Making More $ For Your Business - Keynote & Q&A | Ep 801 - The Game with Alex Hormozi: Summary & Transcript

In short

Podcast Episode Notes

Title

Making More $$ For Your Business - Keynote & Q&A | Ep 801

Host

Alex Hormozi

Episode Overview In this episode of "The Game," Alex Hormozi discusses strategies for increasing business profitability and customer acquisition. He shares insights from his experiences as an entrepreneur and provides frameworks for evaluating business decisions. The episode also includes a Q&A session where he addresses specific business challenges faced by listeners.

---

Key Concepts and Discussions

The Importance of Passion vs. Profit
Monetization vs. Fulfillment: Hormozi emphasizes that while pursuing passion is important, it can be misleading. Entrepreneurs often find that their daily operations diverge from their initial passions.
Finding Balance: He suggests that entrepreneurs should find a way to fulfill their passions without disrupting the core of their business operations.

Strategic Framework for Business Decisions

Hormozi introduces a strategic framework to evaluate initiatives based on three criteria:

What: What is the initiative aimed at achieving? For example, is it to increase customer numbers or lifetime gross profit (LTGP)?
How: How will the initiative be implemented? Should the focus be on doing more, doing better, or introducing something new?
Who: Identify the right person to own the initiative and ensure accountability.

Customer Acquisition Strategies
Incremental Growth: For businesses in the early stages, increasing the volume of sales efforts often yields better results than improving the efficiency of existing sales methods.
Scalability Issues: Hormozi notes that many entrepreneurs overcomplicate solutions and should focus on scaling existing methods before exploring new avenues.

Q&A Insights

Key Takeaways from Listener Questions

Ideal Customer Profiles: Hormozi emphasized targeting business owners with significant cash flow for financial products, suggesting a focus on industries requiring high capital expenditure.
Content Strategy: For businesses doing cold outreach, having a baseline of content (e.g., educational material) can enhance conversion rates by establishing credibility.
Course Offerings: When creating educational products, it's essential to narrow the focus to the most profitable segments to maximize effectiveness.
Membership Models: For a membership strategy, Hormozi advises including tangible benefits like reduced costs for supplies, which can enhance the perceived value of membership.

Managing Emotional Responses in Business

Hormozi discusses the importance of managing emotions when facing business challenges:

Perspective: He encourages a broader perspective on individual setbacks, advocating for a focus on long-term goals rather than immediate failures.
Communication: Effective communication with team members about performance can help mitigate anxiety and clarify expectations.

Building Community and Networking
Hormozi stresses the value of community building both for customer acquisition and retention. He suggests leveraging events for networking and enhancing brand visibility.

---

Conclusion Alex Hormozi shares practical advice for entrepreneurs seeking to grow their businesses and navigate common pitfalls. His insights into customer acquisition, emotional management, and strategic decision-making provide valuable frameworks for listeners at various stages of their entrepreneurial journeys. The episode concludes with an encouragement to focus on value creation while balancing passion and profit.

---

Follow Alex Hormozi

[LinkedIn](https://www.linkedin.com/in/alexhormozi/)
[Instagram](https://www.instagram.com/hormozi/?hl=en)
[Facebook](https://www.facebook.com/alex.hormozi)
[YouTube](https://www.youtube.com/c/AlexHormozi)
[Twitter](https://twitter.com/AlexHormozi?s=20&t=J9vPh75tO3ow9xExYLsBDQ)
[Acquisition.com](https://www.acquisition.com/)

---

This structured note captures the essence of the episode while breaking down the key themes, arguments, and practical advice offered by Alex Hormozi.

Written by AI. May contain mistakes. Listen to the episode to check what was said.

Hear the part that matters, and keep it.Open this episode in VO. Double tap your headphones to save a moment as you listen.

Get VO free

Transcript

Automatic transcript. May contain errors.

0:00If you want to help a million people, sure, then you can help a million people with the content you make and then you can monetize through the elite. And so you can sell to the few and help the many. So if you think about what I do, I make the majority of my money on my portfolio. Just to be very candid with you guys, like we make a lot more on the deals that we do than on the tickets you guys bought. I get my fulfillment from making all the content I make, writing the books that I do. That stuff fills me up. But I do the deals because I also like making money. This is why I'm not a big like follow your passion thing guy Because I started being really into fitness and then I started a gym and then I did well with my gym and then realized that nothing in my day had anything to do with fitness.

0:42And I'm doing payroll, rent, marketing, sale. I'm doing all the stuff of business and I'm basically never doing fitness. And so unless you want to be a personal trainer, unless you want to do hairstyling, that's like the true passion, then eventually you're going to get out of it. And so if you want to keep that cup filled, you just find a way that you can still scratch that itch in a way that doesn't disturb the business. If you try to start a second business because you have this other thing, it'll also quickly become another business that isn't the passion. I've done a lot of quarterlies and strategic planning for portfolio companies.

1:16I've been to enough of them to know how to do them well and how to do them shitty. And so what I want to do is give you kind of a framework for leaving here with the highest leverage action items to go home with. And then we'll do all the Q's and A's. Okay, number one is what, number two is how, number three is who, okay? You have to be able to track any of your initiatives to increasing number of customers, increasing up to GDP, so lifetime gross profit, or decreasing risk. And so I use this as the first filter when I'm at a strategic discussion with the team and saying, okay, we have limited resources.

1:57Obviously, we can't do everything we possibly want to do. So, limited time, money, human capital, that we have to then invest, because that's fundamentally why we like to think about every entrepreneur as an investor, fundamentally, within the assets that you have. And we have to get a better return on it, right? When we're looking at this, I think, okay, in what way can I clearly see that this investment is going to either get me more customers, make my customers worth more, or decrease the risk that the first two things don't continue to happen in the business? Once someone says, hey, you know, one of your employees says, hey, I think we should redesign on our website, which for some reason is something that a lot of teams just love asking to do, right?

