$100 Million Offers - Alex Hormozi (Animated Summary)

what is the secret of sales make people an offer so good they would feel stupid saying no imagine if you made an offer and received this kind of reaction and then you asked who wants it and then this happens do you think this could change your business most likely however right now you find yourself in this kind of situation what are you missing there are many ingredients to create a product that sells so much that people around you will wonder if what you're doing is legal but it all starts with the offer and Alex hormozzi's book 100 million dollar offers it's all about this and delivers big time if you don't know him he has created a true Empire with revenues exceeding 200 million dollars thanks to his ability to promote and sell and he is now revolutionizing the world of entrepreneurial education this is one of those books that every entrepreneur should read and apply in this video I'll provide a detailed summary but I recommend reading it anyway to grasp all the nuances make sure to watch the video Until the End because I'll explain how to create these Grand Slam offers and also have an additional bonus for you at the end [Music] so it all starts with an offer but what is it exactly the offer is what initiates the exchange it's the product and service you agree to give or provide how you accept payment and the terms of the agreement a grand slam offer is obviously more than this but before we get into that we need to set some foundations as you cannot make an incredible offer if you sell something that is similar to what everybody else sells right a commodity can be defined as a product that is found in many places indistinguishable or otherwise very similar to others for example various soaps or detergents on the supermarket shelf the concept is that if all products are the same or similar then the price becomes the deciding factor so if the customer looks at your product and Compares it to another they consider similar and then decides based on price they have regarded you as a commodity and believe me you don't want that I want to offer something so different that people cannot compare to anyone else and cannot compare you on price but they need to make a decision based on the value they perceive from your offer so remember for commoditized products purchases are driven by price for differentiated products purchases are driven by value the Grand Slam offer solves this differentiation problem but what is this Grand Slam offer we are talking about it's an offer that you present to the market that cannot be compared to any other offer or product in the market it combines an attractive promotion an unmatched value proposition a premium price and an unbeatable guarantee with a pricing model where you always get paid to acquire new customers in order to permanently remove the cash bottleneck for growth and expansion no the word offer might be misleading for some they might think that it is a kind of simple promotion done in a certain way when in reality it is more like a shift in the business model it is better explained with this real life example for an advertising agency standard offer from an advertising agency they offered a one thousand dollar setup service plus one thousand dollars per month fee to continue they earned zero point five dollars for every dollar spent on promotion to acquire customers which means they were losing 0.5 dollars for every dollar spent this loss was then recouped with the recurring Revenue so while you continue to lose money to acquire new clients you try to stay afloat and make a little profit by generating Revenue with your existing clients this offer is more or less like many others they all seem the same you are forced to be competitive on price to continue acquiring customers it's harder to get customers to say yes and keep saying yes because your service is the same as many others and if they find something better they switch Grand Slam offer the idea here is to offer something so different that it doesn't even require an explanation of why we are different because it's so evident that you can't even compare you pay a setup fee of 3997 no recurring costs only put a budget for promotion and don't pay us for it we generate leads for you and work them for you and you only pay if they show up for the appointment we guarantee you 20 leads in the first month and if it doesn't happen you get the next month for free additionally we offer you daily coaching for your staff tested scripts tested price lists and offers to present to customers sales call recordings and everything you need to sell your product the entire business structure is absolutely free just for becoming a customer so we'll bring you hot leads for your business and teach you exactly how to close them at higher prices so your margins increase significantly which one would you choose the results were same amount spent on promotion 2.5 times more responses to the ad 2.3 times more closures because the offer is much more attractive four times higher entry price total revenue five thousand dollars versus one hundred twelve thousand dollars return on promotion spending 0.5 to 1 versus 11.2 to 1. it's a pretty big difference before delving into creating the offer we need to take a step back you can have a great business a fantastic offer and excellent sales people but if you're in a declining Market You Won't Do Well if there's demand you can have a mediocre business but you would still do well to help you understand think about a food truck selling sandwiches outside a nightclub at 3am young people come out hungry and the only thing they find is that food truck do you think it will be difficult to sell no of course not on the other hand there was a business in the field of selling advertising spaces great business model excellent sales people but they were selling to newspapers that were declining by 25 each year it was a disaster so this is the framework you need to keep in mind you start from the left if you assess that the market is bad you won't even proceed with this business and move on or redefine the target audience if it's extraordinary obviously you ride that wave and it doesn't even matter much if you're great with your offer or with your sales process but the most common scenario is that the