The Offer Is King (ALEX HORMOZI)

Summary

In this engaging presentation, the host emphasizes the power of an exceptional offer, or 'the offer is king,' as the key to business growth. They dissect three iconic offers from Domino's, Sony, and FedEx, highlighting the importance of believability, high ROI, and a strong business model. The host then explores seven strategies to ethically utilize free offers to attract leads, upsell, and foster customer loyalty, underlining the significance of understanding how to monetize free to stay ahead of competitors.

Takeaways

• 😀 The importance of having an exceptional offer in business to attract customers without the need for hard selling.
• 👑 The concept of 'The Offer is King' suggests that a compelling offer can significantly drive business growth.
• 🍕 Domino's '30 minutes or it's free' offer as an example of an irresistible offer that contributed to their success.
• 💿 The '10 CDs for a penny' offer from Sony as a groundbreaking trial offer with a pricing component.
• 📦 FedEx's 'absolutely, positively overnight' service as an example of a high-value offer without a pricing component.
• 🔨 The three components of a successful offer: believability, high ROI (return on investment), and a business model to support it.
• 🚫 The necessity of believability in offers, as unrealistic offers can deter customers.
• 💡 The use of 'free' in marketing to attract high volumes of leads and customers at a low cost.
• 🎁 Seven strategies for ethically using 'free' offers to drive business growth and customer acquisition.
• 🏆 The 'free bribe offer' as a way to upsell by giving high-value items for free with a purchase.
• 🚫 The 'limited free offer' and the importance of upsell strategies to monetize free trials.
• 💰 The 'free trial plus penalty' model to motivate customers to fully engage with the service to avoid penalties.
• 🏆 The 'free with deposit' model, offering a chance to get money back upon meeting certain goals.
• 🆓 The 'free forever' model, providing a service for free while monetizing through other means.
• 🎉 The 'free giveaway' as a strategy to generate leads and demonstrate the value of the core offer.
• 📝 The 'free with commitment' model, offering a period of free service in exchange for a long-term contract.
• 📈 The emphasis on understanding the metrics of conversion rates, customer lifetime value (LTV), and the importance of selling even when offering free trials.

Q & A

What is the main theme of the video script?

The main theme of the video script is the importance of creating irresistible offers in business to attract customers without the need for hard selling.

What does the speaker suggest is the key to business growth?

The speaker suggests that the key to business growth is having a core offer that is exceptional and irresistible, which can attract customers naturally.

What are the three components of a good offer according to the speaker?

The three components of a good offer are believability, a high ROI (return on investment), and a business model that supports the offer.

Can you provide an example of an irresistible offer mentioned in the script?

An example of an irresistible offer mentioned is Domino's '30 minutes or it's free' delivery promise, which attracted customers without the need for hard selling.

What is the significance of the '10 CDs for a penny' offer?

The '10 CDs for a penny' offer is significant as it was a pioneering trial offer that demonstrated the power of a compelling introductory offer to attract customers.

What is the role of 'free' in marketing according to the speaker?

According to the speaker, 'free' is a powerful marketing tool that can attract high volumes of leads, is typically the lowest cost for acquiring customers, and can lead to massive growth if used correctly.

What is a 'free bribe offer' and how does it work?

A 'free bribe offer' is when a high-value product or service is given for free in exchange for signing up for a paid continuity program, such as a monthly newsletter or membership.

Can you explain the concept of a 'limited free offer'?

A 'limited free offer' is a time-bound or condition-bound offer where customers can access a service for free under certain limitations, with the aim of upselling them to a paid version of the service.

What is a 'free trial plus penalty' model and how can it be used?

A 'free trial plus penalty' model is where customers can try a service for free but must commit to certain conditions, such as attending sessions or workouts. If they fail to meet these conditions, penalties are applied, which helps in qualifying the trials and increasing backend conversions.

What does the speaker mean by 'free with deposit'?

'Free with deposit' is a model where customers pay a deposit to participate in a program, with the promise of getting their money back or having it credited towards a future purchase if they meet certain goals or outcomes.

What is the 'free forever' model and how can it be beneficial?

The 'free forever' model is where a service is offered for free as long as customers commit to other conditions or purchases, such as buying supplements. This can be beneficial as it allows for the acquisition of customers at no upfront cost while generating revenue through ancillary sales.

What is the importance of understanding the metrics when offering free trials or products?

Understanding the metrics, such as conversion rates, retention rates, and average ticket values, is crucial for determining the long-term value of customers and ensuring that the business can sustainably grow while offering free trials or products.

Why is it necessary to continue selling even after a customer has signed up for a trial or free offer?

