- Sell for as much as you can.
- Choose a market that is expanding, or at least not dying.
- Create the best offer you can by knowing your customers as much as you can and throwing as many bonuses and free stuff as humanely possible.
What $100M Offers Talks About
$100M Offers is a book written by Alex Hormozi. It’s a marketing and copywriting book explaining how to design the best types of offers in order to sell as much as possible for as much money as possible. It packs and explains all of the psychological tricks ever used in copywriting.
I have not much to say besides that it’s a great book.
If I had to summarize it in one sentence, it would be: Deliver as much value as you can for as high of a price as you can.
Should you read the book?
Definitely. This summary won’t be enough. It’s a great reminder, but it will be hard to get the concepts without prior reading.
The ebook only costs $0.89, so everyone on this planet should be able to afford it.
Enjoy the summary!
Table of Content
Click to expand/collapse
- Chapter 3: Pricing: The Commodity Problem
- Chapter 4: Pricing: Finding The Right Market – A Starving Crowd
- Chapter 5: Pricing: Charge What It’s Worth
- Chapter 6: Value Offer: The Value Equation
- Chapter 7: Free Goodwill
- Chapter 8: Value Offer: The Thought Process
- Chapter 9: Value Offer: Creating Your Grand Slam Offer Part I: Problems & Solutions
- Chapter 10: Value Offer: Creating Your Grand Slam Offer Part II: Trim & Stack
Summary of $100M Offers Written by Alex Hormozi
Entrepreneurs bet on businesses that they hope will earn them a lot of money. Sometimes it works, sometimes it doesn’t. While it is often random, you can improve your skills to increase the odds in your favor.
This book will teach you how to make offers so that people buy your stuff.
Most offers are good. Few offers are great.
Section I: How We Got Here
Chapter 1: How We Got Here
Alex began opening gyms and learned marketing to get as many customers as possible. He opened six of them, then sold five, and with the money, opened a new business called “Gym Launch” which was a consultancy to help gym owners fill up their gyms.
End of 2016, he ran out of money. So he kept on working on “Gym Launch” with credit cards.
After a month, he had broken even.
By the end of the year, he made $3 000 000 in profit. Two years later, he made $120 million in revenue.
He used the money to buy more businesses and today, he makes $1.6 million per week.
Chapter 2: Grand Slam Offers
The secret to sales is “make people an offer so good they’d feel stupid saying no“.
Most people are wantrepreneurs. They want to build a business but mostly procrastinate by reading books, buying courses, attending conferences…and never doing anything about the knowledge they learn.
Business is providing someone something in exchange for money. Hence, the most important skill is sales, namely: making an offer.
No offer means no business. Good offer means some money. Grand Slam Offer means insane business (and money).
Most entrepreneurs have two problems to solve:
- They need more clients.
- They need more cash.
Making better offers is one of the best solutions to solve both of these problems at the same time.
Here’s how Alex makes money.
- He provides free content on building businesses.
- People use this free content to build businesses.
- Once these businesses reach $3M, he buys or invests in them and grows them to $30M, or $100M.
- He makes more money, so he can buy more businesses.
Section II: Pricing
Chapter 3: Pricing: The Commodity Problem
You grow, or you die. There is no such thing as a standstill. The market grows at 9% per year, so, if you aren’t growing, you’re falling behind.
You need three things to grow.
- More customers.
- More customers that buy more stuff from you.
- More customers that buy more stuff from you more often.
Let’s define some terms.
- Gross Profit: the money you earned minus the money you spent to produce what you sold. If you sell 10 waffles for €2, and each waffle costs you €1, you have earned: €20 – €10 = €10.
- Lifetime Value: the net amount of money a customer will spend over their lifetime. Eg: if they buy 7 waffles over their lifetime, this amount will be 7 waffles x €2 = €14. Since it costs €7 to make these waffles, the lifetime value of a customer is €14 – €7 = €7. Some people don’t take the cost of the goods sold (the cost of making the waffles) into account when calculating lifetime value.
- Value-Driven vs. Price-Driven Purchases: price-driven goods are commodities. They are products available in a lot of places. Eg: when you want to buy water, you’ll take the cheapest one. Some goods are value-driven. Eg: when you need surgery, you’ll get the best surgeon.
