The Game with Alex Hormozi - $100M Offers: E-commerce Edition | Ep 419

Episode Date: August 9, 2022

Give them an offer so good they’ll feel stupid for saying NO: E-commerce edition! Today, Alex (@AlexHormozi) talks about how his $100M offer framework not only works with a traditional sales pitch, but also for E-commerce! What?! Yes, you heard that right. He dives into how each of the 4 variables of his framework applies in every aspect of E-commerce through clear and simple examples.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 on his path from $100M to $1B in net worth.Timestamps:(1:12) - Value equation variables drive purchasing decisions, exceeding perceived value.(3:01) - Apply scarcity, urgency, guarantees, and bonuses in E-commerce like Amazon.(8:10) - Boost value equation with key variables for increased sales.(11:37) - Define the job to be done, and everything else follows.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Amazon has been the pioneer of prime of two-day shipping, one-day shipping, one-hour shipping. Right? And they continue to try and drive this down because they know that the faster than get people to things they want, the more that they will value it and like it and repeat buying on the platform. Welcome to the game where we talk about how to sell more stuff to more people in more ways and build businesses worth owning. I'm trying to build a billion-dollar thing with Acquisition.com. I always wish Bezos, Musk, and Buffett had documented their journey. So I'm doing it for the rest of us. Please share and enjoy.

I am pissed. Not really. But I recently was on a podcast a few months ago via my first million podcast with Sam and Sean. Great guys. And we were talking about my book, $100 million offers, which you can get on Amazon, Kindle for 99 cents if you don't have the dollars for a hardback. And I heard on a later podcast that I wasn't on that Sean was saying, yeah, I really love the book, but it's just a bummer. It doesn't apply to e-commerce. And I disagree. And that is why I'm making this to break down why the value equation and the things inside of the $100 million offers book, which pretty much this, this visual right here, you know, encapsulates or summarizes the vast majority of the pieces in the book. And obviously, there's a lot more examples and stories. And there's, you know, a lot of five-star reviews on Amazon. So check it out for 99 cents if you want. But the main point is that these are variables that create purchasing decisions that get people to value something in order to buy it because they value it in excess of the price. And the idea here is if we understand the things that drive value, then we can understand the things that underpin price, which then lead to profits.

all right and so in the book i do give a lot of service-based examples both b2b and b2c but i wanted to take this to do something a little bit different and talk about how it applies to e-commerce all right because at the end of the day people buy stuff because they value them all right and so the application may be somewhat different but the the fundamentals and the variables are the same okay and so quick recap on this dream outcome is people actually have to want the thing that you're delivering to them number one number two is that when they buy they will buy based on the perceived likelihood that they're actually going to get that thing So it's like a lot of people may want to get rich, but they will buy the one that they think that has the highest likelihood of actually them getting there.

Or a lot of people might want to look skinny, but they'll work with the physician that has worked with 10,000 patients rather than their first patient because their perceived likelihood of actually getting skinny or getting the surgery they want is higher. And they're in a very real way value it more. Time delay is how quickly something can happen, right? It's between when I buy and when I get, if we can compress that time horizon or that timeline, the more valuable it is. If I can get you a six-pack in 30 days for a six-pack in 30 months, which one do you value more? Of course, the 30-days one. So we try and compress the time horizon along how we deliver our products and services. And then finally, effort and sacrifice are the things that we have to start doing that we don't want to do

or we have to give up doing that we do that we do want to do as a result of the purchase. And so in a perfect world, we want to deliver someone the dream outcome. And when they buy it because they've extremely high like that or they're certain that they're going to achieve that. And they're going to achieve it overnight with ease, right? So fast, easy, and exactly what they want, the way they want it to be delivered. All right. So that's what we have to think about here. Now, in the book, I talk about scarcity, urgency,

guarantees bonuses in naming, all right? And so what I want to do is just apply these. And the easiest way to look at this and prove out the point that this 100% applies to e-commerce is to look at the e-commerce giants. All right, specifically, let's just look at Amazon. And over time, they've really nailed down hitting each and every single one of these variables that drive value. Now, if you are an e-commerce person and you're like, well, I can't sell on Amazon.

Well, one is you can. The other is that you can start thinking about it through Amazon lenses. And of course, it's taking him 30 years to build this thing, right? But we can still think if this is the theoretical that we need to try and shoot for, this is the ideal scene, then we can start taking steps towards it to improve the value of our offerings. Okay. Cool.

