$100M Leads Audiobook Part 5 – Cold Outreach Ep 590



Alex Hormozi shares his journey from struggling with gym launch during the COVID-19 pandemic to mastering cold outreach and transforming his businesses into multimillion-dollar enterprises. Facing dire circumstances with market downturns, advertising hurdles, and the closure of brick-and-mortar businesses, Hormozi turned to cold outreach as a lifeline. He details the process of building a cold outreach system, emphasizing the importance of personalization, offering significant value upfront, and the necessity of high volume and persistence. Hormozi's approach involves meticulous tracking of metrics, leveraging technology for automation, and targeting specific leads with a crafted message. He outlines the key lessons learned, including the benefits of operating in secrecy, the reliability of cold outreach, and its resistance to platform changes. Hormozi's narrative underscores the resilience and innovation required to pivot and thrive in challenging business landscapes.

Summary Notes

Introduction to Cold Outreach

  • Cold outreach is a method of generating leads by reaching out to potential customers who are not yet familiar with your business.
  • Alex shares his experience of building a successful cold outreach system that transformed his business, Gym Launch, into a sellable asset.
  • The system generated over half of the company's sales and was developed from scratch.

"This is everything that I learned step by step on how to create a cold outreach system that ended up creating literally tens of millions of dollars for me personally, because it is what created or what transformed gym launch into a sellable asset."

The quote emphasizes the effectiveness of Alex's cold outreach system in significantly increasing revenue and making his business a valuable asset. It sets the stage for the detailed explanation of the system that follows.

The Importance of Cold Outreach During Crisis

  • In July 2020, during the COVID-19 pandemic, many businesses faced closures, and the economic environment was challenging.
  • Alex's companies depended on brick-and-mortar businesses, which were affected by lockdowns and an Apple software update that impacted their advertising efforts.
  • The crisis led Alex to consider various scenarios, including using personal savings to support his business.

"Covid-19 raged in a matter of months. 30% of my customers went out of business... Apple did a software update that crippled our ads... I carried the bucket."

This quote highlights the dire circumstances faced by businesses during the pandemic, specifically the challenges Alex encountered with customer loss and advertising issues, prompting the need for an alternative lead generation strategy like cold outreach.

The Opportunity in Cold Outreach

  • Alex received a message from a potential salesman who had lost a job offer due to the company's situation.
  • The salesman had experience with cold outreach at a gym software company, generating significant revenue.
  • Alex proposed that if the salesman could generate his own leads through cold outreach, he would give him the opportunity to build the system for Gym Launch.

"We're 100% cold outreach... We're doing about 10 million a month right now... I've never started a team, but I bet I could figure it out."

The quote reveals the potential of cold outreach as demonstrated by the salesman's previous company, inspiring Alex to consider implementing a similar system in his own business.

Scaling Cold Outreach

  • The salesman's cold outreach efforts began with no sales but gradually increased month by month.
  • Despite initial doubts from the team, the revenue from cold outreach grew consistently, eventually generating millions per month.
  • The process involved using all legal cold outreach methods and required patience and meticulous development.

"September, zero sales... May, 30 sales, $480,000 in revenue. Today, cold outreach generates millions per month."

This quote provides a timeline of the cold outreach program's growth, illustrating the patience required and the eventual success of the system.

Five Lessons Learned from Cold Outreach

  1. The market potential is often larger than initially perceived.
  2. Private advertising can obscure the presence of competitors.
  3. A profitable cold outreach system is achievable.
  4. Proper expectations are crucial; cold outreach can take a significant amount of time to scale.
  5. Previous failures in cold outreach can be overcome with experience and guidance.

"I learned five important lessons from this experience... I hope to be that person for you now."

Alex summarizes the key lessons learned from his experience with cold outreach, offering to guide others through the process based on his insights.

The Mechanics of Cold Outreach

  • Cold outreach involves reaching out to potential customers who are unfamiliar with your business.
  • It is built on the foundation of warm outreach but focuses on private one-to-one communication.
  • Trust is a key issue since strangers do not initially trust you, presenting unique challenges.

"Cold outreach has one key difference from warm outreach. Trust strangers don't trust you."

The quote emphasizes the fundamental challenge of cold outreach: building trust with individuals who have no prior relationship with your business.

