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
Chapter 1: What insights did Mr. Beast share about headlines?
I was talking to Mr. Beast about this concept and I was like, yeah, I know we need to work on our headlines. They're a little bit too click baiting. I remember he stopped and he was like, absolutely not. And I was like, what do you mean? He was like, you should absolutely have click bait headlines. He's like, they should just be true. They should be baiting the click.
Chapter 2: Should businesses focus on increasing traffic?
But then when the person gets in, it's exactly what they thought it was going to be. The deception comes from when someone thinks it's something and it ends up being something different. The big question is, should you focus on getting more traffic? And for most businesses, the answer is yes, because the return on investments on increments are by definition incremental.
Whereas if you can increase inputs 100 fold, they are orders of magnitude difference. If you have a conversion rate, let's call it of 2% on your about page. And that would be a benchmark, right? That would be about normal. 4% is the one for everything on school. But let's just say, well, let's just say 4%. Fine. So your average there. Okay, fine.
Chapter 3: How significant is the conversion rate in business?
Now, you can tweak a lot of things to try and go from 4% to 5%. That would be a 20% improvement. But most times, if you were to take your income and raise it by 20%, you'd probably be happy. But especially if you're earlier on, you want to increase in order of magnitudes.
And to be clear, if you're later on, you want to increase in order of magnitudes as well, because it will relatively be the same to you. And so going from $1,000 to $1,200 is the same as going from $1 million a month to $1.2 million. But much more fun to go from $1 million to $10 million or from $1,000 a month to $10,000 a month or more.
And so most of the large increases in revenue that occur come from order of magnitude implementations, things that change the dynamics of the game. And so one of the obvious ways of doing this is building traffic or increasing traffic through making content.
Chapter 4: Why are large increases in revenue essential?
Big picture, a lot of the content that's out there has what I would consider too little pre and too little post, meaning basically no preparation and no post-production. meaning it's just shit.
On top of that, the actual content itself isn't really based on anything besides someone having some verbal commitment to themselves that they're going to, quote, make content rather than solve problems for their audience or their customers.
Big thing number one that I'll state outright, which is that if you have customers, when you make content, if they get value from that content, they will still ascribe it to the thing they bought from you.
Chapter 5: How can content help retain customers?
So fun fact is that you can retain customers on a purchased product by providing more free content because your brain is not going to delineate where you've received value from, only that you receive value. So basically you continue to reinforce the positive association that someone in your audience has, customer or otherwise, when you make positive content. So that's reason number one, right?
Reason number two is that it increases the likelihood that people who have not bought from you will buy from you in the future, whether they come from ads, they come from outbound, or they just come from the content itself because they will consume other pieces of content.
Probably one of my largest changes in how I've seen business overall is my understanding of marketing to quote logical and emotional buyers. And so if you were to listen to my stuff years ago, I would have talked about logic and emotional buyers. And I think for the most part, that was because I hadn't spent. a lot of time really diving into it.
I kind of just like heard that and sounded smart enough. And so I just kind of repeated and that's kind of how I went. The more I've looked into it, the more I think that it's actually a question of how much information is required to make a decision.
And so instead of being two people on either side, logical buyers and emotional buyers, it's actually a dollar sign on one side, which means that they've made enough They've learned enough information to make a decision. And then where they sit on this continuum, right? So on all the way furthest away from the dollar, some people require a tremendous amount of information.
Some people require very little information. Now, the reason that the information space oftentimes is very incestuous, people buy thing after thing after thing from different people. So it's a lot, a smaller pool of multiple purchase buyers for multiple potential vendors, right?
And I think the reason for this is that most of the information education space doesn't know how to advertise to anyone beyond low information buyers. And oftentimes this is also entrepreneurs. And so entrepreneurs tend to be a little bit more risk friendly. Like we are risk-philic, if you will, rather than risk-phobic. So we are okay with risk.
And so we're willing to make a decision with less information. So this is the type of person who makes a decision after five minutes of watching a video and says, sure, I'll spend $10,000. where somebody else might say, hey, I need to check with my insurance. I got to check with my spouse. I need to consume 10 pieces. I need to look at Google Consumer Affairs.
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Chapter 6: What is the difference between logical and emotional buyers?
I need to do a whole bunch of research, right? Here's the thing that I think everyone misses out on is that the reason that most digital companies direct response info type businesses stay small is because they don't know how to sell to high information buyers. And there are significantly more higher information buyers than there are low information buyers.
And so this is why most of them in general can't pass a certain revenue level. And it's because they basically sucked up all of the immediate six inch putts, the little tip ins that they can make, and actually haven't been able to take the ball from zero all the way to the end zone, right? They can just do five yard, 10 yard runs, and that's about it.
Typically, that's because the nature of the marketing, the nature of the content that they put out is very offer-driven. Now, as the person who wrote the book on offers, I feel like disproportionately qualified to talk about this, which is that it is the fastest way to make money, which is make better offers.
