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Issue #1: Alex Hormozi's $100M Offers
I stumbled upon Alex Hormozi recently. He was repeatedly recommended by different experienced entrepreneurs, mentioning how legit he is and how valuable his stuff is.
At first I was skeptical but then I decided to watch his free course on his website and then read his book $100M Offers: How To Make Offers So Good People Feel Stupid Saying No (the course is a companion to the book but in itself it covers a lot of stuff from the book).
Here are my key takeaways from this book:
1. Make people an offer so good they would feel stupid saying no
This is the entire premise of the book (Alex calls these offers Grand Slam Offers). Creating an offer that's impossible to refuse is the key to stand out and succeed.
Compare A to B:
A: Pay an SEO agency $1000 a month to maybe make more from the traffic they'll hopefully drive to your website.
B: Pay an SEO agency NOTHING until they generate traffic for you that converts. You only pay for real customers they help you acquire. So if you say no to their offer, you're essentially saying no to risk-free money.
Assuming the B agency has credentials, you'd feel like a fool if you refused their offer. Learning how to craft such offers is the secret that has changed Alex's life.
2. Sell your product based on value, not on price
The worst business you can be in is one in which you can't differentiate yourself. It's a race to the bottom with no hope of lasting success.
To avoid being commoditized, an offer you present to the marketplace can't be compared to any other product or service available.
It has to combine an attractive promotion, an unmatchable value proposition, a premium price (super important, as a high price signals more value), and an unbeatable guarantee with a money model (payment terms) that allows you to get paid to get new customers. This makes you a category of one in which the prospect decides between your product and nothing (because there's no competition).
3. The right market is a starving crowd
If there's a ton of demand for a solution, you can be mediocre at business, have a terrible offer, and have no ability to persuade people, and you can still make money.
You never try to create demand. Your objective is to channel existing demand. It has to be in a market that is growing at least at the same rate as the marketplace and falls into improved health, increased wealth, or improved relationships.
When picking markets, focus on these four things:
Starving Crowd (market) > Offer Strength > Persuasion Skills
In other words, a starving crowd beats everything else. If you're in a "normal" market, your offer strength will help you win. Lastly, if you offer strength isn't great, you'll have to rely on your persuasion skills (worst case scenario to be avoided).
4. Pick one niche and focus on it
Half-heartedly trying one offer in one market and failing doesn't mean that you're in a bad market. Don't hop from niche to niche. Keep creating offers for your chosen niche until you find something that works. Alex suggests committing yourself to creating a hundred offers (one will work and make you rich).
5. Riches are in the niches
You can literally charge 100x more for the exact same product as long as you target a very specific niche and present the product as tailored to them.
Compare a generic product on time management which you can sell for $19 and a highly targeted time management product for outbound B2B power tools and gardening sales reps which you can sell for $1997 because of how specific it is.
6. Charge so much it hurts
The consequences of lowering your price instead of raising it (along with offered value) are beautifully described in the book:
7. The only way to be unreasonably successful is to have a big discrepancy between what something costs you and what you charge for it
You should charge far more for your product and services than it costs to fulfill it. Think up to a hundred times more, not just two or three times more. And it should still always be a steal for your client (because of the value you offer).
8. Perception is reality
The Grand Slam Offer becomes valuable only once the prospect perceives the increase in likelihood of achievement, perceives the decrease in time delay, and perceives the decrease in effort and sacrifice.
People pay for certainty (increased likelihood of achievement). How much would you pay to be a plastic surgeon’s 10,000th patient versus their first? You'd pay a lot more.
The faster you can deliver promised benefits, the more valuable your offer is (decrease in time delay).
The less effort and sacrifice is needed, the more appealing your offer is (decrease in effort and sacrifice).
9. Create flow first
With your offer, channel demand first. This means starting with an irresistible, done for you offer that may be hard to fulfill but that's easy to sell.
Compare selling an ebook with marketing advice for owners of massage studios vs physically visiting them and helping them implement all the advice. Alex likes to start by creating cashflow first (by overdelivering) and then fixing your operations and making your business more efficient:
10. Scarcity drives demand
Particularly if you sell high ticket products, have less spots available than you think you can sell. You can offer honest scarcity by simply defining a number of clients you can take on in a given time period and advertising that.
11. Deadlines drive decisions
Have deadlines and run seasonal promotions with a start and a finish. This helps people take action.
12. Stack bonuses
A single offer is less valuable than the same offer broken into its component parts and stacked as bonuses.
The value of the bonuses should eclipse the value of the core offer.
