The Game with Alex Hormozi - How To Use Data in Marketing | Ep 289

Episode Date: April 6, 2021

It’s all in the numbers! Today, Alex (@AlexHormozi) talks about the importance of data analytics in your company, how the 3 wheels can be used to drive the messaging of your marketing campaigns, and even understand the consumer behavior of your customers! By thoroughly looking at the data and understanding what they mean, you can drive more compelling messages that will drive more sales for your company!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:(0:30) - Marketing: understanding data as a consistent source of new material.(1:45) - Data variables: base campaigns on different variables to maximize impact.(7:33) - Showing increases: percent, absolute, revenue, and subsequent increase.(9:54) - Three wheels: apply them to various stats like profit, revenue, churn.(11:59) - Alex's template: guide for data-driven marketing campaigns.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Now, if you're thinking about from marketing perspective, would you think 18% of gyms that we work with are seven-figure gyms? Maybe I don't think that sounds as compelling as one in five point five. Like, really? One in five? Like, that's not that bad. 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. What's going on, everyone? I've got a special presentation for you today. This is going to be a little bit more advanced stuff, and it's because I'm partially making this for my team. on the marketing side. So one of the things that I have found has been a consistent source of new marketing for us is

understanding data. And so I think some people are much better at telling stores than I am, but I'm pretty decent at slicing data. And so the nice thing is that there's always new inferences that you can derive from data that you can make the same thing mean different things. And so for example, I'll give you some statistics that we have that we've based entire campaigns around. So one campaign that was our most successful campaign that we've ever run was a one-year-later campaign. And so what that was was we took all of our clients that had been with us for over a year and measured all of their stats and measured their stats from before they were with us until now a year later and showed the difference, right? And the differences were crazy. You know, 250,000, 500,000 a year, a million dollars year extra. Like, there were just massive differences. And so from that, from that one, you know, measuring example, there's so many different subdivisions of data that you can use, right? You can just say, hey, when your later, average client is up this, right? That would be one way to do the data. Another way to do that would be like one, one year. later our top 20% of clients have added over $400,000 a year to their yearly revenue. Another one would be the bottom, you know, 80% are at this, right? And so there's, there's all

these are like one in, here's another way of doing it, one in five gyms who's been with us over a year is over Z, right? And so there's different variables that you can play with, right? One is the percentage of people, right? The next is the goal. And then the next is the duration piece. So you have these kind of three wheels that you can spin together to make really interesting statistics and you can and you can you can base so many campaigns around it like another campaign that we have that's launching soon is We just we just we just we just measured one in five point five gyms Is over a million dollar year run rate for us right? So all these you know so for me it's easy because like you know other people are like seven figure gym Blah blah blah and so for me I'm like well they're talking about it. We're doing it right and so I can always position myself because most people don't even capture their own data anyway so they don't even know and it's usually because it's not good

right there do you know they don't have any million dollar gyms they don't need to go measure that right we do know it's a one in five point five so that's 18 percent now if you're thinking about from marketing perspective would you think 18 percent of gyms that we work with are seven figure gyms maybe I don't think that sounds as compelling as one in five point five like really one in five five like that's not that bad right and the thing is is you can also invert that and say all right but four point five out of five five gyms hit this right so it's like I can play on the on the on the on the the the desire that people have to win the lottery it's survivorship bias like that people think they're going to be the one right but I

can also play on the inverse which is something that I like doing a lot which is I love playing on averages I love playing on medians with data because it's like hey this is just what the normal person does right like and here's what's cool you can always say after you say an average that also means half of people are above this we're like wow well I consider myself above average so I'm going to be above that because everyone thinks they're above average right and so when you're clumping data together you can use those three wheels, right?

Wheel one is over what duration, wheel two is what is the outcome? And then I literally can't even remember what the, oh, and then the percentage of clients that achieved that, right? So it's percentage of clients, the outcome, and then the time duration. And so you have these wheels that you can mix a match.

