The 4 Ways to Beat 99% Of Other Businesses | Ep 879
In this episode of The Game, Alex Hormozi breaks down four key strategies businesses can use to outperform their competitors. He explains how companies can gain advantages through operational speed, showing how streamlined workflows and improved response times can justify premium pricing. He also explores how businesses can build and maintain a consistent reputation that reduces customer uncertainty.
The discussion covers methods for becoming a low-cost provider through technology and automation, while maintaining profitability through careful cost management. Hormozi also addresses the value of convenience in customer experience, demonstrating how removing complexity and friction points from customer interactions can create a competitive edge, even when charging higher prices than competitors.
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1-Page Summary
Speed: How to Do Things Faster Than Competitors
Business expert Alex Hormozi emphasizes that speed can provide a sustainable competitive advantage and justify premium pricing. He explains that organizations can train themselves to decrease latency between actions and positive outcomes.
Optimize Workflows to Minimize Time and Effort
Hormozi recommends leveraging templates for everything from ads to presentations to reduce decision-making time. He suggests that niching down can help streamline services and improve delivery speed. Additionally, increasing business availability and responsiveness, such as extending operational hours and anticipating customer demands, can significantly improve service speed and bottom-line results.
Building a Consistent and Reliable Reputation
Hormozi stresses the importance of controlling variables that affect customer experience to ensure consistency. He suggests that businesses should develop systematic approaches to meet customer expectations consistently. A strong reputation, built through word-of-mouth and reliable performance, can help mitigate customer risk before purchase. For newer businesses, Hormozi recommends offering unconditional guarantees to build trust until their reputation is established.
How to Be the Low-cost Provider
To position as a low-cost provider, Hormozi advocates for leveraging technology, automation, and offshoring/nearshoring to reduce operating costs. He emphasizes the importance of streamlining every aspect of the business to pass savings on to customers while maintaining profitability through tight cost control.
Ease/Convenience: Making the Customer Experience Seamless
Hormozi highlights the value of removing complexity from customer experiences. Using the example of being willing to pay $20 to skip a line for a free burrito, he demonstrates that customers often value convenience over cost savings. He recommends continuously gathering customer feedback to identify and eliminate pain points, creating an intuitive experience that prioritizes customer needs over internal processes.
1-Page Summary
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Counterarguments
- Speed as a competitive advantage may not be sustainable if competitors can quickly replicate the speed improvements.
- Decreasing latency between actions and outcomes may lead to rushed decisions and reduced quality if not managed carefully.
- Over-reliance on templates may stifle creativity and lead to a homogenized look that doesn't stand out in the market.
- Niching down could limit market reach and may not be suitable for businesses with a broad customer base.
- Extending operational hours might not be cost-effective for all businesses, especially if there is not enough demand to justify the increased costs.
- Consistency is important, but too much focus on control can make a business inflexible and slow to adapt to changes.
- Systematic approaches are useful, but they need to be balanced with the ability to customize and personalize services when necessary.
- Word-of-mouth is powerful, but it can also spread negative experiences quickly; businesses must manage reputation proactively.
- Unconditional guarantees can be exploited by some customers, leading to financial losses if not carefully designed.
- Being a low-cost provider might compromise product or service quality, which can affect customer satisfaction and retention.
- Offshoring and nearshoring can lead to communication issues, cultural misunderstandings, and potential negative perceptions from customers who prefer local services.
- Streamlining to reduce costs might result in job losses or poorer working conditions, which can have ethical implications and affect brand image.
- Convenience is important, but focusing solely on ease may lead to overlooking deeper customer needs and desires.
- Prioritizing convenience over cost savings might not be a viable strategy for all customer segments, particularly price-sensitive consumers.
- Continuous customer feedback is valuable, but it can also lead to constant changes that confuse customers and employees if not managed properly.
- An intuitive experience is subjective, and what is intuitive for one customer might not be for another, requiring a balance of standardization and customization.
Actionables
- You can streamline your daily decision-making by setting up a "uniform" for work or social events, much like tech icons have done, to reduce the time spent choosing outfits. By having a go-to set of clothes for different occasions, you eliminate the daily indecision and can focus on more important tasks.
- Develop a habit of conducting weekly personal reviews where you assess the speed and quality of your routine tasks, such as grocery shopping or bill payments, and then research and implement one new method to improve efficiency, like using grocery delivery services or automating bill payments.
