sell and fulfill your customers.
• Give you the entire play book for (insert industry)
  • absolutely free just for becoming a client.

In a nutshell, I’m feeding people into your business, showing you, exactly, how to sell them so that you can get the highest prices, which means that you make the most money possible . . . sound fair enough?

Delivery Cube

• What level of personal attention do I want to provide?
  • one-on-one, small group, one to many
• What level of effort is expected from them?
  • Do it themselves (DIY) - figure out how to do it on their own;
  • do it with them (DWY) - you teach them how to do it;
  • done for them (DFY) - you do it for them If doing something live,
• what environment or medium do I want to deliver it in?
  • In-person, phone support, email support, text support, Zoom support,chat support If doing a recording,
• how do I want them to consume it?
  • Audio, video, or written.
• How quickly do we want to reply? On what days? during what hours?
  • 24/7. 9-5, within 5 minutes, within an hour, within 24 hrs?
• 10x to 1/10th test.
  • If my customers paid me 10x my price (or $100,000) what would I provide?
  • If they paid me 1/10th the price and I had to make my product more valuable than it already is, how would I do that?
  • How could I still make them successful for 1/10th price?

“Stretch your mind in either direction and you’ll come up with widely different solutions.”

Offer Bonuses

If I owned a pain clinic, I might get:

• a massage therapist to give me 1-2 free massages to incorporate into my offer.
• a chiropractor to give me two free adjustments. (Value: $100) …
• a low inflammation food company to give me discounts for their products ($50 savings) …
• discounts for braces and orthotics ($150 savings) …
• a local health club down the street to give me a personal training session for free and a free month of membership to their pool ($100 Value) …
• discounts on pharmaceutical drugs from the local pharmacist ($100/mo in savings)

“Repeat the above for multiple service providers (so perhaps I get ten chiropractors to all give me a free adjustment, now I have ten free adjustments in my bundle).”

Communicating Bonuses

“When selling one on one, you ask for the sale first, before offering the bonuses.”

• If they say yes, then after they have signed up, you let them know the additional bonuses they’re going to get. This creates a wow experience and reinforces their decision to buy.
• On the other hand, if the person does not buy after the first ask, then you present a bonus that matches their perceived obstacle, then ask again. Don’t feel weird about asking again. You simply agree with the prospect, add the bonus, and ask if this consolation was “Fair enough.”

“Whenever trying to close a deal, never discount the main offer. It teaches your customers that your prices are negotiable (which is terrible).”

Communicating Guarantees

“It works perfectly with a best-case/worst-case close:”

“Best case you get the body of your dreams and we give you all your money towards staying with us to hit your long-term goal. Worst case you tell me I suck, I write you a check, and you get six weeks of free training. Both options are risk free. But, the only thing guaranteed not to help you is walking out of here today.”

List of Offer Variations

“As you market offers, you will need to create variations over time as the tastes of the market change over time. Here’s the order in which you will change things to keep lead flow consistent.”

• Change the creative (the images and pictures in your ads)
• Change the body copy in your ads
• Change the headline - the “wrapper” of your offer
• Free 6 Week Lean Challenge to Free 6 Week Tone Challenge
• Holiday Hangover to New Year New You
• Change the duration of your offer
• Change the enhancer of your offer (your free/discount component)
• Change the monetization structure, the series of offers you give prospects, and the price points associated with them (Book II)
• Change the entire machine behind it only as a last resort and for a darn good reason, especially once you get traction.

“The lower on the list you go, the more operationally heavy it is, so really be sure you have exhausted the earlier “lighter” ways of varying your offer.”

Local Business

“Ironically, local business marketing is both easier and harder than national level marketing. It’s easier to get to work, but harder to keep working or scale.”

“The TAM (total addressable market) for a brick & mortar is only its immediate radius (most times). So by extension, the smaller the radius, the faster offers fatigue. This is the double-edged sword of local.”

Reference

• $100M Offers, Alex Hormozi