The Game with Alex Hormozi - Having an Exceptional Customer Service (w/ Billy Rickman) Pt. 2 - Apr ‘19 | Ep 464

Episode Date: November 26, 2022

(Disclaimer: This interview was recorded over Zoom. We apologize in advance for the quality of the audio.)“If you have to be an amazing salesman to make the business work, the business is broken.” Today, join Alex (@AlexHormozi) as he guests on Billy Rickman’s YouTube to talk about having an exceptional customer experience and how to blend that in a way to sell more expensive stuff over time. This interview was done all the way back in 2019 but still holds incredible value today. This is part 2 of the interview.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.Check out the episode on Billy Rickman’s YouTube Channel! Timestamps:(1:06) - 5-step customer journey framework explained by Alex.(5:47) - Strategies for selling high-ticket offers without initial industry knowledge.(9:53) - Overcoming limiting beliefs on industry-specific effectiveness.(12:16) - Three immediate actions for business growthFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Mosey Nation, welcome back to part two of the Billy Rickman podcast where we talk about getting big in business. This part of the podcast or this half of the podcast is about having an exceptional customer experience and how to blend that in a way to sell more expensive stuff over time. And this is from all the way back in 2019, pre-acquisition.com, pre-hundred million dollar offers, pre-beard, midstash. And I think that you guys will enjoy it and hopefully enjoy it as much as we enjoy putting it off for you. I mean, one of the things that I tell the gyms is like, when we all started, we looked around at whatever one else is doing and said, cool, I'll charge that. But the secret that no one knows is that everyone else is broke. So why the fuck would you copy them? 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.

Well, yeah, I see that actually a lot in your in your post. And I saw again, obviously, I was doing my due diligence on the, on you and research and give you. beforehand. A lot of the stuff you've been putting out, I don't know whether or not it was just more, it's more of a focus now, but it seems like when I was looking at stuff earlier on and looking at stuff now, the stuff now is a huge focus on the fun and exciting and like kind of right inside of the business and just about not taking yourself too seriously. Is that something like it's just a part of you or is that something you tried to now move into to remind yourself, is it like a conscious thought? I think what you're referencing is Instagram stuff because that's usually like the behind the scenes type type stuff and that's that's that's not necessarily for me it's

just like that's just how how we live but i think that like life can be stressful enough as is like we could all be stressed if we choose to be so there's always something to be stressed about right there's always something to be stressed about so it's like i got a funny ass cat and he does ridiculous things and you know leila makes funny faces and we just we try and try and keep a light yeah awesome but so let me just quickly ask you then about your five uh your five i don't know is it the pillars or what you call them, but essentially the five steps of the customer journey, which is, you talk about the lead generation, the lead nurture. Oh, yeah, yeah.

So, yeah, lead gen, lead nurture, sales, fulfillment, and then resell and ascension. And depending on the size of the business, you could also include HR and finance, but for most small business owners, they're not really, that wouldn't, those are not like, I mean, in our business, obviously, we need to have those functions, but, because right now, we have 125 employees right now full time, whereas a small business owners need to concern themselves with that. So it's really like, how are we getting names? How are we generating interested parties?

They're collecting data, right? What are we putting out there to generate it? From that point, how do we get, how do we turn that prospect into somebody who's going to show up for a conversion conversation of some sort? Which typically for a brick and mortar service business is going to be, how do I get them to schedule? How do we get them to show? Right. And then once they're there, what's the natural series of questions that's going to lead them to want to work with me, which is the sales component? And then after that, it's like, cool, once they make the sale, what do I need to do?

do to absolutely blow them away. And this is kind of one of those nuances that's like a little bit more gym specific is most of the time I teach a concept called client finance acquisition. And so the overarching picture that when you ask at the very beginning, what is the one thing that has grown the business and how do we do it without going bankrupt and all that stuff? Client finance acquisition is how I grew my gyms. It's how I grew gym lunch. It's how we did all of them so fast. And it's essentially when I can put money into ads, right, I prefer to sell something expensive. on the front end when someone's the most excited about it. Typically, people will do low barrier offers on the front end, right, to try and attract more people. My opinion is I can, when someone is

excited, I can generate more revenue from that person, get more of a commitment, cover the cost of onboarding and given an amazing experience. And then when the cost of fulfillment drops, because that person knows the system, knows the work, knows how to be a good client, then at that point, I can decrease their continuity. And so most people, in my opinion, have it backwards. And so I got a decent amount of credit for saying downsell the upsell. I don't think I'm the one who invented it, but I don't. But it works well because what happens is you're like, hey, do you want to have more of what you've just got for half price? And they're like, like, everything I just got was amazing. So I can get all of that for half. Like, yes, you want to stay? They're like, yeah. Rather than, hey, I just gave you everything for nothing, want to now pay for it. And they're like, you know, maybe. Yeah, yeah, yeah. Isn't one, that's a price you amount, yeah.