What is a Grand Slam Offer?
It’s 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.
It’s an offer that is a monopoly because you are the only one making this offer. So the alternative to your product is…nothing. As a result, your price and offer cannot be compared to any of your competitors.
Chapter 4: Pricing: Finding The Right Market – A Starving Crowd
What’s the best advantage a hot-dog stand can have over all of the other stands?
Answer: a hungry crowd.
If there is a huge demand for what you sell, you will sell even if you have the worst business in the world.
By the same token, if your market is dying (eg: you sell to newspapers), your company will also die.
Market is important.
A market grows at the same rate as the marketplace and has common unmet needs that fall into one of three categories: improved health, increased wealth, or improved relationships.
The more demand there is in the market, the better it is.
Here’s what to look for in a market.
1. Massive Pain
The pain is the pitch.
Your customers cannot “want” what you have. They must “desperately need” what you are selling. The bigger the pain, the more you can charge. The better you articulate the pain, the better you will sell.
The point of good writing is for the reader to understand. The point of good persuasion is for the prospect to feel understood.
2. Purchasing Power
Don’t sell stuff to people that have no money to buy it.
3. Easy to Target
Don’t choose a market for which it’s difficult to find the audience.
Don’t get into a dead market.
Making This Real
There are three markets that will always exist.
Why? Because lacking any of these becomes extremely painful.
Now, find a market that is growing (1), with easy people to target (2) that have money (3) to buy what you have (4).
A great market > a great offer > great persuasion skills.
Find your market, and commit to it. You can’t serve two markets at the same time.
The more niche down you are, the better it is, because the more you can charge.
The more niched down you are, the more specific your product is, the rarer it is, the more you can charge.
Chapter 5: Pricing: Charge What It’s Worth
In order to make a compelling offer, you need to understand value.
People buy stuff to get a deal. They think that what they are getting is worth more than the price they’re paying for it.
When the value they receive gets lower than the price they’re paying, then they stop buying.
Price is what you pay. Value is what you get. – Warren Buffett
As we can see, one of the ways to increase the willingness to buy is to decrease the price. However, it is often the wrong decision. The purpose of a business isn’t to sell stuff, but to earn money.
If you can’t be 10 times cheaper than your competitors, don’t compete on price.
There is no advantage to being the second cheapest. But there definitely are advantages in being the most expensive.
The other way to increase the willingness to buy is to inflate the value. Eg: deliver 100k of value for a 10k price.
Most business owners don’t compete on anything.
They look at the average price in the market, then go slightly under while inflating the value.
Often, they’re broke, so let’s not copy them.
You need premium pricing. Here’s why.
|Decrease||Revenue for fulfillment per customer||Increase|
|Decrease||Perceived value of self||Increase|
|Decrease||Perception of impact||Increase|
|Decrease||Sales team conviction||Increase|
The table above is pretty clear.
When you increase your price, you increase the value of what customers get. It’s a psychological trick. People assign more value to what costs more.
Finally, if you offer a service where the customer must do something in order to receive the value (reading the book you sell, respecting the plan you sell, using the gym subscription you sell, etc), then they become more invested when you sell for a higher price.
Those who pay the most pay the most attention.
Of course, to do that, you need to deliver a flawless product/experience.
The author priced his Gym Launch service at three times the most expensive competitor, and 32 times his cheapest competitor.
But he also knew that his product delivered significantly more value than what he was selling it for.
Section III: Value – Create Your Offer
Chapter 6: Value Offer: The Value Equation
The goal is to charge as much as you can for what you are selling.
To do so, you need to forget about the notion of “fairness”. The biggest companies in the world charge you enormous amounts for things that cost them nothing.
You need a discrepancy between what something costs you, and what you charge.
Don’t charge more than what your product is worth (to the buyer). But definitely charge more than what it costs you to make (up to a hundred times).
The value equation helps you set up the price.
The Dream Outcome
People have deep desires. Channel those into your offer. Depict their dream so they feel understood and explain how you will help them get there.
Eventually, almost all products can be attached to one central desire: status. Everyone wants to increase their status, or at least, not decrease it.
