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it takes no more effort to make a Grand Slam Offer than to strike out. The difference is dictated by the skill of the marketer and how well he connects his offer with his audience’s desires.
We learn skills through failure and practice. We do this knowing that nine out of ten times we will be wrong. We still act boldly, hoping for that offer we connect with so well that it results in our big payoff.
it is far better to have understood why you failed than to be ignorant of why you succeeded.
We believe every person, every company, and every organism is either growing or dying. Maintenance is a myth. What this means is, if your company isn’t growing, it’s dying.
So, then,what does it take to grow? Thankfully, just three simple things: Get more customers Increase their average purchase value Get them to buy more times
Gross Profit: The revenue minus the direct cost of servicing an ADDITIONAL customer. If I sell lotion for $10 and it costs me $2, my gross profit is $8 or 80 percent. If I sell agency services for $1,000/mo and it costs me $100/mo in labor to run that client's advertising, then my gross profit is $900 or 90 percent. Note: This is not net profit. Net profit is what’s left over after all expenses are paid, not just the direct costs of fulfillment.
Lifetime Value: The gross profit accrued over the entire lifetime of a customer. This is gross profit multiplied by the number of purchases an average customer will make over their lifetime. Using the example above, if the average customer stays five months, and they pay $1,000/mo while it costs me $100 per month to fulfill, then their lifetime value is $4,500. Here’s the breakdown: Revenue: ($1,000/mo * 90% Gross Margin * 5 months) = $4,500 Lifetime Value (LTV) Note that the indirect costs, like admin, software, rent, etc., are not included in LTV.
Commoditized = Price Driven Purchases (race to the bottom)
Differentiated = Value Driven Purchases (sell in a category of one with no comparison.
Alright, let’s start by defining a Grand Slam Offer. It’s an offer you present to the marketplace that cannot be compared to any other product or service available, combining an attractive promotion, an unmatchable value proposition, a premium price, and an unbeatable guarantee with a money model (payment terms) that allows you to get paid to get new customers . . . forever removing the cash constraint on business growth.
At the end of the day, if there is a ton of demand for a solution, you can be mediocre at business, have a terrible offer, and have no ability to persuade people, and you can still make money.
In order to sell anything, you need demand. We are not trying to create demand. We are trying to channel it.
The degree of the pain will be proportional to the price you will be able to charge
A prospect must have a painful problem for us to solve and charge money for our solution.
The point of good writing is for the reader to understand. The point of good persuasion is for the prospect to feel understood.
There are three main markets that will always exist: Health, Wealth, and Relationships. The reason that those will always exist is that there is always tremendous pain when you lack them.
Think about what you are good at in regards to health, wealth, and relationships. Then think about who might value your service the most (is in the most pain), has the buying power to pay what you want (money), and can be found easily (targeting). As long as those three criteria are strong and the market isn't shrinking, you’ll be in good shape.
Starving Crowd (market) > Offer Strength > Persuasion Skills
All businesses and, all markets, have unpleasant characteristics. The grass is never greener once you get to the other side.
You must stick with whatever you pick long enough to have trial and error. You will fail. In fact, you will fail until you succeed. But you will fail far longer if you keep changing who you market to, because you must start over from the beginning each time. So, pick then commit.
“Charge as high a price as you can say out loud without cracking a smile.”
In order to understand how to make a compelling offer, you must understand value. The reason people buy anything is to get a deal. They believe what they are getting (VALUE) is worth more than what they are giving in exchange for it (PRICE). The moment the value they receive dips below what they are paying, they stop buying from you. This price to value discrepancy is what you need to avoid at all costs.
After all, as Warren Buffet said, “Price is what you pay. Value is what you get.”
