The Game with Alex Hormozi - 6. Discount Promotions | $100M Lost Chapters Audiobook

Episode Date: November 14, 2025

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Discount promotions. A discount turns once into halves. Why pay more when you could pay less? Understanding discount offers. Fundamentally, free and discount offers operate very similarly from a money model perspective. Basically, they create a perceived value discrepancy that on its own can drive action. That being said, I personally am not a big believer in marginal discounts, say 5 to 25% off. It's just not enough to drive real behavior in my opinion, and basically just cuts into margin. Instead, we're just going to be talking about massive discounts, 50% or more. Those are the types of numbers that people respond to. And they drive action from a population that otherwise wouldn't act.

And that's what you have to accomplish with free your discount offer. It has to get people who wouldn't otherwise consider it to respond. No, most of the time when talking about discount offers, they will only make up a component of your offering, not the entire thing. While there are a handful of notable exceptions, in most instances, a discount offer is a piece of the thing, not the entire thing. With hope, that makes sense. If it doesn't, the examples will illustrate it.

Four ways to display discounts. So let's imagine we start a lemonade stand. I say to you, I want to try one of these discount offers out. What do you think? I think we'll be able to get more people to respond to my efforts with some sort of discount, but I don't know where to start. You might say, great question. You're going to have to test it, but I'll show you my framework that I use to test discounts.

It'll automatically get you thinking differently about how to display offers from here and out. You see, there are four ways you can display a discount. Knowing them is important. People will respond differently to the same discount display differently. There are probably others, but these are the four that I find out. most common and have been tested and used effectively. Let's look at our own business and try all four. You'll notice that sometimes it fits and other times it doesn't. Whether we are selling something premium or in higher volume, the price of the offer many times informs what will make the most sense

for us. Let's imagine we have an ultimate lemonade bundle that is three bottles a day for $30. The numbers don't matter, by the way. Well, that's what we're going to promote four different ways. New client special, first week of lemonade, $29, instead of $210. Number one, percentage off. New client special, 87% off first visit. Number two, absolute amounts off. $181 off first visit, normally $210. Number three, relative equivalent off.

A, save a steak dinner. B, less than going out to lunch. Four, simply the discounted price. $29, new client special. Do you see how different all these look and feel? it's the same exact promotion just communicated differently. By cycling through all four, you can test which resonates best in your audience. If you find multiple winners, even better.

It gives you more bullets in the chamber when a promotion fatigues. Before you just read to the next section, think about other ways you could use a discount for your own offer. Just do the exercise in your head and flex your brain muscle. Pro tip. Use absolute prices when talking about understood products and services. In order for a simple discounted price, with no other elements around it,

to be effective, the service will usually have to be one that's well understood. People should already have an idea of what it costs. This is where discounts do well. If you discount something that people don't understand, the offer won't be effective. The only way around this would be to state the price, then state the discount, like in the absolute amount off example. An example that would not work with this would be 50% off agency retainer. No knows what the agency does or how, and agencies have a wide range of costs. So there would likely be a better offer that could be made that would be more easily understood. Just like before, we're going to flip roles and have you explained the pros and cons of discounts to me as that we were considering it for our business.

Pros of discount offers. Me. But wait, so now I know how to display discount offers, but why would I choose a discount offer over a free offer to get more leads? If free is the most powerful. You. There are a host of benefits that discounts get that free offers don't provide. You must match the right tool for the job. Let me explain.

Number one. Lots of cheap leads within the law. Me. So it's illegal to market free stuff? You, of course not. But in some countries, if you have any stipulations or creative offers around free, they are forbidden. Discount offers allow us to advertise compliantly and still generate a decent amount of lead volume. This is especially true when compared to a premium offer, the only other alternative. Me. Got it. So it allows me to market in ways that otherwise wouldn't and still get good lead volume.

