Part 4: Attraction Offers Continued | $100M Money Models Audiobook | Ep 941
In The Game, Alex Hormozi explores effective sales strategies that businesses can use to attract and retain customers. He explains the concept of decoy offers—free or discounted versions of products—and how they can be strategically designed to make premium offers more appealing. The discussion includes practical examples from various industries, including gym memberships, demonstrating how businesses can structure their offerings to maximize perceived value.
Hormozi also delves into two additional sales approaches: the "buy X, get Y free" strategy and flexible payment options. He outlines how businesses can use free add-ons instead of discounts to maintain product value, and explains the benefits of offering customers a choice between immediate payment at a discount or delayed payment at full price. Throughout the discussion, he emphasizes the importance of clear success criteria and maintaining customer satisfaction.
This is a preview of the Shortform summary of the Aug 19, 2025 episode of the The Game w/ Alex Hormozi
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Decoy Offers
Alex Hormozi explains how businesses can use decoy offers—typically free or discounted versions of products—to attract potential customers before presenting them with a premium offer. He emphasizes that the premium version should include enhanced features, benefits, and guarantees that make its value proposition undeniable when compared to the basic version. Drawing from his experience with gym memberships, Hormozi suggests that the decoy offer should be intentionally simplified to highlight the premium offer's superior value.
Buy X, Get Y Free Offers
Hormozi shares one of his most successful sales strategies: the "buy X, get Y free" approach. Using an example from a Nashville Boot Factory, he demonstrates how offering additional items for free, rather than discounting, can be more compelling to customers. This strategy not only maintains perceived value but can also extend customer engagement, particularly in subscription-based services where longer commitment periods are desired.
Pay Less Now or Pay More Later Offers
In discussing payment strategies, Hormozi introduces the concept of offering customers a choice between immediate payment at a discount or delayed payment at full price. He recommends combining this with satisfaction guarantees and clear, measurable criteria for success. The strategy includes capturing payment information from "pay later" customers to facilitate future conversions, while maintaining that if more than 10% of customers are canceling, businesses should reevaluate their promises or pricing structure.
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Clarifications
- Decoy offers in business strategy involve presenting customers with a free or discounted version of a product or service to make a more expensive option seem like a better value. The goal is to guide customers towards choosing the premium offer by highlighting its enhanced features and benefits. This strategy aims to influence consumer behavior by creating a clear contrast between the decoy offer and the premium offer. Decoy offers are designed to help customers perceive the premium option as more desirable and worth the higher price point.
- In sales strategies, "Buy X, Get Y Free" offers involve enticing customers by offering additional items for free when they purchase a specific product or service. This approach aims to increase customer engagement and perceived value without directly discounting the main product. It can be particularly effective in subscription-based services where encouraging longer commitment periods is beneficial. The strategy focuses on enhancing the overall value proposition for customers by providing them with extra benefits or products at no additional cost.
- Combining payment options with satisfaction guarantees and success criteria involves offering customers choices like immediate discounted payment or full price later, along with assurances of their satisfaction and clear goals for what constitutes success. This strategy aims to provide flexibility to customers while ensuring they are confident in their purchase decisions and understand the value they will receive. By aligning payment choices with guarantees and success metrics, businesses can enhance customer trust, encourage conversions, and manage expectations effectively. This approach helps businesses maintain customer satisfaction, reduce uncertainties, and potentially increase customer retention rates.
- Capturing payment information from "pay later" customers involves collecting their payment details during the initial interaction, even if they opt for delayed payment. This information is stored securely and can be used to process payments automatically when the agreed-upon time for payment arrives. It streamlines the conversion process for future transactions and minimizes friction for customers who have already shown interest in the product or service.
- When businesses notice a high rate of customer cancellations after offering a particular deal or pricing structure, it suggests that customers might not find the value proposition compelling enough to continue their engagement. This situation prompts businesses to reassess their promises or pricing to align better with customer expectations and needs. By analyzing the reasons behind the cancellations, businesses can make informed decisions to improve their offerings and retain more customers in the future. Reevaluating promises or pricing structures based on customer cancellations is a strategic approach to enhance customer satisfaction and optimize business performance.
Counterarguments
- Decoy offers may be perceived as manipulative, leading to a loss of trust among savvy consumers who recognize the tactic.
- Enhanced features in premium offers may not always justify the price difference for every customer, leading to a potential mismatch in perceived value.
- Simplifying decoy offers might backfire if customers find the basic version sufficient for their needs, reducing the attractiveness of the premium offer.