Perceived Likelihood of Achievement
This is the certainty that your product will solve their problems. If you can 100% guarantee it will work, they’ll buy.
Eg: people don’t hesitate much to buy food as they know it will make them less hungry. But a book…is this book really worth it?
Perceived likelihood of achievement is inflated with the messaging, proofs, and guarantees.
How long will your product take to fix the customer’s problem? The faster, the better.
There are long-term outcomes and short-term experiences to any purchase. People buy for the long-term outcome, but they stay because of the short-term experiences.
Eg: the promise to earn an additional $100k per year starts with earning an additional $1k.
Give your clients immediate, short-term wins!
Fast beats free. People will always be ready to pay to get something quickly.
Efforts and Sacrifice
What it costs people to get your product. This variable explains why the supplement industry is worth twice the gym industry: it’s easier to take supplements than to go to the gym.
Focus on inflating the Dream outcome and Perceived likelihood of achievement, and on decreasing the Time delay and the Effort and sacrifice.
Inflating the top two is easy. Just make outrageous claims.
Decreasing the bottom two is hard.
Make things immediate, seamless, and effortless.
Once you have done so, you need to convey it in your offer. If your prospects don’t perceive this, they won’t buy. Perception is reality.
Always approach your marketing problems from a psychological angle, not a logical one. If the problem was logical, it would have been resolved already.
Eg: don’t make subways faster. Show people where the train is so they know when it is coming, and the pain due to waiting decreases.
To sell, you need to embrace human nature.
Eg: Ice cream may be unhealthy, but that’s not the point. The point is that people want ice cream, so you have to sell ice cream, even if it’s unhealthy.
That being said, you can sometimes give people what they want, and deliver what they need simultaneously
Chapter 7: Free Goodwill
The author wrote this chapter to ask the reader to leave a comment on Amazon for the book.
Chapter 8: Value Offer: The Thought Process
There are two types of thinking: convergent (math), where only one answer is correct; and divergent (psychology, etc), where all answers can be correct. Life will reward you for solving divergent problems.
Building an offer is a divergent type of thinking. An offer has many elements, and these elements can be combined in an infinite number of ways. Your purpose is to find the way that makes the offer appear the most valuable.
Chapter 9: Value Offer: Creating Your Grand Slam Offer Part I: Problems & Solutions
When the author started with his gym, no one would buy his membership – not even if he gave it for free.
So he started to refine his offer.
Step #1: Identify Dream Outcome
People don’t want to go to the gym. They want to lose weight.
Airlines don’t sell plane tickets. They sell holidays (mostly).
What do your customers want, really?
Step #2: List Problems
Write down all of the problems and limiting beliefs people struggle with and that your product could fix. These problems should come immediately before and after using your product.
Write absolutely all of them.
Eg: losing weight.
To lose weight, people need to eat healthy food. We’ll focus on that problem. What problems do people run into when they want to buy healthy food?
- Buying healthy food takes time.
- It’s annoying
- It demands research
- It demands time to cook
- You can’t do it when you travel
- It’s expensive
List all of the annoying things ever. ALL OF THEM.
Then find out the obstacles to the four elements of the value equation of these problems.
Eg: buying healthy food.
The dream outcome -> this won’t be financially worth it.
Perceived likelihood of achievement -> it won’t work because it can’t be a one-time thing. It has to be regular.
Time delay -> this is too hard.
Effort and sacrifice -> will take too much time.
Step #3: Solutions List
First, name the solutions to the problems you have found.
Second, actually find a way to fix the problem.
“Buying healthy food takes time”-> How to buy healthy food quickly.
Chapter 10: Value Offer: Creating Your Grand Slam Offer Part II: Trim & Stack
In the previous chapter, we covered the problems and solutions. In this chapter, we’ll see what we will actually do to fix the problems.
Your purpose, as a reminder, is to sell high prices, but a steal for the value (selling $100k worth of stuff for $10k.)
The graph above means that if what you do is easy (social media marketing), why would people need to give you money to do it? Easy things are hard to sell.
But if what you do is hard (surgery), then people will gladly pay you for it.
