— Author: Vladimir Super-BusinessDad —
We're all familiar with the persuasive tactics employed by Don Vito Corleone with his, well, "clients." While that might seem intriguing, let's explore a different approach to negotiations. By the end of this brief post, you'll find yourself viewing the prices around you through a new lens.
TL;DR
Understand the power of a "starving crowd" in business — a hungry audience will devour even non-unique offerings.
Tailor your business for high-paying clients, set high prices, and invest in quality and service to make a significant impact.
Learn the value equation — a tool to demystify what makes an offer truly valuable to customers, enhancing your sales strategy.
Craft an irresistible Grand Slam Offer that combines an attractive promotion, unmatched value, premium pricing, unbeatable guarantees, and a payment model that earns you money to acquire new customers.
All You Need in One Book
Realizing that selling a product or service can genuinely assist individuals and companies, I embarked on a quest to become the ultimate salesman. During my search, I came across a recommended book – '$100 Million Offers' by Alex Hormozi1. Despite its seemingly clickbait title and the author's unconventional appearance for a businessman, it caught my attention.
Hence, I invested some time scanning through its content. It stood out from other books I've read. "Let's give it a try."
Starving Crowd
Imagine you're launching a fast-food business. You get a chance to ask a goldfish for one wish. What would it be?
"A perfect location?" Nope, try again.
"A unique recipe?" No, not that.
"The best possible service?" No.
The crucial factor is a starving crowd. Even with non-unique food, in an ordinary location, with mediocre service, but in front of a hungry crowd - you'll sell out. That's the key.
Highly Paid Customers
Who should you send to? Alex illustrates this with a friend's business venture. Despite having a good website that helped fresh graduates build their CVs, the friend earned very little. Why? His customers were unemployed.
The lesson: Build a business for high-paying clients and set high prices. This allows you to invest in your business, improve quality, and provide better service. Once you've earned money fairly from high-paying customers, you gain the freedom to make a positive impact, whether by supporting charities or assisting students in finding jobs.
Value Equation
What is "value," and how do we determine if our offer is truly valuable for our customers? Alex introduces the value equation, providing a framework to demystify this often intangible concept.
We have two elements in both the numerator and denominator. In the numerator, we have:
Dream outcome: What does the customer dream of? What would be the ideal outcome related to the problem we're solving?
Perceived likelihood of achievement: How much trust can we gain, and how credible does our offer look from the customer's perspective?
In the denominator, we have:
Time delay: How long does the customer need to wait for a solution?
Effort & sacrifice: What does he or she need to do?
Let's consider a practical example. Suppose you want to lose weight, and you can choose between going to the gym or opting for liposuction. What is the value equation for both solutions?
Option 1: Going to the gym
Dream outcome: Lose 10 kg. (Score: 5/5)
Perceived likelihood of achievement: Tried multiple times without success. (Score: 1/5)
Time delay: Hardly less than 6 months. (Score: 2/5)
Effort & sacrifice: Requires a lot of dedication, at least 3 times a week, 1.5 hours each time, including transfer. (Score: 1/5)
Total score: 9/20
Option 2: Liposuction
Dream outcome: Lose 10 kg. (Score: 5/5)
Perceived likelihood of achievement: Doctor and the clinic are well-known, with others having done it. (Score: 4/5)
Time delay: 2 hours-long surgery. (Score: 5/5)
Effort & sacrifice: You get to sleep for 2 hours and wake up lighter. (Score: 5/5)
Total score: 19/20
This comparison illustrates why treatments like liposuctions are highly sought after. Now, with a clearer understanding of how value is composed, we can comprehend why people are willing to pay premium prices for certain products or services.
Pack a Grand Slam Offer
“Make people an offer so good they would feel stupid saying no.” - Travis Jones
How can we package our product or service to command premium prices? Alex introduces the concept of the Grand Slam Offer:
“Grand Slam Offer – An offer you present to the marketplace that cannot be compared to any other product or service available, combining an attractive promotion, an unmatchable value proposition, a premium price, and an unbeatable guarantee with a money model (payment terms) that allows you to get paid to get new customers.” - Alex Hormozi
Craft Your Offer
You can create an offer like this in 5 stages:
Define the dream outcome
List all problems/obstacles your clients currently have
Present all problems as solutions
Maximize profit/value
Final High-Value, High-Profit Offer
By following these steps, you'll develop an offer that addresses numerous real problems, delivering exceptional value. Your offer will overflow with value, setting you apart in the market and empowering you to command premium prices.
Enhance Your Offer
To make your offer truly remarkable, consider incorporating the following components:
Scarcity: "We provide a premium service, limiting our clientele to just 100 clients."
Urgency: "Applications closing in 2 days."
Bonuses: "Included in this price are features X, Y, and Z."
Guarantees: Aim for unconditional guarantees, like a "No questions asked money-back guarantee." Be bold with guarantees.
Naming: Craft a catchy and magnetic message to make your offer stand out.
Immediate Action: Three Key Steps to Implement Now
Revamp your business approach with three straightforward steps to immediately enhance your offerings:
Target High-Paying Customers: Tailor your products or services to address the needs of high-paying clients. Identify and tap into a hungry crowd, ensuring demand for your offerings.
Apply the Value Equation: Evaluate your product or service through the value equation lens. Clearly communicate the dream outcome, build trust, minimize time delays, and reduce customer effort and sacrifice.
Craft a Grand Slam Offer: Develop an offer that surpasses competitors by combining an attractive promotion, an unmatched value proposition, a premium price, and an unbeatable guarantee. Make your offer irresistible to your target audience.
Final words
I've applied these lessons and tips to enhance the packaging of both the product I'm developing in my company and other entrepreneurial projects. The impact has been significant. These products now exude exceptional value. We followed up with a price increase and resisted the temptation to offer discounts.
Our firm, well-bundled offer now stands out in the competitive landscape.
The higher price is now justified.
Thank you, Alex.
I would greatly appreciate it if you could share your thoughts on this subject in the comment section. The entire community can benefit from a variety of perspectives, helping us collectively find the best solutions.
If you have friends who might be interested in these topics, please consider spreading the word. The more minds we have engaged in these discussions, the better we can become as both businessmen and fathers.
The book links provided are affiliate links. If you choose to purchase through them, I may receive a small commission from Amazon. There is no additional cost to you. 😊