The Offer Is King (ALEX HORMOZI)

Hello everyone and welcome back to

I guess my show. So anyways, um I guess

you could call it show, I don't know,

thoughts. Anyways, so um I wanted to

make something. So this is called the

offer is king. Um and that's because the

offer is king. So if you have a good

enough offer, you don't have to sell

hard. You don't have to have amazing

copy or amazing creative. Um you just

get a lot of people uh to sign up for

your thing. And so if you really think

about your business, most businesses

should be founded on a core offer that

is exceptional, right? An irresistible

offer. That is what it's going to grow

the business, right? And so what I want

to walk you through is uh three really

good offers, uh

the three components of those offers,

and then seven ways to ethically use

free. So um we're going to cover a lot

of ground really fast. So, um, three of

the greatest offers of all time were

Domino's offer. Some of you guys may

remember this, but it was, um, uh,

delivered to your door in 30 minutes or

it's free, right? That's an irresistible

offer. And they had pizza. But

because of that, people wanted to make

the order. They didn't have to sell them

on it. They saw the offer and when they

were hungry, they were like, "Shoot, in

30 minutes, I can do that. I can have

pizza at my door." And sometimes it's

almost gamification. It's almost a

challenge that's like, "Well, if it's

not in 30 minutes, I get the pizza

free." So um it's it was something that

was incredibly compelling and it was one

of the fundamental uh keys to their

growth and why back in the days of

yellow pages it was literally an entire

section was pizza. No other restaurant

had a food category of pizza. Everything

else is just restaurants, right? So um

any that was because of that one key

irresistible offer. All right. The next

was uh 10 CDs for a penny, right? And

this was from I think it was Sony way

back in the day. Um now obviously it

came with continuity and so that was

kind of like the first trial offer. Um,

but that offer is one of the single

greatest offers of all time for those

who are old enough to remember it. The

third offer, uh, you may recognize, uh,

which is when it absolutely has to get

there by tomorrow morning, and that is

FedEx. So, you'll notice the first two

kind of have a pricing component. FedEx

does not, but it has a really high value

component to it. So, I just want to

break down these things into uh, three

pieces. Each offer has a component of

believability, right? Uh there's a

famous marketer who said, "Uh, for every

dollar you give me, I'll give you $1,000

back." He ran an ad in the paper and he

got zero responses, right? That is a

crazy offer, but it's so good that it's

not believable. And literally no one

responded to the ad, right? And so, one

of the things that makes offers

believable is having a reason why that

you would do this, right? If you're

like, "Hey, I'm, you know, I'm dropping

all my prices by half off because I uh

all my inventory is going to go bad."

People believe that. They're like,

"Okay." or like I'm overstocked and I

got to make room for, you know, new new

inventory. Everything's half off. People

believe that. It's a good reason why,

right? So, believability is number one.

Number two is a high ROI offer. So,

basically, um an offer that people deem

valuable uh that can be communicated in

a couple of words like guarantee to your

door in 30 under 30 minutes. That was

valuable. For FedEx, it was at, you

know, delivered to wherever you need to

be or wherever it needs to go by next

morning. That is valuable, right? you

can give offers, but if people don't

find it valuable, it's not going to

matter, right? And so, um, the third

piece is kind of the the business around

it, right? And so, that's kind of what I

want to cover with, uh, free offers,

because you'll notice the penny offers

basically free. Uh, the Domino's pizza

offer has a free component to it. And

so, understanding how to use free as a

marketer is probably, in my opinion, the

single most valuable thing, um, that you

can learn how to do. It's learning how

to build a better mousetrap. And so, um,

right now I'm working on a book called

Acquire, uh, and the subtext is building

a better mousetrap, uh, which is just

kind of like how to structure offers in

a way that you can get tons of volume,

but also make money on the offers,

right? And so, this is, uh, you know, my

notes for the different ways that you

can use free offers. And I think I have

seven on here, so I'll walk you through

them pretty quickly, um, to just kind of

explain them. So, the benefit of having

free offers is that you get the highest

volume of leads, right? Uh, number one.