Addressing Cold Outreach Challenges

  • Cold outreach involves solving three main problems: finding contact methods, crafting the right message, and persistent outreach to gain attention.
  • The goal is to engage qualified strangers with valuable communication to pique their interest.
  • Cold outreach is a numbers game that requires reaching out to many people to generate engaged leads.

"The more people reach out to, the more engaged leads you get."

This quote reinforces the idea that success in cold outreach is directly related to the volume of outreach attempts.

Developing a Cold Outreach System

  1. Compile a targeted list of leads.
  2. Determine the messaging that will elicit responses.
  3. Increase outreach attempts to compensate for lower response rates.

"First, we get a targeted list of leads. Next, we need to know what to say to get them to reply. Third, we make up for lower response rates by increasing the volume and type of our reachout attempts."

The quote outlines the systematic approach to tackling the challenges of cold outreach, emphasizing the importance of targeted leads, effective messaging, and high outreach volume.

Lead Generation Strategies

  • Different methods are utilized to generate targeted lead lists.
  • Software, brokers, and manual scraping are the three primary approaches.
  • The process starts with using software to scrape leads and then moves on to brokers and manual efforts if necessary.
  • Each method's effectiveness is tested with samples before fully committing.
  • The goal is to work from the most accessible leads to the least accessible.
  • Personalized lists are less likely to have been contacted by competitors.
  • Automation is suggested for scaling but starting manually is recommended for beginners.
  • Interest groups are highlighted as valuable sources for high-quality leads.

"First, I use software to scrape a list of names. Second, I pay brokers to assemble me a list of targeted leads. And if neither of those work, I manually scrape a list of names myself."

This quote outlines the three-step process used by the speaker to create targeted lead lists, emphasizing the progression from automated to manual methods.

"If you can search the database, so can everyone else. But if you assemble a list of names yourself, it's less likely that person has already received many cold reachouts from other companies, so they're the freshest downside."

This quote highlights the advantage of manually assembling a list: the leads are less likely to be over-contacted by competitors, making them "fresher" and potentially more responsive.

Personalization and Value in Cold Outreach

  • Personalization and offering big, fast value are key to engaging strangers.
  • Strangers need to be engaged quickly as they neither know nor trust the person reaching out.
  • Personalization involves knowing something about the lead to make the outreach feel warmer.
  • Providing big, fast value means making an offer that is too good to refuse, often by giving away something valuable for free.
  • The speaker emphasizes the importance of simplicity in messaging and the need for testing and tweaking outreach methods.

"Personalize it. Act like you know them to get more leads to engage. We want the message to look like it's from someone they know."

This quote explains the importance of personalization in outreach efforts, suggesting that messages should be crafted as if the sender has a pre-existing relationship with the recipient.

"The goal is to demonstrate big value as fast as possible. Give yourself a downhill battle by giving away something crazy."

The speaker emphasizes the strategy of offering significant value quickly to win over leads, suggesting that an irresistible offer can greatly enhance the chances of engagement.

Overcoming Cold Outreach Challenges

  • The speaker discusses the importance of volume in outreach.
  • Automating the delivery of messages is recommended to increase the number of potential leads reached.
  • The speaker acknowledges the initial difficulty of cold outreach and the improvement gained by offering more value.
  • The effectiveness of the lead magnet is critical and should be adjusted if it is not yielding the desired results.
  • The speaker provides actionable steps and pro tips to improve outreach, including using simple language and providing sample scripts.

"We offered a game planning session as our lead magnet. Some gyms took us up on it, but most didn't. We needed something better."

This quote reveals a specific example of how the speaker's initial lead magnet did not perform well and the need to offer something more compelling.

"Volume once we have our list of names, personal info, and our big sexy lead magnet, we need to get more strangers to see it."

The speaker stresses the significance of reaching a high volume of leads to increase the chances of successful outreach, suggesting the need for both a compelling offer and a wide distribution.

Automation in Distribution

  • Automation in distribution allows for scaling outreach efforts.
  • Manual methods are time-consuming and limit the number of leads that can be engaged.
  • Automated methods enable reaching more people in less time, even with a lower engagement percentage.

Automated delivery to the extent we can automating delivery unlocks huge scale as someone doesn't need to literally communicate the message to the prospect.

The quote emphasizes the significance of automating delivery to scale outreach efforts, as it removes the need for individual communication with each prospect.

