The Game with Alex Hormozi - Do Epic Stuff & Then Talk About It | Ep 902

Episode Date: October 22, 2025

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 and will learn on his path from $100M to $1B in net worth.Wanna scale your business? Click here.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

The first step in all this stuff is like, do epic stuff, and then step two is talk about it. And that is fundamentally how you provide value. And so when you're providing value in any domain, I want to build my personal brand. Like, your personal brand will be built on the amount of value you can provide other people. You can get whatever you want in life as long as you help enough other people get with day one. So now we shall begin the hottest of Hermosie Hotlines. All right, rock and roll. Tell me about the business.

All right. We are a $1.2 million pool service and repair company in Raleigh, North Carolina. Rock and roll. What's profit? About 50K after $1.45 and that owner's salaries. So $200 all in? Yeah. Yep. $195. Yeah, right around them. Cool. That's fine. Okay. 200K, bottom line. All right. What's the membership price? What's turn? We're about, it depends. It depends. But average is about $4,500.

a year per client. And we're only recurring... What's churn? Yeah. Oh, turn. We lost about 12 people this year, so 12 divided by 176. What about it is 12? Yeah, okay. So you have 93% retention annually. Okay, great. So turn is not an issue. Fantastic. All right. So what do you want to have to happen? What's the problem?

Problem for us is we can't hire and retain and train really talented people. we find that we can keep people for about a year, and then they either want to go do something else or they want to go into a different trade that they view as a higher opportunity, like HVAC, plumbing, electrical, stuff like that. So we're trying to figure out a way to make it so that people want to stick around

and see this as a career that it can be. Yeah, I'm going to guess, what's your close rate right right right now when you meet with people? Our close rate when we meet with clients, or with leads or uh well leads to you know to sell them yeah selling uh we're about 30 percent 30 percent interesting okay so this is me calling the shot this is my guess here though is that i'm gonna bet we have to fix the sales motion number one once we fix the sales motion we can increase prices step two once we can increase the prices which will dramatically increase profit

we can then pay the guys more so they stick yeah currently paid 25% of labor revenue. So yeah, definitely increasing prices. Definitely is a way to do that. And that's the thing. We're just, our close ratio, I feel like isn't high enough to warrant the price increase that I know we need, right? So it's like I don't want it to go to 5% close ratio in order to get that.

I mean, dude, for you to get to 5%, you would have to like 10x the prices. It wouldn't be, it wouldn't be good. So we have to fix the sales motion. So that's my, so like, this is why, like, you've got to pull the thread, right? So it's like, it starts with, like, my guys aren't staying long enough. But the reality is that, like, we're not charging enough, but we can't charge more because their sales process is screwed. So let's fix the sales process. All right.

So walk me through the sales process. Sales process, we have currently, they basically call our office. We do a lot of inbound. We don't do as much advertising as we need to. So we're pretty, pretty well, we show up pretty well on Google. but we're only spending like five, six hundred bucks a month on actual Google Outbound. Well, you know Google ads, right? I mean Google ads, like Google Local Services.

Got it. And so you're, and it's 500 bucks a month is what you're putting into PPC. Okay? Yep. All right. How many leads are coming from that? Any idea? Leads a week are about two to three.

Okay. From that, from that 500 that you spend, right? Yeah. Okay. So I'm going to say you're getting 12, 12 a month, let's just say 10 for simple math. So it costs you $50 a lead right now, right now, roughly. All right. And you convert what percentage of leads?

Convert about 30%. Okay, converting 30% of leads. You can get that to 50 on inbound, just FYI, but you're at 30%, that's fine, for the purposes of our conversation. Okay. So it costs you $150. right? Yes. To get a customer

is going to pay you $4,500 a year. Yep. Not bad. Not bad gig. So let me ask you this. What percentage of your costs are variable versus fixed?

I don't have an exact figure. Let me ask you this. What are gross margins? Gross margins are about 50%. Okay. So that... There's about 25. And that includes labor.

That includes labor, right? Correct. Okay. So it costs you $150 one time to make $2,250 per year in gross profit. Yep. Banger. Banger. Amazing.