market is normal so to make a difference you must move one step to the right you need to have a great offer if even the offer you have is normal then you need to move to persuasion which means that you must have a great salesperson if on the other hand the offer is extraordinary you don't even need to be or have a super sales person do you see the difference think about how much more scalable the business is if you don't have to rely on finding great sales people here's four criteria that can guide you one significant problem your target audience must genuinely want what you're offering not just desire it the bigger the problem the more you can raise the price two purchasing power it doesn't necessarily mean they all have to be wealthy but simply that they can afford the price you're asking for for example don't sell paid services to the unemployed three easily identifiable Target you might have a Target in mind but ask yourself if it's easy to identify the groups or the audience seeking this generally if there are associations mailing lists social groups channels Etc discussing your topic or places where those kinds of people gather the target qualifies 4. growing Market as mentioned the market should not be declining it should either be a large Market meaning there's an abundance of it or a normal Market meaning that it's growing normally once you have identified your Market don't go too broad with your offer you need to Niche down it is important because it allows us to compete in a unique category our own and not become a commodity in a too generic Market where there are big companies with a lot of budget already occupying that space But if you go into a niche it's easier to create an irresistible argument for a specific problem that can solve it better than a generic solution a commodity solution and then you can spend money on more targeted ads more specific ways to reach the Target customers with more specific messages at a higher price go into a niche that's three or four levels down from the General market for example Health weight loss weight loss for new mothers and if the market is still too big you can Niche down once more new moms who follow the keto diet in order to make an irresistible offer you must understand how value works the reason people buy anything is to get a deal they believe that what they're getting value is worth more than what they're giving in Exchange price the moment the value Falls below what they're paying they stop buying from you this discrepancy between price and value is what you must avoid at all costs the simplest way to increase the gap between value and price is by discounting the price and that's a bad decision the way to go is to sell at a high price by substantially increasing the value if your offer doesn't convert it is because it doesn't have a high enough perceived value everyone can raise prices but few can actually sell things at those high prices you need to abandon any notion of what is fair in terms of not being able to charge too much yes you should never ask for more than the value but you should ask for much more than the cost to deliver the finished product so the point is to identify very well what people perceive as value focus on it intensely and ruthlessly eliminate everything else those who truly understand what value is are the ones who will be able to ask for and get high prices for their products and services the concept of giving value is not new but I always found it a bit vague what does it really mean hormuzi codified this in an incredible way here is the value equation look at it for a moment the two components above should be increased as much as possible while the two below should be decreased as much as possible ideally to zero marketers often focus on the top part of the fraction they make big promises and show you with a lot of evidence testimonials Etc that they will deliver it's easy to do but it's a lazy and incomplete approach the most challenging part is working on decreasing the denominator of the fraction the better you do this the more you'll be rewarded by the market since it's an equation ideally if you bring the bottom part to zero even if the top part is small the product would have infinite value according to mathematical laws as something divided by zero equals infinity let's see what the single components of the equation mean dream outcome what the prospect wants to achieve it must be significant for them it's the gap between the current scene and the dreamed one for them our job is to accurately describe to the prospect their own dream so they feel understood and explain how through our vehicle our product or service we will take them there be aware that there are many vehicles in the market promising the same result for weight loss one can exercise take supplements undergo liposuction Etc so you need to do this part well but what really matters are the other variables of the equation perceived likelihood of achievement how much your prospect thinks it is likely that they will reach the dream outcome promised by the product or service we must communicate on this point demonstrating the likelihood through evidence testimonials demonstrations what we include or exclude from the offer along with our guarantee that we will deliver time delay how much time passes from the moment of purchase to the desired result the shorter the better of course if that is not always possible as you sell something that takes a long time make sure you let them have short-term wins to validate that they are on the right path effort and sacrifices efforts are things you don't necessarily enjoy doing but have to do to achieve the result for example going to the gym and dealing with sore muscles as a result of your training sacrifices are things you like but have to give up for example the sacrifice of not eating a dessert if you're on a diet here's the value equation again it's really a key concept of this book remember that perception is reality it's not whether you actually really modify those variables maybe you do it but the prospect does not perceive it for example people complained about the elevators being slow the solution was not to increase the speed of the elevator but to put a mirror in it so people would look at themselves to check how they looked and they completely forgot