2:31Like, I hate our website. I'm like, well, you know what? It converts. So just chill. All right. But you say, okay, fine. Tell me how it increases the number of customers, increases lifetime value, or decreases our risk. Now, if they can't even ladder it up to that, then it's like, maybe we shouldn't do it. Great idea though. Come back later. If they say, okay, well, I think it would get us more customers. Then you can say, cool. How many? By how much? and how much time and effort is it going to cost us? So then we have an expected return and an expected investment that's going to take from us.

3:02Once we understand that, we can then say, okay, how likely is that? And is there another thing we could do for the same investment that would get us more customers or increase lifetime value more? And most times when you have the entire universe of options, that one thing probably isn't the best one. And so that gives me the big picture of what do we need to do? We're going to do this thing. what's the what we're going to increase number of customers because that's the thing we have in the business. Okay, cool. So let's say that we're going to say everything else is okay in our business. We just need to get more customers.

3:34Fine. So the second order that we go through is how are we going to do that? Are we going to do more? Are we going to do better? Or are we going to do something new? Nine times out of 10, especially if you're the zero to one million category, which is about half the people here, you probably just need to do more. And I'll give you an actual, like a rational explanation for this. If you have one sales guy and you go to two sales guys, you can double your sales. When you're big and you've got 20 sales guys, sometimes you just think you can get 20 % more out of the guys you got, and that'll be less effort than hiring and training four more guys.

4:12So it'd be a 20 % improvement versus me increasing the size of my team by 20%, which would be getting whatever, 4.8 more sales guys. So call it five sales guys that have to hire, train, recruit, and make sure they were good. Well, which one is more likely and which one is faster to do? Well, once you get big enough, sometimes you get bigger gains on better. But once you make that 20 % improvement, now you might have to go back to more. So in the beginning, a lot of times more is the answer without doing anything new. When you get a little bit bigger, sometimes better and more alternate more frequently.

4:41And then when you can't do any more, any better, that and only then is when you look at new stuff. And so most times entrepreneurs love doing new stuff and it's usually the last thing the business actually needs. So right now you probably have a way to get customers and you're like, I don't know if it's scalable. Yeah, do 10 times more of it. It's probably scalable. So once we know our what, okay, we got to get more customers. What's our strategy? We're going to go with more. Then we finally have, okay, who's going to own this, right? Who's the person who's going to own this? And I can tell you just from experience that if I've had the same quarterly objective two quarters in a row, and we feel pretty solid about what our more strategy is or what our better strategy is to get more customers or increase lifetime value, then we usually have a who problem.

5:24It's like, hey, Sandra, you've been in charge of this two quarters in a row. For me to think somehow magically this quarter is going to be the quarter after the first two times you messed it up, that's a me problem, right? I'm the one who's making terrible judgments here. Once you go through these three frames, I remember Michael, who was here, he sits on some of the the portfolio meetings, he was like, you know, it's crazy. I expected there, this is when he started with us. He's like, I thought there was going to be way more like, hey, do this and this one judo move. He's like, but 90 % of the time you guys are like, Becky sucks.

5:54Let's move her over. I think we need to replace this person. Well, how's recruiting going so we can scale up this department? That's usually what the discussions are because past a certain size, it's all about people. And so you need very little of this when you get big and a lot of this. And when you're smaller, you feel like you need a lot more of this and very little of this. Okay, so that's my little framework for you guys in terms of thinking through what you're going to leave with here today with your sticky note of things that you want to do is make sure that you can very clearly see, is this thing going to get me more customers?

6:22Is it going to make it worth more or is it going to make my company worth more by decreasing the risk? And if that's what the objective is, am I going to pursue a more path, a better path, or a new path? And once I know that, who's going to own it and buy when? Yes, sir. We offer a checking account that pays 5.25 % interest,$125 million in FDIC insurance. Just wanted to get your perspective and insight on who the ideal customer profile would be to offer something like that to. I mean, it's a very interesting offer. So, I mean, who here is getting 5 % on their business cash? Probably no one. You could grow that on any channel right now because the vast majority of business owners aren't doing it.

6:57And so, like, it's just business owners. And then you'd probably just want the business owners to have the most cash on hand. So probably businesses that have higher capex would be the ones that would make more sense. So I would say like physical products businesses will be helpful because they have to like they always have to keep cash on hand so they can buy more inventory. Like manufacturing businesses, things like that. Those are the ones that are going to have the most cash. Otherwise, like service based businesses typically just keep what they need in payroll for a month or two. Whereas some of the other ones want you basically just want the ones that have to have the biggest war chest.

7:26Because for you guys, it's basically just how many dollars are in their account. So it is very much a whale business. And so I would look at and you probably already have some data on this in terms of your existing customer base. I would cut the crap out of that data and just say, okay, okay, who's the 80-20 of this base? Try and do it by industry. Because size, obviously, like the bigger the size, the more money they're going to have. But if I could also get size times industry, then I would just start there. It makes my search a lot narrower. My messaging can be more targeted based on outreach.

7:53Or how are you guys doing right now? Outreach? Are you doing content? Are you guys doing - Yeah, cold outreach. You're doing cold outreach? Yeah. I mean, I think it makes sense. You can be more highly targeted. Outreach is probably the strategy I do. I think content to supplement that is going to be important because they're going to give you all their money, right? Like that's kind of thing. So they want to make sure that you're legit. And so I think putting, having the content there is going to do more on the conversion side than on the lead gen side. So that when you're doing your outbound stuff, people are going to come to the page, they're going to look at all your stuff and then be like, oh, these guys are legit.

8:20Maybe I will show up for that call. Right? So it's like, that's for all you guys who aren't, so if you do outbound or even if you do paid ads, content's kind of like this really nice baseline layer that you want to have, just because if they click the ad, the next thing they're going to do before they like actually opt in or show up for the call, is they're going to look at you before they're going to go give you money. That's probably what you do too. And only the crazy people don't do that. So have that baseline layer of content. And I think for you guys, especially, I would basically want to increase their problem awareness of this is how much money you didn't know that you're losing.