Okay. I need to put more into advertising. Hell yeah. I've got this amazing investment opportunity. If you give me $150, I'll give you $2.250 back. Just at the end of the year. All right, I'll give you a $2.50 back. How much money are you giving me? As many pennies as I can throw at you. Yeah.

Okay. Well, how much cash you have on hand? Not a lot. Not a lot on hand. Okay. We basically, that's the thing. Our, we have two owners in the business, so we're taking out a good amount of our our basic operating. Pause. Pause, heard. So what you need is a money model. So what, how much of money you're making the first 30 days on $150? customer? Generally, so we just transitioned to doing a different, different type of initial visit model. That currently we're getting about 1,500 per client in the first 30 days, but it really

depends. That's our average. Brough. So you don't even need the money because you're getting 10 to 1 up front. I know, but then so our, on that 1,500, there's a good amount of that, which is cost to get sold because we're making issues for repairing things. Let's say you make 500 on 1500. Let's say you run 30% on the first one, right? Does that sound reasonable? Dude, you're still making 500.

Mm-hmm. On your 150. Yep. So why not spend more? The, I don't know, I'm just scared, I guess. They'll be scared, dude. Put my money where my mouth is, that's it. Yeah.

I mean, I'll say this. I don't know if you were on for the beginning of this, but like, this is a super classic issue. This actually happened a ton in gyms. So gyms have fixed costs like rent and equipment leases and things like that, right? And so the guys would have a vehicle like this that they're getting 10 to 1 on, something really strong. But what they would do is they would only spend enough money to cover all their fixed costs, but never get into the black. They literally would just like spend enough to like they play business on defense rather than offense. Yes. Yep. Right? Like you're playing right now to

be poor rather than to be rich. Yep. That sounds familiar. Yeah. Yeah. And you're willing to make the money for your team. You're willing to make the money for the landlord. You're willing to make the money for the bank, but you're not willing to make the money for you. Yeah. Real, right? Yep. That feels real. Yeah. As much as I would, like, I'd love to like, you know, dive into a hundred other things. Like, this is, I'll bet you right now, this is the core issue. It's like, I want you to go from $500 a month to $5,000 a month and spend? Because if you went from two to three leads a week to two, three leads a day,

would that materially change the business from a casual perspective? Yeah, definitely. But that's the thing. We could do that, but then we run into fulfillment issues. It takes us six weeks to train a guy. So it's like chicken of the egg. Do we... Six weeks is not that big picture, FYI. Right? And I'll bet you could do it in three if you really had to. Right? Okay. So... Yeah, that's the thing. When you're in equilibrium, this is a rule of thumb from me than for everybody who's listening, if you're in equilibrium where you're like, I can maybe take a little bit more demand, but then I'm going to be supply constrained, get the demand, get the cash, then you'll get the resources to take the next move.

And if you have to pay some guys one and a half or one and a quarter over time to fill the slot, one, you're going to pay them more anyways, and that's good. Fine. And I'll bet you those guys would work more for more money. Yeah. So you have flex. You have more capacity. you have capacity that's not stretched. So if you could stretch it, most people, like, you'd be amazed at what people can do if you're like incentivized them. Yeah. Yeah, definitely.

I mean, our team is pretty strapped right now. Yeah. And are you closing, so walking through the sales process real quick, lead comes in, you immediately call them within 60 seconds or what? No, it's basically we have online pricing. All of our prices are online. So they hit our website. They basically sign up.

And then once they sign up on the website, we're contacting them automatically within five minutes. And they're basically signing up. We basically email from the sign up. We don't do any calls right now, not nothing automated. Nothing. Did you could probably double, you could double your conversion if you just called the leads immediately. Yeah. Yeah.

So let's say, let's say, let me. Let me ask you a question. If I paid you another $1.2 million to do one thing, which is to just call your leads in 60 seconds, I give you $100,000 a month. Would you do it? I suppose I would, yeah. Well, that's what's sitting on the table right now because you're not contacting your leads fast. Yes.

