Notes on $100M Money Models by Alex Hormozi

After loving his first two books, I recently finished the third book in the trilogy -- $100M Money Models: How To Make Money by Alex Hormozi. It was really good, just like the first two (I think the first is still my favorite though).

This one focused on different types of offers throughout the lifecycle of a customer (attraction, upsell, downsell, and continuity) and how to combine them all together to make money sustainably. I loved all the examples of these plays and the psychology behind them.

This book has lots of ideas for creative negotiation and packaging to solve problems and still get sales done. Below are my main notes and takeaways.

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Start here
First month of storage free but then upsell all the stuff they need
Make more money per customer than it costs to get them 

Section 1 what’s a money model

Ask to solve problems prospect doesn’t even think they have and make it easy to accept
Make many offers
Make enough profit to cover costs in 30 days
Money models as sequence of offers
Four types of offers
Attraction offers
Upsell offers
Downsell offers
Continuity offers

Section 2 attraction offers: turn eyeballs into money

Offer something free or at a discount

Win your money back
If you do x and achieve y by z date you get your money back and get it for free or get store credit
Easy to track criteria
Get realistic results
Advertise the business as part of the offer
Offer to apply credit towards bigger purchase or over more time
Make all meetings required as part of offer criteria

Giveaways
Make everyone partial winners as a surprise
Advertise chance to win big prize in exchange for getting your content by giving their contact info
Offer everyone who didn’t win your expensive prize at a discount
Pick grand prize and assign monetary value
Ask for permission to contact them
Ask for qualifying actions 
Set date 3-7 days after promoting as prize drawing
Provide value info about prize and countdown daily on social, email, text
Contact everyone else with promotional offer like participation trophy
Make discount 10-30% of gross margin
Limit by time or number of entries or both
Urgency to enter, to claim, to use

Decoy offer
Offer something super cheap to get people to come in and then realize it’s limited utility and then offer something that costs a lot more but gives a ton more value and let them immediately apply the credit towards that 
Make the premium option the obvious choice customers will need
Free or discounted offer version gets them interested and show side by side how premium version a lot better and with more bonuses and guarantees
Ask are you here for free stuff or lasting results 
Then ask which will get you to your goal faster
Your excitement about premium offer gets them excited. Talk as if you know they will already accept your offer. 

Buy x get y free
Make y bigger than x so it’s more powerful
Raise prices to accommodate the deal
Give more free stuff than you’re asking people to buy
The free things can be different than the paid stuff
Buy one and get two free is better than giving 66% discount

Pay less now or pay more later
Combines satisfaction guarantee with paying later
Promise a clear yes no result
Make sure can deliver on it in promised timeframe
Make a conditional satisfaction guarantee
Can only cancel the autocharge on the card if they show up and try the product
Bonuses for pay now option

Free goodwill offer

Attraction offers free Conclusion 

Section 3 upsell offers 
First offer doesn’t have to make much profit but upsells fix that
Upsell fries and soda with burger
More of what they got
Better version of what they got
Additional things they need to complement

Classic upsell
Can’t have x without y
Core offer solves one problem and immediately creates another that you upsell to solve
Always schedule next meeting during each meeting
Upsell warranties and insurance and guarantees 
Set tier pricing to nudge people to pick more than they would by default
Give access to upselled thing as quickly as possible

Menu upsell 
You don’t need that, you need this
AB upsell: ask which product they prefer rather than if they want to buy
Do you want one bottle or two?
Ask if they want to use the card on file or a new card
Prescription upsell; Detailed and personalized instructions upsell more than general ones. Explain how to use it as if they already bought 
Unselling: keep products on the order or menu just to remove them saying the customer doesn’t need them to build goodwill and make the base sale easier
Tell customers what they don’t need and then what they do need and their preferences and how to get value from it

Anchor upsell
Offer premium stuff first
Then if customer gasps offer cheaper but acceptable alternative
Ask if they care what makes it premium then ask what card they prefer to pay with
Only move on to cheap option after waiting for the gasp
Keep primary feature unchanged but change secondary features in cheaper offering
Make premium 5-10X more expensive than core offer

Rollover upsell
Want to just roll it over
Any money back gets spread over a year so customers keep paying
Credit previous purchases towards next offer
Offer to old customers 
Re engage old customers with win back campaign 
Steal other people’s upset customers
Roll over cost of old agreement
I found your negative review of competitor product. I’ll credit whatever amount you have left with them to start with us. That way you don’t lose anything and start benefiting right away. Fair enough?
Win back campaigns past purchasers
Upsell offer at least 4x amount of rollover credit
Sell gift cards at 90% off limit 2 per customer and must be written to someone else who they refer you to then apply gift card to offer which is 5x bigger
Add urgency by making rollover upsell one time must use now

Section 4 Downsell offers when people say no

Change how much they pay or what they get 
How much they pay now versus over time
Change quality or quantity or options
Give and get
Personalize

Payment plan downsells
Scheduled payments
Reward for paying in full rather than punish for paying over time
Offer third party financing like credit card
Offer half now and half later
Offer even and uneven split payments
Offer free trial
Schedule payments around pay checks
If card declined on pay day run a few more times that day

Trial with penalty
If you do x y and z I’ll let you start for free
If they do the training, they get free onboarding, and otherwise they have to pay
To avoid the penalty, they must do specific activities and show proof they did them 
Make check-ins required which are your upsell opportunities
Discounts for card on file

Feature Downsells
Why don’t we try this instead
Cutting a feature like money back guarantee to get discount
Less quality or quantity for discount
People will see the value of the thing you removed once they see the price of the package without it
Gets customers to upsell themselves
Lower service quality
Lower time availability 
Less location availability 
Lower speed of response
Service ratio
Live versus recorded
Do it yourself, do it with you, do it for you
Expirations
Personalization vs generic
Name cheapest combo the minimum and the main one something aspirational
Barter discount in exchange for advertising and referrals

Section 5 continuity offers

How to keep them buying for good
Ongoing value and payments

Continuity Bonus offers
Give away bonuses to sign up today for long term
Focus on the bonus not the membership
Make bonuses things you already have and do
Give customers titles for tier they’re at
People pay 33% more to avoid continuity

Continuity discount offers
Give away products for free if they agree to buy more later
Up front discount and push out the term
Apply entire discount at end
Spread discount over time
Discount after first one or two payments
Bill weekly instead of monthly
“Plus a 3% processing fee”
Give second form of payment to deal with declines
Get ACH if you can
Give lifetime discount after most common churn point
Cancellations
Make cancel fee equal to discount they got
Give them clear way to complain to you and contact you
Ask to do exit interview when canceling
I’ll waive your cancelation fee if you come in and tell me what we could improve and then save or upsell them

Waived fee offer
Sign up monthly with setup fee of 3-5X monthly fee or can waive fee if sign up for year. If cancel inside the term then pay the fee. 
Justify the fee by our costs to find customers and get them started
Can donate their fee to a cause they hate

Section 6 make your money model

Start with attraction offer
Pick and upsell offer
Pick a downsell offer for people who said no
Pick a continuity offer

More ways to sell the same thing not just more things to sell
Affiliate commissions

Make more profit per customer than it takes to acquire them within 30 days