Note, if you're in a heavily regulated industry, state, or country, then a discount offer may be the right thing for your business. Number two. You actually collect some money. Me. So we collect money. for people who buy the discount. But won't that not amount to much? You. Correct. It won't amount to much money, but it can still help liquidate acquisition costs. But we will never build our business to use this money as the real way that we're liquidating our cost. This is just the first way for us to attract and transact with a customer. Me. Got it. So I can collect some cash up front I otherwise wouldn't, which is nice, but I shouldn't rely on it to fund my marketing efforts. Bingo. Number three, people come in expecting to spend some sort of money. Me. So I, so I,

I guess the difference between these leads and free leads is that these folks at least expect to pay for something, so won't be a shock for them. You. Honestly, this is more of a mental benefit than anything, in my opinion. Many business owners and or employees have crazy limiting beliefs around selling and consumer buying behavior. Not you, of course. So giving them something where they feel like the prospects are coming in or opting in ready to spend money makes them more invested in the selling process. Close rates on the initial discount tend to be higher, but still the same on upselling the course. or offer to the individual, which really becomes the quote second sale. Me. Got it. So the discount is really for me and my team more than the actual benefit. And we're still going to have to focus on the second sale, which is where all the money is really made. Pro tip. This is mostly due to conviction of the salesperson, not because people are inherently more willing. A good salesman will

sell the same percentage of free versus non-free leads, assuming the funnels and sales environment are the same. We have tested this four several times in our business. I've tested so many times because it still continues to amaze me. But for whatever reason, it makes people feel better about selling, just fine. This is especially important when you're dealing with small business owners with limiting beliefs. Sometimes you just have to meet them halfway. Number four. The two-step sale. Probably the biggest benefit. Me. So if I'm doing some sort of discount, I can collect their card over the phone, and it's an easy sale. It paves the way for me making future sales more seamless, and I can charge penalties for other things I may need them to do or adhere to during the sales process. You. Exactly.

If utilizing discount offers for lead generation, they can help eliminate things like no-shows. This is important when you have a service where the time or cost of the individual is real, like a doctor's time. You want to eliminate no-shows as much as possible. Utilizing a discount offer over free offer solves that problem for most part because people will typically shop for things they pay for, at least 85 or 90% or more. For us, if we want to use this in our lemonade business, we can set up a follow-up call in seven days after their discounted period is over to see what they think.

we can say that if they don't show up to this appointment, we charge them sort of fee to make sure they show up. We can use this strategy as part of a two-step sales process beautifully, which in my opinion is probably the primary reason we use discounts. Me. So if I want people to do multiple things before I sell them something, more expensive, having a discount front end, make sure that they'll do it,

and gives me an easy way to create an initial trust to lead to future upsell seamlessly. I like it. Number five. Discount offers make upsells smooth as butter. Me. So now I have the person's card on file from the first transaction. I can just ask them, do you want to use the card job of a file for my next upsell?

That's so easy and seamless. You. Yes, the whole point is we give something super valuable away that's not our core offer for an insane discount with the intention of getting leads and getting a card over the phone to get the thing at a designated time. The prospect then comes in at the designated time

and is upsold something far more expensive after receiving the initial thing. An example of a two-step sale would be us giving away heavy metals test consultations for $19, and then upselling the prospect into a $2,100, 10-week, eliminate detox plan once we meet with them. So it would look like this. There'd be an ad, there'd be an opt-in,

which would lead to a phone call for $19 for the promotion. We'd set the appointment. The person would show up for the $19 appointment. They would get value. They would schedule a follow-up for a $2,100 treatment program sale, and then they'd show up with the second appointment and get sold. You'd be amazed at how many more people will buy when they don't have to take their card out.

That's why Amazon's one-click purchasing, Disney's money wristband, and so many other institutions attempt to eliminate this friction. They know they'll buy more, so this is us using that to our advantage. Me, got it. And it would help me get around the pesky, I forgot my card at home, obstacles, because I already have their card on file. Pro tip, it's easier to upsell than to sell. Some people call this the foot in the door principle. Basically, once you get someone to buy something, even a small item, the likelihood they buy from you again goes way up. Discounts as a front end give you this benefit. It allows you to turn prospects into customers, an important shift. Then you can upsell those customers into your main offer, with the added benefit of a card on file close and some

built-in trust from whatever you delivered with your discount offer. Author note, add steps as price and complexity increase. The more complex the thing you sell is, or the higher the price, the more time or prospect will need to spend with you in order to buy. You can do this all at once, think a weekend seminar, over time, think multiple sales calls or making content. Both work. If you're having a conversion issue, you may simply be spending too little time with a prospect before asking for the sale. Pro tip.

