6 Hacks I Use To Create High Margin Service Ep 300

Summary Notes


Alex Hormozi introduces the concept of the "service delivery cube" as a strategy to enhance business value and customer profitability. He emphasizes the importance of repurposing existing resources to create new, valuable offerings without incurring additional costs. Hormozi outlines the cube's six facets: service ratio (one-on-one to one-to-many), client involvement (DIY to done-for-you), support channels, consumption methods (live to recorded), speed and convenience, and a creative pricing exercise (tenfold increase to one-tenth reduction). He argues that businesses can unlock hidden value and increase revenue by reevaluating and adjusting their services along these dimensions. Hormozi also teases an unreleased chapter for fans of his book, "100 Million Dollar Offers," to build hype for his upcoming release, "100 Million Dollar Leads."

Summary Notes

Increasing Customer Value

  • Enhancing customer value is a critical component of business growth.
  • Delivering more valuable services is a key strategy to make customers more valuable.
  • Alex Ramosi emphasizes the importance of this aspect, especially in service-based businesses.

"But the other half of the equation is making the customers more valuable." "One of the key ways of doing that is delivering more valuable services."

Alex Ramosi suggests that improving the value delivered to customers is as important as acquiring new customers. By enhancing services, businesses can increase the worth of their customers.

The Service Delivery Cube

  • Alex Ramosi introduces the concept of the Service Delivery Cube as a creative process for expanding product lines and increasing customer value.
  • The Cube has six components, each representing a different aspect of service delivery.
  • It is used to identify opportunities to repurpose existing resources and offer more value to customers without incurring additional costs.

"And so what I want to walk you through is what I call the service delivery cube. And it's Cube because there's six sides."

Alex Ramosi explains his tool for service expansion and value enhancement, emphasizing its structure and purpose.

The Six Components of the Service Delivery Cube

Component 1: Client Ratio

  • The first component of the Service Delivery Cube concerns the ratio of clients to service delivery.
  • Options include one-on-one, small group, or one-to-many services.
  • Businesses should consider how they can adapt their offerings to different client ratios to maximize value.

"One is the ratio, which is what's my client ratio for a service? What if I wanted to do something one on one? What if I want to do small group? What if I want to do one to many?"

Alex Ramosi discusses the first component of the Service Delivery Cube, which focuses on how services can be scaled according to the number of clients.

Component 2: Client Involvement

  • The second component assesses the extent of client involvement in the service.
  • Service options range from do-it-yourself to done-with-you, to done-for-you.
  • The level of involvement can be tailored to different customer preferences and needs.

"The next is what extent is my client going to be involved? Is it going to be do it yourself? Is it going to be done with you? Right, where we're going to help them implement a change of some kind or is it going to be done for you? It's hands off. They just pay us money."

Alex Ramosi explains the second component of the Service Delivery Cube, which categorizes services based on how much the client will be involved in the process.

Levels of Value and Service

  • Different levels of service delivery have varying levels of value and ease of sale.
  • The "do it yourself" model is challenging to sell because it places all effort on the customer.
  • "Done with you" services are easier to sell due to the educational component, providing a sense of skill acquisition.
  • "Done for you" services are the easiest to sell but can be operationally complex.
  • Companies in each of these service levels can be successful, but their focus varies between marketing and operational excellence.

"What's interesting about this one is that there's another video I'll make at another time called the sales to fulfillment continuum. But basically the easier it is for you to fulfill, the harder it tends to be to sell."

This quote highlights the inverse relationship between ease of fulfillment and difficulty of sales in service delivery models.

"And so do it yourself is one of the hardest things to sell to someone because it's such low value, because all of the efforts on them done with you is a little bit easier to sell because you have a little bit of an educational component, so they feel like they're learning the skill."

Alex Ramosi explains that "do it yourself" services are hard to sell due to perceived low value and high customer effort, whereas "done with you" services offer an educational benefit that can make them more appealing.

"And then finally the easiest thing to sell is done for you because someone just gives you money and they get the result and it's the shortcut."

This quote clarifies that "done for you" services are the easiest to sell since they provide immediate results with minimal customer effort.