8:53And if I were trying to sell to business owners, a lot of business owners don't like other people making money on their business. And so you're like, let me show you how much money everyone's making on you. And I would like to just put that back in your pocket. Solid. Thank you. Hey, Alex. Thanks so much for all the content you put out. It's been a great help. You bet. I help people avoid surgery, especially in the knees. That's what I'm biggest on on YouTube. Knees? Knees. Okay. Knee arthritis is our biggest seller. Cool. I have four other programs for other knee conditions. Do-it-yourself type programs?

9:25Do-it-yourself. Okay, got it. We're starting to build the do-it-with-you service as well. was going to go into writing a book for all knee pain and including all of it in there. But now I'm thinking maybe I should just niche down on knee arthritis since that's the biggest thing going back to your more better how. Also, you said stick to one channel if you're under a million, which that's where we're at, approaching a million. Are you doing, or is it via content? Is that how you have all your customers? YouTube. Okay, cool. What do you think? Should I stick to knee arthritis or write everything about the knee?

9:54I think knee arthritis, that's your number one seller right now. I think it would make sense to continue to do that stuff. I mean, to me, going knee arthritis to knee doesn't feel like, you know, this is a major, like, oh my God, I can't please talk about knee stuff now. This guy's just, like, he doesn't have authority to talk about this. Just talk about arthritis, man. You know, like, I don't think you're going to have that. So I'll say this. This is kind of one of those unique scenarios. It's not that unique, but like, if you talk about knee stuff in general, I don't know I have knee arthritis.

10:22So I'm problem aware, not solution aware as a customer or a prospect. And so I think talking about knee stuff in general, all they know is they have knee pain. You can then help them diagnose the type of pain and then funnel them to whatever solution that they have. Can you solve other problems besides knee arthritis? All day. Okay, great. So then, yeah, I think that makes sense in terms of front ends. But in terms of increasing the monetization of the business, if I were to build this, if I were like buy your business tomorrow, I would do the done with you service first. That'll increase your cash flow for the business and they can reinvest in more front end stuff.

10:55Like the book. Right, sure, exactly. So you have your front end now, add the back end, increase cash flow, and then you can put the people in place or free up some of your time so that you can put more time into more front ends. So I'm thinking if it right, the book would be like an adding another channel, whole distraction versus if I just keep chipping away at YouTube. Yeah, I mean, the book's not even a channel. It's just like a lead magnet. Okay. The book's not going to do a ton, to be really honest with you. like the only way books actually become a channel is if you climb up the rankings get a zillion five stars on amazon because people buy it and love it and then amazon actually becomes your channel they become a traffic source for you so like we sell like 2 000 books a day on amazon so that means that there's some people obviously come from my stuff and then go to amazon but there's tons of people who just search marketing on amazon and my books are number one and number two for those people they don't know who i am and so there's a lot anyone find the book and then find my stuff later who's in here okay so like that that happens but that's a very small amount compared to everybody else in this room and so you doing the book is not going to like really do much i think if you take that same content and just make it public in certain video format probably a lot faster for you it'll probably make you more money cool thanks alex yeah you bet yes ma 'am hi alex hello i talked to you before on that live you don't i'm the writer anyway yeah i I remember.

12:14I have two businesses. One is a personal brand, right? So the typical, I'm a writer, speaking engagements, that whole thing. I came here, though, for help with my academic branding company because I teach tenured professors how to build brands. Basically how to be me because I'm a professor. That's cool, Nish. Yes. Branding company. They have money and no business savvy. It's great. Yes. Exactly. My question is I'm running the branding company through LinkedIn. Okay. So like outreach and content? Yes. That's where all the sales funnel is coming. through. My personal brand is crushing it on like Instagram and TikTok and stuff, right?

12:49Sure. But the branding company is not doing that well. And I just want to know, am I doing too much? Should I just focus on my personal brand stuff and just put the branding company to the sun? So what's the difference? So the personal brand stuff is what? I understand the avatar for the academic tenure thing. Who's the avatar for your personal brand? So it's basically I teach creatives how to get to six figures. Basically what I've done as a writer is what I, it's all directed towards creatives. Basically I'm teaching creatives and PhDs the same thing, how to build their brand and monetize. It probably makes sense to marry those two things.

13:26Yeah, how do I do that? I mean make content. You want to make content about the stuff that you sell, right? Like whatever you make the most money on is the stuff you should talk about. The thing that will differentiate your examples is like you can start talking about the PhD stuff and just weaving those examples into your personal branding stuff. Yes. They don't feel like different businesses to me. If you teach the same thing, then it's just like I have two avatars that I teach the same thing to. Right. And my personal brand, I don't do much content on this other avatar. In which case I'd ask, why do we have the avatar?

13:56If I start talking to PhDs on my personal brand, will I lose those creatives though? Because now I'm not specifically talking to them. Totally. right yes you'll lose you'll lose them on the content that's not about them right so if you made one piece of content that was about creatives and then one piece of content that's i mean if you look at my content strategy right like i think about it from terms of slices like so i have school right so school is for people who are they want to start a business and right now that's still 70 percent of my audience because i talk about business stuff and then 30 percent of my audience is business owners guess who's a hundred times more valuable that side right but i still have school and i have the investment part of the reason just so you guys know the reason i did that investment is I was like, okay, I have all these people who are like, help me start a business.

14:37I'm like, nah, like, why don't you just go to school and I'll make a way that's scalable for me. I mean, I can't help 10 ,000 people a day. It's not feasible. But with school, it's like, I can do that. I can kind of just direct them in a way that I can help one to many. But then for the businesses, then it's like, go here. And so if you see my CTAs, it's like, hey, if you're a business and you want to scale, go here. And if you want to start a business, go there. I will sift traffic if it makes sense because they're still related. It's just what level of stuff I'm talking about. Now, with your thing, I think it's okay for you to talk about the other stuff that you do in your business.

