The Game with Alex Hormozi - Get Over It | Ep 587

Episode Date: September 14, 2023

"Stop whining. It's not gonna get better." Today, Alex (@AlexHormozi) discusses the importance of accepting the rising costs of online advertising and instead focusing on monetizing customers and providing more value. He emphasizes the need to continually improve one's business and find ways to increase the lifetime value of customers, regardless of the advertising platform used.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:(0:27) - Get over it. Accept the marketplace will rise.(1:26) - Focus on monetizing customers you can control.(4:19) - Let math dictate, be less emotional.(5:15) - Make customers more valuable, provide more value.(6:50) - Stop complaining, provide more value, liquidate acquisition costs.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition(This episode is a re-run. Original airdate was October 23, 2019)

If the objective of the game is to keep playing the game is to stay in the game and not quit, then you need to look at your business and think, how can I make these customers more valuable to me? And by extension, what do I need to do for them in order to make them more valuable? The wealthiest people in the world see business as a game. This podcast, The Game, is my attempt at documenting the lessons I've learned on my way to building acquisition.com into a billion dollar portfolio. My hope is that you use the lessons to grow your business and maybe someday soon, partner with us to get to $100 million and beyond. I hope you share and enjoy. Layla and I were having this conversation.

And it was basically that all of the gyms that we've seen and we've worked with over a long time, not even just gyms, just people who've been marketing online for a while, complain about the same thing, right? They complain about the same thing. It's like, man, Facebook's not as cheap as it used to be. And I wanted to make this one video because I think it's incredibly important. Like, you just need to get over it. You just need to get over it.

Like, it's never going to be as cheap as it was. And guess what? It's never going to be as cheap as it is today. because tomorrow it's going to be more expensive. And so, like, you can either continually whine and complain about things that you cannot control, or you can accept the fact that it's a marketplace. It's an auction, and it will continue to rise. And if you look at Google and you look at history, whenever new platforms open up,

they're widely underpriced attention and eyeballs, and so you can make a massive killing, even if you suck at business. And the reality is that a lot of people who got in on this game early sucked at business, but they just happen to be in on it early. And so they could make money on penny clicks because it's not hard to make money on penny clicks, right? But when you have $10 clicks, all of a sudden the game changes because you have to make 100 times more money, right? Or whatever the math is, a thousand times, whatever it is, right? And so right now, if you're like, man, I wish Facebook guys were cheaper.

Man, I wish leads were cheaper. What you need to focus on is what you can actually control, which is the monetization of the customer, right? We've been able to continually spend for years. For six straight years, I've tried to outspend everyone in every market I have ever been in, whether it was an intellectual space or was a local geography. And the reason we've been able to do that is because we focus on how much the lifetime value of the customer was. Because that was under our control. And so right now, if at your gym, you're only selling workouts and you have no other ways of monetizing a customer, then you were losing out. Because the thing is, is that the water is going to rise.

Right. Your ability to spend money and capture leads and buy attention and buy eyeballs is going to continually go down. So get the fuck over it. right? Stop whining. It's not going to get better. Right. And so like it's like I just, I'm being purposely harsh because it's, you just need to accept that that's the reality that we live in. And if you want things to improve, like if you want things to improve, like you're just, what is it, wishing on a star, whatever it is. And what I will say is if you can remind yourself right now of the feeling that you have of like, man, I wish I had spent more when it was cheap, right? Remember that.

because that is when the next thing that comes along, you need to double down. And believe it or not, you still need to double down on Facebook ads. Why? Because it's still cheaper today than it's going to be tomorrow. And it's still the best price stuff, best priced attention that's out there from a targeted standpoint. Right. So like if you think about a big picture, like if I can get a five to one return on something today and I could get a 20 to one return on that same thing two years ago, is it still a good investment today? Yes.