The Importance of Sharing Content

  • Sharing content helps in reaching a wider audience.
  • Encourages listeners to share the podcast episodes to spread business education.

If you've been enjoying this or you've been getting value from this chapter and any of the rest of the podcast episodes, if you could just take a second and ship this to a friend, just click the one button and send it to somebody or share it on your stories.

Alex is requesting listeners to share the podcast to help reach more people with their business education content.

Using Technology for Engagement

  • Technology advancements like AI and deepfakes are making automated communication more human-like.
  • Embracing new technologies can increase output per unit of time.
  • Automating distribution is crucial for efficiency, as hard work is less rewarded than effective results.

Every day, artificial intelligence, deepfakes, and other technology advance. They become more indistinguishable from human communication.

This quote highlights the rapid development of technologies that can automate communication, making it more similar to human interaction.

Personalization vs. Scale

  • Personalization increases response rates but is harder to scale.
  • Automation generally sacrifices personalization for scale.
  • The right balance depends on the size and specificity of the target audience.
  • Technology can help achieve both personalization and scale by using accessible data.

The perfect combination for max leads is max personalization with max volume and with tech, you don't always have to sacrifice personalization for scale.

The quote suggests that the ideal scenario for lead generation is to maximize both personalization and volume, which is achievable through technology.

Follow-Up Strategies

  • Multiple follow-ups increase the chances of engaging prospects.
  • Different methods of contact cater to different preferences.
  • Persistence shows seriousness and increases curiosity.
  • High-ticket sales require more touchpoints.
  • Respecting a prospect's request not to be contacted is more efficient than trying to convert a negative response.

Contact each lead multiple times in multiple ways.

This quote advises on the importance of using various methods to contact leads multiple times to increase the likelihood of engagement.

Reattempting Contact

  • Recontacting leads after a period can yield different results due to changed circumstances or visibility.
  • Following up after three to six months can engage a new group of leads.
  • Working harder than average by doubling inputs can accelerate skill acquisition.

Try again in three to six months and get an entirely new group of engaged leads from the same list.

The quote suggests that timing can be crucial and that leads may become more receptive after a certain period, making it worth attempting to re-engage them.

Learning from the Best and Volume vs. Skill

  • Shadowing top performers and doubling their efforts can lead to rapid improvement.
  • Volume can compensate for lack of skill and reduce the influence of luck.

If you are new to an average team, shadow the best guy on the team, then double their inputs.

This quote advises newcomers to learn from the best and put in twice the effort to quickly improve their skills.

Cold Outreach and Product Sales Strategy

  • Cold outreach may not be profitable for low ticket products.
  • Using cold outreach to recruit affiliates can transform a low ticket sale into a high ticket sale.
  • Selling in bulk to affiliates or earning commissions from their sales can be more effective.

I could make a low ticket product a high ticket product if I sold a lot of them at once.

The quote reflects the strategy of increasing the value of low ticket products by selling them in bulk, either directly to affiliates or through commission-based sales by affiliates.

Tracking Metrics in Cold Outreach

  • Understanding and tracking metrics is essential for successful cold outreach.
  • Failure in cold outreach can often be attributed to poor tracking of metrics.
  • Knowing sales process metrics is crucial for the person managing the outreach.

The person who runs it? Maybe you has to know the metrics of the sales process like the back of their hand, every single stat.

The quote stresses the importance of intimately knowing and tracking all metrics related to the sales process for successful cold outreach management.

Cold Outreach Methodology

  • Discusses the process and strategy behind cold outreach for generating leads and converting customers.
  • Emphasizes the importance of volume and efficiency in cold outreach.
  • Highlights the calculation of engaged leads and conversion rates to measure success.
  • Illustrates examples using phone calls, emails, and direct messages with specific statistics to demonstrate the method.
  • Stresses on the point when it's cost-effective to delegate the cold outreach task to a hired representative.

My hope is that you can generalize the concept to whatever platform you use.

This quote explains the intention behind discussing the cold outreach methodology: to provide a conceptual framework that can be applied to various platforms.

So, like the phone example, you know you do well when the cost of doing cold outreach is less than three times what you make in profit from a customer.

This quote gives a benchmark for successful cold outreach, indicating that the costs should be significantly lower than the profits gained from a customer.