15:08And I'm guessing you could use your LinkedIn business as an example in your personal brand stuff. It feels like it's more separate in your head than it is in reality. If you teach the same thing, you just have two avatars. So just use them as different examples. Okay. I got it. I mean, that's really it. And the thing is, is if you teach a process, the process can work for just about anyone. Examples is going to be the thing that really makes people think, like I don't use a lot of e-commerce examples. Most of these, I don't really like a lot of e-commerce brands. Nothing wrong with them. I just haven't done as many of them.

15:36I like a lot of service. I like financial stuff. I like software, like 40 % of our portfolio is software. I like brick and mortar. Those are games that I know how to play really, really well. So that's what I focus on. Those are all my examples. And so in this room, if I slice this, it's like 90 % here would be covered with service, brick and mortar, info, and SaaS. So your examples will tell your audience who you're looking for the method or the thing that you teach is really just like the vehicle that make sense yeah yeah so just think about it like that it probably applies to more than one person here that's how you can basically segment yourself in the audience thank you does that help yes okay cool yes sir something you said to me yesterday which you've said to me like 50 times already but it only sunk in yesterday was the easiest thing to sell someone is more of what they already bought yeah in that van process i identified like straight away you know flashing red lights The biggest thing that it fixes is our LTGP.

16:28Cool. It's got to increase. We currently sell a 5K front end, which is a certification. For what? For Pilates. We teach online. We teach people to be instructors. Love it. We currently have zero back end on that. The obvious thing is sell them more of what they already bought. Yeah. So my question is, you know, I heard what you said about the school community and what you found was you don't want to overwhelm people, so you do like one live call a month, one piece of content a week. Like our front end is priced at 5K. I want to price the back end higher because obviously you've got a less than 100 % uptake.

16:58So you want to double LTGP. You've got to have a higher price. So how would you price it and how would you structure it? You're at 5K. Yes. I would do this so there's basically two options. So yesterday I talked about like please have some sort of auto renewal, everyone. So this would be applying to you. So the auto renewal level, I'd probably do it like 997 per year. And so think about this, like you're in the fitness world. So like CrossFit, for example, like you basically just get the name and then you have to get certified through L1 or whatever. That model works if you defend the brand. And there are some benefits that you can use.

17:28Like NSCA, if you're familiar with them, they certify personal trainers. And the model there is you pay for whatever your boot camp is, two days, and you get a certification if you pass the test. Awesome. Now you're allowed to be a personal trainer. And then they have an annual renewal that's significantly less, 500 bucks, whatever. And that allows you to say that you are an NSCA certified personal trainer. And they stack a couple benefits here. So they say, we will give you insurance up to a million dollars on any injury that occurs. And so then personal trainers who are always afraid of like, what if I hurt somebody?

17:59It's like, don't worry, we got you covered. And so for 500 bucks a year, they have the insurance and they get to say the name. And so, and most people, especially beginners think they need certifications. We all know, by the way, that's not true, but they think that. And so sure we can sell that to them. Now the Ascension part is probably going to be, I'm going to guess, cause I don't think Pilates instructors make a ton. I'm going to guess it's somewhere in the like, if you just kept people, honestly, like in 5 to 10K a year, that would be the price point that I'd be looking at for the Pilates instructors.

18:27And so when you sign someone up, you say, hey, it's$5 ,000. It renews annually at$1 ,000. Here's the benefits of renewing annually. By the way, global insurance policies, you could run like 90 % margins on this. And the certification margin is 100%. That's cool. So they could just do that and then get a community. Very simple delivery. and then the upper level is like, hey, we meet twice a year and we talk about the strategies of like increasing your income, getting more side clients and like the more businessy stuff. And I think in that price point, you'll probably be okay. So this is something I would test.

18:56I could start at five and then say it renews annually at five and you get these other benefits. And if they're like, nah dog, and you hear that a lot of nah dogs, then just make the standard, the 1K and then upsell them, you know, a month or two in. So you wouldn't do like a one-off five or 10K, a follow-on program, you'd make it renewing. Yeah, I like recurring. Okay, how do I sell that, right? So if you're running, call it three events a year for your base, right before you have your events, you hit up everybody who's been sold into this, but has been sold into this, right as the events come up.

19:29And then they have this nice deadline that they have to buy, have to buy, have to buy. And you give some sort of incentive. So a nice one would be like 5K, we'll put it towards the 10, which means it's five, if you do it before the first event that we have. That's what I would do. That's a very simple model. Thank you. Yeah, you bet. Hey, Alex. How are you doing? What's up? Yeah, my name is Saeed. After recovering from my addiction, I started like a YouTube channel. Cool. Took off in three years. I have like a community. Then I follow you. I started my business. Then after actually reading your book, I 6.8 my business within four months.

20:00It was great, you know. So you overpaid for the 99 cents. Okay. Good to know. How you manage between, how you balance between helping people and not focusing on money, especially like if the business industry, like especially you have a personal brand. In the Middle East, where my business is located, like there is a lot of like crap in healthcare. We don't have really good addiction treatment. So I think a lot of people are following me. I really want to help a lot of people at the same time. But also I love the entrepreneurship. I love the money. Yeah. One of the things that happens like when you start growing your business is you have a customer that you kind of got into business for and then you start falling also in love with business.

20:36And sometimes your love for the business can exceed your love for the customer. And so then people are like, oh, you know what? I love hairdressers. And so I also love helping them. And I want to find a way. But like I have this business that I do that. I don't want to get distracted. Right. The big thing that I think entrepreneurs in general, like we all do this, is we think we need to monetize everything. And I just don't think that's the case. If you want to help a million people. Sure. Then you can help a million people with the content you make and then you can monetize through the elite.