Create checklists, tools, swipe files, scripts, templates. Record every workshop, every webinar, every event, every interview and use them as additional bonuses. Offer exclusive discounts for other non-competing products (ideally get a deal for your customers that they wouldn't be able to get themselves).
13. Offer strong guarantees
An offer can convert 2-4x better by simply changing the quality of the guarantee.
You can offer unconditional guarantees, conditional guarantees, anti-guarantees (all sales are final because of a creative reason why), and implied guarantees (performance-based offers).
An example of a strong guarantee:
14. MAGIC headline formula for naming your offer
1. Make a magnetic reason
2. Announce the avatar.
3. Give them a goal.
4. Indicate a time interval.
5. Complete with a container word
You won't always use all these components. Typically you'll use between three to five.
Examples:
This is just a short summary. I highly, highly recommend studying his stuff as he offers many cool examples.
I stumbled upon Alex Hormozi recently. He was repeatedly recommended by different experienced entrepreneurs, mentioning how legit he is and how valuable his stuff is.
At first I was skeptical but then I decided to watch his free course on his website and then read his book $100M Offers: How To Make Offers So Good People Feel Stupid Saying No (the course is a companion to the book but in itself it covers a lot of stuff from the book).
Here are my key takeaways from this book:
1. Make people an offer so good they would feel stupid saying no
This is the entire premise of the book (Alex calls these offers Grand Slam Offers). Creating an offer that's impossible to refuse is the key to stand out and succeed.
Compare A to B:
A: Pay an SEO agency $1000 a month to maybe make more from the traffic they'll hopefully drive to your website.
B: Pay an SEO agency NOTHING until they generate traffic for you that converts. You only pay for real customers they help you acquire. So if you say no to their offer, you're essentially saying no to risk-free money.
Assuming the B agency has credentials, you'd feel like a fool if you refused their offer. Learning how to craft such offers is the secret that has changed Alex's life.
2. Sell your product based on value, not on price
The worst business you can be in is one in which you can't differentiate yourself. It's a race to the bottom with no hope of lasting success.
To avoid being commoditized, an offer you present to the marketplace can't be compared to any other product or service available.
It has to combine an attractive promotion, an unmatchable value proposition, a premium price (super important, as a high price signals more value), and an unbeatable guarantee with a money model (payment terms) that allows you to get paid to get new customers. This makes you a category of one in which the prospect decides between your product and nothing (because there's no competition).
3. The right market is a starving crowd
If there's a ton of demand for a solution, you can be mediocre at business, have a terrible offer, and have no ability to persuade people, and you can still make money.
You never try to create demand. Your objective is to channel existing demand. It has to be in a market that is growing at least at the same rate as the marketplace and falls into improved health, increased wealth, or improved relationships.
When picking markets, focus on these four things:
- The degree of the pain is proportional to the price you'll be able to charge.
- Your audience needs to have money needed to buy your services at the prices you require to make it worth your time.
- You need an easy way to find people who belong to your market. If targeting them is difficult, it'll be difficult to get your offer in front of them.
- The market needs to be growing. It doesn't have to grow super fast and be sexy but it can't be a declining market (like newspapers).
Starving Crowd (market) > Offer Strength > Persuasion Skills
In other words, a starving crowd beats everything else. If you're in a "normal" market, your offer strength will help you win. Lastly, if you offer strength isn't great, you'll have to rely on your persuasion skills (worst case scenario to be avoided).
4. Pick one niche and focus on it
Half-heartedly trying one offer in one market and failing doesn't mean that you're in a bad market. Don't hop from niche to niche. Keep creating offers for your chosen niche until you find something that works. Alex suggests committing yourself to creating a hundred offers (one will work and make you rich).
5. Riches are in the niches
You can literally charge 100x more for the exact same product as long as you target a very specific niche and present the product as tailored to them.
Compare a generic product on time management which you can sell for $19 and a highly targeted time management product for outbound B2B power tools and gardening sales reps which you can sell for $1997 because of how specific it is.
6. Charge so much it hurts
The consequences of lowering your price instead of raising it (along with offered value) are beautifully described in the book:
When you decrease your price, you . . . . . .
Decrease your clients’ emotional investment since it didn’t cost them much . . .
Decrease your clients’ perceived value of your service since it can’t be that good if it’s so cheap, or priced the same as everyone else . . .
Decrease your clients results because they do not value your service and are not invested . . .
Attract the worst clients who are never satisfied until your service is free . . .
