Alex Hormozi discusses how the principles outlined in his book "100 Million Dollar Offers" apply to e-commerce. He starts by addressing a comment made on the My First Million podcast where someone said the book doesn't apply to e-commerce, but he disagrees. He then breaks down the key points and variables that create purchasing decisions and drive value:
Dream Outcome: People buy things because they value the outcome the product or service promises. The desired outcome may vary for different individuals.
Perceived Likelihood: Buyers make a purchase based on their belief in the likelihood of achieving the desired outcome. Factors like reviews and demonstrations can increase the perceived likelihood.
Time Delay: The speed at which the desired outcome can be achieved influences its value. The shorter the time delay, the more valuable it becomes.
Effort and Sacrifice: Buyers consider the effort and sacrifices they have to make as a result of the purchase. Minimizing effort and sacrifice can increase the value of the offering.
To enhance value further, Hormozi discusses additional variables from his book:
Scarcity: Showing limited stock or availability creates a sense of scarcity, increasing the desire to buy.
Urgency: Creating time-limited offers or limited edition drops adds urgency to the purchasing decision.
Guarantees: Offering guarantees reduces the perceived risk associated with the purchase, such as a money-back guarantee or a try-before-you-buy option.
Bonuses: Providing additional benefits or bonuses with the purchase can increase the perceived value of the offering.
Naming: Naming the product in a way that aligns with the desired outcome can attract potential buyers.
Hormozi uses examples from Amazon to illustrate how these principles apply to e-commerce, such as Amazon's focus on reviews, fast shipping, one-click purchases, scarcity indicators, lightning deals, try-before-you-buy, and bonus content. He emphasizes that while the examples may differ between services and physical products, the fundamentals of creating value and driving purchasing decisions remain the same.