The Game with Alex Hormozi - Part 5: Cold Outreach | $100M Leads Book

Episode Date: August 19, 2023

“Give yourself a downhill battle by giving away something crazy.” In this episode, Alex (@AlexHormozi) discusses his step-by-step process for creating a successful cold outreach system that resulted in generating tens of millions of dollars. He emphasizes the importance of personalization and offering big, fast value to strangers to overcome the lack of trust in cold outreach.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.Get your own copy of the book at acquisition.com/booksWanna scale your business? ⁠Click here.⁠Timestamps:(0:40) - Cold Outreach(8:13) - Building a List(11:18) - Personalize(16:43) - Volume(29:31) - Benefits Of Using Cold OutreachFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Welcome to episode five podcast edition of $100 million leads. This is a one single Kahuna chapter cold outreach. This is everything that I learned step by step on how to create a cold outreach system that ended up creating literally tens of millions of dollars from me personally because it is what created or transformed gym launch into a sellable asset. So we went from just being able to run ads to having a cold outbound team that generated over half of our sales. And we had to learn it from absolute scratch. And so rather than you learning from scratch, let me just give you all the lessons so you can have a big head start. That's what this chapter is about. I hope you enjoy. And if you really love it,

leave a review. It would mean the world. Cold Outreach. How to reach out to strangers to get engaged leads. Quantity has a quality all of its own. Napoleon Bonaparte. July 2020. COVID-19 raged. In a matter of months, 30% of my customers went out of business. Protesters filled every platform with hate and anger. Small businesses suffered in silence. Unemployment skyrocketed. The most tumultuous election ever was upon us. And here we were, trying to generate leads to pay our bills. Employees everywhere and their families depended on it. All three of my companies at the time,

Jim launched, Prestige Labs, and Allen relied on brick and mortar businesses staying open, and they were closed. Brilliant strategy, Alex. To make matters worse, Apple did a software update that crippled our ads were crap, and I carried the bucket. I ran through worst-case scenarios.

How much cash would it take to keep us afloat? How long do I keep paying people when there's no end in sight? Should I dip into my personal accounts? Give up a third of my life savings, half, all of it? What does that say about me? I had no idea what to do.

Early that Saturday morning. I tried to sleep long enough for my alarm to wake me, but it was no use. I went into my office and checked Instagram. I had a new message waiting for me. Hey, Alex. Kiel told me you guys don't need salesman anymore, so my offer got pulled. I quit my job to accept it. Super honored you considered me.

I hope you consider me again the next time you have openings. Looking for context, I scrolled up. Reading our earlier messages rewarded me with a pang of guilt. I was the one who told him to apply. He took the rejection wall, a sign of a good salesman. I felt obligated to reply. You on? I messaged. Yeah, he replied.

Got five? Yes. We hopped on a call. He sounded a little nervous. But I could tell he knew his stuff. It sucks we don't have enough leads for this guy. I've wanted to work with you for a while now. I read your book and used your scripts to become the top producer at my company, he said.

That's awesome. I'm so glad to hear it. What kind of company? I asked. A gym software company. I hadn't heard of them before. Oh, interesting. How did you guys get your leads?

We're 100% cold outreach. So you cold call and cold email gyms then sell them software? Yeah, pretty much. How big is the team? We've got about 30 guys. A team of 30? What's your revenue,

if you don't mind my asking? We're doing about 10 million a month right now. Insane. Just from cold outreach? Yeah, we run some ads, but we haven't really cracked that yet. And you do this with a retention offer? You're not even really making Jim's more money?

Yeah, it's definitely not as easy to sell as the stuff you do for Jim's. Do you think you use the same outreach system here? I've never started a team, but I bet I could figure it out. All right, what was the offer Kale pulled? I was going to be a closer, but he said you guys didn't need one anymore. I thought for a moment. Well, given our current lead volume, he's probably right. But if you can get your own leads, I'll give you the runway to get cold outreach going.

What do you think? It's going to take a while to get going. I'll have to figure out the scripts for your offer. Yeah, that makes sense. How long you think? I'm confident I can make it profitable in 12 weeks. All right, deal. I'll let Kiel know the plan.