about the speed of the ride the Grand Slam offer becomes valuable only if the prospect perceives one or more of the elements in the equation that increase or decrease as they should here's the procedure to create your grand slam offer step one identify the dream outcome no one wants to buy a gym membership they want to lose weight or gain muscle nobody wants to buy airline tickets they want the holiday can you see the difference you must identify and sell what your prospects want that experience that result not the tool itself Step 2 list all the problems list all the problems that people have and the limiting thoughts they have connected to that dream outcome think of them in a sequence what happens immediately before and immediately after someone uses your product or service go into details remember to identify all the problems that your prospects might have because you are trying to create a grand slam offer that solves them all each problem is analyzed from the perspective of the value equation it won't work because it won't happen because it will take too long because there will be too many sacrifices or efforts because step 3 turn problems into solutions for example healthy food is too expensive how to make healthy food shopping sustainable healthy food tastes Bland and doesn't make me want to eat it how to make healthy food tasty and delicious don't worry if there are repetitive Solutions it's normal we'll refine them later step 4 Create the vehicle for your solution there are so many ways you can package your product or service for example the delivery can be one to one in small groups or one to many the effort required by the client can be done for you done with you done by you Etc the way you package and deliver your product or service may vary in accordance to the stage you are in this chart will help you when you are very involved and do everything yourself for the customer the service is easy to sell but hard to deliver because it requires your direct time when it is easy to deliver perhaps because it's already well automated or ready to go but it's on the customer to do everything it is usually harder to sell but easier to deliver so you need to find that right balance between the two but this comes later in a second phase in the beginning when you don't have cash the first thing you need to do is to bring in cash when you can it's better to start from the left side with something easy to sell but hard to deliver if you cannot sell this you need to adjust the offer until you can before adding friction meaning more difficulty in selling by moving to a product that's less easy to sell because it's more impersonal so first generate demand and see what works then gradually offer your product or service at the same price but make the delivery easier and remove more and more of your personal involvement if you don't generate demand first you'll never know what works many start trying to sell something easy to deliver but can't sell enough of that and never have the cash to scale it step 5 trim and stack so at this point you should have a good list of solutions to your customers problems now you need to refine the list and the first thing that you do is to remove all the low value Solutions if unsure refer to the value equation to determine this so you should be left with high value solutions that can be low cost or high cost for you so for every problem you identified you should stack together all the solutions you found and give that bundle a sexy name with a description of what it is repeat that for every other problem identified you should be left with a series of bundles that solves all the problems for your prospects and now it is time to supercharge your offer and that is done by adding urgency scarcity guarantees bonuses and naming the point is to artificially increase demand for our products or Services through some form of persuasive communication when we reduce the supply we can then offer those available units for much more money the perfect combination would be a lot of demand and a small quantity of Supply real or perceived so with your offer you aim to increase demand and decrease the perceived Supply so that you can sell the same products or services at a higher price and in larger volumes how to create scarcity when there is a fixed supply for the available products this creates scarcity or a fear of missing out for example stating that only X products are available because you can only serve a certain amount of customers types of scarcity include limited availability of the number of spots products Etc either in general or over a period of time limited availability of bonuses products no longer available in the future for physical products limited edition launches can be conducted find a real and ethical way to create scarcity some use it wrongly and it is clearly fake ask yourself how many customers can you serve well over a certain period that's your scarcity so you should advertise that how to create urgency scarcity is related to quantity while urgency is related to time having a defined deadline for a purchase or action creates urgency again there are many way to do this for example if you sign up today I can place you in the Monday group or you'll have to wait for the next available date or sign up before the offer expires how to add bonuses the main concept here is that a single offer is less valuable than the same offer broken down into its components and stacked as bonuses here's an example from TV infomercials where they understand this concept very well I'm selling 38 knives at a special price or I'm selling one incredible knife with 37 free knives the latter is perceived as more valuable what they do is set the price and communicate it then expand the offer by adding bonuses until it seems like such a good deal that it would be foolish to refuse it works because you increase the price value Gap explained previously by increasing the value and not discounting the price the point is that when presenting the product the prospect already has an idea of what it could cost when you tell them the price they start to consider whether it's worth it but if you start to increase the gap between price and value at that point they perceive it much more because they had already formed an idea of the price and value with the