The Game with Alex Hormozi - 3 Questions To asked Yourself For Product And Service | Ep 323

Episode Date: August 19, 2021

A change in perspective ain’t too bad. Today, Alex (@AlexHormozi) talks about the important questions to reflect on when you’re thinking about your business, providing value over time, and other practices the wealthy do!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:(1:03) - Check if product is talk-worthy(3:11) - Key questions: Value, Profit, Customer Experience(6:01) - Big vs small entrepreneurs: Product vs promotion focusFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

because the product that you have is not good enough. And it's really hard to confront. Welcome to the game where we talk about how to get more customers, how to make more per customer, and how to keep them longer, and the many failures and lessons we have learned along the way. I hope you enjoy and subscribe. One of the biggest shifts that I had as an entrepreneur going from, you know, making a few hundred thousand dollars a year,

a million dollars a year to making, you know, just under nine figures like we do now, has been a simple understanding that I'm going to try and hit at in a couple of different ways. And hopefully you'll be able to shift your perspective in terms of how you see product and delivery. And so right now, if you're not making the amount of money that you want to make, it's because the product that you have is not good enough. And it's really hard to confront that fact.

But if you really do and sit here, I can't tell you the amount of times I talk to entrepreneurs. And they're like, man, if I just had more people, if more people would just find out about my product, then all my problems will be solved. But the reality is that if you have any amount of customers, then people already have found out about your product. And for one reason or another, they have chosen not to tell anyone else about it. And you have to sit with that for a second. You have to realize that, like, people have found out about your product. and they're not referring people. And you have to ask why.

Why are these people not sending me business? And so one of the first times I heard a statement that I really liked about this was from Dan Kennedy and he said, most small entrepreneurs try and get customers to make sales. Bigger entrepreneurs try to make sales to get customers. And the difference is one person is all about trying to get to the money as fast as possible.

What do I need to say to get this person to say yes? What do I need to say to get this person to buy, right? How do I get the money? right? The other way is how do I make some sort of exchange so that I can now create a long-time relationship with this customer and continue to provide value over time? One has a compounding view and perspective on time and value and the other is short-sighted. And I can tell you the difference between the people who are millioners that I have that I'm friends with and people who are billionaires that I am friends with. This is probably one of the most fundamental differences.

And so I was talking to a friend of mine who's worth a rebellion and he was saying, he said, if it's not going to grow on its own over time, it's not worth doing. And I really sat with that for a second. And it was like, if you put in a one-time effort, like this is how people who are the ultra-wealthy think. If you put one-time effort into something and it compounds over time, then that is an enterprise or product that they want to continue to invest in. On the flip side, if you have to consistently show up and consistently promote and consistently

get out there and sell and sell and do all this stuff, then what ends up happening is that the product itself is not good enough, right? Because people in and of themselves are not referring business. And so let me give you three questions that really changed and hopefully will alter your perspective like they did mine around product and service. And so the first is if I have an existing product or service and I were to make it 10 times more expensive. So really think about the price. Or you can say $100,000 or a million, whatever it is, right? Just a huge number.

And if that's how much I were charging for it, what? What would I need to do? What would the experience need to be? What would the product need to deliver in order for it to be worth that much? What happens is you start thinking in a very different type of mindset about how much value you have to create, right? And so that is the first question that I ask. There's two more and the third one's my favorite and I'll get to in a second.

The second question I ask is if this product that I have cost one tenth as much as it does right now, but I had to make it better than it currently is. what would I need to do? What one-time assets would I need to create that would consistently provide value that I could do at scale, that I could do profitably, right? So, hey, guys, real quick, if you're new to the podcast, I have a book on Amazon called $100 million offers at over $8,000 five-star reviews and it has almost a perfect score. You can get it for 99 cents on Kindle. The reason I bring it up is that I put over 1,000 hours into writing that book. And it's my biggest gift to our community.