21:08and so you can sell to the few and help the many. So if you think about what I do, I make the majority of my money on my portfolio. Just be very candid with you guys. Like we make a lot more on the deals that we do than on the tickets you guys bought. I get my fulfillment from making all the content I make, writing the books that I do. That stuff fills me up. But I do the deals because I also like making money. This is why I'm not a big like follow your passion thing guy because I started being really into fitness and then I started a gym and then I did well with my gym and then realized that nothing in my day had anything to do with fitness.

21:42And I'm doing payroll, rent, marketing, sale. I'm doing all the stuff of business and I'm basically never doing fitness. And so unless you want to be a personal trainer, unless you want to do hairstyling, that's like the true passion, then eventually you're gonna get out of it. And so if you wanna keep that cup filled, you just find a way that you can still scratch that itch in a way that doesn't disturb the business. If you try to start a second business because you have this other thing, it'll also quickly become another business that isn't the passion. You can say a certain percentage of your, like if you want to tie the two goals together, you can say that no matter what, we always give 5 % or 10 % of our profit every year to help these cases.

22:20And so then that way, it motivates you to make more and more money, which you like, because you know that the more money you make, the more people you help. Thank you. Yeah. Shoot. Should I go into a bulk or a cut and I'm just kidding. Um, for sure. My arms just shrunk two inches. Um, not so referring to your sales fulfillment continuum. Sure. So you basically recommend that starting off a smaller businesses need to prioritize the easier to sell, harder to fulfill. Additionally, like higher ticket, same category. So in our particular business, at least from my understanding, the lower ticket is easier to sell, harder to fulfill, and the higher ticket is like the opposite.

Read the full transcript

23:03And so... Easier to fulfill and harder to sell? Yes. Interesting. At least from my understanding. I could have a belief. What do you sell? So we do short-term rental management, Airbnb management. So like with that understanding, would you recommend that I still do like the lower ticket potential client or do you recommend I still go high ticket as we scale? Yeah, it's a great question. I'll give a different example to answer the question. So I had a lady a couple months ago who was in the same position as you. And so she did hairstyle stuff. And so she's like, okay, I can teach hairdressers how to do this particular type of cut.

23:35So that was her low ticket thing. She's like, or I've got this business coaching thing that's like$15 ,000. So one thing was$15 ,000. The other was$2 ,000. And so I just asked, what's the biggest LTV to CAC ratio for each of these products? And so for the 2K product, it was 30 to 1. And for her 15K product, it was 12 to 1. but this one was more money and so it's like okay well we've got bigger LTV to CAC here so the only reason I wouldn't do this is if there's way fewer of these clients but there's way more hairstylists that just want to learn a new style than people who want business coaching I was like okay so we have a way bigger market and a bigger discrepancy in LTV to CAC well let's just do as much as this as human possible and then take this thing and put it behind so you acquire customers as profitably as humanly possible and then your focus goes on ascension so make sense yeah and so within your thing if you have one thing that's really, really easy to sell, use that as the front end.

24:28And then basically your focus as the entrepreneur is on the ascension for those people who then become qualified to buy the more expensive one. So basically like having two, like two offers, depending on like who's coming in basically. Yes. Perfect. But the idea is that you want to sell, you want to sell the thing or want to promote the thing that has the highest LTV to CAC discrepancy because then you're profitable in the acquisition and everything else is gravy. I appreciate it. Yeah. Hey Alex, my business is Avi AI. We're a mobile app that allows realtors to capture professional quality photos using just their smartphone instead of needing to hire a photographer.

25:00They just use our app. It's a credit based system. So one credit is one photo basically. Our offer is don't pay for photos on your next listing. Here's 25 free credits just for signing up. No credit card required. My question is how do we monetize from that offer and someone having a good experience with the app to getting them to actually become a paid customer. That transition, I think, is the biggest green light we need to do. Okay. So are you getting a lot of people who are doing the free credit thing? So we're beta phase and we're launching live right now. The beta phase has been amazing.

25:33Everyone loves we had 0 % churn with our smaller user base. It's actually a charge beta. Okay. We are actually are. Okay, good. Otherwise, I was giving you a little poke. Okay. My churn on my book is zero, too. I'm fucking with you. I got you. People are skeptical, right? Because it's a novel new product. It's kind of riding this whole AI wave. People are skeptical. So once they use it once, they love it. We have people forcing growth in our beta phase. We're like, stop sharing. It's a good problem to have. Just that sticky point of like, here's the offer. Cool. Now how do we monetize them? Well, you're going to charge for the credits after the first 25, right?

26:13Right. But in a world where they only use 20 credits, They have a five credit remainder, right? Like how do we retarget them to get them to come back from the second shoot? Hopefully they just do it on their own or just kind of, yeah, how do we make that process just as smooth as possible with like removing that friction there, right? You'd have to find a way because when they're coming to you, they have a house they need to sell, right? So then they have that. Now, I would imagine that you're going to have, because the way that the realtor industry is, it's like 95, five, it's like 5 % of realtors sell 95 % of houses.

26:44And so you're going to get a ton of the intro realtors who only have one house that's been sitting on the market forever because they're not real realtors. And so they'll use up their 20 credits and then they'll still sit there and they'll get another house in a year or whatever. And those are useless for you and a pain. So I think it's targeting the super users and probably the brokerages. What would be my fastest way of doing this is I'd probably do outreach to brokerages because they're going to have 10 agents, 20 agents, 50 agents. underneath of them. And if you sell the brokerage on it, then you say, listen, our average, do you have stats around average sale of house that uses your pictures versus not that uses your pictures?

27:25Not yet, but we have before and afters. Dude, that would be the first stat that I capture. Okay. Is, okay, figure out what the average home sale length in the U.S. is, and then look at the average home sale length of people who use your pictures, show the graph, and then say, what is this time to close worth to you? And it's going to be far more than whatever you charge for your credits. I think one of our big, big value props is like you could use our app and literally list the same day instead of hiring a photographer who's not only more expensive, but it might take you a week by the time you schedule, get edited photos back and actually go live.

