How To Close Prospects By Saying "No" First (ALEX HORMOZI)

Summary

This script tells a story about Richard Schwartz, a successful furrier, who unknowingly became a mentor by excelling in the mundane aspects of his business. The key takeaway is a sales tactic: getting customers to say 'no' to anything else, which subconsciously leads them to accept upsells. Schwartz's business used this strategy to increase their upsell rates dramatically, turning small add-ons into significant profit drivers. The story encourages business owners to think creatively about how to apply this tactic to boost their own sales.

Takeaways

• 🧳 Richard Schwartz and Mano Schwartz Furs dominated the fur market by excelling in the everyday mundane tasks.
• 📈 The speaker learned valuable business lessons from observing Richard Schwartz's strategies, particularly in sales.
• 💡 A key sales tactic discussed is getting customers to say 'no' to then say 'yes', which is effective for upsell or bolt-on sales.
• 🛍️ The tactic is especially useful for non-complex sales, such as additional items or services that complement the main offer.
• 💼 The example given is from the fur business, where customers were upsold additional services when storing their furs.
• 👂 The psychological aspect of this tactic is that people are pre-programmed to resist being sold to, so they agree by saying 'no'.
• 📊 This technique can significantly increase the uptake of upsells, from the typical 20-30% to over 90%.
• 🎁 A clever twist was offering free fur earmuffs, which then required additional payment for storage and conditioning.
• 🔑 The strategy is about leveraging psychological biases to close sales, making customers feel like they are in control.
• 💼 This approach can be adapted to various businesses, not just retail, but also service industries like physical therapy or dental care.
• 🚀 The speaker encourages listeners to be creative and find ways to apply this strategy in their own business.

Q & A

Who are Richard Schwartz and Mano Schwartz?

Richard Schwartz and Mano Schwartz are fourth-generation furriers based in Baltimore, known for dominating the fur market in Maryland and Pennsylvania.

What did the narrator learn from observing Richard Schwartz's business practices?

The narrator learned the importance of doing the 'boring work' and excelling at everyday tasks to dominate the market, as well as a sales technique to increase upsell rates.

What is the significance of the 'back of napkin math' mentioned in the script?

The 'back of napkin math' refers to the simple calculations the narrator did at a young age to understand and emulate Richard Schwartz's successful business strategies.

What is the sales technique that the narrator learned from Mano Schwartz?

The sales technique involves getting customers to say 'no' to additional offers, which subconsciously leads them to accept the core offer, thus increasing the rate of upsell acceptance.

How does the technique of getting customers to say 'no' lead to more sales?

It leverages the psychological bias of people being contrarian and pre-programmed to resist sales pitches, which paradoxically results in them agreeing to the core offer.

What is an example of an upsell mentioned in the script?

An example of an upsell is offering fur coat conditioning services along with the basic storage service, which adds extra value and cost.

Why are upsells important to a business?

Upsells are important because they can significantly drive bottom line profit, help liquidate acquisition costs, and increase overall customer value.

How does the strategy of offering a free pair of fur earmuffs work in the sales process?

Offering free fur earmuffs incentivizes customers to store their fur coats, and then the business upsells the conditioning service for the earmuffs, which covers the cost of the free item.

What is the 'assume close' tactic mentioned in the script?

The 'assume close' tactic is a sales strategy where the salesperson assumes the customer will accept the upsell, making it easier for the customer to agree by simply responding 'no' to the question of wanting anything else.

How does the script suggest using the learned sales technique in different businesses?

The script suggests that the technique can be adapted to various businesses by creatively applying the principle of getting customers to say 'no' to additional offers, which can lead to higher upsell rates.

What is the final message or advice given to the listeners regarding the sales technique?

The final message is to be creative and find ways to apply the sales technique in one's own business, emphasizing that successful people look for opportunities to use effective strategies.