Try to find something that is both easy to fulfill and easy to sell.
The author lives by the mantra: create flow, monetize flow, add friction.
- Generate demand: “I’ll fill up your gym in 30 days”.
- Get people to say yes to the sale
- Offer less for the same price: “I’ll give you a course so you can do it all by yourself”.
Overall, you need to see how you can make less effort to deliver the same results for the same price.
Any business can be fixed by:
- Over-delivering to create cashflows
- Using the cashflow to fix the problems
Step #4: Solutions Delivery Vehicles
Now is the time when you figure out what you’re going to do to solve all of the problems that your customers have.
Think about anything you could possibly do.
Think about everything that could enhance the value so much that your customers would be stupid saying no.
What could you do that someone would immediately say, “All that? Seriously? Yes, I’m in.”
Product Delivery Cheat Codes
If you are having some issues coming up with solutions to deliver, here are the cheat codes.
- What level of attention do you want to provide?
- Small groups
- One-to-many (conferences)
- What level of effort is expected from your clients?
- They do it themselves
- You do it with them
- You teach them how to do it
- You do it for them
- If you need to do something live, how would you do it?
- By phone
- By Zoom
- By email
- By chat
- If you do a recording, how would you deliver it?
- How quickly do you want to reply to your customers?
- Only from 9h00 to 17h00.
- Within the hour
- If the customers paid 10X the price of what you are selling, what more would you provide? Provide that without increasing the price.
- If the customers paid you 1/10th of the price, how would you provide the same value for the effort that the new amount of money would compel you to make? Deliver the value this way, without increasing the price.
Do this for each and every one of the problems you need to solve.
Many offers fall through when just one problem is not being solved.
Eg: if you’re hired to help people lose weight and they want to eat out, don’t forbid them to eat out. Make a guide that will enable them to eat out and still lose weight.
Step #5: Trim & Stack
Now that you have all of these problems and all of these solutions, you have an enormous list.
Remove the solutions that are costly to provide, and deliver little value.
Then remove the solutions that are cheap to provide, and deliver little value.
You end up with costly solutions to provide that deliver high value, and cheap solutions to provide that deliver high value.
Delivering high value is the most important thing.
If you don’t know what’s high value, look at the value equation.
For high-cost high-value solutions: find ways to decrease the high cost.
For low-cost high-value solutions: actually, there is no such thing. These low-cost high-value solutions usually entails a high-cost, but only in the beginning. Eg: build a course. It’s tough to make, but once it’s made…you don’t need to make it again.
When the author was running his gym, he made:
- Bulking blueprints
- An eating-out system
- A travel eating and workout guide
- Meal plans for every bodyweight and gender
- A grocery list calculator
- Plateau busting meal plans (for when they got stuck)
- Fast cooking guides partnered with meal prep services
- In-person nutrition orientations with every client one-on-one.
- Step #1: What’s the client’s dream outcome?
- Step #2: What are all of the problems that they have in their way to their dream outcome?
- Step #3: What are all of the solutions that can fix all of the problems?
- Step #4: How would you deliver these solutions?
- Step #5a: Only select the high-value solutions.
- Step #5b: Put all the bundles together into the ultimate high-value deliverable.
So, you end up with a gym that:
- Solve your nutrition problem: how to fast, cheap, and healthy, at home or traveling.
- Solve your workout problem: what workout to do according to your age, gender, and goals.
That’s how you get more people to your gym, and how you can increase the price of the membership.
- It solves all of the problems.
- Gives the conviction that the product is unique
- No one will ever sell the same thing because it is too much work, so you compete…with no one.
Ok, so, that’s the basis of your offer.
Let’s now have a look at how to enhance it.
Section IV: Enhancing Your Offer
Chapter 11: Enhancing The Offer: Scarcity, Urgency, Bonuses, Guarantees, And Naming
“When demand increases, raise prices and cut supply”.
Find some tricks you can use to sell more:
- Commitment and consistency
- Peer pressure
- Celebrity endorsements
We use marketing to increase the demand for our product.
When demand hits, you can decrease supply to earn more money per unit sold. The perfect combination is high demand and low supply.
