I Hate Things That People Never Stop Buying Ep 382

Alex Hormozi, the host and successful entrepreneur who recently sold his eight-figure software company, shares his insights on building wealth through business on his platform, acquisition.com. With a portfolio generating $85 million in revenue, Hormozi emphasizes the importance of selling products or services that customers will continually purchase. He advocates for creating a customer surplus where the perceived value far exceeds the cost, thereby ensuring customer retention and loyalty. Hormozi also discusses the transition from selling methods to selling scalable models, the significance of customer experience, and the concept of high value over high ticket pricing. His key message is that fortunes are created not by one-time sales but by cultivating offerings that customers never want to stop buying.

• Alex Ramosi emphasizes the importance of selling products or services that customers will continuously buy.
• He suggests that the key to creating a fortune in business is to focus on items that have enduring demand.
• Alex mentions well-known brands like Starbucks, Coca-Cola, Apple, and Netflix as examples of companies that sell products people continue to buy.
• The concept is simple to understand but challenging to implement effectively.
• Success often comes from improving existing offerings rather than inventing new technologies or curing diseases.

The way to create a fortune in business is to only sell things that people do not stop buying.

This quote encapsulates the core message of the theme, highlighting the strategy of focusing on products with consistent and ongoing demand to build wealth in business.

• Alex advocates for focusing on simple, repeatable actions that lead to success.
• He criticizes the pursuit of complexity, suggesting that "simple scales, fancy fails."
• The repetition of successful actions and doing the "boring work" are key to business success according to Alex.
• He stresses the significance of consistency rather than seeking out new, unproven methods.

Simple scales, fancy fails. Repeat successful actions do the boring work these are sayings we have in our community, because most of the success that I've had with business has not been from curing cancer or inventing a new technology, but improving something to the point that people want to continue to buy it and continue to pay for it.

This quote reinforces the idea that business success often comes from doing simple things well and consistently, rather than trying to innovate in complex ways.

• Alex challenges business owners to consider the total revenue potential if they retained every customer they ever acquired.
• He encourages a thought experiment to calculate the hypothetical revenue based on total past customers and current average monthly price.
• The exercise is meant to demonstrate the potential financial impact of high customer retention.
• Alex implies that businesses would have more resources for customer acquisition and be more confident in their business model if they knew they wouldn't lose customers.

How convicted would you be if every customer you sold, you knew you would not lose?

This quote highlights the importance of customer retention in business confidence and financial planning, suggesting that knowing customers will remain loyal can significantly impact a business owner's approach to growth.

• Alex discusses the necessity of offering tremendous value to customers to ensure they remain loyal.
• He suggests structuring products or services so that the value provided exceeds the payment received by a large margin.
• The goal is to make customers so satisfied that they proactively ensure their continued patronage, such as by updating payment information to avoid service disruption.
• Alex implies that this approach to value can lead to a business where customers are eager to maintain their relationship with the company.

How do I structure the thing in such a way that the value that they are getting is so far in excess of what they're paying me that they never want to leave, that they call me when their credit card goes down to make sure that they continue to stay and pay?

This quote suggests that the key to customer loyalty is to offer value that far exceeds the cost, creating a situation where customers are highly motivated to remain with the service or product.

• Customer surplus is the concept where customers feel they are getting more value than what they pay for.
• A high customer surplus leads to a high perceived value, making customers more likely to continue purchasing the service or product.
• Businesses should aim to create offerings that customers perceive as highly valuable relative to the cost.
• The goal is to turn a valuable service or product into something customers never want to stop buying.

"There is what is called a customer surplus, which means you are getting far more than what you pay for."

This quote explains the concept of customer surplus, highlighting its importance in customer satisfaction and retention.

"How can I turn this thing that is valuable into something that someone will never want to stop buying?"

This quote reflects the strategic mindset of aiming to create offerings with such strong value propositions that customers become long-term purchasers.

• Transitioning from selling methods to selling models can lead to a more sustainable business.
• Models allow for evolution and adaptation over time, whereas methods may be one-time solutions.
• Franchises are an example of model selling businesses, which can adapt their marketing strategies while keeping the underlying model consistent.