To be clear, you'll be expected to figure this all out. The software, the list, everything. I'll front you the time, but we can't support you much beyond that. Understood. Here's what happened during the following months. September. Zero sales. Zipola.

Nothing. Zilch. Nata. October. Two sales. $32,000. Team asked me to pull the plug on the cold outreach. December. Four sales, $64,000 in revenue.

Team asked me to pull the plug again. January, six scales, $96,000 in revenue. February, 10 sales, $160,000 in revenue. March, 14 sales, $224,000 in revenue. April, $20,000, $320,000 in revenue. May, 30 sales, $480,000 in revenue. Today, cold outreach generates millions per month for our businesses. Making this work took every legal-cilled outreach method we knew.

Cold calls, cold emails, cold-drag messages, voicemails, everything, But piece by piece, we built a reliable customer-getting system. I wanted something that would endure. And that's what I'm going to show you how to build. I learned five important lessons from this experience. One, there was another company in my space making a lot more money than mine. It broke my belief about how big the market really was. Two, they made all their money through private advertising.

I had no way of knowing they existed unless they contacted me first. So they kind of operated in secret. Three, they built a very profitable cold outreach machine in my space. If they could do it, so could I. 4. It's good to have proper expectations. Cold Outreach veterans told me it would take a year to scale. I figured we could do it in 12 weeks. I was wrong. It took almost a year. Cold outreach takes a long time. At least it did for me. Five, we tried cold outreach two times before and failed. Working with a person that had done it all before was immensely helpful in getting this going. I hope to be that person for you now.

At some point, you'll want one of two things. Either you'll want to grow faster than you currently are, or you'll want to increase the predictability of your lead flow. Here's how we can do that. We advertise to people who don't know us, cold audiences, and like before, we can contact them privately or publicly. In this chapter, we focus on private one-to-one communication with cold outreach. For out of context, cold outreach sits atop the foundation of warm outreach. So think of this as a more advanced cousin of warm outreach, no longer limited by your warm audience. If you can figure out a way to contact somebody one-to-one, you can use it for cold outrage.

You can knock 100 doors, you make 100 phone calls, you can send 100 direct messages, you can send 100 voicemails. These are all examples of cold outreach that have made companies zillions. It worked 100 years ago, it works today, and when platform stains, it'll work tomorrow. Cold outreach has one key difference from warm outreach. Trust. Strangers don't trust you. And compared to people who know us, strangers present three new problems. First, you don't have a way to contact them. Duh. Second, even if you can contact them, they ignore you. Third, even if they give you their attention, they're not interested. Let me describe what

these problems look like in the real world. If you're knocking on doors, you don't have the addresses. Then, even if you do, they don't open the door when you knock. If they open, they still tell you to pound sand. If you're making cold calls, you don't have their phone numbers. Even if you do, they don't pick up. If they pick up, they still hang up on you. If you're sending cold emails, you don't have their email addresses. Even if you do, they don't open the e-mail.

Even if they do open it, they still don't respond. If you're sending direct messages, you don't have a place to send it. Even if you do, they don't read it. Even if they read it, they don't reply. If you're sending voice memos or text messages, you don't have their numbers. Even if you do, they don't read or listen to it. Even if they read or listen to it, they still don't reply. Now that we got out out of the way, the order we solve these problems is this.

One, get a way to contact them. Two, figure out what to say. Three, contact them until they're ready and able to listen. The result, we find lots of ways to contact the most qualified strangers. We reach out to a lot of them in a lot of ways, a lot of times. Then we overwhelm them with value up front to get them to show enough interest to move forward. Author note, it'll take a few more steps than normal. As a personal rule of thumb, I sell expensive stuff.

I sell expensive stuff better when I do it in multiple steps rather than on the first contact. So my priority is to get the prospect to show interest in the stuff I sell. When they show interest, I schedule a time to sell them. If my league magnet requires a second exchange to deliver it, I do that then. If my league magnet provides value on its own, then the next call is to talk about the value they received. Either way works. Cold outreach is a number scheme.