Number two, it's it's typically the

lowest cost to acquire customers. So

that's number two. And the third is that

in my opinion, um the key to having

massive growth is to having a free

offer, right? And especially something

that's irresistible that can spread

through word of mouth that other people

can comprehend. All right? So first of

the free offers is a free bribe offer,

right? So this is where you offer a so

when someone comes in, you offer a

program for free as a benefit for

signing up, right? So Frank Kern way

back in the day did a uh he had all of

his courses that he'd ever made. So,

high value offer, probably $12,000 in

value. He said, "I'll give you all of

the courses that I've ever made

absolutely free if you sign up for my

$397 a month continuity, right, in my

newsletter or whatever." Right? So,

that's a free bribe offer. So, you can

use the word free, brings lots of

attention, has huge value and ROI, but

it was a free with purchase, right? So,

that's kind of the idea is like if you

buy this much smaller thing, you get

this huge value thing for free, and it's

also a really nice price anchor. Okay?

So, that's number one. If you're doing

the fitness thing, it's like, hey, our

six week challenge is $1,000, or you can

just sign up to become a member and get

our $1,000 challenge for free and only

become a member for $200 a month, right?

That becomes a really compelling offer.

Lots of people say yes, and you get

people straight into continuity. All

right. The second is a limited free

offer. A limited free offer is, let's

say, uh, this is an AB close. When

someone walks in the door, um, obviously

the vast majority of the people

listening to this are gym owners, so I'm

going to just make it gym specific. So,

if someone's coming in, you say, "Okay,

the free thing, let's say, uh, you sign

up for a 14-day or let's say a 28 day.

You sign, you come in for 28 day

promotion." Uh, the free thing uh has

one, you know, you could say 28 day

trial. They come in, it's one day a week

of workouts. You have no personalized

nutrition, no nutri, no accountability

coach. Right? Now, during the sales

process, they'll have already said

they're not motivated, they need help,

blah blah blah. And so then you upsell,

right, as American as Apple Pie, a 28

day challenge or 28 day intensive or

whatever you want to call it,

accelerator, where they uh they pay

$1.99 or $2.99 or whatever for the

enhanced version that has three workouts

a week or unlimited workouts and

personalized nutrition and an

accountability coach. And if they don't

uh, you know, lose 10 pounds in the

first 28 days, you give them another 28

days free, right? So you have an upsell

from an initial offer that makes it

incredibly compelling, right? That's the

point. So they get all this volume for

free, but then you can still upsell

three out of four people into a paid

offer. All right, so that's how you use

free and you can monetize it. The third

way of using free is a free trial plus

penalty. So this would be a downell. So

these can be used in in conjunction with

one another. So if someone uh doesn't

take that that you know the AB close

that I just mentioned, you can say

awesome. If you're going to stay, then

you have to put a card down because you

want to be held accountable. You have to

work out this many times. If you miss

your workouts, we're going to charge you

for the missed workouts and you have to

attend the, you know, a feedback session

and a transformation picture session and

a nutrition session, right? If you no

show any of those, it's 50 bucks. And

so, they have a huge motivator to

actually consume your product or

service. So, the likely they convert on

the back end is significantly higher,

right? That's the point. And so, that

way, at least your trials become more

qualified trials. They're more invested.

And it's a really easy close to close

someone on on a free trial. If you can't

close free trials, then

you have other issues. Okay. Um the

fourth one is a free with deposit. So

this is a classic. Um the old sixe

challenge that we ran for a very very

very long time. It was probably the most

popular fitness offer in the last

decade. Um was a free sixe challenge.

Obviously you always have to be

compliant. Put stipulations for any

types of things things on your

advertisements. Um states differ etc.

Um, but that's where if someone hits a

goal, they do an outcome, um, they can

get their money back or get it credited

towards something. So, it's like it's

free with a contingency. So, it's like

you put X dollars down, uh, if you do X,

Y, and Z, you can either get it back or

you can get it towards program,

whatever. Right? That's kind of the

pitch there. So, it's a free with

deposit. So, free with stipulations. All

right. The uh the the fifth uh way of

doing free is free forever. And this is

a really compelling offer. So this is

where you have to really know how your

mousetrap works, right? So if you have

multiple ways of monetizing a customer,

I could say, for example, I will train

you for free, for legitimate free, like

I will give you free training straight

up. Your membership is free forever,

right? Um as long as you just do the

things that I tell you to do, which may

include buying supplements from us.

