Transcription
I recently read a book titled "100 Million Dollar Offers: How to Make Offers So Good People Feel Stupid Saying No" by Alex Hermosi. This is a type of book that, if you apply correctly, you can sell and earn so much money that even your parents will start questioning if what you are doing is legal or not.
I know the title of the book and the claim it makes is quite bold, and I myself was skeptical at first, but I was positively surprised at the end by the amount of valuable information I learned. Currently, the book has over 9,400 reviews with a 4.9-star rating. This rating alone should tell you something about it. So, let's get started. I have four big takeaways, and because of that, this video is divided into four parts: Number one, your product; number two, your market; number three, your prices; number four, and finally, your offer.
Part One: Your Product
If you're an entrepreneur, you probably know that the two main problems most entrepreneurs face are: one, not enough clients; two, not enough profit left at the end of the month. Most entrepreneurs try to fix these problems by bringing their prices down. What they think is, "If my product is cheaper than the competitor's products, people will buy from me and not from them." This entrepreneur is not wrong, but this is only true for a certain kind of product: a commodity product. A commodity is a product available from many places in a similar quality. Think fruits and vegetables, for example. Except for some small differences, an apple is an apple. It doesn't matter which grocery store you buy it from. The problem is that when selling commodities, you are forced to sell them cheaper to stay competitive. If the client sees a cheaper apple, they swap providers. So, you have a dilemma: lose the clients or stay competitive by lowering your price even more. If you have a commodity offer, you will compete on price instead of value. That's the reason you should stay away from it, and you should also avoid being commoditized, which means you should avoid allowing your product or service to become just one more. You need to have a differentiated product.
I'll give you a very simple example of what a commodity service and a differentiated service look like.
A common service: I'm offering you an online weight loss coaching service. I charge a thousand dollars down plus five hundred dollars a month for returning consultations.
B differentiated service: I'm offering you an online weight loss coaching service. You'll pay one time, no recurring fee, only pay me if you see results. I guarantee you'll lose five kilograms in your first month or you get your next month free. I'll also provide a personalized exercise program based on your goals and an app to help you shop, cook, and eat healthier. I'll be available for returning consultations at all times.
If you are a customer trying to decide which offer to accept, what will it be: A or B? I'm sure you'll choose B. You might be thinking, "But how can I offer all that? I will work all the time and still go bankrupt." Just be patient, we'll get there. For now, remember this: If your product is like nothing else on the market, it'll be difficult to compare prices, which means your prospect is now forced to think in terms of value, not price. It's like you're selling in a vacuum. The purchasing decision for the prospect is between your product and nothing, because nothing compares to your product.
So, to summarize Part One: Never compete on price and avoid being commoditized. Focus on creating a differentiated product. In the remaining parts of this video, I will explain how to do that.
Part Two: Your Market
Let's suppose I've come up with a perfect offer to help people lose weight. It's an irresistible product. But when I launch my product, instead of going to a gym, I go to a kindergarten classroom. How interested in my offer do you think the toddlers will be? This shows the importance of selling your product to the right market. I might be the best thriller author that ever existed. If you only read romance, you won't buy my books, no matter how interesting my offer sounds.
There's a market out there in desperate need of your unique abilities. How do you find it? Here are four indicators that can help you:
Number one: Look for pain. Let me explain it this way: If the person has a headache, which one do you think is easier to sell him: a painkiller or a vitamin C? Vitamin C is something probably he wants in order to have a healthy body in the future, but a painkiller is something he needs right now. In the same way, your market must not want what you are offering; they must need it. When people hear the solution to their pain and what their life would look like without this pain, they will be drawn to your solution. If you can accurately articulate the pain a customer is feeling, they will almost always buy what you are offering.
Number two: Look for purchasing power. Even if you find a perfect system for helping people improve their resumes to get more job interviews, you'll have a hard time selling your product for a higher price because the customers you choose are all unemployed. Your audience needs to be able to afford your service at the prices you require to make it worth your time. Still want to sell your resume improving system? You can, but don't make it your main business. Save it for your charity businesses instead.
One personal example about the importance of purchasing power: A few months ago, in one of my videos, I promoted a course from Dr. Joe Dispenza, which I personally took and liked. I recommended the same course on two different channels that are in two different languages at that time. One channel had 1.1 million subscribers, and another one had only 150,000 subscribers. In both channels, the video in which I mentioned the course performed quite well, and in both channels, I have quite loyal and supportive subscribers. But how many people actually bought the course? Here are the results: 107 people bought the course from the small channel. How many people do you think bought it from the big channel with 1.1 million subscribers? Ready for the answer? Zero. Do you know why? Because the course was around $300, and most of the subscribers of the big channel come from low-income countries. For many of them, $300 is their monthly income, so they don't have the purchasing power for such a course.