You have a double. You can get to 60%. When it's PPC inbound, they already know the price. You could close 60%. And that's without changing anything about the pricing and the offer or anything, just from contact. team fast. 10-4. Yep.

Okay, so we have two changes that are going to be the biggest material changes. Number one is you're going to spend way more on ads. Number two is you're actually going to call your leads really fast. When you do those two things, you have enough gross profit in the first 30 days to cash flow this acquisition anyways. You're then going to be willing to pay some of the guys you have time and change to do more jobs. Some of those guys are hungry.

That's what they're leaving. Give them the opportunity to make more money. And then part of that is you can also pay them a little bit more money to train the guys faster because they're working longer hours. they'll train them faster. Yeah. So incentivize the trainer to get them on the road faster. Yeah.

So we can open up capacity. I mean, I would say, hey, you can do it in six weeks. If you can do it in two, I'll give you a $500 bonus. Yeah. That's a good idea. Yep. There we go. Rock and roll?

Great. Yeah. Thank you so much. And I put the incentive is that if you have to go back and fix one of the spots that the new trainee went to, that that guy's got to do it for free if he takes the commission. Yeah. Yep. Yeah, we do callbacks on, then they're on.

But I would do it on the trainee. If you were to take it from six to two and you're going to sign off that this guy's good enough, I'll give you the bonus, but you've got to basically certify that guy's work for the next month. Right. Okay, so the trainee makes a mistake. If they're rushing through it, the trainer goes and fixes. Yep, Big Papa's got to come in. I see what you saying.

Yeah, yeah, great idea. Rock and roll? Rock and roll, man. Thank you so much. Phil. I really appreciate you, dude. Yeah, you bet. Yeah. What is your advice on dental clinic marketing since you had an agency? We're working for

abroad patients using prices lower than their country. Okay. What's your advice for dental clinic marketing since I had an agency and we're working abroad for patients using lower prices in their country? Okay. So I'll say right now, I mean, I've seen this all over the place, but you can advertise it anyway, right? You could do outbound. You could do content. You could do ads. My bet, given what you're what you're talking about is I would probably do this as a content strategy. Like I don't know if you guys have seen this like the the Turkish hair. Like they've got like there's like a whole industry in Turkey around like guys who are bald getting like their hair back. And the doctors who are over there just post before and after is left and right all day long on Instagram, on TikTok.

And that's how they're generating inbound demand. So I would say that's like number one. But the way to operationalize that is you have to build it into the customer journey. So like when they come in, immediate picture, you know, data. 30, day 60, it's like, we have to go collect these pictures. And if you want, you can give rebates for it, most of time you don't have to. And then by doing that, it's like every single person who comes in the door is a potential before and after it. So it's like you can get 20, figuratively 20 posts a day, or I don't know how many teeth you're doing, right? But maybe it's two posts a day,

right? That you can source directly from your existing customers and you don't have to do anything else. And then you can explain just like, do the before and after and then do like a quick 30 second like, hey, this is, you don't have to say their name. You can cover the eyes if you have to. be like, this is a unique case. And if you're struggling with XYZ, pain-based hook, you know, this is something we do all the time at our clinic, right? That's thing one.

Thing two is, I don't love winning on price, but it is sometimes just like some of the strategy and that's okay. You could just experiment with running ads. My bet, though, I'm just saying, because anything that's like, I mean, they are, I guess they are bargain hunting, but people kind of want the best of both.

It's like they want it to be good and they want it to be cheap. And so, like, I would lead with content first. I would take the best performing content, and then I would run that as ads with the offer. So content first, find winner, put a CTA on the end of the winner, and then drive paid to that. That's what I would do. Hey, Alex, a lot of your videos have helped understand a lot of business points that I didn't understand before.

Okay. I have a full service LinkedIn agency doing content and DMs. I think that founders, after a certain AR, don't want DM sent from their account. Rand risk. Yeah, that's possible. So you got two options. Option one is you just only pick the founders that are below a certain size. That is an option.

The alternative is that you make it work from their brand. Just figure, like, what stops me from doing more? I have to figure out how to get this to be openable from a brand. Okay, that's another way. Maybe it just takes twice the volume, and then they're willing to do it. The next kind of thinking process there is you can frame it out to like, you can either sell them heavy on why it doesn't matter. Option one.