Right. And so we flipped it, and that's what has been able. So what happens is, if, let's say, I'll give you a numbers example. So let's say you spend $100 a day on ads, right? And day one, you put $100 in, and let's say you get 10 leads, right, for $10 a piece. And then from those 10 leads, you get seven to schedule, okay? And then from the seventh that schedule, you get four to show. And from the four that show, you get two to buy.

And so, and you're getting them to buy at 600 bucks a piece. So you made $1,200 from your $100, right? And so what that would look like is, let's say day one, you spent 100, day two, you spent 100. Now, let's say those people came in on day two that you spent on day one, and then you made the sale. On day four, you should be able to get the payments from, you know, that would actually hit your bank account.

I'm talking like real money in your banking out, right? It would say, still day four, which essentially means that I'm now down 400 because day one, day two, day three, day four, but then I get my $1, $1,200. deposit, right, from those first two sales. Yeah. At that point is when the rest of the campaign is cash flowed from sales that have happened. So you mean, you get. Right.

It's a negative acquisition cost. And so now I'm making money, getting new customers. And so there's really no reason to stop until you have another bottleneck. And so that's typically what happens with Argus is acquisition no longer becomes the limiting factor in your business. Usually it becomes operations because most people don't have the skill set to lead, don't have the skill set to manage. They're entrepreneurs.

They're not organized, blah, blah, blah. And so that becomes the next. bottom-neck. So everyone thinks it solves all their problems when in reality just exposes the weakness of their operation. Yeah, yeah. And so then they're like, oh my God, I have all these people coming in and no one's saying. It's like, right, your shit sucks. That's why you didn't have people to begin with, right? Now everyone just knows. So, and then, you know what I mean? And then you have process in place like, you got to have reachouts. You got to have handwritten cards. You got a wild package. You know what I mean? Like there's all these things that everyone's like, man,

our stuff's so good. If people just knew about it, like if your stuff was so good, people would already know. Yeah, yeah. You're not that good. And that's why you're struggling. If we're being real, you're not that good. You're just mediocre. And that's okay, but everyone else is. Yeah, I heard you're talking about Jeb Bezos's quote the other way, the other day. And it was that one way he was talking about the customers are always going to be dissatisfied. Yeah. But it's true. Right. I hear salons all the time. I always ask them, one of the questions I asked was like, so tell me just what is your USP or what is your point of difference. And everybody always says, oh, my customer service. I'm like, not everybody can have a point of difference with great customer service. Your customer service is probably

just the expected level of customer service. It's not exceptional. You 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. I want to go back a little bit if I can just to to the acquisition though because I know a lot of people who are just listening to that

would be like, that's awesome Alex. I totally understand. Let's flip it. Let's get them on the high value first and then we can deliver a reduced price later and keep them on the program. How is it then that you get people purchasing a high dollar value amount

if they don't know anything about your business in the first place? You want to talk about GM owners. That's fine. We can relate that's the same to salons. How do I get somebody to spend $600 straight off the bat when in most salon owners eyes they'll be like,

can't get people to pay $40 straight off the bat. Right. One word is sales. I'm just being like super real with you because I think the biggest thing that is underestimated and underappreciated is making an amazing offer. So I had a mentor early on and most people don't know who he is. But so TJ, Travis Jones, was in the gym guru space way back when I don't know if he's doing it anymore. And at this point, I had no gym. I had no clients. I had no nothing. And I bought. a $3,000 seminar on marketing. As on those do, right? I had no idea why. I can't buy food, but you know,

I can buy a seminar. So anyways, I went there and I was, he was like, yeah, just sell them. And I was like, I never even sold anyone before on anything.

So I was like, what does that mean? Like, what is sales? Like I had no concept. And he was like, he was like, bro in his Australian accent. And he was like,

sales is just like, you just have to give people an offer that they would feel stupid to say no to. And for some reason, because it was like, probably because it was so early, on in my career just like imprinted on me. But it's something that I've really kept is like,

if you have to be an amazing salesman to make the business work, the business is broken. And so the way to make any person be able to sell is to give an offer that's amazing. And then let the business model and the systems and processes back up why it's so great. You know what I mean? Then let the business do the work of keeping a person and getting lifetime value, right? And so I'm a big fan of ridiculous guarantees, you know, to get people unbelievably happy.

with the experience that they're about to have. With your guys is, I mean, I would be doing two-step stuff, which is I'd be closing $100 appointments, like pay $100 just to meet with this person because she's so amazing, like she's booked out with celebrities all the bit long. So I would position her, and then I would go in and just have an assume close for like $2,000 for like extensions and whatever.