Is it as good? No. What's my alternative? shrugging, right? And so what you're focused on as a business should be always improving your mouse trap, should always be improving the actual business so that you can buy and afford eyeballs on any platform independent of the maturity level. If the only game that you can play is for penny clicks, it means that you're going to be a penny stock type business owner, right? You're not going to be able to play with the big boys. You can't play with the blue chip guys. Most of those guys,

wait for five years, for 10 years before a platform even matures before they're like, okay. we're going to get into this because they're in boardrooms and they're like, we're not sure if it's worth putting the attention towards opening this new platform. Hey guys, love that you're listening to the podcast. If you ever want to have the video version of this, which usually has more effects, more visuals, more graphs, you know, drawn out stuff. Sometimes it can help hit the brain centers in different ways. You can check on my YouTube channel.

It's absolutely free. Go check that out if that's what you are into. And if not, keep enjoying the show. Right. And so like, right now, if you could only survive in that environment, it's because your business This sucked, right? If you could only do LBOs and only afford getting leads for $3. And if it was more than $3, you only had $10 leads.

And at $10 you priced out, you've a shamed business or you don't know how to do math. It's one of the two, right? And so you have to be less emotional. You have to be able to let your math do the dictation, right? Like this is a me soft toss and, you know, what we have. But like, if you have a diagnostic selling processing, you're selling one-on-one accountability and nutrition on top of it, you can sell your membership for $425 a month. How do I know that?

Because we're all doing it in gym launch. Can you get $1,000 up front on average? Up front ticket? Yes. Do you think that would help you in your acquisition costs? Probably. If your business isn't doing that, is that going to be, are you going to be beat down by someone else who can?

Yes. Why? Math. Right? Because they can continue to play. Right. And so when the sandbox gets filled or when the level of the water rises and only the best players stay because they can keep swimming because they spent the time to build

the mouse trap that built the highest lifetime value per customer because they were in the end providing the most value. Those are the guys that are. continue to stay and continue to play. And so if the objective of the game is to keep playing the game is to stay in the game and not quit, then you need to look at your business and think, how can I make these customers more valuable? And by extension, what do I need to do for them in order to make them more valuable?

All right? And that's where you need to add the intangibles because if you're only selling workouts, you're only selling your quote community, guess what? Take a ticket. So is everybody else. All right. So if you want to stand out so that you can provide more value, look at the things that, like, I mean, look at what we're doing.

You know what I mean? Like, this is free content. You know what I mean? Look at what we're doing. Sell 101 accountability. Sell one-on-one nutrition. Sell it in a duration-based play. So sell them to goal.

Sell them for 40 weeks up front, paid and full, right? That's here you're going to sell a big ticket. And that's how if one out of five people who walks in your door is going to buy a $3,000 thing from you, that means that per show up. You're making $500 per show, right? And if you know that you're getting one out of three leads in the door to show, that it means you can spend $150, $200 a lead and still break even on the acquisition and still have the lifetime value the customer to collect.

And so if you don't have that, you're just going to get beat by someone who does because they're going to be able to continue to stay and play. And then you're going to be looking around and be like, well, well, Facebook guys don't work anymore. Oh, the ad platform doesn't work anymore. Believe it or not, this story has already happened, right? Like before this, it was direct mail, before that, sorry, before this was Google, before that was direct mail, before that was newspaper ads. Like, it just could, before that was catalogs. Like, it just kept going back and back and back. And so if you're just a student history, when one of these things open up, pound it, drive it as hard as you possibly can, ride that thing, right?

And you honestly should still ride it. And if you can't right now, it's because your business sucks. It's because you haven't figured out a way to monetize your customers properly, right? It means you're not providing enough value. So instead of lamenting, instead of complaining, instead of being upset, instead of stopping your feet and pouting and being like, well, it doesn't work anymore. Do what you can control. Figure out how you can find more value your customers, figure out how you can make more

money upfront from the people who walk in your door so you can liquidate acquisition costs so that you can continue to stay and pay. Hopefully, it's your goal is to help people over a long period of time build something that lasts. It's a game you're going to have to conquer anyways, and the platform doesn't matter. Where you buy eyeballs doesn't matter, whether it's Facebook, whether it's Google, whether it's YouTube, whether it's whatever. It doesn't matter. The only thing that matters is your mousetrap. And if the mousetrap is right, you can buy wherever you want for as long as you want.