The more people reach out to, the more engaged leads you get. Once we figure out how much outreach it takes to engage a lead, then we only have one thing to do. More. Let's go hunting. As there are three new problems strangers introduce, I divided this chapter into three steps, one step per problem. First, we get a targeted list of leads. Next, we need to know what to say to get them to reply. Third, we make up for lower response rates by increasing the volume and type of our reach-out attempts. Problem number one. But how do I contact them? Build a list. Up until this point, from warm reach-outs and posting free content, you've had to accept the leads that came to you from your warm audience. No more.

With cold outreach, unlike any other way of advertising, we get to be as specific as we want. Only want to talk to hedge fund managers managing over a billion dollars? Done. You can do that. Only want to speak to golf apparel retail owners over 3 million in sales? Done. Only want to talk to influencers who get over 50,000 unique page views for month? Done. Now, we get to pick our targets rather than them picking us. Now, you probably don't have a way to reach out to 1,000 perfect fit strangers. And if we're going to get them to buy from us, we've got to first find a way to contact them. D. So let's solve that problem first. There are three different ways I get my targeted lead lists.

First, I use software to scrape a list of names. Second, I pay brokers to assemble me a list of targeted leads. And if neither of those work, I manually scrape a list of names myself. Here's the process. Step 1. Software's. I subscribe to as many softwares as I can that scrape leads from different sources. I search them all based on my criteria. The software then spits out names, job titles, contact information, etc. I try out a representative sample, say a few hundred from each software I use. Then if the contact information is up to date, the leads are responsive and they are the type person the software claims them to be, bingo. Then I get as many leads as the software will give me. But if I can't seem to find the right audience, move on to step two. Step two, brokers.

I go to multiple list brokers and ask them to make me a list based on my audience criteria. They then send me a sample. I test out sample lists from each broker. If I get good results from one or more brokers, I stick with their lists. And if they still can't find who I'm looking I move on to step three. Step three, elbow grease. I join groups and communities that I think have my audience. When I find people that meet my qualifications, I check to see if they have ways to contact them in the group's directory,

like links to their social media profiles, etc. If they do, I add them to my list. If they don't, I can reach out to them within the platform hosting the group. I prefer to find contact information outside the group so I don't come off as solely trying to milk the group for business, but I will if I have to. So, I work my way up from the most accessible leads to the least accessible leads. Here's an important point. If you can search the database, so can everyone else. But if you

assemble a list of names yourself, it's less likely that person has already seen many cold reachouts from other companies. So they're the freshest. Downside, it takes the most time. Of course, you can pay someone else to do this for you once you figure it out yourself, but we're only talking about getting started in this chapter. We'll talk about scaling in section four. Action step. Find your scraping tool by searching outbound lead scraping tool or database lead scraping. Find brokers the same way. With a few clicks, you'll find what you're looking for. Put your first thousand names together. If you have more time than money, you might want to start at step three since it only costs time.

Pro tip. Interest groups are the warmest cold audiences you can get. Interest groups contain the highest quality leads because they are concentrated pools of people looking for a solution. Give them one. Nowadays, there's software that can scrape information from these groups. Use it. They're one of my favorite places to fish. Problem number two.

I have my list, but what do I say to them? Personalize, then give big fast value. Now that you have your list of leads, you got to figure out what to say. I went over a lot of scripting in the warm reachout section. This section builds on that one. At the end of this chapter, I also include three scripts you can model for cold calls, cold emails, and cold chat messaging. That being said, there are two important factors I emphasize to get strangers to engage. Personalization and big fast value.

