16. Advanced Offer Stacking. How To. | $100M Lost Chapters Audiobook

Welcome to The Game w/ Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth. Wanna scale your business? Click here. Follow Alex Hormozi’s Socials: LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Alex Hormozi?

  Advanced Offer Stacking: How To. The amount of money you make is directly proportional to the amount of goodwill you have, multiplied by the amount of offers you make. Frank Kern, timeless copywriter and marketer. Before we dive into this, there's one strong warning I must make. Adding more offers and services is a fast track to adding operational complexity. That makes business hard. If you're looking at your own business, you want to look at things that you can do to add revenue that add little to no cost, time, money, or complexity. If something is going to add complexity, it had better be worth it. Lots of profit or very little cost. Keep that ratio high. I think of a conversion process like an accommodating resistance exercise. What that means is that in exercise physiology, the perfect rep is repetition of exercises that maximally match your ability to generate force at every point in an exercise and with

• 0:45Alex Hormozi?

  each repetition should get proportionally lighter so that you're always 100% effort at all times. This allows you to work a muscle more efficiently, gaining strength and muscle faster. For example, you're much stronger at the top of a squat than you are at the bottom. This is why experienced lifters add bands and chains to their barbells to get it to be harder at the top where they're strongest and lessens at the bottom where they're weakest. To date, there is no machine or apparatus that does this perfectly, but understanding the concept is how I think about selling. I want to match my ticket price and value perfectly with the buying ability and desire of each customer without increasing the complexity of my business. This is where the creative fund begins.

• 1:20Alex Hormozi?

  Identify adjacent customer needs and opportunities. First, I look at all the revenue streams a customer is buying that are related to the core desires I'm solving: power, money, beauty, weight loss, etc. Then I see if I can create affiliate relationships, a relationship where another business owner pays you to send them customers. Or if I can add it in with little to no operations, I'll do that. Adding in a sales consult to sell physical products is an example where the only added complexity is a meeting with the customer. That is usually worth the cost of making lots more money per customer. Here's what the "need streams" look like before and after they've been turned into revenue opportunities.

• 1:52Alex Hormozi?

  So with the old model, a customer comes to you to solve this large problem and only pays you for one component of it, and then pays five or six other businesses for other components of that problem. With a new model, you can look at every single one of the problems that the customer has, and they give you all of that money. Most businesses refer out a lot of revenue. They make recommendations of products or services that are complementary for their own. Over time, though, you'll find that constantly thinking with this mindset adds up. At the time of this writing, I have directly made more than $3 million in affiliate commissions. Those pennies, since they are pure profit, go straight to your bottom line and are not to be underestimated. For example, take a small business owner who makes $35,280 per year take home off of $282,000 per year in revenue.

• 2:34Alex Hormozi?

  Adding in $2,000 per month in retail sales commissions may not seem like a lot when compared to the $23,000 the business is making off selling services, but the added $2,000 per month takes their take-home income from $35,000 to $59,000, which is life-changing for many. Do not underestimate it. That being said, if something you refer out makes even more money, sometimes it's worth buying or incorporating that business altogether.

• 2:58Alex Hormozi?

  Pro tip: free onboarding. I was able to pay for my entire onboarding team and customer support team by adding additional calls to our onboarding process for new clients. They appreciated the extra support, and I was able to guarantee each of my customers clicked each of my affiliate links when signing up for the solutions they needed. I only had to cover the cost of the additional role in the company for the first month out of pocket. After that, the affiliate commissions I received literally paid for the team. These little quote tricks are the things that add up to making your business unbeatable while providing unmatched service to your customers. The ultimate offer stacking process. Now, back to stacking the offers. First, we figure out all the needs we can monetize. Next, we decide how we're going to choreograph the sales process. I use this framework for almost every business I work with to weave each core offer type

• 3:41Alex Hormozi?

  together, after obviously using a free or discounted hook. So, we have attract, we have upfront cash, we have upsells and downsells, and we have continuity. Okay, this gives me the best of all worlds. The upfront money model allows me to profitably acquire customers. My upsells and downsells allow me to squeeze the most juice per prospect by getting whales to buy big and the minnows into my world to buy something big later. Then, finally, I create consistent cash flow by tying in continuity. Which upfront money model, which upsell, and which type of continuity will rely heavily on the type of business I'm working with and how their typical customer buying journey is structured? Mind you, after I have done this process, I'll often repeat it again and again. After this person has taken continuity offer, I may offer additional services, which might be additional continuity,

• 4:26Alex Hormozi?

  and then make offers for them to prepay as a bonus, which would be more attraction offers or upfront. So if you're looking at this example, it would look like something like this.

• 4:35Alex Hormozi?