Service Delivery Cube

  • Alex Ramosi introduces the concept of the service delivery cube as a framework for analyzing service delivery models.
  • The cube includes a spectrum from "do it yourself" to "done for you," indicating a company's focus on marketing or operational delivery.
  • Companies need to consider how they might move up or down this scale to increase value.

"And so that's the second of the service delivery cube of things that I'm looking at. So I might already have one of these. Is there a way I could go up or down on this scale?"

The quote suggests that businesses should evaluate their current service delivery position and consider how they might adjust their level of customer involvement to enhance their offering.

Support Level

  • Support level refers to the various channels through which customers receive assistance during the service process.
  • Options for support include text, chat, email, expert representatives, phone, and Zoom.
  • Businesses must decide which channels to offer based on their team's capabilities and customer needs.

"And where they're going to get support. All right, so are they going to be supported in this process via text? Are they going to be supported in this process via chat? They can be processed via email, via expert representative, via phone, via Zoom. What's the channel or channels that they're going to have access to? Me and my team."

Alex Ramosi outlines the different support channels available and emphasizes the importance of selecting the appropriate ones for both the business and its customers.

Consumption of Information

  • The method of information consumption is a critical aspect of service delivery.
  • Businesses need to decide on the format for delivering information such as live or recorded sessions, written content, audio, or video.
  • The choice between live or recorded content can significantly impact the customer experience.

"Do I want this to be live? Do I want this to be recorded? Do I want this to be written? Do I want this to be audio? Like, if you're listening on the podcast, do I want to have, like, audiobook versions of this? Do I want this to be video?"

This quote presents the various ways information can be consumed and the need for businesses to determine the most effective delivery method for their services.

Service Delivery Cube as a Framework for Innovation

  • The service delivery cube serves as a tool for businesses to assess and innovate their service offerings.
  • By understanding where their service fits within the cube's dimensions, companies can make strategic adjustments.
  • Shifting one's position on the cube can lead to the creation of new, more valuable products.

"And the thing is, all of these are a lot of variables. And that's okay. The point is that if you already have something, you can look at where it fits on all six of these things and say, can I move it one to the left or one to the right?"

Alex Ramosi emphasizes that while the service delivery cube contains many variables, it is a useful tool for businesses to evaluate and potentially modify their service offerings for increased value.

Unearthing Hidden Value in a Company

  • Alex Ramosi discusses the importance of finding hidden value within a company using existing resources.
  • The goal is to drive more revenue and profit with what the company already has.

"And that's what we're trying to find, is I want to unearth where there's hidden value within my company using the existing resources I have that can drive more revenue and profit to the business."

The quote emphasizes the objective of maximizing the potential of existing resources to increase the company's profitability.

Marketing Strategy for "100 Million Dollar Offers"

  • Alex Ramosi mentions adding a lost chapter to "100 Million Dollar Offers" to generate hype for the upcoming "100 Million Dollar Leads."
  • The chapter is available for free in exchange for an email, ensuring customers don't miss out on the new release.
  • This tactic also ensures that interested parties get first access to the new content.

"I added in a lost chapter that has never been released. I'm releasing it now transparently. I'm doing that to build hype for 100 million dollar leads."

Alex Ramosi is using the release of a new chapter to create anticipation for his upcoming project while also building his email list.

The Value of Speed and Convenience

  • Alex Ramosi discusses how speed and convenience are valuable to customers, often more so than free options.
  • Examples include Uber vs. walking, FedEx vs. USPS, and Spotify vs. free music downloads.
  • He suggests that companies can charge for faster services using existing resources.

"So speed, in and of itself is something that people will pay for."

This quote highlights the point that customers are willing to pay for services that save them time, even when free alternatives exist.

Enhancing Customer Support

  • Alex Ramosi proposes differentiating customer support levels, such as offering VIP support with faster response times.
  • This strategy involves repackaging existing services to meet different customer expectations and willingness to pay.

"Is there a way that I can cut the results in half the time? Is there a way that I can speed up my support?"

Alex Ramosi is suggesting that companies can innovate by improving the efficiency of their services, which can be a selling point to customers.

