The Offer Is King (ALEX HORMOZI)
Summary
TLDRIn 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
👑 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.
🎁 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.
🏆 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.
Mindmap
Keywords
💡Offer
💡Irresistible Offer
💡Believability
💡High ROI Offer
💡Free
💡Free Bribe Offer
💡Limited Free Offer
💡Free Trial Plus Penalty
💡Free with Deposit
💡Free Forever
💡Free Giveaway
💡Free with Commitment
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]
you
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