I 10xed a Business to Show It’s Not Luck

Summary

• I crossed $100 million in net worth by age 32 because I know how to grow companies.
• I buy companies at a lower price, improve them, and then sell them.
• We bought a chain of 14 brick-and-mortar locations and grew them to 32 in a year and a half.
• The secret to our success was focusing on the sales process, specifically using something called the "diagnostic sale."
• The diagnostic sale consists of five steps: pre-sale questionnaire, understanding the current situation, identifying the desired state, pinpointing the obstacle, and presenting the solution at a tied price with an incentive to prepay.
• Secret shop your business to understand how your current sales process is actually being implemented by your team.
• Identify the biggest constraint in your business and tackle it first.
• Present your services as solutions to the customer's goals rather than just selling the product.
• Use a pre-sale questionnaire to bring attention to the client’s pain points and elevate their importance.
• Collect the customer's information and credit card details before presenting the price to make closing the sale easier later.
• Understand the client's current state, desired state, and identify the obstacles stopping them from achieving their goal.
• Present a clear, guaranteed path from their current state to their desired state, tying the price to this transformation.
• Push for prepayments by offering discounts and show the customer the financial benefits.
• If prepayment isn't possible, use partial payments with lesser discounts or offer in-house payment plans.
• Leverage third-party financing solutions for customers who need it.
• Repeat the process with your sales team until they can execute it flawlessly.
• Transition customers to recurring revenue models for more predictable income streams.
• Ensure your upsells are at least five times the initial purchase price to maximize revenue.
• Make your service feel personalized without changing the core product to enhance customer perception and satisfaction.
• We grew the revenue per customer from $200 to $800 by changing how we presented the services.
• Focus on implementation and consistency to see long-term growth and profitability in your business.

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How To Take Action

I suggest implementing the following strategies to elevate your small business or personal growth journey:

1. Secret Shop Your Business:
Start by secret shopping your own business. Act like a customer and see what the experience is like. You'll gain insights into what needs improvement, especially in your sales process.

2. Pre-Sale Questionnaire:
Create a simple pre-sale questionnaire for all incoming customers. This should uncover their pain points and current situation. Ask questions like, "What's your primary concern?" or "How long have you been dealing with this issue?"

3. Collect Information Upfront:
Gather customer information and credit card details before presenting the price. It may feel odd, but explain it's for setting up their profile, which helps streamline the purchase later.

4. Understand Current vs. Desired State:
During discussions, clearly define the customer’s current state and their desired outcome. For instance, if you're a fitness coach, understand their current weight and their target weight. Identify obstacles that are preventing them from reaching their goals.

5. Tailor Your Solution:
Present your service as a bridge from their current state to their desired state. Make it personalized without actually changing the core product. Show how your service solves the specific problems they’re facing.

6. Incentivize Prepayment:
Offer discounts for customers who prepay or partially prepay for your services. For example, give a 10-20% discount if they pay in full or a smaller discount for partial payments. This secures cash flow and commitment.

7. Implement a Diagnostic Sale Process:
Train your team consistently on the diagnostic sales process. Role-play until they can execute it flawlessly. Emphasize understanding the customer's issues deeply and presenting customized solutions.

8. Transition to Recurring Revenue Models:
Move customers to recurring revenue models. This could be monthly memberships or regular check-ins. It makes your income more predictable and increases lifetime customer value.

9. Five Times Upsell:
Make your upsells at least five times the price of the initial purchase. If 20% of people opt for it, you significantly boost your average revenue per customer.

With consistent implementation and focus on understanding and solving customer problems, these strategies will enhance both customer satisfaction and your business's profitability. Stay persistent and iterate as you go!

Quotes

"We know how to grow companies"

– Alex Hormozi

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"Secret shop your own business, highly recommend doing it"

– Alex Hormozi

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"Think about yourself as your own business consultant"

– Alex Hormozi

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"We're trying to bring attention to this problem and elevate its importance"

– Alex Hormozi

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"Fundamentally when I switched the sales process, the gyms remained the same"

– Alex Hormozi