How to Sell Ghost Products Strategically Ep 438

Summary Notes


Alex Hormozi discusses innovative sales strategies on his platform,, emphasizing the importance of leveraging existing customer habits and trust-building in sales. He shares his accidental discovery of the 'ghost product' tactic, which involves recommending certain products from competitors to gain customer trust, thereby increasing sales of higher-margin items. Hormozi stresses the ethical use of this technique, aligning it with positive intentions to truly aid customers. He also elaborates on 'prescriptive selling,' which involves integrating products into customers' daily routines, thus avoiding the need for them to form new habits. Hormozi's approach is both a sales technique and a coaching tool, aimed at genuinely helping clients achieve their goals. He concludes by encouraging salespeople to gain experience through high-volume, low-ticket transactions to refine their skills.

Summary Notes

Habit Formation and Sales Strategy

  • Leveraging existing habits is crucial for effective sales and coaching.
  • Being a better salesperson involves understanding and working with customer habits.
  • Alex Rosie emphasizes the importance of piggybacking on existing habits for sales success.

"Getting someone to make a new habit is incredibly difficult. Getting someone to break a habit is incredibly difficult. And so we just want to piggyback on habits they already have."

This quote highlights the challenge of changing habits and the strategy of utilizing existing habits to enhance sales and coaching techniques.

Alex Rosie's Journey and Intentions

  • Alex Rosie aims to build a billion-dollar business with
  • He regrets that business icons like Bezos, Musk, and Buffett didn't document their journeys, so he's doing it for others.
  • Alex Rosie's goal is to help businesses grow and potentially partner with them.

"I'm trying to build a billion dollar thing with I always wish Bezos, Musk and Buffett had documented their journey. So I'm doing it for the rest of us."

Alex Rosie expresses his ambition and his intention to document his journey as a resource for others, much like he wished business magnates had done.

Powerful Sales Tactic: Damaging Admission

  • Alex Rosie discovered a powerful sales tactic by accident, which he calls "damaging admission."
  • This tactic involves a salesperson gaining trust by admitting a product's shortcoming.
  • The tactic will be featured in his upcoming "100 Millimeter Auto Sales Book."

"I want to tell you about the most powerful sales tactic, and that means something for me to say. That statement that I have learned, and I never learned it from a book, I actually learned it by accident, and it will be included in the 100 millimeter auto sales book when it comes out."

This quote introduces the concept of "damaging admission," a sales tactic that Alex Rosie found effective and plans to share in his book.

Retail Sales Success Story

  • Alex Rosie used the damaging admission tactic in a retail environment selling physical products.
  • He taught the tactic to novice salespeople, leading to high closing rates.
  • The tactic involves recommending alternatives for unavailable products, which builds trust and leads to more sales.

"All right, so I'll tell you the story, because some people feel weird about how this ended up playing out, but I ended up selling 100% of people after I made this one switch in how I sold."

The quote recounts the origin story of the damaging admission tactic and its immediate impact on Alex Rosie's sales success.

Implementation of Damaging Admission

  • Alex Rosie encountered a situation where a key product was out of stock.
  • He advised customers to buy an alternative product from another store.
  • This honesty led customers to trust his other recommendations and increased overall sales.

"And so rather than me try and skirt around this clear item that was on the list that I didn't have, that arguably they needed or I wanted them to have, I said, hey, by the way, you can get this one for cheaper down the street at Costco, so you don't need to get this one from me."

This quote explains how Alex Rosie implemented the damaging admission tactic by directing customers to a competitor for a specific product, which paradoxically increased his credibility and sales of other products.

Understanding Customer Needs and Trust Building

  • Alex Rosie emphasizes the importance of understanding customer needs and not pushing unnecessary products.
  • He recounts an experience where he recommended against a product that was not suitable for a customer's goals.
  • Trust-building is achieved by acting in the customer's self-interest and providing value through relevant recommendations.

"And she obviously wasn't trying to gain mass. And so I was like, you're not trying to gain mass, are you? And she's like, no. I was like, you can just cross that out. Go ahead. You don't need to worry about that."

This quote illustrates the importance of recognizing what the customer is not looking for and guiding them away from irrelevant products, which helps in building trust.