This is important because they don't know us and they don't trust us. We got to overcome both issues in a matter of seconds. A. They don't know us. Personalize it. Act like you know them. To get more leads to engage, we want the message to look like it's from someone they know. The best way to do that is to actually know something about the person you're contacting. In essence, we want our cold reach out to look like a warm reach out. Imagine your phone rings from an unknown number and area code. Are you likely to pick it up? Probably not. What about if the number is from your area code? A little more likely. Why is that? Because it

might be someone you know. So to take this concept further, imagine you pick up the phone. The person says, your name, then pausing, like a normal person, you'd say, yeah, who's this? Now, if that person went on and said, it's Alex, then pauses, I watched a few of your videos and read that recent blog post you wrote on dog training. It was killer. Really helped me out with my Doberman. She's a beast. That peanut butter trick really helped. Thanks for that. You'd still be wondering what's going on, but you know you wouldn't be doing? Hanging up. Then you hear, oh yeah, sorry, I got ahead of myself. I work for a company that helps dog trainers fill up their books. We like to partner with the best in the area, so I'm always on the lookout. We work with someone about a half hour

north of you. Johnny's dog care, you heard of them? You'd respond, yes or no, it doesn't really matter. And then they'd say, yeah, we ended up getting 100 appointments in 30 years using a combination of text and some ads. Do you offer similar services to them? Which you'd probably say, yes. And then they'd say, oh, that's perfect. Then we'd be able to use the same campaign in your market and drive the leads over to you. If you got a boatload of high-paying new dog training customers, you wouldn't be upset with me, would you? Ha, ha, ha. You'd laugh lightly. Okay, great. Well, tell you what, I can walk you through the entire thing soup to nuts later today. Will you be a round of four? And you'd say, sure. Or whatever. The point is, if that person had started the call with, hey, man,

want to buy some marketing services, you probably would have hung up. Personalization is what gets your foot in the door to get the sale. Basically, one to three pieces of information we can find that a friend might know about the prospect. Then we want to compliment them on it. And ideally, Show them how it benefited us. People like people who like them. Even if someone doesn't know you, they'll give you more time if you know something about them. This comes in handy for personal subject lines on emails,

the first few messages in chat, or the first few sentences someone hears. Even if someone doesn't know you, they'll appreciate the time you took to research them before contacting them. This tiny effort goes a long way. Action step. Do a little research on each lead before you send a message. We can do this ourselves, pay people to do it, or use software.

batch this work. Then use your notes to figure out the first thing you'll open with to feel more familiar. Pro tip. 50% email response bump. I took our cold outreach template and rewrote it below a third grade reading level. The results, 50% more leads responded. I recommend running all scripts and messages through a free reading level app online. I won't recommend one because they go out of business all the time, but I promise you can find one. Make your messages easier to understand and more people respond. B. They don't trust us. Big fast value. The key difference between people who know you and strangers is, strangers give you far less time to prove your worth.

And they need a lot more incentive to move towards you. So make your life easier by giving away the farm. We're not trying to tickle their interest. We're trying to blow their minds in under 30 seconds. Like warm reachouts, you can directly make your offer or offer a lead magnet or both. It gives the person a strong reason to respond. I specifically call out big fast value rather than your lead magnet as a reminder that it needs to be big, fast, value. If it's not or it's mediocre, you'll blend in with the ocean of people trying to get

their attention and they'll treat you the same. They'll ignore you. So here's how much it matters. The first four months of our cold outreach felt like torture. We offered a game planning session as our lead magnet. Some gyms took us up on it, but most didn't. We needed something better. I tested many parts of our process, but swapping the lead magnet blew everything else out of the water. We swapped from game planning, code for sales call, to actually giving them as much free services we possibly could. Our take rates 3xed and cold outreach became a monster channel for us. If your offer slash league magnet isn't working for you, up the ante, keep offering more and more until you make it so good, they feel stupid saying no. They either buy from you or they have nice

things to say about you. Win, win. If you forget everything about this chapter, remember one thing. The goal is to demonstrate big value as fast as possible. Give yourself a downhill battle by giving away something crazy. Give away something for free people would normally pay for and they will want it. Note, I didn't say so good they should pay for it. I said stuff they actually pay for. Big difference. Take this to heart and your results will show it. Action step. Provide the biggest, fastest value you can afford to with your league magnet or offer. Then write your scripts and don't worry, I got your back there. To give you a head start, I provide some sample phone, email, and direct message scripts at the end of the chapter. Note, phone and chat scripts are never more than a page or two and cold email.

are rarely more than half a page. So don't overthink it. They are no rewards for prettiest script. Get your first hundred conversations or 10,000 emails out of the way before tweaking it. Get testing. Then tweak as you learn. Problem number three.