  You might attract the customer, then you might upsell some upfront cash, then you do more upsells and downsells, then you have continuity, then you have a second continuity, and then you might pull cash forward. This is how you continue to keep stacking profits in your business. You make money or break even in the acquisition, and you continue to make offers to your clients. Each time, you're increasing the LTV of the customer and ultimately, how much you can spend to acquire them. This concept is very simple but incredibly powerful. In many ways, I wrote all of the $100 million money models to get to this part. Let's do a few examples to really drive it home and make it real.

• 5:05Alex Hormozi?

  So I show a sample weight loss offer flow. So someone walks in for a service sale. We try to sell to goal. If they buy it, we move on to the next step. If they don't, we try to sell them a smaller package. If they don't buy that, we try to sell them a free trial with commitments. If they don't buy that, we just give a free trial with no commitments. If they still don't want to buy that, then we try and put them into a free nutrition consultation. Now, all of those paths still lead to a nutrition sale, which is the second consultation. At that sale, we were trying to sell them a full bundle of supplements, which would then lead them to trying to get them to buy more meals. If they didn't buy supplements, we'd try and downsell a four-pack with extras, then just a four-pack, then just extras. And then eventually, if they said no, we'd still try and sell them a 12-pack of food, which if they said no, we'd sell them an eight-pack.

• 5:50Alex Hormozi?

  Then it would be 12 every other week, and then it'd be eight every other week. And you can notice here, as we keep going through it, we just have other options for them to buy, which then moves us to our third sale, which is the continuity sale for service. So we try to sell to their goal. If they said no, we'd try again in three weeks. If they said no, we'd try and sell a goal at the end, and then finally, we would exit them. If they said yes, we'd leave them to the fourth sale, which is we'd try and get them to prepay. Now that you said that you were going to stay this period of time, try to prepay that whole period of time for a small discount. Now, I know that this looks complicated. It's not as complicated as it looks. Each of the sales flows naturally to the next over the span of their time with us. They do not need to take every offer, but we are still going to try. Not only that, in this example, you can see how I'm showing the down sells at each step.

• 6:32Alex Hormozi?

  If you're selling in person or over the phone, in any one-on-one setting, really, these are just things you can do pretty effortlessly. Selling off a page digitally, you won't have this luxury, which is why I'm such a big fan of one-on-one sales. It affords you flexibility and allows you to perfectly match the buying power of the prospect with your ability to sell and solve their need on their budget. And when you do this and you're competing against other people who do not sell like this, you will almost always be able to outspend them. In the above example, we are selling services and then products. Then we are selling them continuity. Then we're selling them some sort of prepayment discount. Some of these sales can happen in the same conversation. Others need to be spaced out. This is what is actually happening to create these sales from the grid I showed earlier. So sale number one, the service sale. This is how we pull cash upfront. On a micro level, we're offering a high-ticket solution first.

• 7:17Alex Hormozi?

  A certain percentage of customers will take that big-ticket offer. But if they say no, totally fine. We transition to a half-down version of the same offer with a different payment plan. If they still say no, we transition to a quarter-down with a slightly higher payment plan over time. If they still say no, we shorten the duration of the program and offer just a quarter-down payment with no payment plan. If they still say no, then they probably don't trust you and you need to work on sales, but that's beyond this book. But if they still say no, then we would try and down-sell a free trial and put their card on file and get them to commit to consuming some of our services to increase the likelihood they convert on the backend. If they still say no and they don't want our services, then to maintain goodwill, we offer a complimentary nutrition orientation. At that orientation, which might be 24 to 72 hours later, we'd begin our next series of offers. Sale number two, physical product sale.

• 8:01Alex Hormozi?

  This is an upsell. At this orientation, after providing some individualized support or value, we'd attempt to sell them on a three-month bundle of a full stack of supplements that's still helping them solve their main need, just in a different way. If they say no, then we'd offer just a one-month supply and put them on a subscription for a discount. If they still said no, we would cross out a handful of these products and just give them the essentials. If they still said no, we would give them one or two products they absolutely should take. After that, we ask if they need help preparing their food. Then we would sell different meal plan prices of a food prep company that we had created a partnership with. This helps the customer get results, save them time, and makes us money. Everybody wins. Pro tip. Another example of one-on-one free onboarding.

• 8:43Alex Hormozi?

  The cash I made from the products I sold at my orientation covered my payroll to onboard every customer one-on-one, and my trainers ended up making more per hour than they did taking on personal training clients. So they were happy to do it. My customers loved the added service, and I still made enough profit most times to cover my entire cost of acquisition, advertising commissions, and payroll, all off of these product sales. Compare that to the guy down the street, always trying to quote "cut costs," or who is quote "afraid" of simply making more offers to customers. His employees would make less than mine, so he couldn't keep the best talent. His customers would get worse service and spend less with him, so they'd get worse results, and he'd make less money, so he couldn't expand as fast or market to get as many customers. In a competitive market, it's obvious which way of doing business wins in the end. Bottom line: people like having problems solved for them in advance, so just solve them and profit.