Option two is you can figure it out from the brand perspective. Option three is that you only take on smaller guys. But I think these are features, not bugs, unless you just figure out another way to get customers. Because I understand why somebody would not want that. But I would say, like, what is your objective as a CEO? Is it to grow the business? Okay. Do you think that your brand as a CEO would be better if your business were bigger?

I think you should sell them on it. And not everyone's going to say yes, but if half of people say yes, because you sell them on it, then you can keep growing the business, then that sounds good enough for me. All right, Google ranks. And then I'm going to Mr. Drew next. All right. I'm a 17-year-old kid looking to start my own pool construction. Dude, I just did one.

Pool company. The digital marketing for a year, my dad has a little construction license in Florida. And vice, yeah, dude. I would run $5,000 a month of PPC, and I would call the leads within 60 seconds. I would sell a $1,500 package up front,

and I would roll them straight in continuity right after that. That's what I would do. Signor Drew, or I think the Germans say Air Drew. Like ERR, or I don't know if that's how they say air. All right, Drew, what's up? We're cooking. Alex, nice to meet me, man.

Nice to meet you too. Talk to me. We made this app for fence contractors. You made an app for defense contractors? That's right. So it allows them to show their client a fence right in their yard. Oh, fence contractors, not defense contractors. I was like, those are wildly different things. One people are blowing up fences, the other person are building them. Good to know. That's right. That's right. Yeah, we're trying to cross country lines. All right. So we got fence.

contractors. All right. You built an app for them. All right. There's an app for that. What's revenue? About half a million a year. All right. 500K per year. What's revenue retention? Our turn's about like 8% monthly. Ooh, that's high. That's high. Okay. 8% a month. All right. That's pretty high. All right. What's price? It's $199 a month. Cancel anytime. And we also, that's for two users, like five users is $2.99 a month. Okay, got it. And so what does this app do? So it actually allows them to show their client a fence, like right in their yard.

It's like the dream outcome on the value equation. It lets them put it right into their yard. Yeah, it's a sales tool. Yeah, yeah, exactly. Okay. So why are they churning? So really like our biggest thing is if they don't use it and like sell a fence, within the first 10 days, they turn.

If they actually go out and we hear them sell a fence, they literally love the product, and it's very rare that they cancel. Okay, how do you get leads right now? We'll cover that in a second. How do you get leads? So we run Facebook ads, just for an instant form. We have a couple of questions up front,

and then our automation puts them right into our CRM, and we reach out right away. Yeah, what's KAC? About $130. Damn. KAC? Not LEIT, not CPL, like, KAC, cost to a car customers, $130? When we hit, like, a really good ad, our cost per lead is like $1.50.

Like, this past week, we literally hit one that was crazy. That's insane. I would not get used to that because it will not stay there. That is insane. Also, I personally, like, I do a lot of the sales personally. So, like, right now I'm not paying, like, a commission, which really helps. Yeah, well, yeah, that's nice, right? When you do things yourself.

Okay. So, I mean, LTV to KAC is still fine, but you, This is what I would encourage you to do. Do not scale your ads at all until you fix this turn issue. There's no point. You're just going to pour it out the back. There's no point. Zero point whatsoever.

Like you want to be able to figure out what activation is. Now, if you know that if they sell a fence, right, with the thing, they stick, right? We know this. Yeah. Okay. So then the question is, how can we incentivize them or how can we make it easier for them to have that happen faster? So what do you, do you charge $199 up front for this? So we do like a 10-day trial with like the credit card attached.

Like we say like, like, you know, it's how we've always done it. If you don't like it in the first 10 days, you can cancel. Yeah. Dude, I think it's a trial issue, dude. Yeah. That also includes like during the trial to 8%. So it might be like lower once someone actually converts to a client. Yeah, I see what you're saying.

Like the pie equation, like we're not going to, our hypothetical max might be too low. Yeah. Well, you do need to figure out what the post-conversion. churn is, not total churn, because especially if you're smaller, like, you factoring in your trials and churn, it's going to mess all your numbers up? 100%. Yeah. Okay. So I'll say this. So you go through the money models book already? Yep.