Cost Analysis and Return on Investment

  • Analyzes the costs involved in cold outreach and how to calculate the return on investment (ROI).
  • Discusses labor and software costs as the primary expenses in cold outreach.
  • Provides a detailed example of cost calculation for a team doing cold calls, including hourly wages, commissions, and lead costs.
  • Explains the expected outcomes in terms of shows, closed deals, and the resulting ROI.

This method is labor intensive. Nearly all costs are in the form of labor.

This quote identifies labor as the primary cost factor in cold outreach, which is important for budgeting and ROI calculations.

That's how cold outreach works. Then you just add bodies. It is boring and tedious, but brutally effective.

This quote summarizes the cold outreach process as a simple yet monotonous task that, when scaled up with more workers, can be highly effective.

Lead Management and Quotas

  • Discusses the importance of managing leads efficiently and setting quotas for sales representatives.
  • Advises giving a specific number of leads to each representative to ensure they are utilized fully.
  • Recommends a system of rewards based on the number of appointments set from the given leads.

If you give a rep too many, They will waste them.

This quote emphasizes the potential for inefficiency if sales representatives are given more leads than they can effectively handle.

Example, I give you 70 leads. You give me back seven appointments, I pay you no leads left behind.

This quote provides a clear example of setting expectations and quotas for sales representatives, ensuring accountability and performance.

Advantages of Cold Outreach

  • Lists seven benefits to using cold outreach over other marketing strategies.
  • Highlights the advantages of privacy, reliability, resistance to platform changes, compliance ease, business valuation, and difficulty of replication by competitors.
  • Emphasizes the strategic value of cold outreach in terms of competition and scalability.

Most people dramatically underestimate the amount of volume it takes to use cold outreach.

This quote points out a common misconception about the effort required in cold outreach, which is crucial for setting realistic expectations.

Having an established outreach team is how we were able to sell gym launch.

This quote illustrates the value of a scalable and replicable cold outreach system in terms of business valuation and saleability.

Volume and Scaling in Cold Outreach

  • Discusses the concept of scaling cold outreach by increasing volume and automating processes.
  • Provides an example of a business that scaled its outreach to 60,000 emails per month.
  • Explains the impact on response rates and customer acquisition when personalization is reduced for the sake of volume.

To break past a million dollars per month, we automated the entire process of scraping, crafting and sending emails for one of our portfolio companies.

This quote showcases how automation can facilitate the scaling of cold outreach efforts to achieve significant revenue milestones.

This generates the business 40 engaged leads per day.

This quote provides a tangible outcome of the automated outreach process, demonstrating its effectiveness in generating leads.

Cold Outreach Daily Checklist

  • Offers a step-by-step checklist for implementing a daily cold outreach routine.
  • Includes details such as who should perform the outreach, the content of the messages, the platforms to use, and the frequency and volume of outreach attempts.
  • Encourages consistency and persistence in cold outreach efforts.

Who yourself what hook plus lead magnet core offer where any private communication platform to whom a list scraped, bought or using software when every day seven days a week.

This quote outlines the basic components of a daily cold outreach checklist, providing a structured approach for entrepreneurs.

Don't set a daily goal below 100 and don't stop for 100 days minimum.

This quote sets a minimum standard for daily outreach volume and duration, emphasizing the commitment required for successful cold outreach.

Encouragement to Share Knowledge

  • Speaker B encourages listeners to share the knowledge from the podcast with other entrepreneurs.
  • Emphasizes the potential impact of this information on businesses, especially during challenging times like the pandemic.
  • Appeals to the listener's sense of community and support for fellow entrepreneurs.

Please don't hoard this to yourself. There's another entrepreneur who has a family and kids who needed this stuff as much as I needed it during the pandemic when I was trying to save my business.

This quote appeals to the listener's empathy and sense of community, urging them to share valuable insights with others who may benefit.

Conclusion and Transition to Next Topic

  • Concludes the discussion on cold outreach and introduces the next topic in the series, which is running paid ads.
  • Offers a free gift in the form of cold outreach script samples to help listeners implement the strategies discussed.
  • Speaker B signs off by encouraging listeners to leave a review to help spread the word about the podcast.

The next episode. Run paid ads. You'll enjoy it. I've run a lot of ads. We're pretty good at it, and I'll share how I do it.

This quote transitions to the upcoming topic, promising to share expertise on running paid ads, which complements the information on cold outreach.

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