I'm not getting enough chances to tell people about my amazing stuff. What do I do? Volume. Once we have our list of names, personal info, and our big sexy lead magnet, we need to get more strangers to see it. We do this in three ways.

First, we automate delivery to the greatest extent possible. Next, we automate distribution to the greatest extent possible. Finally, we follow up more times and more ways. A, automated delivery. To the extent we can, automating delivery unlocks huge scale as someone doesn't need to literally communicate the message to the prospect. This means you get more engaged leads per unit of time, even if you are engaged by overall percentage. Remember, you have far more people who don't know you than people who do, so you don't have to worry as much about burning through an audience. Here's what the difference between manual and automated delivery looks like. Manual examples. A lot of

A five person can say a script to someone over the phone. You can send a personal voice memo to each lead. A person can write a handwritten letter to every person on the list. If it takes a person time to convey each message, then it's manual. Hey, I hope you're enjoying the book right now. If you don't know this, the mission of acquisition.com is to make real business education accessible to everyone. And the only way we can reach everyone is if you choose to share this.

And so if you've been enjoying this, you've been getting value from this chapter and any the rest of the podcast episodes, if you could just take a second and ship this to a friend, just click the one button and send it to somebody or share it on your stories. It would mean the world to me and it would ultimately send this message to more people. So if you could do that now, it would mean a lot. Automated examples. We can send a pre-recorded voicememmo to someone's direct messages. We can send a pre-recorded voicemail to someone's voicemail box.

We can send a templated email to an inbox or a templated text to someone's phone. We can send a pre-recorded video, et cetera. You record your message one time, then send the same matches to everyone. Pro tip. Use technology that gets you more engaged leads for your time. Every day, artificial intelligence, deep fakes, and other technology advance, they become more indisinguishable from human communication. This means we will be able to automate elements of what we currently are forced to spend time on. Embrace technologies that comes out to read the rewards.

Ultimately, technology serves a single purpose to get us more output per unit of time. Use it. Automate distribution. Once we have our messages prepared, we got to distribute them. And there's no word for who works the hardest, only for who gets the best results. although one leads to the other. And as you build your skills, you will find ways to automate portions of the work. I encourage you to automate when ethical and available.

Manual examples. Dial each phone number, click send on each email, direct message, text, etc. Automated examples. Use a robot to dial multiple numbers at once. Send a blast of a thousand emails, text, voicemails all at one time, etc. Generally speaking, you sacrifice personalization for scale. You get a higher response rate with personalized message. The fewer leads you have, the less automation you should consider using.

For example, if there are only a thousand hedge fund managers who meet your criteria, you're going to want to personalize every one of them. On the other hand, if you're targeting women 25 to 45 trying to lose weight and there are tens of millions of them, you can get away with less personalization. But if you personalize, you'll get even more. Wink. Pro tip, personalization tech. The perfect combination for max leads is max personalization with max volume.

And with tech, you don't always have to sacrifice, personalization for scale. Every day, data becomes more accessible to find personal data. If you can set up tech to accomplish both personalization and volume, you create a deadly effectively getting combo. Action step. Embrace new technology. Allocate 10 to 20% of your effort towards brand new untested technology. For example, if you make phone calls five days a week, try out a new dollar or tech one of the days and see how it does compared to your standard dialer. C. Follow up more times, more ways. There are two more ways. you can get more from your list of names. First, you try to contact them more than once. Shocker.

But want to know something crazy? Most people don't. Here's a different way to think about it. Imagine you really needed to get a hold of your parents because something important came up. What would you do? You'd probably call them, text them, leave a voicemail, etc. And if they still hadn't responded, what would you then do? You'd call and text them again, probably shortly thereafter. It's the same way with prospects. They are in danger of living life without your solution. Be a hero. The more ways you try to contact someone, the more likely you are to contact them. People respond to different methods. For example, I never respond to phone calls, but I reply to direct messages far more.