That's part of the program. Now, um, a

good friend of mine owned a, uh, a chain

of, uh, she had a franchise of, uh,

weight loss clinics, and they made only

like 5% of the revenue on service, and

they made 95% of the revenue on

supplements. And so people would come

in, and they'd essentially give the the

service away for free. Uh, but they were

required to use the supplements as a

part of it. So that's a free 100% free,

but you're you're you're bolting on a a

different revenue stream. So, that's

where you can offer multiple services

and monetize a different service than

the one you're giving away for free,

right? Um, and especially if you have

something that's uh high margin, uh you

can give that away for free. If

something's high margin and low value,

uh it's an easy thing that you can give

away for free and then give something

else away that's higher perceived value

or make them buy something that's higher

perceived value. People tend to um

appreciate physical products more than

they appreciate service or value

service. All right. So, that's kind of a

free forever model, which is really

understanding that how you can monetize

the second need, the next thing they're

going to need after the first thing. All

right. The sixth way is a a free

giveaway. Uh this is a a classic,

you know, you run a you run a

a free giveaway. Let's say meals for a

month, right? I'll pay for all your food

for a month. I'll pay for your whatever,

right? Um and so you get tons of people

are going to opt in for that. and you

say like well we you know we picked one

person but if you still do the program

it's this and we'll give you a discount

since you you know signed up you know

signed up to be a part of it. So the

thing is is when you have this people

are still raising their hand to

demonstrate they have a need for the

service right um and so if you have a

giveaway that's perceived as high value

and something that's related to the core

offer that you have you instantly get

tons of very cheap uh leads that are

qualified for the service. All right.

Um, a good friend of mine uh just

started running a $25,000 transformation

challenge and he's getting people to buy

without even doing phone calls um

straight on the page cuz it's a $25,000

challenge and it's like 300 bucks to

sign up online. So, people are seeing

the huge giveaway and then are choosing

to participate um to have the have the

have the chance to earn that. Right now,

obviously with giveaways and things like

that, you always have to make sure

you're not gambling, all that kind of

stuff. Um but I'm just talking big

highle marketing. All right. Um, the

next and probably last one of these

seven, um, there's probably more. These

are just the ones I thought off the top

of my head. Um, is a free with free with

commitment. So, not contingency, but

commitment. So, that's where you say,

uh, your first 28 days or your first

month is free. Um, as long as you commit

to a nine-month contract or you commit

to a whatever, right? And so, when you

do that, you can still market free. Um,

you still you'd have to again put the

contingencies in. You want to be a

compliant advertiser. Um, but that way

you can still give people free on the

front end. It makes the sale very easy.

Puts a little bit more of the onus on

the fulfillment. Um, but if you get the

commitment, which you should, um, then

you will be able to convert a very high

percentage to people on the front end.

And typically at higher average contract

values because they're not confirming

that price on the front end, uh, it's

more like perceived value on the back

end and they're kind of sort of going to

see how it goes, right? Um, now that

being said, during the process, you

still need to sell the people even if

you're not closing them. So even if

someone has their call on file and it's

planning on rebilling, you still need to

sell them on staying. So just a big

mistake that I see happen all the time

is that when people give trials and

things like that, they're not actually

they just sell the trial rather than

selling the continuity. Selling someone

on trials, it's just selling them on

trying it. You have to still sell them

again. Even if they're on, you know,

auto bill or whatever because the thing

is is, you know, 30% of the people who

go through are going to immediately call

you up and say, "Oh, no. I didn't mean

to let that go through." And then you

have chargebacks and all sorts of crap.

So you don't want that. Make sure they

know they're going to get build. And if

it were me, I'd probably only bill the

people that um I knew had been sold and

had kind of at least verbally agreed to

it. We already have the contract, but at

least I know that they're in. So, um

those are seven ways to make free offers

to get uh lots of people in the door and

make irresistible offers that will

ultimately make you more money. So,

learning how to monetize free is one of

the biggest uh tools in your skill set

uh in your toolbox. And if you don't

know how to do it, you will be a

significant disadvantage because your

competitors will be um and they can

acquire more customers at a cheaper

price than you do. And if they can

monetize them in the ways that I just

outlined, um and you just know the

metrics, you know what percentage uh

convert, what percentage stay, what the

average ticket is, and that's why

knowing the math is so important. But if

you know those metrics, then you you can

market with reckless abandon because you

know what your LTV is um and you know

that you can win based on those numbers.

So anyways, I hope that was valuable for

you. uh the offer is absolutely king.

Like if you get the offer right, someone

should be able to explain to someone

else in like one sentence or two

sentences what it is that the offer is.

If if you can't explain it like that,

then it is not clear enough to a

prospect. And if you get the offer

right, it will make you more money than

you know what to do with. All right, so

anyways, uh hope you guys have an

amazing Tuesday. Uh keep rocking and

rolling and I'll catch you guys soon.

Like and comment if you found this

valuable so the gods of the internet

will favor this and show it to more

people. All right, keep being awesome.

Catch you soon. Bye.

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