The 10x to 1/10th Mental Exercise

  • Alex Ramosi introduces a creative process to explore value enhancement by imagining extreme changes in pricing.
  • The exercise involves considering what would be included if the price was 10x higher or what could still be offered if the price was reduced to 1/10th.

"And this is a creative process that I like to think of, which is, if I were to ten x my price of this thing, what else would I include? What else would I be willing to do, right? And on the flip side, if the price of what if I did was one 10th, if I had to fit it into one 10th the price, and I had to deliver more value than I am right now, how would I do it?"

This quote describes a thought experiment to push creative thinking in terms of product value and pricing, encouraging innovation in offerings at various price points.

Service Delivery Cube

  • Alex Ramosi introduces the concept of the Service Delivery Cube as a tool for businesses to find excess capacity and generate more revenue and profit without incurring additional expenses or liabilities.
  • The cube helps in repackaging products, offerings, and services to increase their value.
  • Alex breaks down the cube into six aspects to consider when evaluating current products.

"So the service delivery cube, the reason that I go through this is because I want to see how I can find excess capacity in my business to generate more revenue and profit without taking on more expenses or liability."

This quote explains the purpose of the Service Delivery Cube, which is to maximize business efficiency and profitability by optimizing service delivery without additional costs.

Six Aspects of the Service Delivery Cube

  • Alex details the six aspects of the Service Delivery Cube: ratio of service delivery, level of effort required from the client, channels of support, consumption mode, convenience and speed, and the creative process of pricing.

Aspect 1: Ratio of Service Delivery

  • The first aspect involves deciding the ratio of service delivery, whether it will be one-to-one, small group, or one-to-many.

"We've got the ratio of, is it going to be one to one? It's going to be small group, it's going to be one to many."

This quote outlines the first aspect of the cube, which focuses on the scale of service delivery and how it can be adjusted.

Aspect 2: Level of Effort from Clients

  • The second aspect considers the level of effort clients are expected to put in, ranging from do it yourself, done with you, or done for you.

"What level of effort are they going to be putting in? Is it do it yourself, done with you or done for you?"

This quote describes the second aspect, emphasizing the varying degrees of client involvement in the service.

Aspect 3: Channels of Support

  • The third aspect examines the channels of support available to clients, such as text, phone calls, or a combination of different methods.

"What level of support or what channels of support, excuse me, are the clients going to get?"

This quote introduces the third aspect, which is about the different support channels a business can offer to its clients.

Aspect 4: Consumption Mode

  • The fourth aspect is about how clients consume the service, whether through live or recorded experiences, and in what format: written, audio, or video.

"How do I want them to consume this. Do I want this to be a live experience or this is a recorded experience?"

Alex mentions the fourth aspect, focusing on the delivery format of the service and how clients engage with it.

Aspect 5: Convenience and Speed

  • The fifth aspect deals with the convenience and speed of service delivery, with an emphasis on the value of speed in service categories.

"How can I make this more convenient or less convenient? How can I make this faster for them?"

This quote highlights the importance of convenience and speed in service delivery, which can significantly increase the perceived value.

Aspect 6: Creative Process of Pricing

  • The sixth aspect involves creatively thinking about pricing, such as what could be included if the price were ten times higher or what could be added to make the service valuable at one-tenth the price.

"If I were selling this for ten times more than I am right now, what would I include that I'm not? And then if I had to deliver more value than I currently am, and I was do this for one 10th the price, what would I jetpack into that thing?"

This quote discusses the final aspect, which challenges businesses to think about value addition in relation to pricing strategies.

Conclusion and Call to Action

  • Alex concludes by encouraging the use of the Service Delivery Cube to provide more value and invites comments and questions from the audience.

"Hopefully you found this valuable so I don't choke on myself from this tickle that I'm trying to keep to out use this, think through it, and if you're meeting with your team and thinking, how can we provide more value? This is one of the easiest cubes that I like to walk through."

The quote concludes the discussion on the Service Delivery Cube, suggesting its ease of use for businesses looking to enhance value. Alex also engages with the audience, prompting interaction and feedback.

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