So the free trial with penalty would be the first improvement that you could make to this. That's like the smallest operational change that you could do. The second level of it, yeah, that's free trial with penalty. You could use that as a front end offer instead of a downsell offer. and just say like, we will give it to you for free as long as you X, Y, Z, right? So you have to use it. Right. Like, if you go out and sell someone a fence right in their yard, it's free for the first 10 days.

Well, you're already doing that. So there's no reason for them to do it. You know what I'm saying here? Okay. Yeah, I see what you're saying. You have to have a penalty associated with it. That's option one. Option two is that you charge them up front and then say, I will rebate you the $199 if you,

use the app to put it in at least two people's yards or three people's yards. Whatever the average, let's say they close 30%. Say like, you do three yards in the first 10 days where you put the fence in, I'll rebate you back the $199. And I'll tell you why I'm doing it, because I know that if you do it, you'll stick. Let me just show you my cards. Because as soon as you use the tool, you'll make more and you'll never leave. So I'm going to incentivize you to use it.

I do what you're saying? Totally. Okay. Cool? So just make the second month free. Okay. So we literally just charge $199 up front. If they use it two or three times,

we can give them their money back right there. Right. Well, you don't need to give them their money back. Just don't bill the second month, build the third. Okay. Yeah, that makes sense. Okay. Yeah?

That would be it. Like, we just have to incentivize activation because if you can get your turn down to like, because you need to be at 80 plus percent per year or higher for this to be something cool. 100%. Yeah, 100%. That's all you have to do.

Just get it to 80%. 80% a year. So you want to be at like less than 2% a month. I know it's got to be yeah it's got to be like closer to 1% of them. All right. I'm a man on a mission. I'll make it happen. Okay. And I want you to do this though. Measure the churn from trial. Basically don't even look at churn on the front end, look at conversion rate and then post-conversion rate measure churn. That's what you should be looking at. Okay. So like only measure the churn once they've actually converted into a subscription. Right. Yeah. And your true cack, I'm guessing now, because it's costing you $130 a sign of a trial, right? I got to look at it.

closely, but I'm pretty sure it's something like that, yeah. Yeah, so, and then let's say it's one out of three trials convert. I don't know. It's something like that, yeah. Yeah, so your actual KAC is closer to 500, not 130. Okay. Cost to require a customer, not a trial. I think it actually is 130.

It is around 130. Okay. Because, like, right now, say we get 100 leads, I'll sign up about, you know, eight of them on a trial, and we'll get, like, three or four, something like that. Okay. Okay. But, yeah, I would go rebate, second month free, they bill, you know, you bill them up front.

It'll also get them way more likely to commit to it. Also, with $200, you can, like, be on call if they have any issues tech-wise. 100%. As soon as we sign someone up, we, like, bam-fam, like, right to an onboarding. Like, as soon as we can. Like, it's a-s-at.

So we do that. We go right into an onboarding, teach them how to use it. And then, honestly, once we get them, like, and they place the fence, like, right in front of them, they get- Word. So all your effort is activation, dude. That's it. All the effort, all the incentive goes there.

Once you have that, the rest of the machine works. 100%. Absolutely. All right. That's it. That's what we do. It was great to meet you, man. Thank you so much.

Pleasure, Drew. Appreciate you. Bye, bye. Tudels. All right. Atman, Desh Maine. Hi, Alex. I'm 27-year-old physics coach for high school students based in India for Olympiads.

Okay. Medical and engineering entrance sense. Interesting. How do I enter and serve customers in the United States and EU? I don't know how you're going to enter. the EU, S&EU. Because that, we got the fence guy who was just on here. He's big on that stuff.

Like, you know, border. I'm kidding. So how do you enter? Well, I mean, fundamentally, I'm going to give you the obvious thing. I don't know how good you're, if you're out of India, I don't know how good your English is. So I'll be real. Like, this is me. I'm just trying to help.

