In this episode of The Game with Alex Hormozi, entrepreneur Ben Francis (founder of Gymshark) joins Hormozi to discuss branding and business strategy. The discussion centers on the impact of real-world experiences in fostering brand loyalty, as demonstrated by Gymshark's success in hosting fitness expos and cultivating personal connections.
The conversation also explores the importance of long-term brand-building versus short-term business metrics. Hormozi and Francis emphasize the need for entrepreneurs to establish enduring brands that transcend the founder's lifetime. They examine strategies for balancing brand-building efforts with direct response marketing and explain how a consistent commitment to brand equity can yield compounding returns and higher pricing power over time.
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Alex Hormozi emphasizes the high demand for genuine in-person experiences that digital interactions cannot fully replicate. He points to Gymshark's success, attributing it to fostering personal connections at fitness expos which resulted in brand loyalty and higher sales.
Hormozi and Ben Francis, Gymshark's founder, highlight how exceptional in-person events create a multiplier effect, as attendees share their experiences within networks, amplifying the brand's reach. Brands like Gymshark and GymLaunch strategically invest in physical retail and meetups, recognizing their unmatched impact on cultivating brand allegiance.
Hormozi stresses the importance of entrepreneurs adopting a long-term approach to building iconic brands, rather than solely focusing on immediate business metrics. Ben Francis admires brands like Range Rover that become industry symbols transcending the founder's lifetime.
Hormozi contrasts this vision with practices of arbitrage businesses overly focused on return on ad spend metrics, which can lead to unsustainable models. He cites New Balance's remarkable turnaround after shifting from direct response to brand building, despite initial losses—the investment paid off after 18-24 months.
Hormozi emphasizes that compelling branding leads to higher response rates across marketing efforts. By associating products with aspirational elements customers love, brands can witness higher long-term advertising returns.
Investing in top-of-funnel brand awareness allows brand equity to compound over time, permitting brands to maintain a positive stance while "under-asking" relative to the goodwill built.
The optimal brand-building to direct response ratio is often 75:25 or 70:30, as evidenced by New Balance reallocating its marketing budget from 70:30 to 30:70. Hormozi advocates a "give to ask" ratio of 3:1, suggesting iconic brands should aim for 6:1—continuously investing in brand equity before relying on it for sales.
1-Page Summary
There is an increasing awareness of the value that genuine in-person experiences provide over digital interactions, as evident from the strategies employed by successful businesses like Gymshark.
Alex Hormozi, the podcast host, emphasizes the irreplaceable nature of real, in-person interactions, which he suggests are in high demand. He compares digital communications to the "beyond meat of connections," suggesting they fall short of the authenticity delivered by face-to-face encounters. Hormozi points to Ben Francis, founder of Gymshark, and highlights how Gymshark's emphasis on physical presence at fitness expos significantly drove the company's growth. The personal connections established at these events resulted in a loyal customer base and disproportionately higher sales figures in the hosted cities.
Ben Francis's Gymshark and Hormozi's own business experiences underline the potency of in-person events. Despite the seemingly unscalable nature of these events, they create a multiplier effect as attendees often share their exceptional experiences within their networks, extending the brand's reach.
Hormozi relays that Gymshark's decision to open phy ...
IRL (in-real-life) vs. AI/digital experiences
Alex Hormozi emphasizes the significance of entrepreneurs adopting a long-range approach to building iconic brands, contrasting this with the narrow focus on immediate business metrics.
Entrepreneurs are encouraged to prioritize the creation of an iconic brand with a 50-year plan in mind. Hormozi discusses insights from Ben Francis (presumably the founder of Gymshark) on the importance of a long-term brand-building philosophy. Francis admires companies like Range Rover, Harley Davidson, and Ford that have managed to build products and brands that not only endure but become iconic symbols in their respective industries. Hormozi shares a mutual understanding with Francis about the goal of building a brand that continues to influence the market well beyond the founder’s life. They contrast this vision with the practices of arbitrage businesses that are overly focused on bottom-of-the-funnel and return on ad spend (ROAS) metrics, which can lead to unsustainable business models.
Hormozi shares the cautionary tale of New Balance, a company that witnessed a remarkable turnaround by shifting its focus from direct response marketing to brand building. This strategic redirection, instigated by a new Chief Marketing ...
Long-term brand-building vs. short-term business thinking
Alex Hormozi delves into the foundational aspects of branding and how effective branding can drive significant business advantages.
The discussion highlights that companies with compelling branding experience higher response rates across all marketing efforts. Hormozi discusses incorporating aspirational associations into the brand strategy, suggesting that bold branding moves can persuade customers to turn to the brand for even mundane needs. By associating the product with things, people, or experiences the target customer loves, businesses can witness long-term higher returns on advertising and investment.
The podcast confirms the importance of top-of-funnel brand awareness activities. Hormozi speaks of the long-term benefits and effectiveness of a high ratio of "give" to "ask," aligning with the concept of investing more in brand-building. Brand equity can compound over time, allowing a brand with a larger audience to still "under-ask" relative to the goodwill built, thus maintaining a positive brand stance.
The New Balance turnaround story is a prime example of the power of branding—the company reversed its direct response to brand-building marketing budget allocation from 70:30 to the oppo ...
The importance and value of branding
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