• 9:29Alex Hormozi?

  Sale number three: more services sale. This is continuity. In the third sale, we're meeting with the customer a few weeks later. We're now positioning this as a feedback meeting. This is how we get valuable feedback about how they're enjoying our service. You should do this for any service you have. First, because it gives you valuable information that you can always improve. Second, it allows you to save a customer who's not happy. Third, it provides an upsell opportunity. This is where if the client was having a great time, we would sell them on staying for the long haul. Again, first we'd start with a high-ticket prepayment, then we'd downsell our way to simply closing them on continuity. If the client is not enjoying their time, or feel like they need more support, we still naturally sell them on a higher-level program with more support. Every problem is an upsell opportunity. "Oh, you feel like we haven't given you enough support? Then how would you like if we message you every morning and we check in with you weekly? Would that help?

• 10:14Alex Hormozi?

  Awesome, then I think you'd be a great fit for our VIP program. You can start for free today. In fact, I'll even credit the entire cost of your first program to the VIP program because you didn't have the best experience. You get the idea. You just turn around and sell them the next grand slam offer." Sale number four: prepay sale or last chance. Upfront cash, downsell continuity. Finally, the last sale in the four-step sales process, getting them to prepay for services or become a last chance at getting them on continuity before the end of their treatment plan or program, etc. This helps suck up some of the sales where people quote "weren't sure" if they wanted to commit yet at the meeting beforehand.

• 10:51Alex Hormozi?

  You can also use this as an opportunity to upsell those people who committed to continuity in the last example to prepay for a discount. Again, just more cash upfront. Now, weaving them together. This may seem like a lot, but done over six to 12 weeks, it's not that overwhelming. And communicating with your clients, more in general, will make you more money. Notice a couple of things. First, the big high value offer is our grand sum offer. But in the real world, that grand sum offer may have gotten them in the door. Not everyone says yes, so having another grand sum offer in your back pocket will dramatically increase your closing percentage. The second thing to notice is that we still advance all prospects to the next stage, even if they said no. This gives us another opportunity to provide value and monetize the person. See how much more effective this is? Now, you may be thinking to yourself, how on earth am I going to do with all that?

• 11:36Alex Hormozi?

  Well, you start by adding one of these conversation opportunities at a time that adds the most money at the lowest cost. Then we get that down, then you add the next one and so forth. Note, prospects want you to solve their problems. People like buying, they just don't like being sold. This is where the grand sum offer comes in and makes it fun for the buyer and the salesman because everyone likes selling a good deal and everyone likes buying them. A win-win. Layering these offers together one at a time and creating down sells is what makes your conversion process wildly efficient, not letting a dollar of spending power go to waste. Four steps to picking the right offer for your money model.

• 12:06Alex Hormozi?

  Money models are built off a series of offers. Each offer, or series of offers, satisfies the stage of your money model. We lower CAC, we maximize 30-day gross profit, then we maximize gross profit over lifetime. And the way I do things, each stage has different types of offers that fit that goal. But no matter what type of offer, I follow the same process when adding a new offer to my money model. It goes like this: right stage, right problem, right way, right time. Right stage. First, I make sure the offer fits the stage of the money model. If I want to get new customers at a reasonable price, I'm going to focus on attraction offers. If I want to increase 30-day gross profit, I add upsells or down sell offers. If I need to maximize lifetime gross profit, I focus on continuity offers. Once I know the offer meets the goal, I move on to the next step. Right problem. Customers have many problems. You can't solve them all.

• 12:49Alex Hormozi?

  So I prefer to pick problems that make sense for my business, that I can solve with existing resources and that provide customers big value when solved. Right way. Third, I solve based on my customers' preferences. Say two people want to lose weight. One might change their workouts. The other might want to change their food. You can try to convince people that your way is the right way, but most times, they're just going to go to someone who solves the problem the way they want it to be solved. So I prefer to present effective options that people already want. Right time. Fourth, and most importantly, I offer to solve their problem at the right time. Someone might be hungry, but if you ask them if they want another steak after they're full, they'll probably say no. So to sell the most, I make my offer at the time of greatest need. Summary. First, figure out what stage of money model. Then, make sure your offer's fit at that stage.

• 13:34Alex Hormozi?

  Then make sure your offer solves the right problem for the customer, the way they like it, and at that moment that they need it most, not when it's convenient for you.