Continuing to sell even after a customer has signed up for a trial or free offer is necessary to ensure they understand the value of the service and are more likely to convert to a paying customer. It also helps in managing expectations and reducing the likelihood of chargebacks or cancellations.

Outlines

00:00

👑 The Power of an Irresistible Offer

The speaker introduces the concept that a strong offer is central to business growth, using the phrase 'the offer is king.' They emphasize that a compelling offer can attract customers without the need for hard selling or elaborate marketing. The speaker plans to discuss three iconic offers from Domino's, Sony, and FedEx, which have been pivotal to their success. The importance of believability, high ROI, and a solid business model surrounding the offer is highlighted. The talk also promises to explore the strategic use of free offers to drive business growth ethically.

05:00

🎁 Creative Uses of Free Offers in Marketing

This paragraph delves into the various strategies for using free offers to attract customers and convert them into paying ones. The speaker outlines seven methods, starting with a 'free bribe offer' where a high-value item is given away to entice sign-ups for a paid service. They also discuss 'limited free offers' that upsell to a more comprehensive package, 'free trial plus penalty' to ensure commitment, 'free with deposit' where customers get a refund upon meeting certain goals, and 'free forever' offers that hook customers with a free service while monetizing through other means. The importance of understanding how to monetize free offers is underscored as a critical marketing skill.

10:01

🏆 Advanced Free Offer Strategies for Customer Acquisition

The speaker concludes the discussion by presenting advanced strategies for using free offers, such as 'free giveaway' promotions that create buzz and attract leads, and 'free with commitment' models that offer an initial free period in exchange for a long-term contract. The emphasis is on the importance of selling the full value of the service even when offering it for free, ensuring customer commitment and understanding the financial implications of each offer. The speaker stresses the significance of knowing conversion rates, retention percentages, and average ticket values to confidently and effectively market with free offers.

Keywords

💡Offer

In the context of the video, 'offer' refers to the central proposition or deal presented by a business to attract customers. It is the core value proposition that drives customer acquisition and business growth. The video emphasizes that a compelling offer can reduce the need for hard selling and can be a key differentiator in a competitive market. An example from the script is 'Domino's offer' of a free pizza if not delivered within 30 minutes.

💡Irresistible Offer

An 'irresistible offer' is a term used to describe a deal or proposal that is so attractive it is hard for the target audience to refuse. It is a central theme of the video, illustrating how such offers can significantly contribute to business growth by drawing in customers effortlessly. The script mentions that businesses should be founded on an 'irresistible offer' to ensure success.

💡Believability

Believability pertains to the credibility of an offer. The video explains that for an offer to be effective, it must be believable to the customer. This means providing a reasonable explanation for why the offer is available, which helps in avoiding skepticism and encourages customers to take action. An example given is that customers believe in an offer when there's a logical reason behind it, such as overstocking or a limited-time promotion.

💡High ROI Offer

High ROI (Return on Investment) Offer refers to a deal that provides significant value to customers, making them perceive it as a worthwhile investment of their time or money. The video stresses that an offer must have a high perceived value to be successful. For instance, the '10 CDs for a penny' offer mentioned in the script is highlighted as a high ROI offer because of its exceptional value.

💡Free

The term 'free' in the video is used to describe an offer where customers can receive something of value without any monetary cost. It is a powerful marketing tool to attract customers, as it can lead to high volumes of leads and low customer acquisition costs. The script discusses various strategies to use 'free' offers ethically and effectively, such as 'free bribe offer' and 'free with deposit'.

💡Free Bribe Offer

A 'free bribe offer' is a marketing technique where a high-value item or service is given away for free in exchange for a customer's commitment to a paid service or product. This concept is used to entice customers with significant value while securing a sale. The script cites Frank Kern's offer of giving away all his courses for free if customers sign up for a monthly newsletter as an example.

💡Limited Free Offer

A 'limited free offer' is a strategy where a product or service is provided for free for a limited time or with certain limitations. This approach creates a sense of urgency and exclusivity, prompting customers to take advantage of the offer before it expires. The video uses the example of a 28-day trial at a gym, which is free but can be upgraded to a more comprehensive program.

💡Free Trial Plus Penalty

This concept involves offering a free trial with certain conditions or penalties if the customer does not meet specific requirements. It serves as a commitment device to ensure that customers engage with the product or service. The script describes a scenario where a gym might charge for missed workouts if a customer fails to meet their workout quota during a free trial period.

💡Free with Deposit

The 'free with deposit' model is a strategy where customers can receive a product or service for free, provided they pay a deposit that can be returned or credited if certain conditions are met. This approach encourages customers to participate with the promise of getting their money back if they achieve specific outcomes. The script refers to a 'six-week challenge' where the service is free if customers achieve their goals.

