The Game with Alex Hormozi - How To Close Everyone: Downselling like a Pro | Ep 201

Episode Date: April 28, 2020

Make the customer feel like you are accommodating them in every way possible. Today, Alex (@AlexHormozi) talks about how reciprocity is one of the greatest persuasion tools when it comes to downselling, how to get your customer to genuinely say yes to your offer, and why your words and the way you say these words affect the flow of the conversation.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:(0:56) - Downselling with skill, avoiding price lowering, using strategic cards(1:47) - Reciprocity: a powerful influence in human psychology.(3:11) - Properly using reciprocity in a downsell environment, asking for testimonials.(6:57) - Making clear deal-breakers, sounding convincing with "fair enough?"(7:55) - Goal: get customer to say yes, talk genuinely and convincingly.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Everyone buys something. What I mean by that is that everyone has some money, right, no matter what, and everyone has this problem, and we should find a way to help everyone to a certain degree. Welcome to the Jim Secrets podcast where you 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 that we have learned along the way. I hope you enjoy and subscribe. What's going, everyone? Welcome back. A quick little tactical training for you today as well. How to Close Everyone, Downselling Like a Pro.

So one of the big beliefs that I like to set in our community is that everyone buys something. What I mean by that is that everyone has some money, right, no matter what, and everyone has this problem, and we should find a way to help everyone to a certain degree, right? And obviously you want to try and sell your primary program because that's going to be your objective. That's because you think it's the thing that's going to help them the most, et cetera. But there come times where people can afford it for whatever reason, right? This is reality. Anyone tells you otherwise is whatever.

So in the real world of sales, understanding how to downsell like a champ, is one of the reasons that you'll be able to massively increase your your close rate. Now, doing it properly is one of the key points here. All right. So when you do it poorly, it sounds like begging and it sounds like you totally lose your frame in the sale and now you sound desperate and aggressive and clingy and you sound like you've got, I love this term, commission breath and basically just ruins the sale.

And then they don't, even if they could afford it, they don't want to buy for me because of what you're doing, right? It sounds unethical, et cetera. Like, wait, you just said it was this price. just going to keep lowering it. And so the key to doing this is having a key set of cards that you have in your back pocket that you can choose to play as you go down, right? So it's kind of like a step down.

And the way that you do this is through exchange. So one of the other powerful influences in human psychology in general is reciprocity. We have a very hard time if someone gives you something, not giving something back. The beautiful thing is, is that after you exchange something, the person who sets the terms always has the power in the agreement. So for example, if someone asks me to do something, which is essentially what they're doing when they say, no, they can't afford that.

They're asking you to do something for them, right? Can you do it for less? That's the implication, right? They can't do it for that. What else can you do? And so there's a study that, like, showed this enough. I mean, there's hundreds of studies that show this, but where they took people in colleges and they let them cut in line. And the thing is that doing a small favor, people don't have a good idea of what equality in an exchange is. And so if you do a small favor for someone and after you do the small favor, then make a big ask, it's still very hard for people to say no. And so that's the thing is that people don't have with reciprocity an idea of fairness of exchange there. It's like, hey, yeah, remember I bought you lunch yesterday? Can you take me to the airport and back this weekend or can you help me move out of my apartment?

Like that's not a fair exchange. The thing is that with reciprocity people will say yes to things because of just underlying human psychology. So here's how you use reciprocity, which is one of the strongest things motivators for persuasion in a downselling environment. All right. So after let's say you offer your primary program, you're like, hey, it's, you know, it's X, right? And they're like, I just can't afford that. So what you say is this. You say, tell you what, I'll do it for this if you, X, Y, Z, right?

If you leave me a testimonial. So I'll drop the price in half if you leave me a testimonial. Fair enough. And when you say that, it's like they asked you to make some sort of adjustment. You take that in consideration. You make the adjustment and you make the offer again. Then you say, does that sound fair? Right.

And the thing is, is it's very difficult for people to keep hearing that over and over again and not say yes. So I'll give you an example of one of the step downs that we use that's really successful. And so let's say we're selling a front end program for $300, all right, for $300 a week, 100 bucks a week, very straightforward, three weeks. All right. So they say, you know what, that's too much for me? You say, no problem. What if we just did 49 a weeks for 12 weeks, right, with a commitment?

And so what we're doing is that you always have these, you always have these cards that you can play. So in a fitness example, right, you have the term. So how long they're committing to. That's number one. Number two, you can ask them to give you a testimonial. You can ask them to give you reviews. You can ask them to bring a friend. And each of these things are things that you can ask them to do so that you can

ethically lower the price because you're asking them to do more. All right? On top of that, you can also add bonuses in the original package. I don't like removing bonuses as much because I want to give them those things. And so it's more like, I'd rather go in the other direction of asking them to do more things for me. And that way, if someone else is like, why is she paying? x and i'm paying z you can say well she's doing some extra things for me that you're not and they're like oh and so that way you're not saying like two people are having different prices

for the same program because you've made additional terms to the agreement right so traditional step down would be like hey can you do this thing for 299 they say no you say awesome no worries uh you know what i can just cut the price in half and if you can just commit to 12 weeks fair enough they say no and you say okay no worries let's just not even worry about the commitment just gets you started today for 49 bucks fair enough they say no you say all right and you have to acknowledge that it gets kind of increasing ridiculous as you make more and more offers right in it in a light tone because it's still gonna pool on that internal mechanism inside of people to take action say yes okay so we started