And even when you say percentage of clients, you can say percentage of clients, you can say the top percentage, the bottom percentage, the median, the average, right? And you can also say one in, right? So there's different ways. You can also say the fractional version, like one fifth of, right? So all of these, that's just like, that was just on the one wheel

of what percentage of clients, right? What percentage, one fifth, one in however many, the fractional amount, the top percentage, the bottom percentage, so you can invert either one of those. So one in five or four out of five, right? That would be the inversion of the same stat. And so when I'm using all of that, like this is what I'm running through, and this is what I've had a really hard time teaching my team, which is why I'm making this right now, is that like this is what I'm running through when I'm thinking, when I'm looking at like the data they get back from customer support, excuse me, customer success is like this,

they're like, here's all the gyms that we have. I'm like, okay, how can we say this differently? How can we say this in a compelling way and make it a hook for our marketing, right? And so that was all the examples I had for percentage of clients, right? Now, if we're talking time duration, right? So with time duration, I'm going to be thinking super long, long time away. And here's what's cool about when you use longer durations away. If someone's been with you for a year, the likelihood that they've succeeded is very high,

especially in an education-based business. So I love pulling out the one-year or two-year-later pieces because, one, it shows that people stay with me for a long time, which means that I continually provide value, right? So that's social proof of continued value creation, which I like a lot. So, boom, when you have the long-term duration, it's great. And that's an advantage, especially if you're an older player in the space, having those one-year-two-year-later testimonials is something that no one else can show, that you can show to also demonstrate your long-standingness in the space, right?

But on top of that, somebody who's been with you for that long is going to usually have a very good outcome. And so if I just say, hey, the people have been with me for over-year average this, that it's like, wow, that's crazy, right? And so the data will give a very positive impression of what you're marketing, right? Flip side is that you can cut it at different times, right? You can look at first week, you can look at first 30 days, you can look at first two months. And so the thing is, if you have this data on it, a regular basis, you can timestamp this stuff and really you can slice it and find

that the slice that you're like, oh, this is really good. Like for us, like our average gym in the first, I guess first 15 days, not 15 days, excuse me, first two weeks does 15,500, all right, in additional revenue. That's the average, which means half people get better than that, right? Crazy. And so, and I give you the other stat earlier, one in five point five gyms is a million dollar gym, right? And so I can play with these, you know, with these numbers, because I could, you know, could have said 18%, or I could have said with the percent of the 15,500, I could say that's a,

what's the outcome, right? The outcome wheel could be, what's the increase, right? If it was the increase, it might be like the average person, you know, doubles what they do in revenue in the first 14 days. That's a different way of saying it, right? I don't know what, I don't know what the actual number is because I don't, I don't have that one offhand, but like, that would be something that I'd be, that's something I would ask my team. I'd be like, hey, figure out what the fraction is here. Is it a doubling? Is it a 1.5x? Is it a 30% increase? 30% increase doesn't sound as good as 15500, right? So I'm going to say that one instead.

And so when we're talking about increases, there's four ways you can show it. Real quick, guys, you guys already know that I don't run any ads on this and I don't sell anything. And so the only ask that I can ever have of you guys is that you help me spread the words so we can out more entrepreneurs, make more money, feed their families, make better products, and have better experiences for their employees and customers. And the only way we do that is if you can rate and review and share this podcast. So the single thing that I asked you do is you can just leave a review, but take you 10 seconds or one type of the thumb, it would mean the absolute world to me. And more importantly, it may change the world with someone else.

One is a percent increase, which is this went up by X percent, right? The next is an absolute increase, which is additional, 15,500, right? The next would be the actual total number made, which would be their revenue plus the increase, boom, right? which would be different but similar, right? So you've got the just the increase. You've got the total amount made. You've got the percentage increase.

You've got a relative increase, which is one that I like, which is what is $15,500 buy you, right? So $15,500 might be like, I would have to look up industry averages, but I'd say maybe industry average for a micro gym, rent might be, let's say, $2,000 a month. So I would say in the first 30 days, the average gym in our program pays off three, quarters are nine months of rent. Wow, that sounds kind of interesting, right? Like, that's,

that's compelling, that's unique, right? So hopefully you're following along with me, you're like, the three big wheels, right? Wheel number one you've got is what's the outcome? Wheel number two is the time duration and wheel number three is what percentage of clients, you know, achieve this outcome. And so when you're playing with these three wheels and you're slicing the data, all of these wheels have variables, which is why you can slice data in so many different directions. But for me, this is usually what I will search for. Like, this is what I will hunt for. I will look for the piece of data that tells the story that the copy can't tell.

