When others bring you customers
Lesson 10 of 31 in the course “Million Dollar Sales Course”. Free, with animations and a quiz.
Case: the ads went off, sales barely dipped
You know 4 ways to find people yourself. Now let others bring them. Hormozi tells this story: once Facebook shut off all their ads for two weeks, and they didn’t even notice. Sales dropped only from 21 to 15 a week. Later at a conference he asked who came because another customer recommended them. Almost everyone raised a hand. Why it’s so powerful: ads grow in a straight line, spend twice as much, get twice as much. Word of mouth doubles itself: one customer brings two, two bring four.
A leaky bucket
So why don’t most businesses grow on word of mouth? Hormozi explains with a simple formula: new customers from referrals minus customers who leave. Picture a bucket: you pour water in the top, and there’s a hole in the bottom. If more people come through referrals than leave, the business grows by itself. If it’s the same, you stand still without ads. If fewer, you have to keep topping up with ads just to not shrink. So first patch the hole: make sure people don’t leave disappointed.
Why nobody talks about you
Hormozi says something uncomfortable: if customers don’t bring anyone, your product is worse than you think. It’s not bad, there’s just nothing to tell about it. His formula: price is what people pay, value is what they get. The gap between them is the urge to tell friends. You can widen the gap two ways: lower the price or give more. But price can only drop to zero. Hormozi quotes marketer Rory Sutherland: “Any fool can sell something for less.” So look for ways to give more.
How to give more: quick wins
Three of Hormozi’s moves. First: promise a bit less than you deliver. When expectations are lower, it’s easy to beat them, and the person is pleasantly surprised. Second: customers decide whether they like you in the first 48 hours after buying. Give them several small wins in that window. For Misha: instant access and a plan, a first preset a couple of hours later, a first 20-minute edit the next day. Third: deliver early, never late. Hormozi pads his timelines by 50% so that “on time” for him is “early” for the customer.
Case: Dropbox and a bonus for both
A good product isn’t enough, you also have to ask. Hormozi noticed that asking only works when it benefits both sides and doesn’t sound like a favour. The classic example is Dropbox. Invite a friend and you both get extra cloud storage. Founder Drew Houston showed in a 2010 presentation that the program permanently raised sign-ups by 60%, and in 15 months the service grew from 100 thousand to 4 million users. By his account, they borrowed the idea from PayPal, which paid people for invites.
How to ask: 3 ways
Out of Hormozi’s seven ways, three are easiest for a beginner. A bonus for both: the friend gets a discount, you get a gift. For Misha, the friend gets −20% on the course and the person who invited gets a preset pack. Ask right at purchase: “Who will you learn with?” Hormozi tells of a salesperson whose sales were half referrals just because he asked that question. A time-limited event: “bring a friend” for two weeks, with a clear end date. The bonus must be real and the date honest.
Partners: who already has your people
A partner is another business that already has your people. They tell their audience about you and get a percentage of sales. Hormozi recalls launching his supplements through gym owners. In the first three weeks there was only $150,000 in sales against $3 million of stock in the warehouse, and he thought it was over. In week four sales hit $400,000+ a week and, by his account, with no ads and no sales team. Partners for Misha: a creator who sells LUTs, a photography school, a camera shop. One question: who already has my people?
Do it yourself: your referral program
Fill in the card. What the friend gets: a real benefit, not a “thanks”. What you get: a gift you actually want. When to ask: right after purchase and after the first small win, while emotions are high. Three partners: businesses that already have your people. What to track: how many new customers came via referral and how many left. If more leave than come, first improve the product and the first 48 hours, then ask. A partner who promotes you for money must label it as an ad, more on that in the creators level.
Check yourself
- What should he do first?
Correct answer: Find out why people leave and patch that “hole”. If as many leave as come in, the business stalls. While people quit the course disappointed, no ads or bonuses will create growth. - What’s better for referrals?
Correct answer: Promise “a first video in 7 days” and help them do it in 3. When expectations are below the result, people are pleasantly surprised and want to talk. Hormozi advises promising a bit less and delivering more, sooner. - Which ask will work better?
Correct answer: “Invite a friend: they get −20%, you get a transitions pack. Until Sunday”. It’s a good deal for both sides, with a clear action and an honest deadline. That’s how programs like Dropbox’s work. - Which partner fits best?
Correct answer: A creator who teaches phone filming. He already has Misha’s people: those who film and want to edit better. For his audience an editing course is the logical next step.