Throwback: Nobody Knows You Exist. Advertise More | Ep 734

In this throwback, Alex (@AlexHormozi) breaks down how much to advertise when you’re starting out, how to scale past $1M a year, and why uniting sales and advertising under one leader can be a game changer. He shares the 4x4 Rule for getting customers, the dangers of diversifying too early, and how to think about channels as you grow. 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 Mentioned in this episode: Get access to the free $100M Scaling Roadmap at www.acquisition.com/roadmap

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

• 0:00Alex Hormozi?

  So in this podcast, I want to talk about advertising more when you get started, how much to advertise when you're getting up to a million dollars a year, and once you get past a million dollars a year, how I unify sales and advertising into one department to make a beast of getting customers, and how I think most businesses get this wrong. No one knows you exist. Advertise more. And so, to give you context on this, when I walk through the streets, I usually get stopped four or five times on like a 60-minute walk. And when I was launching my book last year, I had 500,000-plus people who were registered to this massive event, broke the internet, whatever. But during the month leading up to it, we're advertising on all channels, we're running ads, we've got affiliates that are pumping it, I'm making content all over the place.

• 0:45Alex Hormozi?

  And over the four weeks of people that stopped me, only one person knew that I had a book coming out. And so every time I'd see somebody like, "Hey, you gonna be at the book launch?" And they're like, "Oh, you have a book?" And I was like, "How can you not know that I have a book?" There's a story from Henry Ford that I love, which is that he was walking by, the CMO of Ford was right next to his office. And every day he'd walk by and he'd see the marketing campaign, he'd see the marketing campaign day after day after day. And so, three months into seeing the same campaign, he knocked on his CMO's door and he's like, "Hey, when are we gonna stop running this thing?" He's like, "I'm getting exhausted of seeing it." And the guy just looked at me and he's like, "We haven't started running it yet." And so the thing is, is that we get so sick of our advertising

• 1:25Alex Hormozi?

  so much before our customers or potential customers even remember our names. And so, the extent of advertising that you have to do, there are so many people in the world, and people's attention is so spread thin and so, they're so distracted, that in the off-chance you actually do get an advertisement of some sort in front of them, the likelihood that they remember that it was even you and the core message of that advertising is even lower. And so, many of us have this big fear that we're harassing our audience by repeating ourselves over and over and over again. But... The vast majority of the time, no one even A. knows you exist, or B. specifically knows the message that you're trying to let them know. And so, I like to tell my team and remind myself that we need to be reminded more than we need to be taught.

• 2:08Alex Hormozi?

  And so, your audience needs to be reminded more than they need to be taught. And I don't know about you, but I follow plenty of accounts where like, they have the same four or five messages, more or less, that they put out there. And the reason I follow them is because I like the reminder. I like to be reminded to be patient. I like to be reminded to not think, take things too seriously. I like to be reminded that I have to think long. Like, those are the things that I like to be reminded of. And so, imagine if that account's like, "I already said be patient once. I don't want to say it again." They've already heard that from me. It's like, no, people have messages that they want to continue to get fed into. And every time you feed that same message that they liked before back into them, they'll have another positive experience with you. The amount of novelty that's required in content is significantly less than you think as a creator. Think about it like you're going after a girl. And she's with somebody right now.

• 2:52Alex Hormozi?

  Alright, so you're like, "Okay, well, I'm gonna ease off, but I'm just gonna just let them know. I'm just gonna throw these little flares out there that I'm interested. I'm here, I'm not being disrespectful, but I'm available, right?" And then what happens is as soon as she gets out of that relationship or whatever, then she's receptive to your message. And so, the thing is, same way it works with customers. It's that they might not be looking for a marketing solution. They might not be looking for a plumbing solution. They might not be looking for an IT services provider for three months, six months, nine months. But they might like to hear your stuff. But the moment they are in the market, you're the first one they think of because you continued to repeat the messages that resonated with them to begin with. The big thing is the four by four, alright? Which is, especially when you're starting out, four hours a day doing the core four.

• 3:37Alex Hormozi?

  And so, the core four means you're reaching out to people you know one-on-one, reaching out to strangers one-on-one, making content one-to-many, or running ads one-to-many. And so, there's the four ways, the only things one person can do to let other people know about their stuff. And so, I use the rule of 100 as my guide there, which means you either make 100 minutes of content, you do 100 outreaches, so either cold or warm. Or, or and, if you want to get really spicy, or at least a hundred dollars a day of advertising. Now, obviously, the hundred dollars a day, you can scale as much as you want. But as a baseline for anybody who's starting a business, those are three ways that you can just say, okay, what do I have to do to let more people know about my stuff? If you're not making a hundred minutes of content, you're not doing a hundred outreaches a day, or you're not spending a hundred dollars a day on ads, no one's going to know you exist. And that is the biggest threat to your business.