That's the angle I would take. That's a more sales-oriented process. The other way from an offer standpoint, and this is where it gets a little bit more difficult for me to dive in. It's like, you have to look at all the different ancillary services that exist and think like what thing could I offer for free that I could then upsell other portions that they really can't live with that. So I'm still free here. So an example would be there's like a weight loss clinic that I know. I'm not sharing names because they're whatever. But they would run free,

free weight loss, just free. Like free, it was a clinic. And so what happened is they would come in and they're like, we'll continue. I mean, it was like $5 a week, something nothing, right? And as long as you continued buy food from us or buy bars from us or whatever, then you're going to go. And so where the margin would be anyway. Right. So they gave the service away, but then they monetize another aspect of it. Right. And so it's like there's, it's just like how creative can we go with the offerings so that people, like people have a cool offer that's going to generate a lot of traction, but then how are we going to monetize it, right? And so I think everyone thinks two, two dimensionally, like if they're a chiropractor, it's like, well, I just got to give free

back cracks. It's like, okay. What else do you sell? You know what else is this person who has a bad back coming in with? They probably have pain because they're overweight. It's probably because they, you know what I mean? Like it's just like, let's take a couple more thought processes and think how we make an offer that's going to be, I call them a splinter stack, but most people are like, they want to compete on best value, which is the dumbest thing in the world because no one understands it.

Right. It's like we do this and this and this and this and it's all included, you know, or whatever, right? But they don't say that, right? They're like, this is what we do, right? but instead you should peel off each of these things right and then name them as like bonuses for this thing so like you could have like up crack your back and as a bonus you're going to get this and this and this and this and this and then it seems like you're stacking shitloads of value when it was stuff you were going to do anyways right yeah it so it's like how can we be creative

you know in that in how we're making offers you find the right offer you're you're golden lastly on that point uh one of my challenges i'm trying to work through anyway with my clients and certainly in the industry as a whole. And I think I've heard a lot of you talking about the same thing. It's about breaking the limiting beliefs around this particular topic about like, no, that doesn't work in the industry. And I don't just like even right now, people would be, when I upload this, people will listen to this and go, no, that wouldn't work for our industry.

That's a gym thing. And I'm like, I reckon it's probably most GM owners would say right now it doesn't work for the gym industry there. But you're coming along and disrupting the industry and go, well, actually, we've just been doing it all wrong. And I think that's kind of the message I want to do an hour. industry as well because traditionally like people that technicians right they're they're really good at hair or they're really good at beauty but they're not really good of marketing not really good of sales and because of that fear factor of learning that they don't do it and so what do they do

they do the basic stuff that everybody else is just doing they just go well i'll just keep putting an offer out there that's you know get a free facial for not free but get a facial for 89 and hopefully it'll convert and then they say marketing doesn't work but i really love what you're doing because you're disrupting patterns and disrupting what people's beliefs are around marketing and offers I mean, if there's eyeballs, like marketing works, period. You know, I had a chiropractor here, and he's like, yeah, I tried Facebook ads. They don't work. And I was like, yeah, yeah.

It's like, I tried marketing. It doesn't work. I'm like, what? You know what? I'm like, I tried marketing. I don't even know what that means. You know what I mean? I ran an ad once.

Right, yeah. I mean, and it was probably like a boosted post of a picture of him that didn't have any copy weren't offered me. You know what I mean? Just, just whatever. But, I mean, if you're listening to this, I mean, you don't know who I am, but there's so much more than you're letting yourself do. I mean, one of the things that I tell the gyms is like, when we all started, we looked around at

whatever else is doing and said, cool, I'll charge that. But the secret that no one knows is that everyone else is broke. So why the fuck would you copy them? Right. Just being real. And so that's that's the fundamental issue, right? Is that most people are broke. Most people, not some.

Most people. And so you talk about the gyms that closed, 80% of them are still open and the person's head is just barely above water. Yeah. And they've been that way for six years. Right. And every day they wonder why they're still going to work. They still think by doing the same thing, they're going to get a different result tomorrow.

Right. And hoping for a corner to come that you're going to turn, that never does. Right. If I just had five more clients, if I just had 10 more, whatever. And the things never comes, right? They don't change their actions and they don't change their beliefs.

Finally, let's wrap this up. Three things, any business should be doing right now to help grow their business. Just real summary. Yeah. Three things. Well, you have more clients. increase your prices and get people to buy more times.

Those are the three things that someone should do. But if people aren't doing that, then I'm a big rule by metrics. So if you don't know what your attrition is, can't improve it. If you don't know what your average ticket is, can't improve it. If you don't know what your lifetime value is, can't improve it. And so it's like if you don't even know those things, then what three things can I tell you to do? So do all that first.

And then once you at least have metrics, you can start moving them. Alex, thanks for joining me. I really, really appreciate your time. And I know you're super busy. and for you to take the time out with me this morning, well, in the afternoon of you there is a huge honor and I'm just super stoked. I know a lot of people, like you said,

even though we spoke about gym stuff, a lot of the information you said today is just brick and mortar business, small business, growth, marketing, sales. It's all the same stuff, right? Yep. Yeah. Absolutely.

Absolutely.