we've already done two drop downs we did half price with commitment then we remove commitment forty nine dollars all right we're 49 and we were eliminated commitment that's two step downs all right step underneath of that You're like, all right, how about this? I'll do it for 39 if you leave me a testimony at the end. Fair enough. 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. And also, when you have the testimonial,

you're also putting another implication that they're going to get results. So you're selling while you're downselling at the same time. Right now you've said three down cells fair enough. They're like no I still can't do it. You're like all right cool. Let's just get you kicked off at $29 a week Pay as you go. Don't worry about it. And just bring a friend in the first 30 days. All right that way I can at least cover my cost and that way it gets me at least half price what I was saying before. Fair enough. It's hard for someone to hear that make you have you make all of these what is it accommodations for them and not say yes three four four five six times and be very clear about how you're asking for this don't just say sound good sound great cool that's not the call to action the call to action when you're down so I mean I really like this in general what I'm selling is fair

enough sound fair because you're lowering the bar to just say yeah that sounds fair you're like awesome great what card you want to use let's get you started right if you want you can even transition be like cool do you want to do your you know nutrition appointment in the morning or the afternoons you're already taking more micro steps in the right commitment before you ask the card if you want to do that all right but i'll go i'll go through this one more time for everyone who's listening so primary offer it's 299 it's got all this amazing stuff fair enough no okay no worries um what we can do is if if the price is enough but you really still

want this if you if you want to just go longer which you're probably going to need anyways right i'll do it for 49 a week which is half of what i said earlier all right fair enough And when you're asking this, you have to ask it like you actually want them to say yes. And that's why the tonality is so important. Don't just like read the script and be like sound fair. Like you have to be like, fair enough. Like you have to really, you have to ask it like you're actually asking them to say yes. I know this sounds minor, but it's everything over the phone.

You don't have your body to make so that they can see because only 9% of communication is verbal. Right. And everything else is how you say the words, not just the words you're saying. I can give you another example of like how I can take one sentence and make it mean like six things by how you say it All right sales the same thing so big program they say no Commitment at half price fair enough they say no say listen don't worry about it I get it sometimes can be scary how about this I'll just let you get started for day Pays you go I'll prove myself all right we don't have to get married we can just start first date right

49 all right fair enough You got to really wait for it and they're like uh you're like okay you're killing me here that's okay no worries we'll get this start all right we'll figure this out together the thing is is that when you're doing this it's collaborative you're on the same side of the table saying let's figure out a way to make this work right because if you have built the rapport throughout the sale you've dug the pain right so they know that this is something that they need to do and they know they need to do with you they will work with you as long as you've

maintained rapport and you don't get aggressive right and so you're like okay no worries how about this I'll do it for 39 a week all right so it's 25% off of my already 50% off, right, if you just leave me a testimony at the end. Fair enough? It's hard for, like, it's hard for people to keep saying no to that. And you're like, okay, 39. All right. I'll do it.

All right, this is, this is the best I can do, all right? Because at this point, I'm pretty much paying you to work out, all right? So it's, I can do this for 29, all right? Just send me a friend in the first 30 days. That way, at least I can get back to the 49 that just at least covers my costs. Fair enough. And we say it like that. You see how the tonality changes, right?

They're like, man, this guy's really trying to help me out. He's really trying to accommodate me. And so when you drop down that many times, like at this point, we're at six drop downs, okay? So this person, all right, if they say no at this point, then in my opinion, it's not a money thing. You lost them earlier on in the sale and they're trying to get off.

And at some point earlier on, they became disengaged with the phone call, right? That's where you get the, hey, can I get the credit card? They hang up, right? It's because they're just done with the conversation. They just want to get off the phone, right? in person, they can't just get off the phone. You have a little bit more fighting room.

Over the phone, it's not that way, right? And so these are the things, and that's why you have to confront the obstacles earlier on, like someone's disengaged, they're not paying attention, they're giving you surface level problems. That's where you're like, hey, can I be real with you instead of nice to you? And then you deliver the pain, and like, hey, I'm not saying that to make you feel bad, all right? I'm saying that so I can help.

And so when you say that, it's like you've given yourself permission to inject the truth, rub the pain a little bit, but then you put a band-aid on it afterwards. All right. And so, any of you, that's, that's earlier on objections. I won't get into that right now. But knowing how to downsell will massively includes your crows rate. And by adding these little cards that you have

that you can trade with people on allows you to have flexibility in the deal, right? And then that way, they can feel like you accommodated them, you still help them. And then ultimately, what you're doing is just trying to get your foot in the door, because in seven days and 14 days, they're finally going to trust you,

and then they'll buy the full. the full price program later. Like, don't worry about it. It's just like, let's get you going. Let's get you in our world so that we can provide value and then after that we'll make it work. All right.

So two cents on downselling. You need to know how to downsell it and you know how to do it ethically without sounding like you're begging or being pushy. And that's how you do it. All right. Lots of everyone.

If you like this, drop a comment, drop a review, drop a, you know, drop a whatever. Engage with this. And have a, have a miraculous Wednesday. All right. Catch you soon. Bye.