• 4:22Alex Hormozi?

  The reason it's so important as a founder to do this in the business is that you have to be able to make it rain. And so every business at the most basic level has to advertise before it can have money, right? So like, if you want to make money, people cannot give you money until they know you exist. And so is a prerequisite for making money in business is that you advertise first, and then you have a product that you can deliver on, and that's the most basic form that you have to have. If you just have the product and no one finds out, you will continue to not make money. Until you're at a hundred thousand dollars a month, advertising is all of your focus. And the main reason for that is, if you don't have enough people coming in, you're not going to have enough iterations of the product to get feedback, to know if your stuff's good or not, and what you need to do to make it better.

• 5:06Alex Hormozi?

  Now, the thing is, is that up to a hundred thousand dollars a month, at that point, it's all advertising. But at some point, in order to continue to scale, you need to fix the product. You need to make sure that people are recurring. You need to make sure people are happy, that they're referring other people, that they're staying month after month, or they're repurchasing month after month after month. And so if you're not solving that, then you've got a leaky bucket. And that's going to be a problem that you're going to deal with later. And so the smart move is to fix that stuff now so that you can grow a really big business. And this is one of the biggest mistakes that I made so many times in my early career is that you start advertising, you start understanding a sale and acquire customers, and you say, oh, that worked, I'll do more of it. And you should do more of it, but within this current context of you have to make sure that you're delivering. And so my recommendation is get to a million dollars, so get to a hundred thousand dollars a month-ish,

• 5:51Alex Hormozi?

  then put all of your focus on filling all the holes in the bucket. So that, and the thing is, is that when you do that, you're actually going to keep growing. Because if you keep the same activities, and then you fix the holes, you're still going to keep growing steadily, month after month after month, even with the same level of advertising effort. Then, once you fix the holes, then you go back to the front end. And say, how do I 10x this? And that is how you can stair step, even though your actual revenue growth will still look flat, because when you fix the holes, you'll make more money. But the doing-ness of the business will shift. Now, if you do the alternative of that, which is you just advertise more and more and more, there's going to get to a point, it's an asymptote. So basically, you start growing and you start plateauing like this. Because then, your infrastructure's too big, and there's too many moving pieces to fix the thing that you should have fixed earlier. But then, you're in a rock and a hard place scenario.

• 6:35Alex Hormozi?

  Because then, you can't dial back the advertising, because you've got all these people that you've hired. But the more you sell, the more your reputation goes in the tank, because the stuff's not good. And so, you get in a really hard scenario. And so, fixing it first, fixing it early, sets you up to build a much bigger business later. Under a million dollars a year, it's one channel, one avatar, one product. I see way too many small business owners saying, "Hey, I've got two businesses, or I have seven products, or I have two different avatars, or blah, blah, blah, blah," right? No, focus on one specific type of customer. And if you just say yes to everyone with money, you're basically saying no to your business, because you're never going to be able to focus and make something really good. You can't serve six customers and then make a good product, only doing a hundred thousand dollars a month. It just doesn't like, it's too small volume. Like, you don't get enough reps. And so, you need to do one very specific thing,

• 7:20Alex Hormozi?

  which means you have to say no to people who aren't that type of person. You serve one problem, which means you have one product for that specific avatar, and you get better and better at templatizing it, at productizing the service, or productizing whatever the product is itself, making iterations on it. And you advertise through one channel. Meaning, you just know how to make cold email convert, or you just know how to make cold calls convert, or you just know how to make TikTok ads convert, or you just know how to make YouTube videos that convert. Whatever your channel is, you just stick with that channel. Because as soon as you're like, "Oh, I'm going to do two different things." It's like, that's not the objective of this stage. You just need to get it reliable, so that you can then keep tweaking the product, so that then, you can 10x the existing channel you're on. Once you get to about a million a month, is when I recommend starting to think about second and tertiary channels of getting customers. And part of the reason I recommend that

• 8:04Alex Hormozi?

  is that when you start a second channel, it's going to cost you money, and it's going to cost you time. And so, the reason that you keep that one channel and keep doing it longer than you think is because you need to be able to get it working at the same level or higher with not you doing it. So that you can have the secondary channel. If you're the one who's gassing this first channel and then you move to the second. Well, now you have this second one that's not going to be working out nearly as efficiently as the first one, especially in the beginning, the first three months, six months. It's not going to be cranking like the first one is. But the first one's also going to go down because you're not there. And so you spend the extra time there. You put the right people in place. You make sure the training is such that they actually can meet or exceed what you were doing on your own.