Now, if, let's say, I wanted to buy a jacket, all right? So this is a very different example than my normal ones. And I have other examples and services with this one is just for physical products. So let's say I wanted to buy a jacket. My dream outcome might be that I look good in this jacket. That could be an outcome. It could be that it's very warm. Ideally, maybe it's both of those things, right?

And I might even want a jacket that looks good and that isn't warm because I just want to wear it. I think it looks good, but I don't want to get hot. Right. So it depends on what my dream outcome is. Right. So you're going to have different messaging for different avatars depending on the product itself and what problem it solves. All right. So let's just use, for example, that I just want a fashionable jacket that looks cool.

Okay? So that's point one around what our dream outcome is. Great. Now, I may be a buyer who's like, but I'm not that fashionable, and I don't really know how to like pair stuff and make it look cool. All right. So what are the ways that we can increase the perceived likelihood of achievement of me achieving this cool look? All right? Well, first off is reviews. If I have lots of five-star reviews on my page and I can read them, then I'm more likely to make the purchase because I see other people made the purchase and are happy about it. Right? Makes sense. That's why reviews Amazon pioneered this and then it became commonplace. because it increased the perceived likelihood of achievement, right? What else can we do? And I actually saw this. Levi's did this for selling a gene jacket, which is why I'm giving the example because it was so masterful on how they did it.

What they did is that I saw this video. It was maybe 90 seconds, and it had the gene jacket, and it had three different ways you can wear it. And they showed, here's how you pair it with dark stuff. Here's how you pair it with light stuff. Here's how you pair it with the same looking gene, blah, blah. And I was like, well, I did not know how gene jackets work, but now I do.

And now I know how to wear it. So my perceived likelihood of achieving the dream outcome of looking cool has just gone up simply by them making a video that demonstrated it. Right? These variables apply to services and e-commerce just the same. It's just the way that we show someone how to experience the dream outcome they desire differ. All right. In a, let's say I'm teaching a skill. I'm going to show somebody who has the skill, showing them demonstrating the skill and the results of having that skill.

right? That would be increasing the perceived likelihood. But if it's a physical product, then we have to think what's the outcome they want? And then how do we increase the likelihood that they see that? An easy way is to demonstrate it. Right. It's to literally demonstrate this is probably what you're thinking and here's how it works. That's why unboxing videos and things like that work because it decreases the risk associated with making the purchase because they're like, oh, that's what's going to happen. It decreases the other side of me swiping my card. What happens after that? Right. And as much as we can demystify what happens after, they say, oh, I now can create expectations, and then this product will meet the expectations

and I will be happy. Great. Now, the next one is time to like. Amazon has been the pioneer of prime of two-day shipping, one-day shipping, one-hour shipping, right? And they continue to try and drive this down because they know that the faster than get people to things they want, the more that they will value it and like it and repeat buying on the platform. Right. And so this should be a no-brainer. This absolutely applies to e-commerce. All right. Now, the next one, and that can also apply at different levels, right? There's the actual purchasing experience, but then there's also the experience of using the products. It depends on types of products that you have, like a jacket might not have a huge time delay in terms of using it. If you sold custom tailored stuff, then delivering it faster or

finding a way to operationalize that more quickly would be very real value, right? Right. Right. So there's the purchasing process and then there's also the like the wearing it process, all right, and like unboxing and actually having them experience again the dream outcome. Hey, Mosinich, quick break just to let you know that we've been starting to post on LinkedIn in and want to connect with you. All right, so send me a connection request and note letting me know that you listen to the show and I will accept it.

There's anyone you think that we should be connected with, tag them in one of my or layless posts, and I will give you all the love in the world. All right, so let's get back to the show. Finally, of these four variables, we have evidence sacrifice. And so the purchasing decision here, Amazon has one-click purchases with everything on file,

save so you can make a purchasing decision in a split second, right? And so that's why the rise of products like Bolt and Shop Pay are all things that have, decrease the effort and sacrifice. And a lot of e-commerce stores have been able to use this to their advantage and make more sales, right? And that's because in a real way, things have become more valuable. So it increased the likely that people are going to buy. All right. But let's look at the other ratchets that I said. These are inside of the book are enhancers of value. They do even more to increase the value equation in your favor so that you can sell more stuffs. Okay. So let's look at

Amazon. For example, what do they have under virtually every single item? how many they have left in stock is their way of showing scarcity. Only two left. Only six left. Only 17 left. And then they have it by size, right? So that they can show scarcity at every single level. Huh.