Contacting someone multiple times multiple ways shows them you are serious, and doing so quickly communicates you of something important to discuss. Curiosity increases because they fear they're missing out. Personally, I like to email first. You know why? Because most people don't respond. If someone doesn't respond to one of your outreach methods, use that as a reason to follow up with another method. Hey, I'm calling you to follow up about my email. We either get a response

or a real reason to reach out again. Either way, we win. And once you do get them booked for an appointment, expect more than one conversation. Remember, we're contacting complete strangers. Outreach takes more touch points with people who don't know you. So expect two or three conversations before I hire ticket sale. Shoot for less, but expect more when you're starting out. Bottom line, act like you're actually trying to get a hold of these people rather than going through the motions and you probably well. Action step. Contact each lead multiple times in multiple ways. Pro tip, don't be an income poop. If someone asks you not to contact them, don't contact them again. Not because there isn't a chance it could work, but because for the same effort, you can reach out to someone who isn't already

negatively inclined. It's just more efficient to turn neutral to yes than no to yes. On top of that, you don't want a bad reputation. That kind of stuff follows you. Try hard because you have a general desire to solve their problems, but be respectful. Second, once you finish contacting your list, start back at the top again. This actually works for three reasons. One, because they simply may not have seen your first series of messages. Only a fool would think 100% of people see what you put out 100% of the time. So we make up for that discrepancy with follow-up.

Two, even if they do see it, it may not have been a good moment to respond. People's schedules change every day. And there are times when people can't respond to you even if they wanted to. So the more opportunities you give them to respond, the greater the chance they will. Three, their circumstances may have changed. They may not have needed you then, but need you desperately now. Imagine a person you message about losing weight before the holidays. At that time, they fit into their skinny jeans, so they feel no pain.

They probably wouldn't respond. But after they gain 10 pounds over the holidays, they may all of a sudden be in desperate need of what you offer. And now they respond to your reach-out attempt. The only thing that changed was their circumstance. So try again in three to six months and get an entire. highly new group of engaged leads from the same list. Everything may be right except the timing.

So the more times you contact them, the more likely we will catch them at the time they're ready to engage. Action step. After you've attempted to contact them multiple times, multiple ways, wait three to six months, then do it again. Pro Tech. If you are new to an outreach team, shout out of the best guy on the team. Then double their inputs.

If they make 200 calls, make 400. If that means you work more, duh. You will suck before you are good. You can make up for your lack of skill with volume. Volume negates luck. And when you do twice as many, you'll get good in half the time. Once you beat their numbers, then you can get cute and try new things. Replicate before you iterate.

Three problems strangers create solved. I wrote the book in this order to build on itself. Start with warm reachouts, get some reps, post some content to grow your warm audience, get even more reps. Then you'll be ready for cold reachouts. And now, we solve the three core problems cold audiences, finding the right list of people, getting them to pay attention to you, and getting them to engage. Victory.

Author note. For people with low-ticket products, I had trouble making cold outreach profitable when selling for my direct-to-consumer business. Cold outreach teams are expensive, and my average ticket wasn't high enough. But I learned I could make a low-ticket product, a high-ticket product, if I sold a lot of them at once. So I switched from using cold outreach to get customers to using cold outreach to get affiliates who got customers for me. There were two ways that worked. Either I'd sell the affiliates

lots of products in bulk up front, then they'd sell my products to their customers, or I'd use cold outreach to recruit them, then get them to sell my products to their customers and receive a commission after the sale. One affiliate sale can be worth thousands of customers. Both ways transform my, quote, low ticket sale into a quote, high ticket sale by selling many at once. So the numbers pencil out. If you're having trouble using cold outreach for your direct-to-consumer business, consider going after affiliates instead. More on this in the affiliates chapter later. Benchmarks.

How well am I doing? The two times I failed at cold outreach, I hired people who'd never tracked metrics well. The third person did. And cold reach-out succeeded. The person who runs it, maybe you, has to know the metrics of the sales process like the back of their hand, every single stat. Let's break down the numbers with a couple of platform examples. I cannot give an example for every platform because it would take too long.