💡Free Forever

The 'free forever' model is a business strategy where a basic product or service is offered for free indefinitely, with the expectation of monetizing through other means, such as add-on services or products. The video explains that this can be an effective way to attract and retain customers, as long as there are alternative revenue streams in place. An example from the script is a weight loss clinic that offers free training but monetizes through the sale of supplements.

💡Free Giveaway

A 'free giveaway' is a promotional strategy where a business offers a high-value item or service for free to attract attention and generate leads. Even though only a few customers may actually receive the giveaway, it can result in a large number of interested customers who are then offered a paid version of the product or service. The script mentions a 'meals for a month' giveaway as an example to attract potential customers.

💡Free with Commitment

The 'free with commitment' model is a strategy where a customer receives a product or service for free on the condition that they commit to a longer-term contract or purchase. This approach can make the initial offer more attractive while ensuring a steady revenue stream. The video describes an example where a customer gets the first month free if they commit to a nine-month contract.

Highlights

The importance of having an exceptional core offer that is irresistible to grow a business.

Three components of a great offer: believability, high ROI, and a business model around it.

Domino's 30-minute delivery promise as an example of an irresistible offer.

The concept of using free as a marketing tool to acquire customers at a lower cost.

Seven ways to ethically use free offers to attract customers and grow business.

Free bribe offer as a method to upsell with a high-value free item.

Limited free offer to create urgency and upsell to a paid version.

Free trial plus penalty as a strategy to ensure commitment and convert trials to paying customers.

Free with deposit offer as a way to provide a trial with a refundable deposit.

Free forever offer to provide continuous service for free as long as customers meet certain conditions.

Free giveaway as a method to generate leads and demonstrate the value of the service.

Free with commitment offer to provide a free trial in exchange for a long-term contract.

The necessity of selling the value of the offer even when it's free to ensure customer retention.

Understanding the metrics of conversion rates and customer lifetime value to confidently market free offers.

The Offer is King concept, emphasizing the power of a clear and compelling offer to drive business success.

Encouragement to like, comment, and share the content for wider reach and internet visibility.

Transcripts

hello everyone and welcome back to

i guess my show so anyways um i guess

you could call a 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 like an

irresistible offer that is what'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 gonna 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

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 shooting 30

minutes i can do that i can have pizza

at my door and sometimes there'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 was something that was incredibly

compelling 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

pizza everything else is just

restaurants right

so um anyway that was because of that

one key irresistible offer all right the

next was uh 10 cds for a penny right

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

you may recognize

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 for every dollar you

give me i'll give you a thousand dollars

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's

gonna go bad people believe that they're

like okay or like i'm overstocked and i

gotta 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 you 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 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 offer is

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

and the subtext is building a better

mousetrap 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

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 twelve thousand dollars 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 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

in 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 a fitness thing it's like hey uh

our six week challenge is a thousand

dollars or you can just sign up to

become a member and get our thousand

dollar 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 a b close when someone walks

in the door um obviously the vast

majority of people are seeing 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

you sign up for a 14 14-day or let's say

a 28-day 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 199 or 299 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 down so it so these can be

used in in conjunction with one another

so if someone uh doesn't take that that

you know the a b close that i just

mentioned

you could 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 know 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 backend 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 six-week challenge

that we ran for a very very very long

time was probably the most popular

fitness offer in the last decade

um was a free six-week challenge

obviously you always have to be

compliant put stipulations for any types

of things things on your advertisements

um states differ etc but that's where if

someone hits a goal they do an outcome

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 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's true forever right

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 shadow franchise

of uh weight loss clinics and they made

only like five percent of their revenue

on service and they made 95 of their

revenue on supplements and so people

would come in and they'd essentially

give 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 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

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

gonna need after the first thing all

right the sixth way is a a free giveaway

uh this is a classic

you know you run you run a uh uh

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 gonna opt in for that and you say

like well we you know we picked one

person but if you still undo the program

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

since you you know signed up or you know

sign 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

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 just started

running a 25 000 transformation

challenge and he's getting people to buy

without even doing phone calls

straight on the page because it's a 25

000 challenge and it's like 300 bucks to

sign up online so people are seeing the

huge giveaway and they're choosing to

participate

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 high-level

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

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

but if you get the commitment which you

should

then you will be able to convert a very

high percentage of 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

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 caller file and it's

planning on rebuilding 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 trial is 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 percent of 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 built and if it were me i'd

probably only build 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 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

tools in your skill set in your toolbox

and if you don't know how to do it you

will be a significant disadvantage

because your competitors will be

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

and you just know the metrics you know

what percentage convert what percentage

stay with the average ticket is and

that's why knowing the math is so

important but if you know those metrics

then you can mark it 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 i 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

keeping awesome catch you soon bye

[Music]

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