"Many times there are, especially in the elearning space, people will sell a method, which I think, by the way, is silly, because people will never. They'll definitely buy the method and then never need the method, right?"

This quote criticizes the practice of selling methods in eLearning, suggesting that it is not a sustainable approach as customers may not need to repurchase.

"Ideally, you want to transition your business from a method selling business to a model selling business, because then you will have a model that can always evolve over time."

This quote advocates for businesses to focus on selling models rather than methods, emphasizing the long-term benefits and adaptability of models.

• There are eight factors (referred to as the 'eight C's') that can make a service or product stickier, increasing customer retention.
• The most important factor is the customer surplus, which involves delivering high value at a reasonable price.
• Instead of cutting prices to create a customer surplus, businesses should focus on increasing the value delivered to customers.

"Right now, in the Netflix video that I made, like how I crack recurring revenue, there's eight c's that I look at to make something stickier."

This quote introduces the concept of the 'eight C's' as a framework for analyzing and improving recurring revenue through increased customer retention.

"The biggest one by far is the simple customer surplus, the value discrepancy in what you sell, sorry, what you deliver, and the price that you charge for it."

This quote emphasizes the importance of customer surplus as the key factor in creating a sticky product or service.

• The podcast's growth relies on word of mouth, without the use of ads, sponsorships, or direct selling.
• The host encourages listeners to share the podcast in the same way they discovered it, fostering organic growth and community support.
• Good karma is mentioned as a benefit for those who help spread the word about the podcast to other entrepreneurs.

"The only way this grows is through word of mouth."

This quote explains the podcast's growth strategy, which is based entirely on listeners sharing it with others.

"My only ask is that you continue to pay it forward to whoever showed you or however you found out about this podcast, that you do the exact same thing."

This quote is a call to action for listeners to promote the podcast, ensuring its continued growth through community engagement.

• The SaaS model is highly recommended for its measurable metrics and service continuity.
• Business strategies and metrics from the software world are applicable to service-based businesses.
• The idea of creating a fortune is tied to the ability to offer a service that customers consistently find valuable and do not want to stop buying.

"And in the software world, which I highly recommend, you look at all the writers for business in software, because software is software as a service, right? SaaS?"

This quote suggests that the principles of SaaS are worth studying for their applicability to other service-based business models.

"The idea, if you want to create a fortune, is to think consistently, how can I make this so that no one stops buying?"

This quote summarizes the overall business philosophy of creating offerings that maintain high customer retention through consistent value.

• The initial step in building a billion-dollar company is to focus on promotion to acquire customers.
• Pricing and value are not the primary concerns during this phase, but the price should be balanced to generate interest without maximizing profit.
• The goal is to make sales in order to gain customers, not the other way around.
• Continuous product testing is crucial to ensure customers remain engaged.
• The promotion stage should not be exited until the product has been optimized to minimize customer churn.

"The first step is getting enough promotion so that you can get customers, all right? He said, we're not worried about pricing. We're not worried about value."

This quote emphasizes that the initial focus should be on promotion and customer acquisition rather than pricing strategies or the intrinsic value of the product.

"The promotion period is simply to get customers. All right? You make sales to get customers. You're not making customers to get sales."

This quote highlights the importance of understanding the difference between sales-driven and customer-driven strategies, with the latter being crucial during the promotion phase.

• After successful promotion, the next phase involves optimizing the product to ensure customers do not leave.
• The goal is to reach a point where the product is so compelling that customers continue to purchase it.
• Effective marketing at this stage results in compounding growth due to high customer retention.
• The process requires a deep understanding of customer needs and behavior, including interviews, surveys, and usage pattern analysis.
• Enhancing the value within the community or ecosystem of the product is critical to reduce churn rates.
• Achieving low churn rates is challenging, but it is a key differentiator for successful companies.

"And so if you're thinking about this in sequence, it's promotion, which is usually zero to a million product, which is one to 10 million, which is where you're optimizing your product so that people never want to leave, they never want to stop buying."

The quote outlines the sequence of focusing first on promotion and then on product optimization, with the latter aiming to create a product that customers consistently want to purchase.

"And we do these things over and over and over again until we get to the point we're at 1%, 2% monthly churn at most, rather than ten or 20%, which is what most people have."