27:57Yeah. So those are two different speeds. So one is speed to close, the other speed to list. And I think those are separate, but also really cool. But in terms of the Ascension process, one, I would go to brokerages because it's going to be more leverage. You can get 50 agents at a time. And then in terms of getting the realtors to come back, I would, I mean, this is me. I like hopping on the phone with people, especially in the beginning. And so I'd be asking, how many houses do you have right now? And so if I can get all of the houses, you know, like, can I get them to buy a big bulk of credit so they have 10 houses worth or 20 houses worth, get them prepaid, increases cash flow for you, and it gets the commitment.

28:32Yeah, that's one thing we want to do is like sell a yearly plan, but then also offer like an afterpay situation where they don't have to pay in bulk, but we get the cash collected and then they can kind of use the credits. I would use the Audible system since people are already familiar with it. So they get credits every month. That's what we're going to do. And then when Audible, when you cancel, you lose all your credits if you choose to cancel. So we kind of have that way of reducing. Yeah, I would just use the credit system. We have the largest portfolio company we have. That's how our software works.

28:58It's a usage-based credit system, but they still bill annually. Thank you. Cool. Yes, sir. Yes. So my partner and I came here with the intention of to learn how to grow our business. Sure. 10 MedSpas. Oh, sweet. Yes. Love that space. And then after yesterday when you talked about like building your company to sell it. Sure. I was like, okay, we can probably do that. Like that's something that made all perfect sense and$4 million sounds pretty good and better than the cash cow that we make now. How can it help? The way that we build it was different partnerships, different states, different – like we opened one by one.

29:31and the strategy always changed and we grew. And now that we've figured it out, now we have the winning formula. You have the model. Yes, we have the perfect model. My question is really, do we go back with the existing partnerships that we have with non-compete contracts that we have with certain partners in different states? Do we go back and change the existing or do we leave it like a cash cow and slowly grow it and then open a new company with the intention to sell it from scratch with our winning formula, grow that and try to sell it in like 40 months. I think you can definitely merge the companies.

30:00If you're familiar with, do you know what a private equity roll-up is? So basically with a roll-up, you have many businesses that are similar. So let's say I'm doing a roll-up for chiropractors. So I would go knock on doors and be like, hey, Mr. Chiropractor, can I buy your business? And so they might say, yes, sure. But if I get 10 chiropractors together that have John Schmoe, chiropractor, Jim Crackback, chiropractor, they have all these different chiropractors. That's not a very valuable asset yet. So I have to get them all to convert to the same CRMs, same backend systems. I can consolidate all the payrolls.

30:30I get all of that. I can centralize the phone system so it goes to one person. And so I get lots of EBITDA that drops to the bottom line just by consolidating systems. And then I get them all in the same colors, same logo, same whatever. And so then you make the deal where you say, hey, what are your partnerships? Like 50-50 or like what's the deal? Yeah, they're different based on the situation because we kind of always improve the deal as we went. Understood. And so yeah, once you have more proof, you could ask for more. I get it. So what I would end up doing is probably making some sort of holdco and saying, I'm going to try and swallow all of these up.

31:00You guys are going to get way smaller slices of holdco. So you might get 5 % of holdco, but we're going to sell holdco for like 200 million. And so the thing is, is the way you explain this, your individual asset is probably not that sellable. Like let's say they own 50 % of one of your med spots, right? You being able to sell this is going to be really hard. And you're probably only going to get like a three X multiple on it because buying a one-off med spot is just not super valuable. If you sell with us, we're going to get 10x. And so your half is still worth more. The smaller slice of this big thing is worth more than the 50 % slice of this smaller thing.

31:33And so basically, Holdco takes 100 % ownership of the new entity, of the old entity, and then they get a tiny slice of the big thing that owns everything. If we just sit down and think of a new name, new concept, new color, whatever, and just continue growing parallel, and then we can just keep the partnerships and make a new one from scratch with the winning formula without these partners, wouldn't it just make more sense to do it like that? If it's the same effort, like to change everything. I mean, do you think it's the same effort? I think we created, not a mess, but. Let me explain why Private Google Rollup exists.

32:04Because it's much easier to combine 10 than start 10. Okay. And so if you have the relationships, then it's like, let's just, and I'm sure you use the same backend systems probably because you, right, you just have to change the fucking logo. Not even, like. Right, okay. So like you're already like 90 % of the way there. This is why I'm bringing this up. So you're 90 % of the way there. And when you see how much money that you would make in being able to sell all of these 10 for your slice, you're not going to want to not include those. I see. So I would do that. If you have the better model, the smart cookie move is let's go to other med spas that already exist.

32:38We've done that also. Some of them are like that. Right. So you want to convert. Like that's the model. Like this is the private equity models. This is who we're looking for. They do between one, three million. They got a solar guy. He's kind of older. He wants to get out whatever and we take over with our systems and then we consolidate We put everything central and so we get more profit We have you know way better systems and that's how you can gobble up a marketplace And then the equity arbitrage that you have is you can buy for three and sell for ten yourself for twelve when it's big enough Like that is the PE play.

33:03That's how it works. Okay. Could you start scratch? You absolutely can't I mean obviously you guys are good at you'll make money either way It's just a question of which one will make you the most money the fastest if you already have 90 % of the conversion here I would lop everyone in they don't have any voting power. I have all the voting you guys don't you have to agree to these terms up front And then I mean just make the deal. Okay. Thank you. And the day-to-day wouldn't change It's just what the what your ability to sell changes. That's it. And I wanted to say thanks for everything. No, you better Thank you.