Destroy any margin you have left to be able to actually provide an exceptional experience, hire the best people, invest in your people, pamper your clients, invest in growth, invest in more locations or more scale, and everything else that you had hoped in the goal of helping more people solve whatever problem it is that you solve.
In essence, your world sucks. And to make matters worse, your service probably sucks because you are squeezing blood from the proverbial stone. There’s just not enough money left over to make something exceptional. As a result, you fall in line with the armies of average businesses that race to the bottom. I’ve lived that life. It’s terrible. If you love your customers and your employees, please stop short-changing them when there is a better way.
7. The only way to be unreasonably successful is to have a big discrepancy between what something costs you and what you charge for it
You should charge far more for your product and services than it costs to fulfill it. Think up to a hundred times more, not just two or three times more. And it should still always be a steal for your client (because of the value you offer).
8. Perception is reality
The Grand Slam Offer becomes valuable only once the prospect perceives the increase in likelihood of achievement, perceives the decrease in time delay, and perceives the decrease in effort and sacrifice.
People pay for certainty (increased likelihood of achievement). How much would you pay to be a plastic surgeon’s 10,000th patient versus their first? You'd pay a lot more.
The faster you can deliver promised benefits, the more valuable your offer is (decrease in time delay).
The less effort and sacrifice is needed, the more appealing your offer is (decrease in effort and sacrifice).
9. Create flow first
With your offer, channel demand first. This means starting with an irresistible, done for you offer that may be hard to fulfill but that's easy to sell.
Compare selling an ebook with marketing advice for owners of massage studios vs physically visiting them and helping them implement all the advice. Alex likes to start by creating cashflow first (by overdelivering) and then fixing your operations and making your business more efficient:
I have always lived by the mantra, “Create flow. Monetize flow. Then add friction.” This means I generate demand first. Then, with my offer, I get them to say yes. Once I have people saying yes, then, and only then, will I add friction in my marketing, or decide to offer less for the same price.
Practicality drives this practice. If you can’t get demand flowing in, then you have no idea whether what you have is good. I’d rather do more for every customer and have cash flow coming in, then optimize my business but have zero cash flow coming in after (and zero idea about what I need to adjust to better serve my customers).
10. Scarcity drives demand
Particularly if you sell high ticket products, have less spots available than you think you can sell. You can offer honest scarcity by simply defining a number of clients you can take on in a given time period and advertising that.
11. Deadlines drive decisions
Have deadlines and run seasonal promotions with a start and a finish. This helps people take action.
12. Stack bonuses
A single offer is less valuable than the same offer broken into its component parts and stacked as bonuses.
The value of the bonuses should eclipse the value of the core offer.
Create checklists, tools, swipe files, scripts, templates. Record every workshop, every webinar, every event, every interview and use them as additional bonuses. Offer exclusive discounts for other non-competing products (ideally get a deal for your customers that they wouldn't be able to get themselves).
13. Offer strong guarantees
An offer can convert 2-4x better by simply changing the quality of the guarantee.
You can offer unconditional guarantees, conditional guarantees, anti-guarantees (all sales are final because of a creative reason why), and implied guarantees (performance-based offers).
An example of a strong guarantee:
“I’m not asking you to decide yes or no today...I'm asking you to make a fully informed decision, that is all. The only way you can make a fully informed decision is on the inside, not the outside. So you get on the inside and see if everything we say on this webinar is true and valuable to you. Then, if it is, that’s when you decide to keep it. If it’s not for you, no hard feelings. You will then, after signing up at URL be able to make a fully informed decision that this isn’t for you. But you can’t make this decision right now for the same reason you don't buy a house without first looking at the inside of it. And know this...whether it’s 29 min or 29 days from now...if you ain’t happy, I ain’t happy. For any reason whatsoever, if you want your money back you can get it because I only want to keep your money if you’re happy. All you have to do is go to support@xyz.com and tell use “gimme my money” and you got it, and in short order - our response times to any support request average 61min over a 24/7 time period. You can only make such a guarantee when you're confident that what you have is the real deal and I'm fairly confident that when you sign up at URL you’re getting exactly what you need to BENEFIT.”
14. MAGIC headline formula for naming your offer
1. Make a magnetic reason
2. Announce the avatar.
3. Give them a goal.
4. Indicate a time interval.
5. Complete with a container word
You won't always use all these components. Typically you'll use between three to five.
Examples:
- Free Six-Week Lean-By-Halloween Challenge
- Back Sore No More! 90 Day Rapid Healing Intensive (81% off!)
- 5 Clients in 5 Days Blueprint
This is just a short summary. I highly, highly recommend studying his stuff as he offers many cool examples.
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