This quote conveys the iterative process of improving the product and the community around it to achieve exceptionally low churn rates, which are essential for sustained growth.

• Embracing the ideology of never losing customers is a profound shift that can lead to continuous revenue growth.
• The concept is simple to understand but difficult to implement, which deters many from pursuing it.
• Those willing to do the "boring work" and focus on customer retention are the ones who unlock significant long-term value.
• The strategy relies on having time on your side, allowing even those with subpar marketing to succeed if the product remains indispensable to customers.
• Over time, a product that retains customers can generate a substantial income, regardless of the company's marketing prowess.

"But if you're part of Mozi Nation and you like doing the boring work, you like doing the things that other people are not willing to do, then these are the things, these are the keys to the kingdom, is creating things that people will never stop buying."

This quote underscores the importance of dedication and willingness to engage in the less glamorous aspects of business, such as customer retention, which ultimately leads to creating products that customers continuously purchase.

"Because then over a long enough time horizon, even if you suck at marketing, people will find out about your product over a long enough time horizon."

The quote suggests that with a focus on customer retention and a superior product, marketing becomes less critical as the product's longevity in the market will naturally attract customers.

• Long-term commitment to a business increases the likelihood of success.
• Over time, a consistent approach can lead to a refined product and a large customer base.
• The duration of business operation is linked to customer retention and business growth.

"If you were to multiply this, and you're 20 years into your career, and you've actually been doing the same thing, one, it would be far more likely that you'd have something that you would have figured out how to make the product so good that people wouldn't leave."

This quote emphasizes the importance of perseverance and continuous improvement in business. It suggests that long-term dedication to a business can lead to a high-quality product that retains customers.

• Successful monetization strategies can significantly increase profits.
• Offering superior value to customers is more important than the number of customers.
• The goal is to provide a product or service that delivers more value than its price, creating a customer surplus.

"And it wasn't because we were selling the same amount of customers, it was just that we had such a better monetization view. With such a better product, we were able to deliver so much more value that we were able to grow to a much bigger size."

Alex Ramosi highlights the impact of effective monetization and product value on business growth. The quote suggests that offering a high-value product can lead to greater business expansion than merely increasing the number of customers.

• The concept of "high ticket" is less relevant than providing "high value".
• Pricing should reflect the value provided to the customer, resulting in a favorable price-value discrepancy.
• Creating a significant customer surplus by offering great value at a reasonable price is the foundation of building wealth.

"So when someone says, I charge high ticket, I think it's a silly concept altogether because it really should just be high value. That's the real concept, which is high value."

Alex Ramosi criticizes the focus on high pricing and advocates for a focus on high value instead. This quote underlines the notion that businesses should prioritize the value they deliver over the price they charge.

• Wealth is built by creating products or services at a low cost and selling them at a higher price.
• The key to substantial wealth is to offer products that provide so much value that customers continue purchasing.
• The concept is simple to understand but challenging to execute, which is why many people do not achieve wealth.

"That is where fortunes are made. That is where fortunes are founded. That is where you sell things that people will never stop buying."

Alex Ramosi outlines the fundamental strategy for building wealth through business. The quote conveys that creating and selling valuable products at a profit is the essence of wealth creation.

• Success requires doing the "boring work" that others are not willing to do.
• Commitment to the necessary efforts will lead to success beyond what most people can imagine.
• Being part of a dedicated community ("Mosey Nation") implies a commitment to hard work and success.

"But you are part of Mosey Nation and you are not going to be one of those people because we do the boring work. We do the things that people are not willing to do so that we can have success that they have never dreamed of."

Alex Ramosi encourages dedication to the hard work required for success. This quote motivates listeners to embrace the often tedious tasks necessary to achieve exceptional results.

• Alex Ramosi owns acquisition.com with $85 million in revenue.
• He emphasizes his intention to provide value without selling anything to the audience.
• The focus is on sharing tactical business growth strategies through his content.

"I own acquisition.com. We do $85 million in revenue and I have absolutely nothing to sell you."

Alex Ramosi introduces his business credentials and assures the audience of his intention to provide value without any sales pitch. The quote establishes his credibility and genuine desire to help others grow their businesses.