33:29Yes, sir. Hey, Alex. Hello. I am a dentist I created a course to teach dentists how to do clear liners. Okay, like Invisalign. Yeah, but brand agnostic Yeah, went all in on this last year. So I don't practice anymore My wife helps me with a lot of like the back end financial stuff. I struggle with whenever the numbers come up. She's big into data and like I've learned, super important. I tend to get just like really emotionally charged about that. Okay. Sales numbers down, you're like, I paid this thing. Like yesterday, big roller coaster. You're like zero for 10, let's kill everybody. Partially that, but also she'll just kind of tell me like, hey, like business isn't doing that great.

34:08And then I'm kind of like, kind of living in my own like head. Sure. I guess like what is a better way to kind of like approach that and just be more still have passion for the business, but like remove the emotion out of like the decisions. I mean, this just gets into like anxiety management, which is, you know, for me, I mean, I talk about my philosophy, you know, philosophical views because I just remind myself that I'm a little monkey on a tiny little rock in the middle of a galaxy that no one gives a shit and I will die and I'll be forgotten. And so the fact that my page isn't converting that well just doesn't bother me that much.

34:38And so that's how I get around it. I'm just being really honest. So like, I mean, I go through that mental loop-de-doop like probably 20 times a day. And it's like right when I'm like, oh, I'm about to be upset. I'm like, oh, wait, nothing matters. Okay, got it, back. And so, I mean, that's how I diffuse me. I think everyone's a little bit different. Some people work out. Some people, you know, do kumbaya, whatever. That's just worked for me. But I think probably answering the question is like, what am I so afraid of? you have some emotional charge because you're afraid of something happening.

35:05And so a lot of times it's like the fear of it is a lot greater than what the reality of it is. Because the absolute worst case scenario in this entire thing is that you go back to practicing. Your worst case is you're a rich dentist.

35:18Like, what are we talking about? You know what I mean? So it's just like the only upset I have is that my greater ambition doesn't achieve. But like I will be able to eat and live in the best neighborhoods and travel whenever I want and make my own schedule. Like that's guaranteed for you. It's just, you know what I mean? I just don't want to go back to practicing dentistry. I get that. Yeah, but I'm saying like the worst case is that, which is like, you know, there's people who have it a lot worse. I'm just being real. Like that's how I think about it. But yeah, I mean, if your wife brings up the data, then it also might be just like, hey, when she brings it up and how she brings it up would probably just be a conversation, which is, okay, if I just get off stage and I just did a big pitch and then you're like, that sucked, not the right time, right?

35:59Like, give me a cool down period. and if it's like hey when you have bad news by the way for everybody humans have like a really really big capacity to take bad news if you brace them so they train doctors on this and you might know this but like they train physicians on like if you have to say like a family member died or they have cancer there's some sort of big bad news they train the doctors on how to get someone to brace themselves and say hey i have bad news you might want to sit down for this right and so people are like okay i'm ready and so training her on how to give you news would be really valuable Thanks.

36:33Hey, Alex. My name is JC. I have a company called Master Injector. And we provide education and training to people that work or practice at MedSpa. We've been doing live events. We have three MedSpa's here today. So on the live event side, we charge about$4 ,000 for the weekend. And then we're doing virtual events. And now we're trying to leverage. We have about 10 ,000 followers on Instagram, about 10 ,000 through our database. And we want to do a membership model that's more of an online education. I was curious to see how you would approach this for the strategy to start this membership. So I think selling workshops on the front end is really good because people understand it.

37:08They get a big deliverable. The reason I do it, right, is you can control about the experience, make sure you don't over deliver everything. And I think that I would probably sell it on the back end of that. So I'd be front end would be the workshop. The back end would be the membership. And how long is the two days? The workshop. OK, yeah. With two days, you could sell the membership. And then we just have to think about what are the benefits of being a member. You can have the continued education, but no one's going to really watch it anyways. And so I like the kind of like magical things. Like the reason I like that insurance thing so much is that they don't have to do anything and they just get this benefit.

37:38I would imagine injectors also have like, they have hard costs, right? They have to buy the stuff, Moderna or whatever, right? And so if you did group buying for all of those injectors, you can improve their margins. And so basically if I know the average injector, I can save them$5 ,000 a year on the hard costs that they're going to have for their injectables. then my membership at$2 ,000 a year, they'll never cancel. Because why would you? It's like you can be a solo practitioner or you can be with the co-op and the difference in price is obvious. And we'll give you insurance in case you inject somebody in the eyeball.

38:08And then those are probably my two major benefits. You can include the education piece. But I would say that education mostly is commoditized. I think those other things would be more valuable to people because it's like this covers your downside. This drops your bottom line for sure. So value stack and make it sticky? The discount would make it sticky. Basically, as long as they're practicing, they're going to buy through your reps that you can negotiate down the rates for because of volume. Because you have a lot of people, right, who are doing the injection. About a thousand customers. Yeah.

38:37So you have, like, think about that kind of volume compared to a single med spa. You have a ton of injection volume that you're buying or that is being bought in your community. I would go to Moderna or whatever and then be like, hey, I represent a thousand injectors. Can you give me 30 % off or whatever? And then with that, you can put your markup on or you just pass that savings on in general. And then you just like Costco. So they pass all the savings on and they just charge a membership. So just be that for the injections, add the insurance on top. And then the baseline can be the continuity with the education.

39:09And you sell that on the back of the workshop. OK, that makes sense. Yeah, I own a brick and mortar health and wellness business. Patients have to come in on a repetitive basis, 20 mile radius for marketing. So what I learned yesterday is obviously your ad spend, you want to get to about a million a month for that one channel. So right now we're about a six ROAS. Cool. So obviously I want to keep putting money into that. At what point do you say, okay, because your ROAS is going to go down as you put more of that money in because you should have such a limited market. At what point do you say, okay, now I need to change or add in other channels?