That’s the purpose of enhancing your offer. Increase demand, and decrease perceived supply, so you can sell the same product for more money and in higher numbers.
The purpose of marketing in general is to move the blue curve (demand) on the right.
Customers only want what they don’t have.
You too. As soon as you have it, your desire for it disappears. So to increase the demand, you must delay satisfying your customers. You need to sell fewer units than you can, so they want it more.
Eg: sell 10 workshops for $500 VS sell two one-on-one for $5000.
How is this possible?
Because the demand for a product isn’t linear.
It’s fractal (not from Aure: not sure fractal is the right word. IMO Alex meant “exponential”).
1/5th of people are ready to pay five times the price (or more).
In this case, you make more money, provide more value, and the offer seems more exclusive – hence increasing demand.
Now that you sold two workshops for 5k, you still have 8 people with desires that weren’t served.
So next time you promote your workshops, open three spots instead of two.
Always offer lower supply than you have demand. Offering higher supply leads to killing your demand.
Always make the offer when the demand is high. The longer you delay making the offer, the bigger the offer you can make.
Conclusion: supply and demand are a delicate balance. If you satisfy no one, you kill their desires. If you satisfy too many, you also kill everyone’s desires. Keep your supply slightly under your demand.
If you sleep with your significant other every day they have less desire than if you haven’t slept with them for a week. We want the ravenous prospect, not merely the aroused.
Chapter 12: Enhancing The Offer: Scarcity
Scarcity is one of the most powerful forces that helps you sell. The reason why experts or celebrities can sell at high prices is that everyone assumes that everyone wants what they sell, hence that there is less of it, hence that it is more valuable.
Some people manage to sell for €50k of their time in one day.
Here’s how. Imagine someone is looking for a solution to add €5M in revenue per year. Not many people know how to do that. Let’s say there is only one person that knows. Is it worth paying €50k to that one person to get €5M back?
So selling for high prices depends on two variables.
- How many people offer the service.
- How valuable is the service.
People that charge this much money usually can because they don’t need the money – which is why they succeed at getting it.
On the other hand, people that need the money will always be compelled to negotiate.
Let’s have a look at how we can create scarcity.
A fixed supply of goods creates scarcity, fear of missing out, and urgency. And people buy, because the fear of loss is greater than the desire the equivalent (eg: losing €5 hurts more than earning €5 gives pleasure).
There are three types of scarcity.
- Limited supply
- Limited supply of bonuses
- Never available ever again
Engineering Scarcity with Physical Products
Do limited releases no more regularly than once a month.
Make sure you sell out consistently, or your product will appear like it has less value.
It’s a bit trickier, but still possible.
- Say you are only accepting “X” clients.
- Say you are only accepting “X” clients per week/month…and you only have Y spots left.
- Only accepting X clients per class.
The best way is to sell 1-1 meetings at an extremely high price and for an extremely low number of people.
You can also increase scarcity by telling them that once they’re out of the program, they can never come back (that will compel them to stay).
Chapter 13: Enhancing The Offer: Urgency
While scarcity relates to quantity, urgency relates to time.
1. Cohort-Based Rolling Urgency
For groups starting every X week, month, etc.
Just say “If you’re ready to sign up, you can start next Monday. Otherwise you’ll have to wait for next week/month before getting in”.
Won’t refusing clients make you lose sales? No. You make more money from this strategy than you’d make from people who missed out, as these people were never going to be your customers anyway.
2. Rolling Seasonal Urgency
These are offers with sign-up dates: “valid until the 30th of this month!”
You need to respect the actual 30 of the month as if you don’t, you will lose all credibility.
That doesn’t stop you from running the promotion every month though.
“June sales! July sales! August sales!”
Deadlines drive decisions.
Vary your strategies more often if you are a local business.
3. Pricing or Bonus-Based Urgency
This is offering a bonus that will fade with time, or announcing that you will increase your prices “tomorrow, so get it now!”
4. Exploding Opportunity
Like above, but bigger.
Chapter 14: Enhancing The Offer: Bonuses
A single offer is less valuable than the same offer broken into its component parts and stacked as bonuses.
Eg: this knife costs $37, but if you get it, you will receive 10 other knives..for free!
