How To Create Offers So Good Only Fools Say No
Summary generated from Jason Fladlien on mastering the art of offer creation
What Is an Offer?
Let me give you the definition I use. An offer is perceived value exchanged for time, money, and energy. There's not an ounce of fat on that definition. If you truly understand that sentence, you will make more money than you deserve.
Every offer has two parties. The seller wants to deliver the most perceived value for the least time, money, and energy on their end. The buyer wants the opposite: maximum value for minimum cost. These forces oppose each other, so your job is to work them through so both sides win.
Why Perceived Value Beats Actual Value
Notice I said perceived value, not actual value. There's a huge difference.
Sharks kill fewer than 10 people a year. Mosquitoes are the deadliest creatures on the planet. But there's no Mosquito Week on Discovery Channel. Perception drives behavior, not reality.
Actual value only matters after the purchase. Someone buys, then they decide if it was worth it. The only reason actual value matters is because it increases perceived value for the next thing you sell. Great delivery today means easier sales tomorrow.
Here's the hard truth: great stuff isn't good enough. Mediocre competitors with better packaging are eating your lunch. The Mona Lisa with duct tape for a frame doesn't hit the same. You need the best product with the best perception.
The Real Order of Importance: Energy, Time, Money
Most people think money is the most important factor. Then time. Then energy. They have it completely backwards.
Energy is the most important. Time is second. Money barely makes the list.
Let me prove it. Say your friend John is a barista. He can solve his problem for free by spending 10 hours researching online. That's $150 in time at $15 an hour. Or he can buy your product for $99. Which is the better deal? Free is more expensive than paid in so many scenarios.
Now consider this. John wants whiter teeth to look better. Jane can't sleep because her toothache is excruciating. Who spends money first? Jane. Pain before gain. Pain is an energetic force.
Here's the real insight. If you knew you couldn't fail, how easy would it be to take action? Almost effortless. So why do people procrastinate? Fear. Fear of looking stupid. Fear of being laughed at. Fear of letting loved ones down.
Even if something is free and takes no time, most people still won't do what they should. That's because every objection is really just fear. Fear of loss. Fear of losing their identity as someone who makes good decisions.
So when I think about offers, money is way down the list. I'm focused on the energetic forces that oppose the purchase.
The Money Reframe That Made Me Rich
Here's the thought that should occupy your mind as a seller: How can I sell at the highest price possible and still have the best deal?
Most people think best deal means lowest price. Wrong.
If I can cut someone's time in half and cut their risk in half, I can double the price and double the conversion. When you raise prices, one of three things happens: conversion goes down, stays the same, or goes up. Two out of three outcomes favor you. Even if conversion drops, you can increase prices by 10%, lose 40% of your customers, and still net the same profit.
The question is always: How do I sell at the highest price in the market while still offering the best deal? If you figure that out, customers will thank you.
Core and Bonuses: The Two Parts of Every Offer
Every offer has a core and bonuses. The core is what they pay for. The bonuses are what they get for free.
Most people obsess over the core and treat bonuses as an afterthought. That's backwards. Free has the most perceived value of all.
Before Twitter went public, they were pre-revenue. Nobody could value them with math because you can't apply formulas to zero. They could only be valued based on the story people told about them. That's what bonuses are. Their value is based on the story you tell and the understanding of what it can do.
Let me prove it simply. Would you rather get something for $1,000 that was normally $2,000, or get something for free that was normally $2,000? Free wins. What about $500 discounted to $200 versus $500 to free? Free wins every time.
A good deal is great. Something for nothing is greater. Your audience should always feel like they're getting something for nothing.
The Bugs in the Human Brain
Our brains have bugs like computer viruses. If you understand them, you can communicate better and make smarter decisions.
The Pain/Gain Bug
You find $10 on the ground. Happiness goes up 50 points. A few days later, you lose that $10. Happiness drops 100 points. Your net worth is exactly the same, but now you're at negative 50 happiness. We value what we could lose far more than what we could gain.
The Number vs. Percentage Bug
A pair of shoes is $210 down the street or $10 across town. You rush across town for a 95% discount. A year later, you're buying a Lamborghini for $1.2 million. The salesperson says you can get it across town for $1 million. You say forget it, I'm buying here. Both scenarios save you $200. But 95% off feels worth the trip. 0.01% off doesn't.
The Something for Nothing Bug
Your wife comes home from a sale and says look at this great deal. You ask, were you going to buy that? She says no, but it was too good to pass up. If you weren't going to buy it, it's not worth it at any price. But people don't think that way.
How to Use Scarcity
Your goal is to offer a temporary opportunity to get bonuses for free that soon they can't get at any price.
Scarcity increases value more than anything. Let me tell you about the Ripken brothers. Cal Ripken Jr. was a 19-time All-Star, holds the record for most consecutive games played, and was elected to the Hall of Fame in his first year of eligibility. His brother Billy spent most of his career injured and appeared on a magazine cover as a symbol of his team's failure.
I had a baseball card of Billy that's now worth $1,500. Same year, same set, Cal's card is worth a quarter. Why? On the bottom of Billy's bat, there's something written that rhymes with duck face.
They pulled it off shelves immediately. Scarcity made a mediocre player's card worth 6,000 times more than a Hall of Famer's.
For your most important offers, create exclusive bonuses that can't be purchased. They can only be obtained for free through your offer, and only for a limited time.
The Power of Relative Comparison
The best way for customers to know if it's a good deal is to see other people pay more for it.
Here's how I did it on my $57 million launch. I went to my audience and said I need players with money to run an experiment. It's $10,000 upfront. I don't know if it will work. A bunch of people said yes immediately. I told the rest of the audience that if it works, I'll sell it to them later.
We proved it worked, optimized the process, documented results, and sold it to everyone else for $2,500. They thought it was an incredible deal because others paid four times more.
Here's the key: both groups thought they got a great deal. To a millionaire, $10,000 is 1% of their net worth. To an average earner, $2,500 is 4% of their net worth. What's more scarce to a millionaire? Time. What's more scarce to a thousandaire? Money. Different market segments have different values.
Drama Makes Offers Irresistible
People love drama. True crime is the most popular podcast category. Taylor Swift dating a football player dominates every conversation. Drama captures attention.
Great offers have drama. When Alex Hormozi launched his book, he stacked bonus after bonus after bonus, then revealed the price: free. It short-circuited everyone's mind.
I discovered the power of drama by accident 13 years ago. I was making an offer on a webinar. I said it's $97 one-pay or three installments of $97. Someone pointed out I had set up the payment wrong. It was only two installments, not three. So I said I'll honor that mistake until the webinar ends. That day was my highest-converting webinar ever. People rushed to take advantage of my screw-up. Drama.
The best way to use drama is through relative comparison. We used to sell software at $47 for one license, $77 for 10, and $97 for 25. Then I'd say if you buy in the next 72 hours, I'll double your licenses. And if you buy before this webinar ends, I'll give you 100 licenses. That's less than a dollar per license. The drama of escalating value made it irresistible.
Risk Is Everything
If you can eliminate the risk someone has to take to do business with you, every customer you'd ever want will be yours.
When I think about an offer, I'm thinking: How can I take the risk on for them?
This is the most important thing I can leave you with. Perceived value matters. The comparison to time and money matters. But the energetic force that opposes the purchase, especially fear, matters most. And the fastest way to neutralize fear is to remove the risk.
Do that, and you can sell $9 million in 8 days. You can sell $57 million in 226 days. You can stand on my shoulders and sell more than I ever have.