$100M Offers Audiobook Part 5 Ep 583

In this collaboration between the game podcast and the audiobook "100 Million Dollar Offers," Alex Hermosi and Leila Hormosi discuss the power of scarcity and urgency in enhancing offers and the ethical use of these tactics in business. They differentiate between scarcity (limited availability) and urgency (time-limited availability), emphasizing the importance of ethical application to avoid long-term losses and instead build sustainable profit. The Hormosis share a personal anecdote of attending a high-profile fundraiser at Arnold Schwarzenegger's estate, illustrating how scarcity and urgency, coupled with bonuses and high-status associations, can lead to record-breaking charity earnings. They also explore the psychological underpinnings of supply and demand, showing how creating exclusivity can increase both demand and prices. The episode concludes with practical strategies for businesses to ethically implement scarcity and urgency to boost sales and customer desire without compromising integrity.

• Discussing scarcity and urgency as offer enhancers.
• Differentiating between scarcity and urgency.
• Ethical versus unethical use of these tactics in business.
• Importance of using ethical practices for long-term profitability.

"Today we're going to talk about offer enhancers, specifically scarcity and urgency. First off, the difference between the two. Second off, the ethical ways of using them in business and the unethical ways of using it, which I highly don't recommend long term, you'll lose money, so definitely use it the right way and make more money."

The quote introduces the main topics of the podcast episode: scarcity and urgency as offer enhancers, their differences, and the importance of ethical application in business for sustainable profit.

• Describing the atmosphere of an exclusive fundraiser.
• Use of status symbols and luxury to create an aura of exclusivity.
• The psychological impact of exclusivity on willingness to donate.

"The fundraiser was 25,000 per ticket to attend, with an invite list of only 100. There was a red carpet and all."

The quote sets the scene of an exclusive and high-status fundraiser event, highlighting the scarcity of tickets and the associated prestige.

• Discussing the impact of scarcity and exclusivity on human behavior.
• The concept of people desiring what is scarce or what others want.
• The strategic use of supply and demand to increase perceived value.

"People want what they can't have. People want what other people want. People want things only a select few have access to."

This quote reflects the psychological principles that drive human desire, particularly the allure of exclusivity and scarcity which can be leveraged in business and fundraising.

• Demonstrating the effectiveness of scarcity and urgency in a fundraising context.
• The strategic reduction of ticket supply and increase in price to boost demand.
• The outcome of employing these tactics: a highly successful fundraising event.

"They had raised an extra $1 million that night, before the event had even started, by cutting the supply of tickets and raising the prices."

The quote exemplifies how scarcity and urgency (limiting ticket availability and increasing cost) led to a substantial increase in funds raised for the charity event.

• Acknowledging other persuasive techniques used at the fundraiser.
• Commitment to focus on scarcity, urgency, bonuses, and guarantees as key tools.
• Distinction between offer-related tools and selling techniques.

"Scarcity, urgency, bonuses and guarantees were not the only persuasion tools being employed to get egregious prices at the fundraiser."

The quote acknowledges that while scarcity and urgency are powerful, they were part of a broader set of persuasive tools used to drive up prices at the fundraiser.

• Marketing's role in influencing supply and demand curves.
• Enhancing offers to increase demand and decrease perceived supply.
• The goal of selling more units at higher prices.

"Fundamentally, all marketing exists to influence the supply and demand curve."

This quote underscores the core purpose of marketing: to manipulate supply and demand in order to optimize sales and profitability.

• Desire as a motivator for increasing demand.
• The paradox of desire and possession.
• Strategies for increasing demand by limiting supply.

"Desire is a contract you make with yourself to be unhappy until you get what you want."

This quote, attributed to Naval Ravikant, captures the essence of desire and its role in consumer behavior, which marketers can leverage by controlling supply to heighten desirability.

• Illustrating the impact of scarcity through workshop sales examples.
• The difference in profit and exclusivity between selling many units at a lower price versus fewer at a higher price.
• The concept of demand being fractal and nonlinear.

"Scenario one, we sell ten units at $500 each. Scenario two, we sell two one day workshops, one on one, for $5,000 each."

These scenarios demonstrate how manipulating supply and pricing can create different levels of demand and profitability, emphasizing the power of scarcity in marketing.

• Supply and demand are inversely correlated in business dynamics.
• Satisfying too much demand can kill the business's potential for future sales.
• Mastering the balance between supply and demand is crucial for a business's longevity and profitability.
• The interplay between supply and demand affects the profitability and desirability of an offer.
• Understanding and manipulating these variables can lead to increased profits over time.

In are loving it, it would further increase their desire. And the next time they would act with more urgency and be willing to pay more for the same thing than they originally did.

This quote elaborates on the psychological effect of seeing others enjoy a product or service, which can increase desire and willingness to pay among potential customers.

This is a continuous theme. Conversely, if we were to promote scenario.

This quote introduces the concept of continuous themes in marketing strategies, suggesting the importance of recurring patterns in consumer behavior.

Hermosi law the longer you delay the ask, the bigger the ask you can make. The longer the Runway, the bigger the plane that can take off.