All right. So if you want to enter those markets, there's no way anyone actually knows where you live online unless you say so. And so you would just make content in English. and you would attract those customers. That's it. The reason many of the people may not be doing that with you is that they think that you're in India.

And so they would think that because of other posts that you have, maybe languages that you're currently speaking in, or accents you have in English. And so I would strongly encourage you to do whatever it takes, to remove your accent, so that you can have better access to those markets. This is non-politically correct advice.

This is me trying to actually help you make All right, that's what I would do. There's a whole series of YouTube videos actually about how to, like, remove an Indian accent when speaking English. I know this because Sharon talked about this to me. So when Sharon came here to the U.S., he had a really thick Indian accent, and he actually got the same feedback, which is why I feel fine sharing it, which is that you, like, you will be limited by that accent, especially if you're trying to enter these markets.

In terms of the EU, I would say, like, honestly, like, why bother? Like, just start with the U.S. at the biggest, richest market, and you probably already speak English decently. So I would just focus on that rather than try to like, you know, piecemeal, you know, the European markets, unless you're just saying UK rather than Europe, in which case you just speaking clearer, better English and making content in those, well, not in those markets, but online to those avatars will attract those customers. All right, Caleb Stewart, started my roofing company in January, been doing Law of 100. Great, love that. And went full time, congratulations. How do I bring someone else on and get them to do this versus just doing it for themselves? You mean like go recruit a sales guy?

I'm guessing you're not saying like, why don't people go do roofing? I mean, because it's work. But the way to, like, so the progression is you need to sell people, stage one. Stage two is you need to recruit somebody else that sells. Stage three is that you recruit a team of people that can sell. Those are the three levels of salesmanship, which, by the way, for all the entrepreneurs, who love to say that they're really good at selling, you are level one. one salesman. You need to transition your identity from sales god to sales training god and sales

leader. And so it's no longer about how well you can close. It's about how well you can get people to learn how to close on your behalf. So how do I get people to not do this on their own? Well, they can do it for you and get paid for it. So I'm not really, I'm not actually really sure. I feel like it's like a mental thing because you're like new to this. But I like this is, to me this is not a thing. Like just go recruit other salespeople, say, hey, this is what I'm willing to pay you as a commission. Let me show you how to door knock. Okay, commands, all right, is there a way to become like you or what you suggest for providing value in any business field? So, number one, definitely don't want to become like me. You want to become more like you,

the ultimate unlocked version of yourself, not me. Does this thing one. Because I will not beat you at being you, and you will not beat me at being me, right? So there's no point in trying to copy or clone me, just be the most of you. Now, within that context, if you're being the most of you, the question is then who and who do you provide the most value to? And around what context or topic do you have unique insights that you've gained either, that you've gained, right? And so when you're starting out, you have to do it in one of two ways. You either have to have to have achieved something already, which is notable, that gives you proof, or you have to let your effort be the proof. And so if you say, hey, I made, you know, 2,000, you know,

videos on TikTok and here's what I learned, then you will have something valuable that you have learned. The first step in all this stuff is like, do epic stuff, and then step two is talk about it. And that is fundamentally how you provide value. And so when you're providing value in any domain, I want to build my personal brand. Like, your personal brand will be built on the amount of value you can provide other people. Like just help other people. Like Zig Zigler said this old school personal development guy. We said, you can get whatever you want in life as long as you help enough other people get what they want. And I think it's so true. So I would just think, how can I help other people get what they want?

And if you're like, if you don't have enough proof and everyone misses this, start for free. Work for free. Get experience. Go get 10 free clients. Go do the work for them. Make it a free trial plus penalty. Right? It's a great way to get started.

I talk about this in the first chapter or one of the first chapters in the Leeds book, your first five clients. It literally outlines the entire offer structure, when to start charging. All of this is inside of the Leads book. I think I had a bit. It's page 51. So I explain my first business and how I did it, how the outreach worked, how I started for free, and then when, how to do the out, like literally, like what messages to send, how to send them, and then the actual process of doing this. And I give you 11 ways of showing proof. It's on page 61. It's 11 ways to show proof so that you don't look like a newbie. Okay? Rock and roll.