- "Buy X, get Y free" offers could potentially devalue the product if customers start to expect additional free items with every purchase.
- While offering additional items for free can extend customer engagement, it may also increase the company's costs and reduce profit margins.
- Subscription-based services using the "buy X, get Y free" approach might struggle with customer retention once the initial promotional period ends.
- Immediate payment at a discount might lead to a lower customer lifetime value compared to strategies that encourage full-price purchases over time.
- Satisfaction guarantees and clear success criteria are beneficial, but they can also be exploited by customers, leading to increased returns and service costs.
- Capturing payment information for future conversions raises privacy concerns and may deter customers who are cautious about sharing their financial details.
- A cancellation rate of less than 10% might not be a realistic target for all businesses, especially those in highly competitive or volatile markets.
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Decoy Offers
Alex Hormozi underscores the tactic of leveraging decoy offers to entice leads while strategically positioning a premium product to maximize sales and perceived value.
Decoy Offers: Advertise Free or Discounted Version, Then Present "Premium" Offer
Hormozi addresses how businesses can engage potential customers by initially advertising an inexpensive or "free" version of a product or service, known as the decoy. The goal is to then upsell these leads with a premium offer, augmented with an array of features, benefits, bonuses, and guarantees that surpass the basic version.
Engage Leads With Decoy Offers; Focus On Premium Offer With Features, Benefits, Bonuses, and Guarantees
Hormozi reflects on his experience where something as simple as a free gym membership was the decoy while the "ultimate version," priced at $3.99, offered unlimited sessions, tailored coaching, and guarantees of achieving results. He illustrates that such decoy offers serve as a springboard to introduce the premium offer. Hormozi emphasizes the significance of selling dreams rather than the product features; the full features of the premium product are detailed during the sales pitch rather than the advertising phase.
Contrast Decoy and Premium Offers to Show Superior Value and Persuade Purchase
Hormozi counsels that the decoy offer should be noticeably more limited than the premium option, which should be enhanced to the point of undeniability in its superior value. When customers inquire about the decoy offer, they are presented with the premium offer, strategically positioned beside the basic option to visually and conceptually illustrate its added value. He suggests utilizing direct contrasts such as "Are you here for free stuff or lasting results?" to segue the discussion toward the premium offer.
Highlight Premium By Simplifying the Decoy Offer
To highlight the premium's merits, Hormozi suggests marketing a less complex or scaled-down version of the premium offer as the decoy. The i ...
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Decoy Offers
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Counterarguments
- Decoy offers may erode trust if customers feel manipulated into considering a more expensive product than they initially sought.
- Upselling can sometimes lead to customer dissatisfaction if the perceived value does not match the cost of the premium offer.
- Focusing on selling dreams rather than product features might lead to unrealistic expectations and customer disappointment.
- Simplifying the decoy offer too much might make it unattractive and fail to serve as an effective lead-in to the premium offer.
- Direct contrasts between offers can come off as pushy and might turn off some customers who prefer a more consultative sales approach.
- Discount offers attracting higher customer turnout does not necessarily translate to higher profitability or customer loyalty.
- Presenting the premium offer first could intimidate leads who are price-sensitiv ...
Actionables
- You can create a visual comparison chart to help customers differentiate between offers. Design a simple infographic that clearly marks the benefits of your premium product against the decoy offer. For instance, if you're selling software, the chart could show the number of features available in each version, the level of customer support provided, and any exclusive content or services included with the premium version.
- Experiment with a "Choose Your Outcome" interactive guide on your website. Set up a short quiz or survey that asks potential customers about their goals and preferences, then recommends the premium product based on their answers. For example, if you're offering photography courses, the guide could suggest the advanced course for those wanting to turn professional, emphasizing how it aligns with their aspirations.
- Offer ...
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Buy X, Get Y Free Offers
Alex Hormozi discusses "buy X, get Y free" as a compelling sales strategy that he employs in every business he owns, and hehas found it to be one of the most powerful attraction offers.
Buy X, Get Y Free Boosts Sales
Buy X, Get Y Free Offers Give Free Products With Purchase
During a visit to Boot Factory in downtown Nashville, Hormozi noticed their advertisement strategy, "Buy one pair, get two pair free" for cowboy boots. The store's success suggested that this type of offer was potent in increasing sales. Hormozi echoes this idea by stating that customers who purchase a product can receive additional items at no extra cost.
More Free, Higher Value Items Boost Offer Effectiveness
Alex Hormozi shares examples where customers might buy one expensive item and get two additional items for free. For instance, buying one pair of boots for $600 allows customers to get two more pairs at no additional cost, equating to each pair costing $200. Hormozi asserts that by offering more free, higher value items, the perceived value of the offer is enhanced.