"Hermosi law" is a principle suggesting that delaying a sales pitch can lead to greater returns, analogous to a runway allowing for larger aircraft to take off.

This is the real key to never going hungry.

The quote metaphorically suggests that managing supply and demand effectively ensures a business's sustainability and success.

Subsection delicate dance of desire is that supply and demand are inversely correlated.

This quote summarizes the subsection's theme, emphasizing the delicate balance between supply and demand.

We want the ravenous prospect, not merely the aroused.

The quote distinguishes between a prospect who is extremely eager ("ravenous") versus one who is simply interested ("aroused"), highlighting the goal of generating intense desire in customers.

• Enhancing an offer involves both internal and external variables that position the product in the customer's mind.
• Scarcity, urgency, bonuses, guarantees, and names are strategies used to enhance an offer.
• These strategies can shift the demand curve in favor of the business, creating a perpetual desire for the product or service.

I will show you how I one. Use scarcity to decrease supply to raise prices, and indirectly increase demand through perceived exclusiveness.

Alex Hormozi outlines his strategy for using scarcity to manipulate supply and demand, thereby increasing prices and the perceived value of an offer.

Two, use urgency to increase demand by decreasing the action threshold of a prospect.

Urgency is presented as a tactic to prompt quicker decision-making in potential customers, boosting demand.

Three, use bonuses to increase demand and increase perceived exclusiveness.

Bonuses are discussed as a way to make an offer more attractive and to enhance the perception of exclusivity.

Four, use guarantees to increase demand by reversing risk.

Guarantees are mentioned as a means to reduce perceived risk for the buyer, which can stimulate demand.

Five, use names to restimulate demand and.

Naming strategies are highlighted as a tool to rekindle interest and expand market awareness.

Expand awareness of my offer to my target audience.

This quote emphasizes the importance of increasing the visibility of an offer to the intended demographic.

• Scarcity is a powerful force that can unlock unlimited pricing power.
• Authority figures or celebrities can charge high rates due to implied demand and limited supply.
• Real-world experiences and specialized knowledge can create unique supply-demand dynamics.
• Scarcity can be created intentionally through limited offers and exclusivity.

Scarcity is one of the most powerful and least understood forces to unlock unlimited pricing power.

This quote introduces scarcity as a crucial yet often misunderstood element in pricing strategy.

Can charge egregious rates is because of implied demand.

The concept of implied demand is presented as a reason for high rates charged by authority figures or celebrities.

There is little that substitutes for incredible demand.

The quote underscores the importance of genuine demand in a market, which cannot be easily replicated or faked.

The person who needs the exchange less always has the upper hand.

This negotiation principle suggests that the party with less dependence on a transaction has a strategic advantage.

Let's attack some real world in the trenches strategies to reliably create scarcity.

Alex Hormozi proposes to discuss practical strategies for creating scarcity in business offerings.

It creates scarcity or a fear of missing out.

The quote explains how limited availability induces a fear of missing out (FOMO), prompting action from consumers.

• Scarcity is the concept that limited availability increases desirability.
• It plays on the fear of missing out and the psychological fear of loss.
• This fear of loss motivates individuals more than the potential for gain.
• Scarcity can be created in three forms: limited supply, limited bonuses, and one-time availability.
• Proper use of scarcity should not appear phony and should be based on real limitations.

"This is an example of scarcity." "It is the fear of missing out on something. It pulls on our psychological fear of." "Loss and gets us to take action." "Fear of loss is stronger than desire for gain."

These quotes explain the basic concept of scarcity and its psychological impact, emphasizing that the fear of losing something is a stronger motivator than the possibility of gaining something.

• Limited releases of products exploit psychological biases to a business's advantage.
• Limited releases can be applied to flavors, colors, designs, sizes, etc.
• To maximize the effect, it is crucial to sell out every time a limited release is offered.
• Consistent sell-outs create scarcity, which increases demand over time.
• Selling out also provides social proof and increases desire for the product.

"Physical products having limited releases is a." "Tried and true method of using psychological." "Bias to your advantage."

These quotes outline the strategy of using limited product releases to create scarcity and leverage consumer psychology for increased sales.

• Employing scarcity in services can be more complex but can be done ethically.
• Three methods to create scarcity in services are outlined: total business cap, growth rate cap, and cohort cap.
• These methods involve setting limits on the number of clients or the rate of accepting new clients.
• Scarcity in services can create a waiting list, reduce price resistance, and allow for price increases over time.
• It's crucial to communicate sell-outs to the public to maintain the scarcity effect.

"Services with services, especially if you want." "To consistently get customers. It can be a little trickier to." "Use scarcity, but I will show a." "Few very simple ways to employ scarcity."

This quote introduces the concept of using scarcity in service-based businesses, which requires different tactics compared to physical products.

• A real-world example of scarcity is limiting the availability of a free lead magnet.
• By restricting downloads to a certain number per week, a free resource becomes more desirable.
• This strategy creates anticipation and increases the likelihood of consumption once the resource is available.
• Honest scarcity is the most ethical form of scarcity, where businesses simply advertise their actual capacity.