It’s much better to do it this way than to sell 11 knives for $37.
Why does it work? Because in your mind, the knife costs $37. Ok, that’s fair. But you get this whole set of 10 knives on top of this…for free! What a great deal.
Bonuses work better than discounts. Discounts teach your prospects that your prices are negotiable.
That’s not good.
Bonuses, instead of giving X for less of a price, enable you to give X + Y for the same price.
Presenting Bonuses 1-on-1
Don’t give the bonus before you close the sale on the first trial. Give it after, to create a “wow” experience.
If the first close doesn’t work, give a bonus equal to the size of the obstacle in the prospect’s mind.
Don’t forget to:
- Always offer bonuses
- Give them a name with the benefit in the title.
- Explain your prospects:
- How the bonus relates to their issues
- What it is
- How you discovered it (what you had to do to make it)
- How it will improve their lives
- Provide proof
- Paint a mental image of how their lives will be like assuming they have already used your product and experienced the benefits.
- Put a price tag and justify it.
- Each bonus should address a specific obstacle
- The value of the bonus should eclipse the value of the offer
- Add scarcity and urgency to the value of the bonuses
- only people who buy that program will access these bonuses. These bonuses are not for sale, we don’t make them available anywhere else.
- I have x bonus left, if you buy the product now you can get bonus as a bonus.
- If you buy today, I will add bonus for free.
Advanced Level Bonuses – Other People’s Products and Services
Contact companies that do stuff in your field and get their products for free in exchange for exposure to your clients.
And negotiate an affiliate fee on top of that, and further discount.
Eg: come to my gym, and get two one-hour massages for free + 30% for the first six months if you sign up within one week at the massage therapist!
Here’s the type of bonuses you can give:
- Books, lists, spreadsheets, etc that take time to create, but once they’re created, they’re created.
- Record all of your workshops, interviews, etc and cram them as bonuses too.
Bonuses are Wow things, things that could almost stand on their own, and appear awesome as bonuses.
Chapter 15: Enhancing The Offer: Guarantees
The biggest reason why people don’t buy is the risk that the product won’t do what it says it will do.
That’s why you use a guarantee.
A guarantee is a statement like “If you don’t get X in Y time, we will Z”.
You have four types of guarantees.
- Unconditional: the strongest guarantees. You refund someone no question asked.
- Conditional: those with terms and conditions. If you know the key things people must do to succeed, they need to be part of the conditions.
- Anti-Guarantee: it’s no guarantees at all due to a massive vulnerability that your customers need to understand that you have.
- Implied Guarantees: these are guarantees where you get paid only if the customer gets results. It’s the strongest guarantee.
You can stack up guarantees, like bonuses.
But don’t people take advantage of guarantees? No they don’t. For a guarantee to make you lose money, the number of people that ask for a refund should be equal to the number of new customers, which is never the case.
However, a strong guarantee can attract people that come for the guarantee.
That’s why you may tie the guarantee to certain conditions.
Name your guarantee. The stronger your guarantee is, the more you can use it to show people how good your business really is. “My guarantee is so strong that don’t you think I would already be out of business if I didn’t deliver?”
Make your guarantee according to the type of obstacle your clients have. That’s the only job of the guarantee.
Chapter 16: Enhancing The Offer: Naming
The name should be good enough that its pronunciation gets people interested.
It should also be changed once it reaches the fatigue zone.
Don’t change the offer! Just change the name of it, the way it is presented.
The name should respect the MAGIC formula.
- Magnetic: make a magnetic reason. “Back to school discount”.
- Avatar: announce the avatar: that’s your client. Who are you selling to?
- Goal: give your clients a goal. That’s the thing they’re looking for: pain-free, double your profit, first client, etc.
- Interval: indicate a time interval: how long will it take for your clients to get what they want? “Pain-free in 10 days or less”.
- Container: complete with a container word. It shows it’s a bundle of things you’re getting. Challenge, blueprint, BootCamp, etc.
Not all of these are mandatory, just get two or three.
The shorter the name, the better. The more specific, the better. If it rhymes, it’s better. With alliteration, it’s better.
For more summaries, head to auresnotes.com.
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