Give away lower cost time if you can. The other way of solving this problem, my preference, is to not give away the doctor's time, and instead, operationally fix the first visit so it's something a front desk admin or an assistant can handle. This would be like a prospect coming in for braces, filling out all the required information, taking x-ray pictures, applying for financing, and everything else that needs to be done. This allows the business to use the doctor's time on only the most qualified candidates. Typically, once the person has come in, you can set the file appointment for the sale.

By doing this, you eliminate the cost of no-shows while also pre-qualifying all candidates and putting them in the best situation to say yes when they come in the next time. In person, you could also easily close a card for a no-show fee on the next visit. This all but ensures the person will show ready to buy. I call this strategy the proprietary five-minute appointment method. Feel free to swipe it. If desired, the doc can squeeze the person in between appointments for five minutes just to say hello and set up the next in-depth appointment where a treatment plan will be recommended and sold.

This will allow them to be able to take appointments all the time instead of during a less than desirable tiny window of time for, quote, new patients. Increasing the available time slots for appointments will improve the percentage of people who schedule more than just about anything. Cons of discount offers. Number one, giving away the farm. Me. But aren't we giving away the farm with this discount offer? You. Well, it depends what we're discounting.

If we always discount our core offer, then people will become trained to buy only a discounted times. No, Bueno. This is why we aren't going to use this as our business model, just a way to acquire customers. The only time where true discounts on core offer works is if our pricing models to wildly increase your prices during the quote regular season and live off the discounting.

Clothing retailers live this model, but again, it can become a double-edged sword. That's why we're going to splinter our offer into tiny pieces and just give a core component at a discount, not the whole form. Me. Ah, got it. So we're just going to give away a sliver as value to get the card so we can up somewhere later, not making our entire business.

Number two. Bargainhoppers. Me. Won't this attract bargain hoppers like freebie seekers? You. Again, this comes down to what we're giving away. This was the, quote, issue with Groupon back in the day. People started to notice that these customers had no desire to buy the main thing.

But most of the businesses that complained about this did not know how to structure their offers to automatically qualify prospects to become customers of their core offer. We shouldn't see people as customers if they buy the discount. We should see them as qualified leads. But we can resolve both of these issues with intelligent offer structure, which I'll cover in the advanced offer stacking section, section C. Me. Got it. These are really just opportunities for us to upsell. And if we structure it right, there's nothing unqualified about these folks. Heck, I buy discounts sometimes, then want more.

Offers' Conclusion. In my opinion, discount offers can be used with great effectiveness on the front end or the back end. These can massively increase the take rate on all offer. These are wildly powerful. I cannot overstate them. In my experience, as a front-end offer, discounts tend to work better with well-understood services, like dentists, chiropractors, gyms, haircuts, etc. People have price ranges they understand so the discounts can be attractive to them to generate inquiries. It must be something that people would value receiving a discount from. If a customer doesn't know what they're getting, a discount on it doesn't really make much sense because they

nothing to compare it to. So if you're in a well-understood market or of a service that is well-understood, discount offers can be powerful on the front end. The other main benefit is that discounts almost entirely eliminate no-shows. Attract section conclusion. Brass tax. If you're not getting enough response, you probably need to make your front-end more appealing. We need to give people who otherwise wouldn't respond are reason to do so. Enhancing your Grant Slam offer with a free or discount front-end is the fastest way to do that. This applies whether you are just figuring out your first acquisition channel or you're adding an additional acquisition channel. Always remember, generate flow, monetize flow, then add friction. In that order, I sits in the beginning. I almost always start

with a free or massively discounted offer so that I have something to benchmark and then improve upon. Fundamentally, to make this process work, you must know your business and your product better than your customers do. Why? Because all businesses capitalize on an information advantage, as in we know more about our customers' problems than they do. We capitalize on this advantage by making them aware of all the other problems they're going to encounter on their journey, then capitalizing on that through upsells. This is how you design a winning, acquisition strategy.