Alex Hormozi Reveals The MOST Powerful Marketing Strategy in 2023

0:00I continue to be inspired by how much word of mouth actually matters. Like it just every year I feel like it sets a new record in my mind for how important it is because people right now like I see this all the time people like it's all about influencers [clears throat] and whatever like and sure like the tactics of ads and all this stuff like that's great. But the only thing that is still viral is word of mouth. Like everything else is linear in terms of the relationship like if you spend a dollar in ads you get X back. If you do a cold reach out you get X back. If you do a hundred you triple it you a thousand it it's a thousand to a thousand like whatever that relationship is that ratio it's fixed.

0:33>> Mhm. >> Word of mouth is the only one that is exponential in nature. One tells two two tells four four tells eight. And so if you want to have an enduring business you have to have the monster of word of mouth working for you rather than against you who's building a reputation rather than eating it from underneath of your feet. And I think that like that stuff that you were talking about earlier where you're like you're doing this good will and it's coming back to me. I just see that is like the invisible hand of the word of mouth that just like I mean you've had it happen a hundred times I'm sure which is like you go and you meet somebody you're like dude my buddy saw you at an airport and you like stopped and answered his questions and whatever

1:05>> Yeah. >> and and mind you to be fair if I'm like somewhere and I can't it's the thing that bothers me the absolute most is sometimes I have to be places and I feel like I'm killing people. >> I hate it. I hate it. >> feel like I'm dis I'm like I can't talk to >> like dude I one time and actually I became really good friends with this guy because of that exact scenario dude. I had a guy his name was Roman. I'm still friends with him. Good [ __ ] dude. Came up to me at a speaking event and I was like I he's like hey man you got time and I didn't and I'm like no [clears throat] I can't I can't. And uh and dude he was like he had been going through all this crazy like really bad stuff. Yeah. Um and then I dude it was bothering me.

1:41Like [ __ ] bad dude. Like like I thought the whole time I was speaking the whole time afterwards I'm like [ __ ] I got to find that dude cuz I got time now. Yeah. And weirdly enough uh I was at another event and I [ __ ] ran into the guy. And I was able to apologize and say hey dude, I'm like" and he was like, "You know what, dude? I actually That really really made me mad." >> [laughter] >> I'm like I'm like, "Bro, I I get it. I I would felt bad about it, you know, but that [ __ ] bothers me, too, brother."

2:09>> And I think that for the audience, I think the the bigger take like sure the tactics that we're sharing right now are like useful, but I think the biggest thing is like the perspective of there was that person that bothered Andy enough that it kept kept him up at night. And I think that if you if you can develop whatever that is where it's a splinter because it's those thousand splinters that become the bundle that becomes very a very strong stick that you can wield or it's wielded against you. Um and like for me like I think about the products we build, right? In the same way where the only way to build an enduring company is either to to to sell stuff that people never stop buying from you or to build a company where people never stop selling for you.

2:48Those are the only two ways to build an enduring business that just continues to thrive over and over again. And if you're one of these guys who is and like I get the get cuz I actually came from the direct response world of like understanding how the arbitrage of like ads and all this stuff works. >> too, bro. That's where I started when I was 18. >> Right? Cuz you think transaction right >> I was writing [ __ ] classified ads for a credit booklet that I wrote. Credit repair booklet. I was writing classified ads to put in [ __ ] newspapers. Like we didn't have the internet, you know, [laughter] I'm a little older.

3:16>> Um but the uh but what happens is as you scale your cuz I'm I'm going to get a little bit higher-level business, but hopefully you guys will ride with me. >> Yeah, they'll get it. >> So as you scale advertising spend, you go to colder and colder audiences. Meaning there's people who have less trust and they're honestly less of a fit than the warmest like if I if I was like, "I'm going to only market a vegan powerlifting women who are moms over whatever" and I had a product that was just for them, I'm probably going to do okay. But if I want to market to the nation, there's just a less of a fit with my product. And so what happens is your cost to acquire a customer goes up because ad costs will only go one way for for of time. They will go up. And your conversion on future audiences that are colder will only go one way, which is down. So, how do you combat two things that are inevitably going against you? You have to have one thing that is non-linear nature that fights that fight, which is word of mouth. Because that when that one customer comes in and tells five people, it allows you to continue to scale because you have decreased cost of acquisition. I'm getting a little bit like business stuff here. But like it's the only way that it gets big.

4:18If what you want if you want to grow something big, then having the strong word of mouth base, which is why like you can get into transactional sales stuff, sure. If you know how to market, you know how to sell, you can become a millionaire. Like you can absolutely You probably become a decamillionaire just by like learning how to sell [ __ ] And I'm using [ __ ] in the true poop word. Like terrible Yeah, terrible stuff that doesn't doesn't matter, right? But if you want to achieve a certain level of scale, my recommendation is to continue to do the thing at a scale way below your friends until you figure out a way to get everybody who buys stuff from you to tell a friend. Like if this is a mental exercise I like putting people like our our portfolio CEOs through. I said, "Okay, the marketing gods have decided that you are no longer allowed to market anything." And they eliminate all of your customers except for one.

5:07And every single customer from this point going forward has to come from that one customer. How do you treat that customer? And what happens is you start thinking like, "Well, [ __ ] I would do this differently. I'd do this differently." It's like, "Well, then do that stuff." And then what you'll see is that the result you get from the remaining the remaining efforts of your advertising will compound rather than continue to go linearly in the wrong direction, they compound in the right direction.

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