- Create a personal feedback system by asking friends or family for input on your most common activities or projects, identifying any recurring issues they observe, and then taking one actionable step to address the feedback, such as improving your punctuality by setting reminders or using time-tracking apps.
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Speed: How to Do Things Faster Than Competitors
Business expert Alex Hormozi emphasizes the importance of speed as a critical element of competition, suggesting that the ability to deliver faster can secure a sustainable competitive edge and permit premium pricing. Hormozi asserts that speed is a behavior trained by humans with the aim of decreasing latency for positive outcomes.
Optimize Workflows to Minimize Time and Effort
Leverage Templates, Materials, and Automation to Streamline Tasks
To minimize time and effort, Hormozi highlights the significant role of templates in streamlining tasks. Templates reduce the decision-making process, which tends to be the slowest part of an organization. By creating a repeatable process for ad templates, email templates, landing page templates, presentation templates, and templated steps to be followed, companies minimize time-consuming deliberations.
Additionally, niching down simplifies the customer base, aiding the provision of templatized services and products and improving delivery speed. For instance, a business in New Mexico, by streamlining the process of getting IDs, enabled customers to complete the procedure in just 15 minutes.
Increase Responsiveness to Meet Customer Needs Faster
Hormozi also discusses the significance of responsiveness in driving more business. By increasing availability, such as selling not just 12 hours a day but expanding to 20 hours due to international market demand, businesses can substantially improve their bottom line.
For example, better staffing during peak hours and pre-making products like Marriott Cafe's grilled chicken ahead of lunch rush anticipate demands, ensuring immediate service to customers and reducing latency. A sales team taking thorough notes on customers and referencing them in follow-up calls can make the experience faster and more pleasant for the customer, enhancing the company's reputation.
Prioritize Speed As a Key Competitive Advantage
Speed Changes Behavior More Than Lack of Speed
Hormozi underscores that speed changes customer behavior more than the lack of it. He illustrates this with the example of Spotify, which was able to outpace competition such as LimeWire by providing faster service, despite LimeWire's free downloads. Social ...
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Speed: How to Do Things Faster Than Competitors
Additional Materials
Counterarguments
- While speed can be a competitive edge, it may not always lead to sustainable advantage if competitors can quickly replicate the speed of service or if the market values other attributes more, such as quality or customization.
- Speed as a trained behavior might overlook the importance of strategic thinking and innovation, which can sometimes require a slower, more deliberate approach.
- Over-reliance on templates and automation can lead to a lack of personalization and creativity, which might be detrimental in industries where customer experience and unique solutions are highly valued.
- Niching down to streamline services might limit a company's market reach and growth potential, and it may not be suitable for businesses that thrive on diversity and a broad customer base.
- Expanding availability hours could lead to increased operational costs and employee burnout if not managed properly, potentially harming the business in the long term.
- Pre-making products to reduce latency might compromise the freshness or quality of the offering, which could negatively impact customer satisfaction.
- Taking thorough notes on customers can be seen as invasive or excessive data collection, which might raise privacy concerns among customers.
- The assertion that speed changes customer behavior more than the lack of it may not hold true for all industries or customer segments, especially wher ...
Actionables
- You can streamline your daily routine by creating a "speed kit" with essentials for quick departures. Pack a small bag with items like your wallet, keys, phone charger, and a snack, so you're ready to leave the house swiftly without forgetting anything important. This reduces the time spent searching for items and ensures you're prepared for the day ahead.
- Enhance your decision-making by setting personal deadlines for everyday choices. Give yourself a specific time limit, like 30 seconds to decide what to have for breakfast or 2 minutes to choose an outfit. This practice can train your brain to make quicker decisions, potentially translating to faster responses in professional or personal situations.
- Improve your responsiveness to friends and family by adopting ...
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Building a Consistent and Reliable Reputation
Building a consistent and reliable reputation is fundamental in today's business landscape. Hormozi and other speakers emphasize the crucial role of consistency and reliability, especially in services that are recurring. To maintain a strong reputation and ensure customer satisfaction, it's imperative for businesses to control the variables that can affect customer experience and to use their established reputation as a tool to mitigate risk prior to purchase.