Now, when you're making those better offers, you will immediately tip in the people who are on the fence or ready or looking for something like this. These are the most aware customers. Eugene Swartz talks about this in his book, Breakthrough Advertising. Or he states that there's these levels of awareness, right? So at the top, you have unaware.
So somebody has no idea you exist or the problem, whatever. Then you have problem aware. So they just know they have a problem. They don't know what's out there, but they just know they have problems. So if you ever hear like, do you get up to pee three times a night?
Or like, are you like, it's playing with your kids, you know, making you ashamed of your, if you're being out of shape, that's problem aware. Now, each of those hooks could lead me down to buying ashwagandha root or buying supplements or buying a gym membership, but it's probable. The next is solution aware. All right, so this is the different types of solutions that exist.
Underneath of that, you have product aware. So now you're comparing your product to somebody else's product. And then finally, you have most aware, which are typically people who are existing customers of yours who have purchased in the past that you try to get them to buy again. The last one is where most people stay in most aware and product aware.
And what you need to do is make promotions, you make offers, and this ultimately gets people to buy stuff. For us with our content, we want to be able to make hooks to people further out in the awareness scale.
And so the hook should be, if you want to go after a larger market, rather than what I see a lot of content is basically people just making an offer as their content, which is not content, right? Is that you want to make hooks relative specifically to solutions that already exist. That's a problems, which is going to be the biggest bucket.
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Chapter 7: How can you sell to high information buyers?
Nevada homeowners, something, something like you, you won't believe this. It could be something for, it could be selling solar. It could be selling insurance. Like you have no idea, but it's just the curiosity, which gets you to take down and go down that funnel.
And there's typically a lot more education that has to occur to get someone from not even knowing this industry exists to being able to make a purchasing decision and call it 60 minutes. I will loop around to like, but okay, I'm getting this. How does this relate to content? Well, hopefully this is relating to content, but beyond that.
If you're hearing this and thinking, okay, well, what do I do about this? Well, one is that the pre-search, the research you do prior to making your content, in my opinion, should one, be clear as to what stage of awareness you're going after. Are you trying to go after a problem? And those are the wider hooks for most people.
And I would recommend if you're going to do stuff, that's a good place to be, or just solution aware stuff. Those are good places for you to make content around because it's a little bit wider, you'll get more reach on it. All right. Now, you still want to make it about your stuff or something at least adjacent to your stuff.
Otherwise, you'll have a meme account that just has a whole bunch of views and no one cares about it, all right? Because the point here is still to build a brand. Here we are. Now we're catching up. If the question here, and the reason that we're even talking about this is because we want to 10x the traffic to our about page, to our site, rather than thinking in increments.
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Chapter 8: What makes better offers crucial for business success?
then there are basically two positions that I posit create the best brand loops or the most reinforcement for a brand. So one is aspirational outcomes. The second is aspirational effort, which is inputs. So basically, you want a type of outcome that not many people in your space or that people who are your customers, more specifically, aspire to have. And this works both B2B and B2C.
So I'll give you a couple of examples. Gymshark signed up CBOM. And CBOM, if you don't know who he is, he's the best bodybuilder in the world right now. He just retired, but he was basically the goat of the industry for the last six or seven years. He is aspirational for fitness people. They make an association with CBOM in making content. Now, they can obviously afford CBOM.
You can still make an association with somebody by making content about CBOM. And so that's obviously not as strong, but it's still directionally correct. Now, the aspirational outcome, though, if you are the authority, is that you want to be the person who does it, obviously. Now, if you know the person who does it, that gives you some degree of transference to not 100%.
Now, for example, imagine I get, you know, my podcast only has Elon, Zuck, Jeff Bezos, whatever, and no one else. It's like, well, you probably make very strong billionaire associations with me because they are all ultra wealthy billionaires or sense of billionaires at this point. That's the outcomes part.
And I think that this is actually, if I had to be real real, most of you guys are missing this, right? Which is that you haven't done anything yet. You want people to respect you. You want people to listen to your authority, but you can't actually answer the question, why should they?
And I think if you can simply answer that question, which is why should I listen to you in your content and remind people on a regular basis of whatever that aspirational outcome is, they're more likely to listen. Warren Buffett gives very simple personal finance advice to people. Are there other people who are qualified to give personal finance advice and maybe even be better at it?
I'll bet you Dave Ramsey is better at giving personal finance advice than Warren Buffett. Why? Because it's his whole business. So he knows what people struggle with probably more intimately than Warren Buffett does. But we will still listen to Warren Buffett because he's $100 billion. And so we figure if it works to get to $100 billion, I'm sure he can help me save up to pay my mortgage off.
This is an important link that I'm trying to make here. North Face, if we know that their jackets can have someone stay warm at the tip top of Everest, then we can reasonably state that it'll keep us warm on our way to work while we're going from the house to the car and then the car to the place that we're eating or whatever.
These aspirational outcomes basically serve as risk mitigation for your potential audience and customers. It worked at this super extreme level. It'll probably work for me at my not nearly as extreme level. So that's from the outcome perspective. And I think many of you need to double down on that part, which is what can you say that no one else can say?
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