So, to conclude: You might have a great product in a very large market, but if they don't have the purchasing power for what you are selling, the game is over.
Number three: Look for a market that's easy to target. If you have a perfect market but no way of finding the people in it, you can't sell to them. Where is your customer? Make sure you can find them on mailing lists, social media groups, channels they watch, etc.
Number four: Find a market that is growing. A simple example of a growing market can be a business based on social media, such as YouTube, and an example of a dying market can be a business based on the newspaper market. When a market grows, you grow with it, and if a market is shrinking, you'll shrink with it, no matter how good you are at what you do.
There are three main markets that will always exist: health, wealth, and relationships. The reason is that these are very painful when you lack them. So, if you can find a smaller subgroup within one of these larger markets that is growing, has the purchasing power, and is easy to target, then you've found your market. Let me give you an example of a market that will cover all four requirements we just discussed. Let's say you are targeting the long-lasting relationships market. Do you focus on 60-year-old divorced men or on college students? Well, think about it: lonely senior citizens are likely to suffer more pain for being alone, have more buying power, and are easy to target. Also, there are more people turning 60 than 20, so it's a growing market.
Let's say you have found a market that has all four components we talked about. What do you do next? This is the important point where many entrepreneurs go wrong. They find a market and sell to everybody that is in that market. If you sell to everybody, you sell to nobody. You need to focus on a specific segment of the market. In other words, you need to focus on a specific niche. Simply put, niche markets will make you more money because your product will be more unique, therefore, there will be little to no competition for example. There are many people selling time management courses. Fewer people selling time management for health professionals. Even fewer people selling time management for nurses, and even fewer selling for night shift nurses. If you are a night shift nurse having trouble with time management and you see that course offer, you'll think, "This is made exactly for me." Once you find your niche, commit to it. Many people make the mistake of jumping from one niche to another, thinking that the problem is in the niche, but very often, they just haven't been able to figure out how to make an irresistible offer. Changing niches is quite costly as well because you need to start all over again.
Before I move to Part Three and talk about the price, let me summarize everything we covered in this part about market:
Number one: Make sure you choose the right market that has four key elements. The market you choose must have pain, purchasing power, be easy to target, and finally, it must be growing.
Number two: Don't focus on the entire market. Find a niche and stick with it. Don't jump here and there.
Part Three: Your Prices
"Charge so much it hurts." - Alex Harmosi. Imagine I sell a digital course, let's call it "How to Make Money Online." The price for the course is $5,000. Would you be interested in buying it? Your answer is probably no. Maybe you think that the price is too high for a digital course. You might even have concerns if it's worth it or not.
Now, let me try again. Would you buy this course if you knew that you will start earning $7,000 per month guaranteed? The time required to start earning that much money is around 11 months. The amount of work you will need to do is three hours per day. Finally, you don't pay for the course upfront. You pay me once you start earning money and seeing the results yourself. So, would you now be interested in my $5,000 course?
Now, I don't have such a course, but if I did, I'm sure you would be interested. The reason you weren't interested the first time is that you could only see the price: $5,000. You didn't see the value you were going to get. In business, those who understand the value benefit the most. In order to create a compelling offer, you must understand the value. The difference between price and value is this: Price is what you pay; value is what you get. If the value you get is more than the price, then you buy. The moment value drops below the price, the sale is canceled. It's very important that you understand the difference because the author is not talking about just blindly charging premium prices. You will first need to deliver value.
When you look at the price of a Prada bag, maybe you don't understand why someone would pay so much for a handbag, but the person who buys that product thinks the value they're getting is worth the price, whether it is quality, beauty, status, or any other personal reason. It doesn't matter. There's an audience out there who swears by their products, and that's the only kind of customers they want to sell for. You might think that's going to reduce the number of customers who can buy from me, and you're right, but keep in mind that every business's primary goal is not getting people to buy; it's making money. So, remember, you don't compete on price. You might sell for fewer people, but you'll still make more money.
The thing most people don't realize is that you can only provide the most value if you charge premium prices. Here's why: When you raise your prices, two important things happen.
Number one: You increase your clients' emotional investment. This is important, especially if you need the client's cooperation. For example, a therapy program needs an invested customer willing to do the work and go through a high level of discomfort, otherwise, it will fail. If your client pays a low price for that, chances are they will give up more easily than if they pay a higher price. Also, if they're more invested, they'll have better results.
Number two: Finally, when you increase your prices, you are able to offer more quality because now you have money to improve your business. It has a snowball effect. You will be able to pay good employees, your employees will be happier, better employees, and better products result in an improved customer experience, which allows you to scale your business and your brand.
So, now you know you need to raise your prices, but to do that, you need to offer value. Here's how to do it: There are four variables that create value. The author calls them the four drivers.
Number one: Dream outcome. Let's suppose you own a gym. What's the desire that your customer has that you can help them fulfill? Remember, you're not selling a gym membership; you're selling weight loss, muscle definition, and health. You're not selling a flight; you're selling the vacation experience. You're not selling an English course; you're selling a movie with no subtitles. Your goal as a businessman is to make your customer feel understood in what they desire and explain how your product or service will get them there.
Number two: Perceived likelihood of achievement. Another word for this is certainty. How certain is your prospect that they will achieve their dream outcome if they purchase your product or service? They need to look at your offer and think, "I'm sure this guy can help me." For example, when you buy your favorite chocolate, how sure are you that you will love eating it? Very certain, right? That's what you want your client to feel. You want them to trust your product so much that they are 100% sure you'll help them.
Number three: Time delay. This is the time between a client buying and receiving the promised benefit. How long will it take your client to achieve their dream outcome if they buy your product? You want to decrease this time delay as much as possible if you can. If you're selling weight loss, for example, it will not be immediate. To go around this time delay problem, you can offer them short-term experiences that occur while they don't get there. For example, as they begin to exercise, they might feel more energized or relaxed. Make sure their experience is pleasant enough to keep them in the game. Also, keep in mind that people are willing to pay significant prices for fast results. Compare the prices and speeds of traveling by bus and by airplane, for example, or Uber versus walking. That's why Amazon has been investing so much in their quick drone deliveries.
Number four: Effort and sacrifice. This is what it costs people to purchase your product, in other costs that are not money. Going to the gym, for example, costs money, but it has other costs too. Maybe you have to wake up earlier to go there. Sometimes you'll feel sore. It'll take you some of your time every day, etc. When you look at it from that angle, it's easy to understand why liposuction is such a popular practice. I'm not saying it's the healthiest or recommended way to lose weight, but think about it: how much time and effort can you save if you go through liposuction instead of buying a gym membership? Humans will always search for the quickest, easiest solutions. You can complain about it or you can use it to make money.
The dream outcome and the perceived likelihood of achievement are the variables you'll seek to increase. The time delay and the effort and sacrifice are the variables you'll seek to decrease. If you can always focus on the variables you need to decrease, that's where the gold is. The reason is that anyone can promise you'll lose weight, but actually making it happen in less time and with less effort than the competition is what can really get you to charge premium prices. Can you imagine how powerful and expensive it would be if a prospect purchased your weight loss product and instantly saw their stomach turn into a six-pack? How valuable would a product like that be? Infinitely valuable.
One final thought about value creation: When thinking about how to create value, you need to focus on finding psychological solutions. There are two types of solutions: logical and psychological. For example, making a faster elevator is a logical solution. Adding mirrors to the elevator to keep people busy looking at themselves and forgetting about the time is a psychological solution. Making faster trains is a logical solution. Putting a clock that shows when the train will arrive and how many minutes are left is a psychological solution. Most logical solutions are tried, and many of them have failed, plus they are very costly. On the other hand, psychological solutions are cheaper to implement, effective, and there are many of them to be discovered.
So, to summarize this part: We discussed why you should charge a premium price and how it will allow you to do things for your clients that others can't. Remember, you are not just charging a higher price; you are also delivering higher value. It's important that your product is so good that even if you charge premium prices, your client is still getting a good deal. In the next part, I will explain how to do that.
Part Four: Your Offer
Okay, now you already know what you need: a market with high enough demand for your product or service, a product or service that offers so much value your clients won't be able to say no, a price so high that it gets your clients super invested. Now it's time to finally create your offer.
Step One: Identify Dream Outcome. Imagine your customer avatar asking for your help as they state their dream outcome. What are they asking you for? To create your offer, you need to work with something impressive and desirable, but also realistic, because you'll need to make it happen. Here are a few examples of dream outcomes: "Make my first million dollars," "Feel more beautiful," "Impress my friends with my new car." Since we're pretending that we work with gym clients for this example, I'll go with: "Lose 14 kilograms in seven weeks."
Step Number Two: List Problems. Now, list each core thing that someone has to do to achieve their dream outcome. Then think of all the reasons they wouldn't be able to do it. Be as detailed as you can. For example, to lose weight, people usually diet and exercise. There are many obstacles in both these activities. Let's list some of them:
When dieting: You might think, "Buying healthy food is hard and stressful." "I don't like most healthy food, so I'll probably choose wrong." "It takes a lot of time to cook healthy food."