Prescriptive Selling and Ghost Products

  • Alex Rosie introduces the concept of prescriptive selling, where specific instructions are given on how to use products.
  • He explains the strategy of using "ghost products" or "sacrificial lambs" to build credibility and trust with customers.
  • These products are recommended but not actually intended to be sold; they serve as a tool to demonstrate the seller's intent to prioritize the customer's needs.

"But I ended up, over time, not even carrying the products that I had on there that I was recommending out because they were so powerful as a sales tool for me to gain trust from the other person."

The quote highlights the tactic of using ghost products as a means to establish trust rather than focusing on making a sale, which can lead to more effective long-term customer relationships.

The Ethics of Persuasion

  • Alex Rosie discusses the fine line between manipulation and helpful persuasion, emphasizing the role of the seller's intention.
  • Positive intent in persuasion is equated with helping the customer, while negative intent is considered manipulative.
  • The goal is to change behavior with the customer's best interest in mind, which can lead to trust and eventually to sales.

"And like all persuasion, the difference between manipulation and help is intention. And so if you want to help someone, you are manipulating them, but you're just doing it in a positive intent."

This quote explains that persuasion is not inherently negative; it is the seller's intention that determines whether the action is manipulative or helpful.

Sales Strategy and Product Margins

  • Alex Rosie suggests giving away low-margin products to build trust and keeping high-margin products to make a profit.
  • He advises having a few low-margin products available for those who want to purchase everything but focusing on selling high-margin items.
  • The approach is presented as an effective sales strategy when dealing with multiple products.

"So gain the trust by giving away the low margin stuff and then keep the high margin stuff for yourself so that people trust you, and then they buy that stuff."

This quote encapsulates the strategy of using low-margin products as a means to build trust, which can lead to the sale of high-margin products that are more profitable for the seller.

Pre-Suasion and Closing the Sale

  • Alex Rosie touches on the concept of "pre-suasion," setting up the customer before the final pitch.
  • He emphasizes the importance of giving customers a vision of the benefits they will experience.
  • Properly explaining how to use the products is crucial before making the sales ask.

"And so you want to explain to them exactly how to take it before you make the ask."

This quote suggests that clear instructions on product usage are a key part of the pre-suasion process, preparing the customer to be receptive to the sale.

Podcast Growth and Community Support

  • Alex Rosie mentions that the podcast relies on word-of-mouth for growth, as he does not use ads or sponsorships.
  • He encourages listeners to share the podcast in the same way they discovered it, to help spread the word and support other entrepreneurs.
  • The approach is based on community support and the goodwill of the listeners.

"The only way this grows is through word of mouth. And so I don't run ads. I don't do sponsorships. I don't sell anything. My only ask is that you continue to pay it forward."

This quote emphasizes the podcast's growth strategy, which relies on listeners sharing and promoting the content organically, fostering a sense of community and mutual support.

Habit Formation in Sales

  • Alex Rosie discusses the importance of integrating new products into existing habits for effective sales.
  • The strategy involves associating the use of a product with a daily routine to avoid the need for customers to form new habits.
  • Rosie provides a step-by-step approach to seamlessly introduce products into a customer's life.
  • The method includes visual cues, such as placing items next to commonly used objects and using labeled tape for dosage reminders.
  • Integrating products into a customer's daily routine is presented as a form of coaching, enhancing the sales experience and fostering trust.

"I don't want you to put this in your cupboard because you'll forget about it. I want you to put it next to your toothbrush so don't have to make a new habit."

This quote emphasizes the importance of placing new products in visible locations associated with existing habits to ensure regular use and prevent forgetfulness.

"Getting someone to make a new habit is incredibly difficult. Getting someone to break a habit is incredibly difficult. And so we just want to piggyback on habits they already have."

Rosie explains that it's much easier to add a new product to an existing routine than to create or break habits, underlining the strategy of leveraging current behaviors for product usage.

Prescriptive Close and Ghost Products

  • The concept of a "prescriptive close" in sales involves recommending products based on the customer's existing routines and needs.
  • "Ghost products" are additional items offered during the sales process to enhance trust and provide a more comprehensive solution.
  • Rosie illustrates how to conduct a smooth transaction by using the customer's card on file, minimizing the need for further decision-making.
  • The process of signing the contract is used as a subtle cue for the customer to complete the purchase, reinforcing the efficiency of the sales experience.