My hope is that you can generalize the concept to whatever platform you use. Phone example. Let's say I make 100 cold calls per day, and let's say I get a 20% pickup rate. From there, I'm able to get 25% of people to want to take my lead magnet. That means I got four engaged leads. If it took me four hours to make those calls, it means I got one engaged lead per hour. I can do this at first. Once the amount of engaged leads that convert to customers makes me more than it costs to pay a cold outreach rep,

I teach someone else to do it for me. More on this in Section 4. So you know you do well when you make at least three times the lifetime profit of a customer compared to what it costs you to get them. Email example. Let's say you send 100 personalized emails per day. From there, 30% open our email. From there, 10% reply showing interest. That means we'd have three engaged leads, which is 30% times 10% equals 3%. The numbers will vary, but shoot for 3% of your list turning into engaged leads. Here's a sample from a new campaign for a very niche high-ticket service business in our portfolio. It shows a 4% lead-to-engagement rate, and presumably, a third of them convert into sales. That would net us one new customer per 100 reach-out attempts. Direct message

example. Let's say I make a personal video or record a personal voice memo for 100. people. I say their name and add one personal line before delivering my standard message. From there, 20% of people reply. Now we have 20 engaged leads. From there, we use the same ACA format from the warm outreach section to qualify them for a call and so forth. So like the phone example, you know you do well when the cost of doing cold outreach is less than three times what you make in profit from a customer. Note, you can do way better than three times. That's the bare minimum. For context, the portfolio company above gets over 30 to 1 returns from its outreach efforts. Costs This method is labor-intensive. Nearly all costs are in the form of labor. In order to

calculate our return on advertising, we add up all labor and software costs associated with steps 1 through 3 in the section before last. Let's imagine we have a team doing cold calls. We pay them $15 per hour and $50 per show in-appointment or shows. We have $3,600 in profit per sale. lead costs us 10 cents. They call 200 leads per day. We would likely get about two shows per day from one rep. If they worked eight hours per day, we would pay $120 in labor and $100 in show commissions per rep and $20 for the leads. This means we'd pay $240 for two shows or $120 per show. If we closed 33% of shows, our cost to get a client, excluding commissions, would be $360. Since we get $3,600 in profit per new client, we would make a 10-to-1 return. That's how cold outreach works.

Then you just add bodies. It is boring and tedious, but brutally effective. Pro tip. Give each rep an explicit number of leads to work each week. They should care for these leads like they are their children. If you give a rep too many, they will waste them. If someone can work 100 leads at full capacity, I'll give them 70-ish. That way, they have time and energy to squeeze everything they can out of the leads they've

got. And since all reps get the same amount of leads every week, you can give them absolute quotas for deals. Example, I give you 70 leads, you give me back seven appointments, I pay you, no leads left behind. This sounds hard. Why bother? Most people dramatically underestimate the amount of volume it takes to use cold outreach. They also underestimate how long it takes, but there are seven enormous benefits to using cold outreach. Number one, you don't need to create lots of content or ads. You focus only on one perfectly crafted message you convey to all your prospects. Your only goal is to make that one message better every day. There is no, quote, ad fatigue or, quote, banner blindness, since your prospects have never seen anything from you. So,

you don't need to be a marketing genius to make this work. Two, your competition won't know what you're doing. Everything is private. By that fact alone, you can continue to operate in secrecy. You're not educating your competitors by how you acquire customers. They don't know what you're doing, or even that you exist. Three, it's incredibly reliable. All you have to do to get more is do more. A certain amount of input creates a certain number of responses. It becomes like clockwork, bringing a reliable flow of new engaged leads into your world.