Or it can reinforce the story that the copy tells and makes it feel more compelling. Now, mind you, you have to be absolutely compliant when you use numbers, right? Which is one of the things I also like doing it because we track our stuff. And most people in our space don't because they're still figuring out how to market and figure. out their business. But the thing is, most people don't track this stuff. And so I have a huge competitive advantage because I've been tracking this stuff for years, right? And on top of that, we have pretty decent metrics around this stuff, especially around client success. And so with that, I can hunt and say, okay, let's look at new clients, you know, first eight weeks, right? What's how much,

what's the increase in revenue? Okay. And the thing is, is everything I just talked about was one stat. Right. I just talked about revenue. I could use the same three wheels with time. the customer outcome and then what percentage of them achieved it I could use those same three wheels with any of the stats I could use it with profit I could use it with revenue I could use it with churn I could use it with I could use it with I could even use it with growth percentage right I could use it with like there's there's so many different ways I can I can use those three wheels in my marketing but usually this will be the central core concept that I will make an entire campaign

around right because at the end of the day there's only so many ways for me to say we make gems more money Right? Like, I mean, and the thing is, at the end of the day, everyone promises that. So the question is, how can I make a different, more unique promise, and how can I make it more compelling and believable that they will achieve it? Right. And so that's kind of why I use data as most of the times the central selling point that I have for any program that I sell. Now, the good thing is, is that, and I've always done it that way because I'm usually my way of convicted because it's easy to have conviction in stats because those are what they are. so I can have absolute conviction that this is what it is. So take it or leave it, these are the stats, right?

Like, you can choose, you know, if I said, you know, my weight loss program has an 87% success rate of people hitting, you know, over 15 pounds, then, then, like, me even, like, how about this? I'll say it even differently. Let's say I had a, let's say my success rate of people hitting over, I have a 70% success rate of people hitting over 12 pounds loss in their first six weeks with me, right? there's two variables that I'm playing with actually three again which is what percentage of the customers achieve X result right and I can change X results because

I say what percentage customers achieve over over 30 pounds lost it'd be much smaller it only be like 10% right and sometimes it's worth saying the top 10% of our clients hit X I think it works better with business stuff but like in a weight loss scenario that would be that would be an example it's like I have this percentage of customers you achieve this and I can move these right until I find a sweet spot where I look in the data and I'm like Huh, 70% of our clients hit over 16 pounds lost. That's pretty good, right, in this period of time.

And so now I can start marketing that because I have the data to support it and substantiated, right? And so when I'm thinking about new hooks, right? Here's a different one that I ran that crushed it for us, which is I told you earlier about the 5.5 gyms. One in 5.5 gyms is a million dollar gym. Here's another way you can do it with the time. I didn't even get into the time duration one yet.

is that I can say one in every, excuse me, every X days, X minutes, X hours, X weeks, X months, we achieve a Y, right? And so I found out, because I looked at our stats, and I think the last year we had done, gosh, I don't know, it was like, I honestly can't remember the number, but I do remember the outcome. It was, I think we had created like 50-something, seven-figure gyms in 2019 or 2020, something like that. Anyways, point is, is we created that many. And I was like, well, there's 52 weeks in a year. That means that one in every 7.7 days, we create another seven-figure gym.

So that means basically every week we're cranking out another seven-figure gym. So it takes the idea of like this is how many of these outcomes we've had, right? So again, in that weight loss example, I could say, how many people have we had lose, you know, 20 pounds, right? over the last year. And they might say, you know, we've had shit. We've had 200 people hit that. I'd be like, cool. So we can say every two days, another person crosses 20 pounds lost at my facility.

Wow. Isn't that a different way of saying X percent of people hit this goal in X period of time? Right? So there's these different ways of slicing it. And so I would implore you, and this is also for my team, that when we're looking at what our main hook, our main messaging that we're going to wrap the whole campaign around, is let's look at the data, right? And let's think about the three wheels.

What's the outcome? What percentage people hit it over what time duration? And then play with all of them, right? With the time duration, it's one in every how many days, every how many minutes, whatever. Is it over one year? Is it in the first 30 days? In the first six weeks? You know, whatever.

Like, is that, that's the time duration. The customer, I already said all the million ways of slicing the outcome and the percentage, right? And so hopefully that makes sense for you. Hope you find that valuable. That probably give you unlimited ways. of slicing your own data, but I'm telling you it's one of the most compelling things in the world because it's just true. So I'll leave you with that. Keep being awesome. That was a huge marketing hack that has made me a tremendous amount of money. So use it and be fruitful.