initial offer without bonuses there are some things to remember when presenting the bonuses always offer them give the bonuses a special name that reflects their benefits explain them in terms of how they improve one or more elements of the value equation each bonus should address a specific problem they have the value of the bonuses should overshadow the value of the offer this is a psychological matter of the value attributed to this not the actual cost which obviously won't be the case how to offer a guarantee the main obstacle to buy for your prospect is the risk of buying something which is not satisfactory or useful so guarantees are a way to reverse the risk from them to you most business owners fear giving a guarantee because they think that customers might take advantage of them some do it but a small part which is largely overshadowed by the increase in sales because you actually have a guarantee there are different types of guarantees unconditional no questions asked here if they want their money back conditional they get their money back under certain terms and conditions implied guarantees they are basically performance-based offers where the seller gets paid only if certain results are met to go to the next level with guarantees you can stack them up as you do it with bonuses and also in your wording you can be more creative you know nowadays especially in the online World guarantees are pretty common and when something is common it becomes almost invisible or unimportant so try to stand out see these two examples 30-day money-back satisfaction guarantee in 30 days if you wouldn't jump into shark infested waters to get our product back thank you we will return every dollar you paid which one do you think catches the eye more and is more powerful so don't be afraid to be creative how to name your product one of the reasons your offer may not succeed is because your prospect doesn't know that the offer is for them or doesn't know what problem it solves when naming your product try to tell them that it is for them and that it solves their problem the way they want to formulate names use the magic formula not all the components are mandatory pick from three to five of them to create your name let's analyze the components of the formula magnet create a magnetic reason for why you're running the promotion example 88 off for Christmas or a new product launch Etc Avatar announce who you're targeting this defines who your customers are and who they are not be specific example moms in New York or post-pregnancy women Etc goal give them a goal this is where you articulate their dream outcome it can be an event a result an experience Etc example pain-free VIP smile Etc interval indicator time frame inform them about the expected duration note that in some markets this can be seen as a dangerous claim that some platforms may not allow evaluate whether you can use it and how for example this might get banned lose 10 kilograms in 10 days however this one should be okay six-week weight loss challenge container complete with a container word use a word that summarizes everything so that the bundle you create looks like a system example challenge boot camp Master Class program detox Etc so for example by combining three components you could name your weight loss product like this six-week weight loss challenge for post-pregnancy women and now before ending this video as promised I'm gonna tell you my experience in applying these Concepts so first of all initially I approached this as a simple way to repackage my offer but by working on it I realized that it was actually much more than that it is basically a way to rethink your entire business model at least for your customer acquisition strategy I'm saying this because a lazy approach that I initially tried was to take what I had already and put it together in a different way more aligned with this book however this approach requires more than that because you really need to understand what your customer desires and go all in on that by satisfying exactly that not only with your core offer but also with your bonuses so I had to work on that and create more resources to really deliver what I was promising the lazy approach did not work also another obstacle I found was being able to accept the change and modify our strategy personally I did not encounter many difficulties as I read the book and I completely got aligned with these principles however it was not really the case for my partners and employees I underestimated this initially and I had to train them on these Concepts too before I actually crashed any resistance I was getting so I think that if you are in a position where you are starting out it would be much easier to get going with this strategy from scratch conversely when your company is used to certain habits it can be more challenging and you need to be more persuasive in aligning those around you however apart from these obstacles I found this book amazing as before we could not sell anything online and we relied on a salesperson to call by phone every single lead we had which made the whole acquisition process very costly and less scalable but then thanks to this book we were able to create the same amount of new customers with half of the advertising budget and without the cost of the salesman and we started selling online directly I hope you like this detailed recap if you don't know this book is the first of a series that hormozy is creating at the moment the second book has come out and it is about generating the leads for your offer you can see the detailed summary of the second book called 100 million dollar leads here if you want see you next time

Channel: The Founders' Potential

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Keywords: 100 million dollar offers, alex hormozi, skills required to grow business, book recommendations, book summary, Best business books, Must read books to be successful, entrepreneurship, business skills you need to master, Books for entrepreneurs, entrepreneurs know how, business skills for entrepreneurs, business summaries, animated book summary, hormozi, marketing books for entrepreneurs, alex hormozi marketing, $100 million offers summary, alex hormozi business tips

Id: n1i16Hif1Bw

Length: 25min 39sec (1539 seconds)

Published: Sun Oct 01 2023