Ensure Consistency and Reliability in Products/Services
Businesses must ensure that every customer encounter matches the ideal state of the service or product offered. Achieving this requires a keen awareness of the variables that influence the customer experience.
Control Variables Affecting Customer Experience
Hormozi emphasizes the control of variables as necessary for consistency in business. Each small detail should be accounted for to maintain the quality expected by the customer. By controlling as many variables as possible, businesses can consistently match the ideal conditions with every subsequent service or product state.
Develop Systems to Meet Customer Expectations
To develop systems that meet customer expectations, businesses must focus on the intricacies of their service or product, as highlighted in Hormozi’s anecdote about making videos. A meticulous approach to every detail ensures a consistent final product that meets or exceeds consumer standards.
Leverage Reputation and Guarantees to Mitigate Risk
A business's reputation is a vital tool for mitigating customer risk before the purchase. Hormozi suggests that a strong reputation, fostered through word-of-mouth and consistent performance, can significantly reduce the perceived risks for consumers.
Build a Positive Reputation Through Word-Of-Mouth and Performance
Hormozi points out that a negative reputation can deter consumers, so it's crucial for businesses like the New Mexico DMV to build their reputation on faster, more convenient service than what's typically expected from a DMV. This strategy implicitly guarantees a better experience and mitigates risk of customer dissatisfaction.
Conditional and Unconditional ...
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Building a Consistent and Reliable Reputation
Additional Materials
Clarifications
- Hormozi is a reference to a speaker or expert in the field of business and reputation management. In the context provided, Hormozi emphasizes the importance of consistency, reliability, and reputation building for businesses. The mention of "other speakers" suggests that there are multiple experts or individuals contributing to the discussion on maintaining a strong business reputation. The text uses Hormozi's insights to highlight strategies for controlling variables, meeting customer expectations, leveraging reputation, and offering guarantees to mitigate risks in business operations.
- In business, a conditional guarantee typically involves specific requirements or conditions that must be met for the guarantee to be valid. On the other hand, an unconditional guarantee assures customer satisfaction without any additional conditions or restrictions. Conditional guarantees may have limitations or exclusions, while unconditional guarantees offer a straightforward promise of satisfaction regardless of circumstances. Understanding these distinctions can help businesses tailor their guarantee strategies to build trust and manage c ...
Counterarguments
- While consistency and reliability are important, innovation and adaptability are also crucial in a rapidly changing business environment. Overemphasis on consistency might hinder a company's ability to innovate.
- Controlling variables affecting customer experience is important, but it is impossible to control all variables, especially those external to the business, such as economic fluctuations or customer personal issues.
- Systems designed to meet customer expectations may not always account for individual preferences and unique needs, which can lead to a one-size-fits-all approach that may not satisfy all customers.
- Leveraging reputation and guarantees can mitigate risk, but overreliance on reputation can lead to complacency, and guarantees may not always be financially sustainable for the business.
- Word-of-mouth is powerful, but it can also spread negative experiences quickly. Businesses must be prepared to manage and respond to negative feedback as well.
- Conditional guarantees may sometimes be necessary to protect a business from exploitation or unreasonable customer demands.
- While established businesses like McDonald's may not need to offer guarantees, they still f ...
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How to Be the Low-cost Provider
Alex Hormozi explores strategies for businesses to gain a competitive edge by positioning themselves as the low-cost provider from the beginning.
Leverage Technology and Automation to Reduce Operating Costs
Hormozi underscores the need for every aspect of the business to focus on efficiency and cost-reduction processes so that savings can be passed on to customers.
Use AI, Automation, and Offshoring/Nearshoring to Reduce Costs
By utilizing AI, automation, and offshoring or nearshoring strategies, businesses are able to significantly reduce operating costs. Hormozi suggests these technologies and strategies as key ways to streamline business processes, which, in turn, can contribute to offering lower prices to customers.
Streamline Processes to Pass Savings On To Customers
Streamlining business processes is integral to passing on savings to customers. Hormozi advocates for organizing every component of the business in a way that reduces costs, which will thereby allow the business to offer its services much cheaper than the norm. This becomes an attractive proposition for customers, providing a service that they are likely to stick with even through difficult times.
Position as the Low-cost Option
Hormozi advises businesses to position themselves as the low-cost options in their respective markets.