39:43Is it like a three to one? Is it? Honestly, if you're at six to one and you're, are you selling high end health and wellness stuff? We do regenerative medicine. Yeah, I think that something's wrong because most of the guys that I know who are in that space just murder it, especially if you're local. I would basically keep tweaking the model until I'm getting like 15 or 20 to 1 because when you're selling high ticket local, like you're going to get the best return. And like if I had to bet on one business that I for sure would get the highest ROAS for, it would be a pseudo medical business for local.

40:12Like you can absolutely just print for those businesses. And so you're doing meta ads right now. What's the process for getting lead to close? Basically, on Meta, it goes to a landing page. I have go high-level running. Sure. I have VAs that reach out, get them scheduled. They pay a deposit, come in. And then basically from when they come into the office until close, that's pretty much a fixed – I mean, we pretty much know how that close rate is going to be. Okay. So what's the average ticket? $5 ,600. Why is CAC so high? I don't know. Yeah. I will say this. We don't get a lot of referrals. Okay.

40:45Do you have financing? We do. Huh. average income in the area is 56 or 56 000 when we first started it was good because we were just doing chiropractic two thousand dollar care plans for a year yeah you like the neuropathy and all that stuff yeah yeah i got i know the blueprint stuff yeah got it yeah it might be and i don't like saying this because i never like doing outside outside forces but you might have like a 10 out of 10 model and like a two out of 10 city for it you know i mean there's a reason that barry's boot camp is only in 15 markets or whatever it's just because that's the market that's going to sustain that price point and that margin.

41:18I mean, the fact that you're getting six to one is great. Do you do the diabetic dinners and like all that stuff or no? Yeah. So yeah, I mean, you have the acquisition system. I don't know if your close rate's the thing that's suffering, but I mean, it seems like you have that down. I'm guessing you're basically trying to pull, squeeze blood from a stone, is that there's just not enough of those high ticket buyers in an area where the median incomes. Yeah. And a lot of these people have low income, low credit scores. Sometimes they can't get a financing anyway. So you have to downsell. So like, then you down sell the$500 thing.

41:46And one of the things that I think is an issue why we're not getting referrals is that we do have to down sell. So like, let's say they say yes to a 10K care plan, but they only get approved for 1800. We can only do like one PRP. They're not going to get the results. They get pissed off because they only have 5 ,000 in their bank account. They just paid 1800. Yeah. I mean, there's a reason that brick and mortar is, they're so specialized in terms of picking markets. Like it's super important. And I'm guessing that you started this business, then you went down the rabbit hole of how do I make more money in this business?

42:13You bought stuff that gave you the sales system. and you made a lot more money. And then you're like, okay, well, now what do I do? So I think next steps would probably be, except the fact that that particular location might not be like, I mean, it makes money, obviously. So I would try and double down on how can I make this thing completely turnkey and automated without me? I would test Facebook ads in 20, 50 other markets, spend 20 grand testing, and then just look at your lead costs across those markets. And then you'll be like, oh, this thing is a fucking pocket and then you can put your next location there.

42:47Got it. Okay. Thanks. Yeah. No worries. Basically, I'm a real estate coach. I took your gym launch. Honestly, gym launch secrets changed my life. I applied it to real estate coaching. I productized the entire thing. $8 ,000 high ticket. Absolutely amazing. You guys should read the book. It's just actually how to do a coaching business. I mean, a gym is a coaching business, but anyways. Yeah. So I took the entire book. I had a$99 community. The term was absolutely crazy. developed a high ticket. It's been absolutely awesome. And four months ago, I did an annual conference. We had 1 ,100 people in New York City, sold out.

43:22Absolutely amazing. Increased my conversion for all of my sales because of brand association, all that stuff. The issue is conference made no money whatsoever. So with the pitch from the event, you made no money? I actually didn't have a pitch. Okay. So for the next conference now, it's like, what do I sell from stage? Because I saw Jim Conn, the offer was amazing. Do I sell my high ticket? Do I sell the community? That's kind of where I'm stuck on. So you have your 8K thing, right? Yeah. What do they get for that? It's an eight-week transformational bootcamp. They get every single system they need in their business to go from zero to 40K a month.

43:56Okay. So either you can just sell that from stage, but most times if you're going to sell something from the stage, you want it to be higher. You want it to be 25K or higher. It's usually like 25, 35K is kind of the sweet spot for most most stage pitching. If you're like curious, like why was your thing 15? It's because this is the last week and we're just trying it out. It'll be 25 next week, 25 to 35 K. How many days is it? Two days. And there's a networking event. So it's kind of like a two and a half. I like end of day one, obviously. And then just make a soft toss, you know, like day two for it.

44:28And the big thing is that's cool with events is that you'll be able to have your customers there. And so you can show social proof live, which is more compelling than anything. And so do a panel before you do the big pitch of like, look at Realtor 1, 2, 3, 4, 5. And then they'll be like, holy cow, this guy's awesome. It's just more compelling. Cool. When I did gym launch, I did delivery events the same way. And I never sold at our events. And they were just, I didn't even break even. I just lost money on them. That was it. And so what I got from those events was just proof. And so for everyone, if you're not doing events for your business, I think just about any business can do events.

45:03Don't go to hotels. Go to an event space. it's a thousand times cheaper but also the main thing you can get out of it is marketing material and so but part of the reason that we were able to sell gym launch so obviously kale was able to go in the ads but 80 % of the winners that we had from our ads were just customer stories and so we were able to extract as many customer stories in person from those events and that is what more than paid for the events in terms of long tail and so we had whatever three or four events a year that we held we would collect as many testimonials as we could from those events and then those became our entire ad creative strategy for the next 12 weeks until the next event.

45:40And so we got pretty, pretty good at it. The social proof, the brand, absolutely amazing. The thing is that the event still has to be banger. Like you always want to still do that, but like there's always going to be people who are more qualified or want more. And it's like, you just want to make the offer for them. Cool. Cool. Here we go.

From the publisher

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: