What does it take to create an offer that customers can’t resist? How can you maximize your revenue while delivering exceptional value to your target market?
Alex Hormozi’s $100M Offers shares proven strategies for creating high-value offers. Hormozi’s approach combines psychological principles with practical business tactics to help entrepreneurs develop products that generate substantial revenue.
Continue reading to discover the essential components of an irresistible offer, from crafting a high-value product to setting the perfect price point.
Overview of Alex Hormozi’s $100M Offers
Success in any business—from a local food stand to a multimillion-dollar tech business—depends on the strength of your offer: what you present to the customer to try to earn their business. But how can you create not just any offer, but a lucrative one that people can’t refuse? Alex Hormozi’s $100M Offers breaks down strategies for creating offers that consistently generate massive, life-changing revenue.
Hormozi is an entrepreneur, marketing expert, and investor with experience both in scaling up his businesses and helping other entrepreneurs achieve their revenue goals. Drawing on this expertise, he provides recommendations that will help you maximize earnings by fine-tuning every aspect of your offer. By following his guidelines, Hormozi writes, you’ll have customers clamoring to take you up on your offer, and you’ll gain the financial freedom that every entrepreneur dreams of.
We’ll go through each component of a successful offer, starting with the foundation: creating a high-value product. Then, we’ll explain how to set high yet fair prices for your products and how to identify your ideal target market. Lastly, we’ll explore ways to boost your offer’s appeal by leveraging scarcity, urgency, bonuses, guarantees, and compelling offer names.
The Offer Foundation: A High-Value Product
An offer, as Hormozi describes it, includes everything you’re presenting to the customer to get their business. The foundation of every good offer is a high-value product that can command premium pricing.
What exactly makes a product high-value? Hormozi says that a high-product value makes customers believe it will fulfill their deep desires with minimal effort on their part. It also minimizes how long it takes to achieve those deep desires: If the process to achieve the end result takes a while, there should be smaller gains along the way to keep them engaged. This caters to people’s general aversion to delayed gratification.
To illustrate these components of a high-value product, consider the following example: You’ve created a comprehensive online course and mentorship program to help people start and grow an online business.
- The product appeals to deep desires, such as financial freedom, being your own boss, and creating wealth and legacy.
- It provides a quick path to positive results via a proven step-by-step system that takes a beginner from an idea to a profitable business in six months.
- The program also minimizes the effort required through extensive training videos, user-friendly templates and tools, and personal mentorship from successful entrepreneurs who can answer customer questions.
- Lastly, it highlights shorter-term wins like building an online presence and generating the first revenue stream within weeks to keep people motivated.
Designing Your High-Value Product
With these characteristics of a high-value product in mind, we’ll walk through Hormozi’s steps for designing your own high-value product and, later, modifying it to reduce your workload as your success grows.
Step 1: Identify a Customer’s Deep Desire
Hormozi’s first step in designing a product is to decide which desire you want to fulfill for your customers. Naturally, before you can design a product, you have to know what that product’s purpose will be.
Step 2: Identify Potential Roadblocks
Make an exhaustive list of all the different roadblocks that might prevent customers from fulfilling their deep desire. In the previous example with an entrepreneurship program as the product, this might include things like the inability to travel for a training program, or a busy schedule that generally makes extra time commitments difficult.
Step 3: Turn Roadblocks Into Solutions
Next, Hormozi advises you to write down a solution that corresponds to each challenge in your list from Step 2. Then assemble these solutions into a product that’s not only unique, but also addresses every potential roadblock related to the customer’s deep desire. This will significantly increase your product’s value.
For example, to address a customer’s time constraint, the entrepreneurship program might include training materials available in audio format, so they can listen while they’re driving or doing other tasks.
Step 4: Adjust for Sustainability Over Time
Once you’ve built up a loyal customer base, Hormozi’s last step is to modify your product to reduce your workload while maintaining a good value for the consumer.
By addressing all possible challenges for the customers, you’ll have created a highly attractive, user-friendly product that’s hard for people to turn down. This will help you establish credibility and a high demand for your product. However, this kind of product may be difficult to sustain in the long term due to the resources and effort it requires from you. Therefore, it will help if you can make changes to your product or business model to make things easier on yourself.
For example, you might create a series of Frequently Asked Questions pages to ease the pressure on your company’s helpline and reduce the time it takes to assist customers.
Set the Right Price: High, Yet Fair
Once you have your high-value product, the next key aspect of a successful offer is to figure out how to price the product. To maximize your profits, Hormozi advises that you set high prices that still feel like a good deal to your customers. We’ll cover the three pricing principles he explores: creating a unique product to avoid price-cutting competitions, capitalizing on niche markets, and leveraging high prices to increase prestige and customer commitment.
Strive for a Unique Product to Avoid Price Competition
Hormozi recommends that your offer provide such unique benefits that it eludes direct comparison with competitors. If your product is a commodity that people can find elsewhere, you may get stuck in a constant price-cutting battle that hinders business growth. Each business will try to keep lowering prices to attract more customers until the profit margins are too small to sustain the business. By offering something distinct, you can avoid this pricing competition.
Hormozi writes that if you do find yourself in a direct competition, it’s more effective to raise the value of your offer than to drop your price. For example, you might add accessories or features to your product and increase your price, rather than dropping the price to match the current market. This approach maintains large profit margins and reinforces the high worth of your product.
Capitalize on Niche Markets
Hormozi also explains that specialized, niche products can command higher prices because they cater to specific needs. These items appear custom-fit, distinguishing them from generic alternatives. For example, rather than offering a generic prenatal vitamin, you could offer a more expensive line of customized prenatal vitamins and supplements specifically formulated for the parent based on their trimester, age, dietary restrictions, and individual nutritional deficiencies.
Leverage Pricing to Increase Prestige and Customer Commitment
Another key pricing principle that Hormozi emphasizes is that charging the highest prices in the market can bring a sense of prestige to your product, enhancing its appeal. When people see the high price, they’re more likely to assume it’s the highest quality option available.
Moreover, a heftier price tag encourages customers to be more committed to your product, leading them to engage more deeply and consistently with it. This commitment is particularly important if your product requires customer participation—like using a new software or completing a fitness program—to achieve good results. In these cases, their participation not only benefits them (assuming they enjoy the product) but also enhances the perceived value of your product by increasing the chances they’ll achieve the deep desire that your product promised.
For example, if you offer a fitness app that’s free or cheap, and the customer doesn’t use it regularly, they’re less likely to reach their fitness goals regardless of the app quality. This might leave a generally negative impression on the customer. On the other hand, if you sell someone an expensive fitness app, they’ll be more motivated to use it consistently. As a result, they’ll be more likely to reach their goals and to associate that achievement with your product.
Identify Your Ideal Market
To successfully create a lucrative offer, you must choose the right market—one where your ability to meet your customers’ needs, your customers’ ability to afford your product, and growing demand for your product intersect. We’ll explore Hormozi’s recommendations for finding an ideal target market. We’ll also explain why it’s better to commit to one market and stick with it, rather than shifting your focus.
Tap Into Existing and Growing Needs
The first recommendation is to search for customers who already have a pressing need for your product. Hormozi explains that this kind of customer will be more inclined to pay higher prices to address their deep desires.
To find customers with an existing need, you might direct your marketing efforts toward those who have already shown an interest similar to what your product offers. For example, you could target individuals who have subscriptions for other services related to your product or memberships in relevant trade groups.
Hormozi also recommends that you opt for a market that’s currently expanding, meaning more and more people have a need for your product. An expanding market suggests a sustainable and increasing demand for your product, ensuring that your business has room to grow. Choosing a shrinking market, like selling new film cameras, will make sales more challenging as the market trends toward digital photography.
Commit Long-Term
Hormozi points out that understanding your market takes time. Therefore, rather than frequently shifting focus and wasting time getting to know new markets over and over again, commit to just one market and strive to understand it deeply. Mastery of your chosen market can lay a strong foundation for sustained success by steadily building a base of loyal, paying customers.
Maximize the Offer’s Appeal
Now that we’ve covered the basic elements of a successful offer, we’ll cover Hormozi’s advice for maximizing its appeal to customers. To do so, you’ll leverage a few psychological tools that make it harder for customers to turn your offer down. These include: creating a sense of scarcity and urgency, using bonuses to increase the product value, offering guarantees to lower the buyer’s risk, and choosing compelling product names.
Psychological Strategy 1: Increase Demand Through Scarcity
The first tactic to increase an offer’s attractiveness is creating a sense of scarcity by limiting the quantity of your product and by limiting the timeframe when people can buy it. Hormozi writes that scarcity plays on our natural inclination to value what seems rare or exclusive and can ramp up both demand and the perceived value of your product, meaning people will pay a higher price for it.
Limited Quantity and Limited Time Frame Promotions
Hormozi describes the following ways to create scarcity around the quantity of product:
- Offer a limited number of products or bonuses.
- Announce one-time-only sale.
- Set a cap on customer numbers, potentially with a waiting list.
- Be open about how much of your product is left (for example, by writing “75% sold out” on your website).
Publicly sharing how close you are to reaching capacity or how close you are to selling out can enhance trust in your offer, as it confirms that others have already decided to purchase it. It’s a form of social proof that implies a collective endorsement of your product’s value. Similarly, let people know when you’ve sold out. Hormozi explains that this not only gratifies those who made a purchase (they’ll be relieved they didn’t miss out) but also creates a sense of urgency among potential customers for future offers. Knowing they missed out once, they’ll be more inclined to act quickly next time to avoid the same mistake.