When going to the gym: You might think, "I don't like wearing these clothes, they're too tight." "I feel self-conscious when these people stare at me." "I'll end up hurting myself as I exercise."
You'll find a lot more problems if you stop to think about it. This is good news. The more problems you can find, the more problems you can solve.
Step Number Three: Solutions List. Now it's time to turn your list of problems into solutions. To do that, first, simply add the words "how to" and then reverse each problem that you listed in the previous step. For example: "I'll end up hurting myself as I exercise" becomes "How not to get hurt as you exercise." Another example: "Buying healthy food is hard and stressful" becomes "How to make buying food easy and enjoyable." One more: "It takes a lot of time to cook healthy food" becomes "How to cook healthy food quickly." Do that process with every problem on your list. What we are doing now is building a list of all the solutions we want to sell to our prospects. These statements you came up with in this step represent what you need to do. In the next step, you'll define how to do it.
Step Number Four: Create Your Solutions Delivery Vehicles. Now it's time to think about how to solve each of these problems you've identified. Pick a solution from the list you wrote in the previous step and think about how you can do that. Here's an example:
Problem: Buying healthy food is hard and stressful.
Solution you came up with: How to make buying food easy and enjoyable.
How to do it: You might offer, "You can go shopping with your client to give them assistance and keep them company." "You can pair them with another client of yours so they can help each other and keep each other company." "You can buy their food for them and get it delivered." "You can offer text support while they're shopping." "You can offer them a personalized shopping list every week."
As you can see, this list goes on and on because there are many possible ways you can solve one single problem. You can think of group solutions and one-on-one solutions. Once you do this for all the problems you found, you'll have a huge list, but you'll also notice that some of the solutions apply to more than one problem. As you think of possibilities, don't rule anything out just yet, even if you don't want to do it or don't think it's reasonable. You might have some completely crazy and impractical solutions there. Keep them for a while.
Step Number Five: Trim and Stack. Now, finally, we'll look at the cost of providing these solutions to your business. For example, let's suppose you could move in with your client, you would shop for them, cook for them, and be there when they exercise so they never get hurt. Do you think that solution would increase the chances of your prospect losing weight? It probably would, but can you do that? Unfortunately, it wouldn't make your business very scalable if you moved in with every client you had. This is a very high-cost solution.
So, now you'll classify your solutions into high-cost and low-cost, and also into high-value and low-value. When you're done classifying the solutions, start by removing the ones that are low-value and high-cost. You don't need them. A low-cost and low-value solution is not good either, but you can keep some of them handy in case you need extra bonuses someday. What should remain now are high-cost and high-value, or low-cost and high-value solutions. Many high-cost and high-value solutions won't be practical. For example, the solution I've mentioned before, moving in with your client, is probably a high-value solution but at a very high cost too. So, with high-cost and high-value solutions, take one step back. Is there a lesser version of this experience that you can deliver at scale? Keep taking one step back at a time until you arrive at something that you can realistically offer.
What you are now left with is a handful of solutions that are low-cost and high-value: the perfect ones. Many times, they are digital because the cost of a digital product is very small compared to a physical product. Ebooks, software, apps, sheets. These products take some time to be designed and crafted the first time, but once you have it done, you'll have almost zero cost to deliver it to your next clients.
Here's an example of a bundle you can use to make your offer based on our weight loss example:
Problem: Buying healthy food is hard and stressful.
Solution: How to buy healthy food fast, easily, cheaply.
Name: Foolproof Bargain Grocery System.
Short explanation: It'll save you hundreds of dollars per month on food and take less time than your current shopping routine.
Delivery vehicle:
1. One-on-one nutrition orientation where I explain how to use...
2. Recorded grocery tour.
3. DIY grocery calculator.
4. Each plan comes with its own list for each week.
5. Grocery buddy system.
6. Pre-made grocery carts for delivery.
This six-item list is only aimed at helping your client with the shopping for groceries. Problem: How about the cooking problem? You'll have another similar bundle for that, and another one for exercising, and so on. Can you see now how much value you're actually offering? You'll make it impossible to not lose weight with a product/service like this, and your customer will know that they will have a very small chance of failure because you thought of solutions for every single obstacle that could be in their way. With a product like this, you're absolutely sure that what you're selling is a high-value product that has no competition. It's not comparable to anything else on the market, and you'll never feel like you're a fraud for charging a premium price for it.
This was a pretty long video with a lot of information. I congratulate you if you made it to the end. Most people wouldn't even click on such videos. I have one small request from you: If you introduce something valuable to someone, they associate that value with you. You probably have an entrepreneur friend who needs to hear the information we covered in this video. Share the video with that friend. Thank you very much. Have a nice day.