So it's my very shameless way of trying to get you to like me more. and ultimately make more dollars so that later on in your business career, I can potentially partner with you. So that's my give. Go check it out, Amazon, and back to the show. First question, if this were 10 times expensive or $100,000 or $1,000 or $1 million, is what I charge for my product, what would it need to be, what would the experience need to be, and what value would I need to deliver in order for

it to be worth that much? The second question is if it were one-tenth the cost, but I had to make it better than my current product or service. what else would I create or do or make in order to facilitate that outcome? And the third question, which is probably my favorite, which I think underpins the entire ideology that I'm hitting on here, is if I had a business and I were only allowed to sell one more customer, and the rest of the growth of my business had to come from that customer without me asking,

as in that that customer's experience was so remarkable, was so positive, was so amazing that they, they alone had to, on their own volition, tell other people about my service, what would need to happen? What would need to happen to create that experience? And when thinking about all three of these product frames, I like them because they kind of hit on different aspects of the product.

The first question, which is a $100,000 or a million dollar question hits on value, which is how do I create the most value in the product itself? The second question hits on the profit of the product, because if it's one tenth the cost and I have to make it better, this means I don't have to do high margin, one-time investment type things to make the entire product more valuable. Right? So that hits on profit. So first is the value of the product. The second is the profit

to me, right, as a business owner. And then the third question hits on the experience, which is what's the customer experience, which is everything else that surrounds the product that we're selling or service that we're selling, right? What is the experience that has to occur in order for this customer to become a raving fan that it's so good that they remark about it. They cannot help themselves but remark about it. And what's interesting is that every super wealthy person that I know pretty much exclusively talks about product. And usually the really small people that I know only talk about promotion. And promotion should really only exist to get your product right.

And then once it is right, then you can juice it and then let it go and take care of itself. And the reason that it's so important, at least in my opinion, is that if you think about the six ways of getting customers, right? And if you don't know what those are, it's paid media, earned media. So paid media is advertising, right, in promotions. earned media is followings, right, if you have any kind of organic following. The third is through your contact lists, so people on your phone and your email list, etc. that you already own their contact information. The fourth is through manual outbound.

So that's DMs, cold emails, cold calls, cold all of that stuff where you reach out to people. The fifth is through affiliates of partners who can promote your stuff. And the sixth, which is the most powerful and the only one that compounds is word of mouth. So think about that for a second. every of the other five ways of acquiring customers is not compounding. Those are linearly scaled, right? It means if you double the amount of outbound people you have, you double the amount of customers that you get.

If you double your ad spend, you might be able to double the amount of customers you get. Sometimes it's less than that. But you get the idea. They scale relatively linearly, right? Whereas word of mouth, referrals, which is the sixth way of getting customers, is the only one that compounds. It multiplies rather than is additive. All right. If you get two people to tell two people and those people tell two people, then it continues to compound.

And that is what creates enterprise value. That is what creates an enduring thing. And that is what, when you spend the extra time to make the product so good that people have to tell their friends about it, then that's where you get the unending scale. And also is where all the profit is. Right? You don't have to worry about the turn as much because the product's so good. You don't have to worry about the negative reviews because the product's so good. You don't have to worry about customers bad meth on you because instead they're telling their friends about how good you are. And this has been one of the shifts that has been most helpful for me. And honestly, when I look back on my own trajectory, how much I talk about promotion in the beginning of my career versus now I talk so much more about people and product. And anyways, I wanted to share this with you because it was, I could tell you how good I am about this kind of stuff. Anyways, the real nuts of this is that everything that the ultra wealthy do is compounding. it grows with time where time becomes an asset instead of a liability. And if everything you do, you have to go out and get more business, go out and get more business,

go out and get more business, right? It means that it requires effort every single day. Whereas if you put a lot of front-end effort, which is the investment, which is the patience, right, to make the thing that much better in the beginning, then it will pay you in dividends over time. And most people skip that step because they just want to make the first sale. They're just trying to get a customer to make a sale rather than trying to make a sale. to get a customer. And so anyways, I hope you found this valuable.

I cover this stuff in my book, which is basically free. It's 99 cents. It's the cheapest I could let Amazon do it. It's called $100 million offers. If you wanna grab it, I'm donating the 35 cents that Amazon gives you, it gives me. It's for you guys.

It's everything that I've learned about how to create offers that are so good, people feel stupid saying no. I think it's the number one seller in advertising and direct marketing on Amazon right now. Love you all. Hope you got value. from this if you did hit that subscribe button and i'll see you guys the next video lots of love get you soon bye