Similarly, restricting the timeframe in which people can make a purchase also nudges customers to act swiftly. One way to encourage urgency is through strategic promotions tied to a season or another short period. Even if discounts are a regular occurrence, framing them as limited-time offers can lead to a surge in sales. For example, you might offer a “New Moon Sale” for one day only, every month.
The Exploding Offer Strategy
According to Hormozi, you can also create urgency by framing your offer as an “exploding opportunity”—one that diminishes in value over time. For example, you might offer discounts on a wedding planning service if the customer books very far in advance, with prices increasing over time. Or you might offer an investment opportunity in a promising company where the initial cost to buy stock is far lower than the anticipated future value, but only if you invest early. By emphasizing the potential for benefits to decrease over time, you encourage customers to jump on the deal before it’s too late.
Psychological Strategy 2: Bonuses and Strategic Timing
In addition to scarcity and urgency, bonuses—extra items or services presented as “free”—can significantly enhance the attractiveness of your offer. The key is to increase the price of your product so that you can add extra items and frame them as free to the customer. This makes the customer feel like they’re getting an exceptional deal.
For example, you might say, “At no additional cost, we’ll give you five accessories to go with your new gadget.” This offer appears more generous than the gadget alone, even if you’ve already factored in the price for those bonus items. If you add bonuses one after another to your original offer, the deal becomes increasingly irresistible.
The timing of when you reveal bonuses can also impact their effectiveness. Hormozi recommends that you offer bonuses after you pitch a product by itself: Start by presenting the main offer, and if the customer decides to purchase it, offering them a bonus afterward will be a pleasant surprise that adds value. If they’re hesitant initially, and then you offer the bonus, this can tip the scales in your favor. By offering an unexpected extra “gift,” you create a sense of obligation. The customer will want to repay your apparent generosity by accepting the new offer.
Psychological Strategy 3: Build Confidence with Guarantees
The next strategy to increase the psychological appeal of your offer is using guarantees. Hormozi says that by offering a guarantee, you’re shifting risk from the customer to yourself, which can lower their resistance to making the purchase. It also demonstrates your confidence in your product: It’s a way of saying, “We believe in our product so much, we’re willing to back it up.” This level of confidence can be infectious and drive more customers to commit to a purchase.
Guarantees should be clear about the conditions, including the time frame and the form of compensation, such as a full refund, partial credit, or an extended period of free service if the initial offering doesn’t meet their needs. Hormozi further explains that there are several variations of guarantees you can offer, including the following:
Unconditional Guarantees: These provide a straightforward promise, like satisfaction or your money back within a specific period.
Conditional Guarantees: These depend on the customer meeting certain criteria or actions. For example, you might only offer a refund if a client isn’t satisfied after attending all the sessions in the program you offer.
Outcome-Based Guarantees: These are tied to the customer achieving some result from your product. For example, you might provide consulting services and instead of charging upfront, take a commission once the customer achieves the desired outcome, like landing new clients.
Psychological Strategy 4: Create an Intriguing Offer Name
The last strategy for increasing the psychological appeal of your product is to create a compelling offer name. A well-crafted name can not only capture attention but also clearly communicate the value and urgency of what you’re selling. Hormozi describes five strategies for creating a good name: Create an attractive theme, target specific customers, appeal to deep desires, define the time frame, and evoke uniqueness. (These correspond to what he calls the “MAGIC Formula”: Magnet, Avatar, Goal, Interval, and Container Word.) He recommends using three to five of these, to keep your offer name succinct and memorable. Let’s explore each of these in more detail.
Create an Attractive Theme: Make your offer more intriguing by coming up with a special occasion or a themed promotion, like a “Winter Solstice Sale.” This provides a compelling reason for customers to engage with your offer.
Target Specific Customers: This part of the name specifies what kind of customers your product is meant for. Tailor your offer’s name to resonate with a particular demographic or interest group. A more “local” name tends to be successful. For example, you might advertise your lawn chairs and outdoor gear to “Soccer Moms of Waterville.” This specificity makes potential customers think that the offer is crafted just for them.
Appeal to Deep Desires: Use words or phrases that evoke your targeted customer’s deep desires. For example, you might include the phrase “Effortless Marketing,” which directly speaks to the desire for a simple solution that will facilitate the customer’s business success.
Define the Time Frame: Be specific about the time frame associated with the offer—how long the offer will be available or how soon the customer can expect results. For example, you might advertise a “Memorial Day Weekend Sale” or include the phrase “Double Your Clients in 6 Months.”
Evoke Uniqueness: Choose a term that encapsulates how unique your bundle of services or products is and suggests that what you’re offering isn’t just another commodity. Exciting words like “Booster” or “Revolution” can convey the transformative nature of your offer.
Combining a few of these elements will lead to compelling offer names such as “10K Club: High Ticket Client Accelerator,” “Luxury Valentine’s Escape for Newlyweds,” or “72-Hour Black Friday Cyber Blitz.”