"Give you a real world example of scarcity to enhance the value of a free lead magnet." "Honest scarcity the most ethical scarcity, the."

These quotes provide an example of how scarcity can be applied to something as simple as a lead magnet and introduce the concept of honest scarcity as an ethical marketing strategy.

• Extreme scarcity involves offering very limited one-on-one access with a high price tag.
• This strategy can be highly profitable and attract the best clients.
• The service level should be capped at a small number and tailored to the provider's preferred working style.
• Another form of extreme scarcity is to make it clear that once someone leaves a service, they cannot return.

"Sell a very limited supply of one-on-one access." "Once you're out, you can never come back."

These quotes discuss the concept of extreme scarcity, where access to the service provider is highly restricted, and the consequences of leaving the service are permanent, thus increasing the perceived value and commitment of clients.

• Urgency complements scarcity by adding a time limitation to the availability of an offer.
• Deadlines can drive decisions by creating a sense of urgency.
• Unlike scarcity, which is a function of quantity, urgency is a function of time.

"Chapter twelve enhancing the offer urgency deadlines drive decisions. Scarcity is a function of quantity. Urgency is a function of time." "This is where you only limit when." "People can sign up rather than how many."

The quotes highlight the importance of urgency in marketing and how it differs from scarcity. Urgency is about the limited time frame in which an action can be taken, which can be a powerful motivator for consumers.

• Cohort-based urgency involves starting clients on a regular cadence.
• Operational benefits include a choreographed onboarding experience.
• Urgency is created by having limited start dates, e.g., weekly cohorts.
• Potential clients are nudged to sign up sooner to avoid waiting.
• The less frequent the start dates, the more powerful the urgency effect.
• Fear of losing sales by turning business away is unfounded.
• Sales often spike at the end of limited-time offers.

"Number one cohort based rolling urgency. For example, if you start clients every week, even in unlimited amounts. You can say, if you sign up today, I can get you in with our next group that kicks off on Monday. Otherwise, you'll have to wait until our next kickoff date."

This quote explains the concept of cohort-based urgency, where clients are grouped and started together, creating a natural deadline for sign-ups.

"The biggest sales on a week long campaign or launch happen in the last 4 hours of the last day, up to 50% to 60%. That means that the last 3% of the time allotted creates 50% to 60% of the sales."

The quote highlights human behavior in response to deadlines, demonstrating that urgency can significantly boost sales at the last minute.

• Utilizing real signup countdowns in digital marketing to create urgency.
• Credibility is key; countdowns must be authentic.
• Seasonal promotions should be visible across all marketing materials.
• Changing the name of the promotion by season creates a sense of novelty.
• Local businesses benefit from varying marketing more frequently.

"Having actual signup date countdown is very useful, but make sure they are real. If they aren't, you'll lose credibility and just look like every other wannabe marketer."

This quote emphasizes the importance of using genuine countdowns to maintain credibility and effectiveness in marketing.

"Deadlines drive decisions. By simply having these, you can point to them and let human beings push themselves over the edge so as not to miss out."

This quote underscores the psychological impact of deadlines on decision-making, encouraging potential customers to act to avoid missing out.

• Creating urgency through offer or promotion pricing structure.
• Allows for urgency in businesses that sell clients year-round.
• Can create fear of missing out (FOMO) on a promotion rather than the service itself.
• Use pricing promotions, discounts, or added bonuses to create urgency.
• Clean your pipeline with every price change to boost sales.

"It would be a lie to say that if you own a roofing business, you won't service them if they buy after the date. But if you talk specifically about the promotion, you can often elicit the same urgency on buying the prospect while maintaining your integrity."

This quote illustrates how to maintain integrity while creating urgency by focusing on the promotion, not the availability of the service.

"Never raise your prices without letting people know it shows a position of strength and will give you a nice little influx of cash from the people in the pipeline who are on the fence."

The quote advises to communicate price increases to customers as it can lead to a surge in sales from those who were previously undecided.

• Exploding opportunities create urgency due to time-sensitive gains.
• Examples include arbitrage opportunities and competitive job offers.
• Emphasizing the decaying nature of the opportunity encourages quick decisions.
• This strategy is applicable across various industries and scenarios.

"Every second someone delays, they miss out on disproportionate gains."

This quote explains the concept of an exploding opportunity, where delay results in missed potential benefits.

"This forces prospects to make fast decisions rather than try and wait it out to see if they get a better offer."

The quote highlights how the decaying nature of certain opportunities compels quick decision-making from prospects.

• Incorporating urgency in offers leads to more action from potential clients.
• Multiple methods of urgency can be employed effectively.
• Free resources are available for learning how to use scarcity and urgency ethically.
• Taking action is essential for change; upcoming episodes will cover bonuses and guarantees.

"Adding a deadline and incorporating one or multiple forms of urgency will get more people to take action than otherwise."

This quote summarizes the effectiveness of adding deadlines and urgency to drive more sales and actions from customers.

"If you want to walk through some live ethical examples of scarcity and urgency with me, go to acquisition.com training offers and select scarcity and urgency."

The quote provides an invitation to access free training resources on using scarcity and urgency in marketing offers.