What does that do? It drives conversions. People want to buy. All right? Are you guys tracking with me? Does this feel like it applies to e-commerce? Let's keep going. Urgency.

What else does Amazon do? They have lightning deals, right? When you do a limited drop, a limited edition drop of a T-Chi there's only 100 printed and we drop them on Friday and first come first serve. What does that do? It gives scarcity. And because there's a time component, it adds urgency. Now, to really add urgency, we'd say we're only selling this for an hour, but hopefully the point drives home. All right, but a lightning deal, for example, where they said we're only giving this price for 60 minutes, that is absolutely urgency. All right. Saying how many you have left is absolutely scarcity. Are you guys

tracking with this? All right, cool. Now, guarantees. So what do we do here? Well, Amazon took this one step further. Not only did they already have a money back guarantee, right? Because it's satisfaction. You don't have to do anything. You just send it back. And they made it easy to return stuff. What they did now is try before you buy. Right? So they have seven day layaway. So you can buy the thing and they charge you seven days later. You can literally try the thing on and not even have to get billed on the card. Right? Why did they do that? It's a version of a guarantee. Why? Because what we're doing is we're decreasing the risk of someone purchasing, right? That's what we're doing here. We're decreasing the likelihood that they have a poor experience, which as an inverse increases the likelihood that they do have a positive experience if they choose to purchase. So it's like, if I'm trying it on before I buy it, then I'll be very darn sure that if I like it, my perceived likelihood of achieving the outcome after I'm wearing it is very, very high. That's why they did it, right?

This is an implied guarantee. It's a version of a guarantee. So they technically have two guarantees. They have one, which is the money back guarantee, which has now become almost table stakes for physical products, but on top of that, they added in a try before you buy. Now, bonuses. All right, some of these ones will include bonuses like the training that I said for Levi's, like little videos on how you can tips and tricks on how you can use this thing, right?

If you have a widget that's like at-home health kitchen stuff, having videos on how they can actually use the thing in better ways, it's huge. If you have a supplement business, for example, telling people how to take the products and the best things to combine it with and what time a day and how they can make sure they don't forget it and blah, blah, blah. Those are all things that can be bonuses that can be perceived benefits of doing the thing, right? And all of this stuff goes back to these variables, okay, and increasing value and increasing the likelihood somebody wants to buy. All right. And then finally, naming it in a way that I think it will be cool. If I said my dream outcome was that I wanted

a warm jacket, then probably having warm or hot or fire or flames or oven, right, in the name might be something that would increase my likelihood that I'm thinking this is going to be something that will help me experience my dream outcome. Right? Okay. Now on the flip side, if I wanted just something that was fashionable and light, then it might be a light fashion jacket, right? And so it's telling me the dream outcome. So we have to be explicit in what we're doing. And I'll also bet you, right, that you'll have different avatars that will be attracted to different things. Or maybe same avatar, but they're solving different needs. So the question is, what job is, are we trying to do? What's the job to be done?

And then everything else is going to fall down from there. Now, Amazon specifically, people name it based on the things that people search for, right? Which makes sense because why would they do that? Because it's exactly what I was looking for by naming it properly. And so my hope here is that this at least gives you a little bit of a cursory overview of the things that you can do within any commerce or physical products business to apply the $100 million offer framework to make your stuff more viable so that people increase in higher amounts at higher percentages and they do so willing to pay higher prices because you've checked all these boxes off and the competitors that you might even have the same products as you, but they haven't increased the perceived likeative achievement.

They haven't shown how demonstrated how they can use the product. They don't have guarantees. They don't have tried before you buy. It takes two weeks to get there. And the purchasing process is paying the ass. They have to make an entire profile. They have to do all this stuff. Right. And they find out that there is no scarcity. So as far as they're concerned, they can buy this whenever, so they can come back next week if they feel like it. Right. And there's no urgency or time timeline where they do it because maybe maybe this is seasonal for for for for you but for them it's your round so again they can take even more time to make the decision right and then in terms of bonuses yours comes with all these different trainings and things like that they can and how to use the

product and how to use it in different ways and even how to use it for different avatars to solve different problems right because people are going to experience different problems that they're using they're hiring your product to solve