“We question all of our beliefs, except for the ones we really believe in, and those we never think to question.” Orson Scott Card
Many entrepreneurs believe that charging “too much” is bad. The reality is that, yes, you should never charge more than your product is worth. But you should charge far more for your product and services than it costs to fulfill it.
there are four primary drivers of value. Two of the drivers (on top), you will seek to increase. The other two (on the bottom), you will seek to decrease. (Yay) The Dream Outcome (Goal: Increase) (Yay) Perceived Likelihood of Achievement (Goal: Increase) (Boo) Perceived Time Delay Between Start and Achievement (Goal: Decrease) (Boo) Perceived Effort & Sacrifice (Goal: Decrease)
The best companies in the world focus all their attention on the bottom side of the equation. Making things immediate, seamless, and effortless. Apple made the iPhone effortless compared to other phones at the time. Amazon made purchasing a single click of a button and made purchases arrive almost immediately (maybe by the time you read this, they’ll be sending drones to our doors within 60 minutes). Netflix made consuming television immediate and effortless. So, the older I get, the more I have shifted my focus to “the hard stuff”
The Grand Slam Offer only becomes valuable once the prospect perceives the increase in likelihood of achievement, perceives the decrease in time delay, and perceives the decrease in effort and sacrifice.
As a business owners and entrepreneurs I increasingly approach problems to find psychological solutions, rather than logical ones. Because if there were a logical solution, it probably would have already been solved, thereby eliminating the problem. All that’s left are the psychological problems.
“Any fool can sell a product by offering it for a discount, it takes great marketing to sell the same product for a premium”
The thing people buy is the long-term value, aka their “dream outcome.” But the thing that makes them stay long enough to get it is the short-term experience. These are little milestones a prospect sees along the way that shows them they are on the right path. We try and tie as many of these as possible into any service we offer. We want clients to have a big emotional win early (as close as possible to their purchase). This gives them the emotional buy in and the momentum to “see it through” to their ultimate goal.
Life hack: if you introduce something valuable to someone, they associate that value with you. If you’d like goodwill directly from another entrepreneur - send this book their way.
But I wanted to make sure they got way more than they paid me.
Step #1: We figured out our prospective client's dream outcome. Step #2: We listed out all the obstacles they’re likely to encounter on their way (our opportunities for value). Step #3: We listed all those obstacles as solutions. Step #4: We figured out all the different ways we could deliver those solutions. Step #5a: We trimmed those ways down to only the things that were the highest value and lowest cost to us. All we have to do now is… Step #5b: Put all the bundles together into the ultimate high value deliverable.
Buying food→ How anyone can buy food fast, easy, cheaply → Foolproof Bargain Grocery System . . . that’ll save hundreds of dollars per month on your food and take less time than your current shopping routine ($1,000 value for the money it'll save you from this point on in your life)
Fundamentally, all marketing exists to influence the supply and demand curve.
The “perfect profit combination” is lots of demand, and very little supply, or perceived supply.
“Desire is a contract you make with yourself to be unhappy until you get what you want.” It follows, therefore, that we only want things we do not have. As soon as we have them, our desire for them disappears. Therefore, if we seek to increase the demand (or desire), we must decrease or delay satisfying the desires of our prospects. We must sell fewer units than we otherwise can. Let that sit with you for a second.
Hormozi Law: The longer you delay the ask, the bigger the ask you can make. “The longer the runway, the bigger the plane that can take off.” We must endeavor to keep our supply (and satisfaction of desire) under the demand that we are able to generate. This maximizes profits and keeps desire ravenous in our customer base. This is the real key to never going hungry.
Humans are far more motivated to take action to hoard a scarce resource than they are to act on something that could help them. Fear of loss is stronger than desire for gain.
Whenever trying to close a deal, never discount the main offer. It teaches your customers that your prices are negotiable (which is terrible). Adding bonuses to increase value to close the deal is far superior to cutting prices. It puts you in a position of strength and goodwill rather than weakness.
reversing risk is an immediate way to make any offer more attractive.
Alliteration is when you make all (or most) of the words start with the same letter or sound. An alternative approach to rhyming is to use alliteration when naming your program. This is easier for most people than rhyming. Again, you do not need to rhyme or alliterate. Don’t force it.
“The first $100,000 is a bitch, but you gotta do it. I don't care what you have to do—if it means walking everywhere and not eating anything that wasn't purchased with a coupon, find a way to get your hands on $100,000. After that, you can ease off the gas a little bit.” Charlie Munger, Vice Chairman Berkshire Hathaway