• 8:46Alex Hormozi?

  And then when you start the second channel, you can pour resources into it because you still have cash flow from your main thing. And that little switch is where most people get lost and they just crush their businesses. So don't do that. So to give you guys some context, I didn't open up a second channel of acquisition until we were at four million a month. Now, mind you, I started with paid ads because I was good at paid ads. And I learned how to run paid ads in my local business, which then when I went national, I knew how to do the same skillset. But after four million a month, I was like, okay, I need to get this second channel going. And so I started increasing that channel via cold email, cold call, cold DMs with an outbound team. But I say that because a lot of people are like, shouldn't I do this?

• 9:27Alex Hormozi?

  I tried to lay that as long as I possibly can because I know it's going to cost a huge amount of time, a huge amount of money. And it might not work for six to 12 months. And to give you context, it took me 12 months for outbound to be responsible for half of my revenue. So it's not going to happen overnight. A lot of businesses don't do this, but you should unify sales and advertising. So those should roll into the same person. And so I saw this really early on in Jim Launch. We had two departments. We had a sales department and we had a marketing department. And marketing always said the sales guys weren't closing as many leads as they should. And the sales guys always said that the leads weren't good enough or they didn't have enough leads. Right? But when we unified that under a CRO, Chief Revenue Officer, which if you're the founder, that's you. You then say, there's really just an acquisition department.

• 10:12Alex Hormozi?

  And fundamentally, as I see it, advertising and sales sit on the exact same continuum. You have low information buyers and you have high information buyers. And so fundamentally, a low information buyer needs not a lot of information or already has a certain amount of information to make a purchasing decision. A high information buyer requires more information or doesn't have as much information when they start talking to you. And so you have to fill in more holes. Fundamentally, sales just fills in the holes that advertising failed to answer.

• 10:42Alex Hormozi?

  And so if you have exceptional, best-in-class advertising, you don't need sales. It's not that they're separate departments. They solve the same problem. One just communicates one to many. The other communicates one-on-one. People buy real estate on the internet via auction. You don't necessarily need to have salespeople. If you give a customer enough information, they can make a purchasing decision. That being said, you're like, wait, Alex, you have salespeople. Of course I do. Because there's always going to be a certain number of customers that I can get people to buy automatically. And then there's people who still want more information that most likely they didn't see the advertising to answer that question. And so then the salesperson can just say, oh, these are the three piano keys I need to play in order to get you to buy. Great. And they spill that specific information need to turn the customer from a maybe to a yes.

• 11:26Alex Hormozi?

  And so unifying the two departments is one of the highest leverage moves that you can make as a founder, because it eliminates the cross-departmental BS. It's we're all here to sell customers. And so advertising works hand-in-hand with sales, not in competition with them, so that they can get a pat on the head from you or whatever director's running that department. So oftentimes, you are the chief revenue officer who's uniting both of those fronts. But over time, if you can find someone who does that, that usually is the fast track to being CEO. So Kale, for example, at GymLaunch, became chief revenue officer. Right? He basically stood on top of sales and marketing, so that he could control the customers coming in the door. And then, once he knew how to make it rain, he could run the business.

• 12:09Alex Hormozi?

  Real quick, guys, I have a special, special gift for you for being loyal listeners of the podcast. Leila and I spent probably an entire quarter putting together our scaling roadmap. It's breaking scaling into 10 stages and across all eight functions of the business. So you've got marketing, you've got sales, you've got product, you've got customer success, you've got IT, you've got recruiting, you've got HR, you've got finance. And we show the problems that emerge at every level of scale and how to graduate to the next level. It's all free, and you can get it personalized to you. So it's about 30-ish pages for each of the stages. Once you answer the questions, it will tell you exactly where you're at and what you need to do to grow. It's about 14 hours of stuff, but it's narrowed down so that you only have to watch the part that's relevant to you,

• 12:54Alex Hormozi?

  which will probably be about 90 minutes. And so if that's at all interesting, you can go to acquisition.com/roadmap. R-O-A-D map. Roadmap.