Market the Business As the Affordable, Budget-Friendly Choice
Hormozi talks about targeting small business owners by marketing the service as significantly cheaper than competitors, ...
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How to Be the Low-cost Provider
Additional Materials
Counterarguments
- While leveraging technology and automation can reduce costs, it may also lead to initial high investments and could potentially displace workers, requiring a balance between cost savings and social responsibility.
- AI and automation may not be suitable for all business models or industries, especially those that rely heavily on human touch, creativity, or complex decision-making.
- Offshoring and nearshoring can reduce costs but may also result in quality control issues, communication barriers, and negative public perception due to the impact on local employment.
- Streamlining processes to reduce costs might sometimes compromise the quality of products or services, leading to customer dissatisfaction.
- Being the low-cost provider can sometimes lead to a perception of lower quality, and businesses may struggle to rebrand or reposition if they wish to move upmarket later.
- Focusing solely on being the low-cost option might limit the company's ability to innovate or invest in ...
Actionables
- You can analyze your daily tasks to identify repetitive activities that could be automated with existing software. For instance, if you spend hours organizing your emails, you might use email sorting tools that automatically categorize and prioritize your inbox based on your preferences, saving you time each day.
- Consider adopting a budgeting app that helps you track your spending and find areas where you can cut costs. These apps often provide insights into your spending patterns, allowing you to see where you might be overspending on non-essential items and adjust your habits accordingly.
- Explore group purcha ...
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Ease/Convenience: Making the Customer Experience Seamless
Alex Hormozi and a New Mexico business owner's experiences underscore the importance of removing complexity and creating convenience in customer experiences. A focus on ease can offer a clear competitive advantage, making services more appealing and retaining customers by prioritizing their needs.
Eliminate Complexity and Friction In the Customer Journey
"Eliminate the 'Hard' Parts of Customer Experience."
Hormozi stresses the importance of simplicity in the customer experience. He illustrates this with a personal anecdote from Chipotle, where he would have preferred to pay $20 to skip a long line for a free burrito, indicating that customers often value their time and convenience over cost savings. This resonates with the idea that a fast and effortless experience can be more attractive than free services.
Alex Hormozi suggests that the process of making something easy involves identifying the aspects that are difficult and then removing them. By eliminating these hard aspects, ease naturally follows.
Optimize Usability With Data and Feedback
Hormozi recommends making every touchpoint in the customer's journey as easy as possible. He advocates using customer feedback to pinpoint what customers find challenging about a service or product. He suggests businesses should continuously address these pain points and cross difficulties off the list to create a more seamless customer experience.
For instance, Hormozi talks about a massage business that tailors its service to customers by knowing each individual’s pain points in advance, suggesting the use of past data and feedback to improve the service quality.
Create an Unmatched Advantage Through Ease and Convenience
Prioritize Customer's Needs Over Internal Processes
The New Mexico business owner managed to create an exceptional ...
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Ease/Convenience: Making the Customer Experience Seamless
Additional Materials
Counterarguments
- While eliminating complexity is beneficial, some services or products inherently require a certain level of complexity to ensure quality or safety, which cannot be oversimplified without potential negative consequences.
- Over-reliance on data and feedback might lead to a homogenized experience that doesn't account for the diverse preferences of different customer segments.
- Prioritizing customer needs over internal processes can sometimes be at odds with regulatory requirements or long-term strategic goals of the business.
- Effortlessness and intuition in customer experience are subjective and may not be achievable for all customers, especially in diverse markets with varying cultural and personal expectations.
- Simplifying the customer journey could lead to reduced opportunities for upselling or cross-selling, which can be important revenue streams for businesses.
- In some cases, customers may seek out complex experiences for their own sake, such as in luxury services or products where the complexity is p ...
Actionables
- Map out your daily routines to identify unnecessary steps that can be streamlined or eliminated. For instance, if you find yourself repeatedly sorting through a cluttered email inbox, consider setting up filters or unsubscribing from newsletters that you no longer read to reduce the clutter and save time.
- Use customer reviews and feedback to improve your personal projects or side hustles. If you sell products online, for example, actively seek out and analyze customer feedback to identify common pain points. Then, make adjustments to your product descriptions, packaging, or shipping processes to enhance the overall user experience.
- Reassess your commitments and prioritize them based on how the ...
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