Offer Free Additional Items Instead of Discounts
Hormozi advises offering more free items instead of making discounts. He contrasts discounting three t-shirts at $6.67 each to selling one shirt for the full price and offering two additional shirts for free, which, while maintaining the same total discount value, seems more compelling to customers. He reasons that free offers tend to attract more attention than discounts.
Buy X ...
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Buy X, Get Y Free Offers
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Counterarguments
- "Buy X, get Y free" strategies can sometimes devalue the product in the eyes of the consumer, making it seem less premium or exclusive.
- Offering free products can boost sales, but it may also reduce profit margins and not be sustainable for all business models.
- While providing more free, higher value items can enhance perceived value, it may also lead to increased consumer expectations and a dependency on promotions for sales.
- Free additional items might be more attractive than discounts in some cases, but discounts can be more straightforward and sometimes preferred by customers looking fo ...
Actionables
- You can create a personal rewards system where you treat yourself to a small freebie after completing a set task or goal. For instance, after finishing a week of workouts, you might reward yourself with a free hour of your favorite hobby or a special treat you wouldn't normally have. This mimics the "buy X, get Y free" strategy and can help reinforce positive habits.
- Start a book exchange club with friends or neighbors where for every book someone contributes, they can pick one from the collection for free. This encourages sharing and provides a sense of added value, similar to getting a free product with a purchase. It's a way to keep your reading list fresh without spending money.
- Offer to help a friend or fa ...
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Pay Less now or Pay More Later Offers
Alex Hormozi sheds light on "pay less now or pay more later" offers, which he regards as powerful attraction offers in the business world.
Pay Less now or More Later Offers Let Customers Pay a Discounted Price Upfront or Full Price Later
Hormozi introduces a strategy where customers have the option to pay a discounted price upfront or a full price later. This deal structure allows customers to lock in a lower rate indefinitely if they pay today or face a higher ongoing rate after 30 days.
"Satisfaction Guarantee: 'Pay Later' Only if Satisfied"
The "pay later" feature is combined with a satisfaction guarantee, so customers have the freedom to cancel the billing before the charge if they are not satisfied with the service. Hormozi exemplifies this with an offer to double a customer's reading speed where customers can put a credit card down for $0, with a $297 charge pending for the next day. The charge only goes through if the customer does not cancel before the charge, which they can do if their reading speed doesn’t double, representing a conditional satisfaction guarantee.
"Get 20-50% Off & Bonuses With Immediate Payment"
Hormozi also maps out the immediate payment option—customers who pay now receive a significant discount of 20 to 50% and additional bonuses. For instance, instead of waiting, he accepted a $97 immediate payment in exchange for discounted training and bonus materials, illustrating the incentives offered for upfront payments.
"Pay Later" Captures Payment Info For Future "Pay now" Conversion
Hormozi advises that for "Pay Later" customers, businesses should take their payment information. This permits a straightforward transition to the "Pay now" situation for future transactions. Capturing this information also allows for follow-up offers that might convince the customer to proceed with immediate payment, smoothing th ...
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Pay Less now or Pay More Later Offers
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Counterarguments
- The upfront discount might not be as appealing if the customer is unsure about the long-term value or quality of the product or service.
- Satisfaction guarantees can be subject to abuse by customers who have no intention of paying, which can lead to increased costs for the business.
- Immediate payment discounts may inadvertently devalue the product or service in the eyes of the customer, leading them to question its full price worth.
- Capturing payment information upfront for "pay later" customers could raise privacy and security concerns, and some customers may be hesitant to provide this information.
- The criteria for satisfaction guarantees might be too restrictive or vague, leading to disputes between the customer and the business.
- There is a risk that the business may rely too heavily on future conversions, which may not materialize as expected.
- The strategy may not be suitable ...
Actionables
- You can experiment with flexible pricing in your next garage sale by offering an immediate payment discount and a full-price option with a satisfaction promise. For example, label items with two prices and explain to buyers that they can pay less now or the full amount after a week, provided they're happy with their purchase. This approach can help you understand customer preferences and potentially increase sales.
- Create a personal rewards system for early commitments, such as completing chores or projects. Decide on a task, set a discounted 'early-bird' reward for yourself if you complete it ahead of time, and a standard reward if you finish it by the deadline. This self-motivation technique can help you gauge the effectiveness of immediate incentives in your daily life.
- Develop a personal policy for evaluating satisfaction guarantees when you shop. B ...
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