You can reverse engineer the amount of sales you want to make to the number of inputs at the top of your lead pathway. Eventually, you'll have an equation. For every X people contacted, you get Y customers. Then you simply solve for X. For example, let's say for every 100 emails, I get one customer. If I want 100 customers, I need to send 10,000 emails. That's 33 per day. One person can send 111 emails per day. Therefore, I need three people sending emails every day to get 100 customers per month. Four, fewer platform changes. Private communication is rarely subject to platform changes, whereas public platforms change rules and algorithms every day. You've got to stay on top of rule changes to remain effective. In contrast, rules for cold calling, door knocking, and cold email have hardly changed in 30 years.

5. Compliance is less painful. Many platforms have stringent rules around claims you can make about the stuff you sell. Some also ban certain industries altogether, tobacco, firearms, cannabis, weight loss, etc. With cold outreach, you don't need to deal with any of this. You still need to be FTC compliant, but you don't also need to worry about platform rules on top of that. This makes life easier. If you have a phone, you can make money. If you have an email account, you can get leads. This makes you very hard to stop. 6. No spokesperson equals sellable business. If an investor can buy it from you without worrying your business will stop getting customers if you leave, your business is far more valuable. Having an established outreach

team is how we were able to sell gym launch. The business could grow without me dancing in front of the camera or relying on me being super ridiculously good looking. I don't think they would have wanted to buy us without it, or at least not for as much. Seven, hard to copy. Even if someone wants to copy your entire cold outreach system, they'll often need to learn how to do each step. And many steps are invisible. They don't know how you scrape your list. They don't know how you personalize your messages. They don't know what software is used to distribute the messages, etc. On top of that, they still need to learn how to hire, train, and operate a team of people who can do each step. Once you have a head start, it compounds with time. It becomes very hard to

catch you. Author note. Belief breaking volume. Scaling to 60,000 emails per month. To break your beliefs around what's possible, here's an example. To break past a million dollars per month, we automated the entire process of scraping, crafting, and sending emails for one of our portfolio companies. One virtual assistant sends 2,000 emails per day using multiple pieces of software. This generates the business 40 engaged leads per day. Note, the response rate dropped because we took out so much personalization. From there, they're able to get 10% of engaged leads sold, meaning they get four new customers per day. This got them past that 100 customers per month barrier. Fun facts. They started with us at 250,000 per month, our minimum size requirement

for investment at the time. The business makes $20,000 per customer. With four new customers per day, do the math at how big they are now. Your turn. If you recall our advertising checklist, this kicks off your journey to get more engaged leads with cold outreach. You start this as you run out of people to advertise to, or because you just want more. Here's a sample. Cold reachouts daily checklist. Who? Yourself. What? Hook plus league magnet slash core offer. Where? Any private communication platform. To whom? A list scraped, bought, or using software. When? Every day, seven days a week. Why? To get leads to engage to sell stuff. How? Live calls, voicemail drops, email blast, text blast, direct message texts, video messages, voice messages, direct mail pieces, handwritten cards, etc.

How much? A hundred per day. How many? Day one? Twice. Day two, twice. Day seven, once. How long? How long? As long as long as it takes. Pro tip. Count in hundreds. This is a volume game. You will need to do a lot of volume, efficiently to get the results you want. Don't set a daily goal below 100,

and don't stop for 100 days minimum. If you do 100 reachouts for 100 days straight, I promise you will start getting new engaged leads. Next up. Now that you have set your commitment for this cold outreach method, we move on to the last thing a single person can do to advertise. Run paid ads. Free gift.

Cold outreach script samples. I had to cut scripts to make this book a manageable length. If you want to model your scripts off of them, go to acquisition.com forward slash training, for it slash leads. And if you need another reason besides, it'll make you money, it won't cost you any. It's free. Enjoy. Hey, if that's going to make you money,

what you just heard, go leave a review. That's how more people find out about this stuff. Please don't hoard this to yourself. There's another entrepreneur who has a family and kids who needed this stuff as much as I needed it during the pandemic when I was trying to save my business, please share it. Thank you. And yes, the next episode, run paid ads. You'll enjoy it. I've run a lot of ads. We're pretty good at it. And I'll share how I do it. This has been $100 million leads written by Alex Hermosey,

read by Alex Hermosy, copyright, 23, acquisition.com, audio production, copyright, 2023, acquisition.com media.