"And so the person says, yeah, sure. It's like, cool, what I would do. What do you know? I have all the contracts from all the people that I signed up the day before in front of me."

This quote shows how Rosie creates a seamless and convenient transaction by preparing contracts in advance and using the customer's existing payment information.

Budget Considerations and Prioritization

  • Alex Rosie addresses the scenario where a customer is concerned about the cost of products.
  • He suggests a consultative approach, offering to prioritize products based on importance and the customer's budget.
  • Rosie advocates for the removal of the least essential product first, if necessary, while maintaining the perceived value of the remaining items.
  • He emphasizes the importance of not undermining the importance of any product, suggesting dietary adjustments to compensate for any removed supplements.

"And then what I would then do is take off one and say, this would be the lowest one I'd remove. Does this work for you?"

Rosie describes a method of negotiating with customers on a budget by identifying the least critical product and offering to remove it to meet their financial constraints.

"I could take this one out, but this is what I want you to add to your diet to replace this thing, because you don't want to show that what you took out isn't important because then it looks like you're selling stuff doesn't matter."

The quote highlights Rosie's approach to ensuring customers understand the value of each product, even when one is removed due to budget limitations, by suggesting dietary alternatives to maintain the overall benefit.

Selling Techniques and Strategies

  • Emphasize the problem your product or service solves to justify the cost.
  • Highlight the opportunity cost of not purchasing.
  • Reintroduce the problem to remind the customer of what they're solving.
  • Discuss changes in the customer's identity and habits that could finance the purchase.
  • Use the customer's desire for improvement to find budget for the purchase.
  • Smooth sales pitches come with practice and experience.

"So if they don't buy the thing, then you reintroduce the problem that you were solving."

This quote underlines the strategy of reminding the customer what problem they are trying to solve with the product or service, reinforcing the value of the purchase.

"Are you going to go out less? You're going to drink less? Are you going to smoke less? Are you going to whatever less? And they're like, well, yeah, I definitely want to be better on these things. I'm like, cool. Well, how much of that do you do? Cool. We just found some money."

This quote suggests a method to help the customer find financial resources for the purchase by considering the savings from changing their habits.

"If this sounds really smooth, I've done this a lot of times."

This quote indicates that the effectiveness and smoothness of the sales pitch is a result of practice and repetition.

Gaining Sales Experience

  • Seek opportunities to practice sales in a high-volume, low-ticket environment.
  • Working in businesses like car washes or salons can provide valuable sales experience.
  • The skills learned from frequent low-ticket sales transactions are transferable to high-ticket sales.

"It will teach you more about the skill of selling and dealing with people than any course ever will."

This quote emphasizes the invaluable, practical learning experience gained from real-world sales situations over theoretical knowledge from courses.

"I used to be arm wrestling over $97, right? And so when we were selling 10,000, $100,000 things, I was like, this is unbelievable."

This quote reflects on the speaker's journey from struggling to sell low-ticket items to effortlessly selling high-ticket items, highlighting the growth and confidence gained from experience.

Prescriptive Closes and Ghost Products

  • Combine the use of prescriptive closes and ghost products.
  • Offer solutions that are tailored to the customer's needs.
  • Suggest alternatives when your services are not the most cost-effective option.

"That combines two things, ghost products and prescriptive closes."

This quote introduces the concept of using ghost products and prescriptive closes as a sales technique, where the salesperson prescribes the best solution and sometimes suggests an alternative product or service.

Building Trust with the Client

  • Position yourself as an ally to the customer during the sales process.
  • The goal is to move from an adversarial position to one of collaboration.
  • Creating the perception of being on the customer's side can build trust and facilitate the sale.

"If you can walk yourself around the table, psychologically, this is one of the fastest ways to do it."

This quote metaphorically describes the process of moving from an oppositional stance to a collaborative one with the customer, which can lead to a more trusting relationship and successful sales outcome.

"And so if you can move, like, at the end of the day, the goal as a salesperson is to move to their side of the table."

This quote reiterates the importance of aligning with the customer, both figuratively and psychologically, to achieve a successful sale.

Conclusion and Farewell

  • The speaker concludes with well-wishes and a sign-off.

"So, anyways, lots of love, keeping amazing, and I will see you guys. Bye."

This quote is a friendly and positive conclusion to the speaker's discussion, indicating the end of the session or episode.

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