From: alexhormozi
One of the fastest ways to generate substantial revenue in a service business is by strategically combining different types of offerings [00:00:00]. This strategy applies to any business that provides or sells products to customers [00:00:07]. Acquisition.com, for example, generates about $85 million in annual revenue by implementing such approaches [00:00:14].
Categories of Business Offerings
Businesses can categorize their offerings into three main types:
- Products: These are tangible or digital goods that customers receive [00:01:43].
- Physical Products: Items received in the mail, such as supplements [00:02:16].
- Digital Products: Goods consumed digitally, like a Netflix subscription (media) [00:02:21].
- Services: These involve people performing actions or tasks for others [00:01:52].
- Physical Services: Experiences like a massage [00:02:32].
- Digital Services: Services delivered online, such as those provided by a marketing agency [00:02:36].
- Access: This grants individuals entry to a person, an experience, or an exclusive sphere [00:01:59].
- Physical Access: Like concert tickets, providing entry to an event or a person [00:02:48].
- Digital Access: Entry to virtual events or direct communication channels (e.g., Slack access to an expert) [00:02:56].
Enhancing Value Through Combination
To make an offering more valuable and avoid being a commodity, businesses should consider combining these categories [00:03:13]. The goal is to differentiate your business to such an extent that you become a standalone entity with “monopoly prices” [00:03:22].
For example:
- A physical product business could add digital products to enhance its value and differentiation [00:03:51].
- A physical service business could integrate digital components, physical products, or digital products into its offerings [00:03:59].
The High Value of “Access”
Among the three categories, access is particularly valuable, especially digital access, which boasts almost 100% margins [00:04:12]. Digital products also have nearly 100% margins [00:04:28]. In contrast, services are harder to scale due to the complexities of managing people, culture, training, and onboarding [00:04:36]. To increase business value, integrating multiple types of offerings is key [00:04:51].
The “Access” Hack for Fast Cash Flow
One of the easiest and fastest ways to generate cash flow, especially when facing financial constraints, is to leverage access [00:05:11]. This strategy involves selling a more individualized, higher-touch version of your solution [00:05:22].
Key Elements of an “Access” Offer:
- Limited Capacity: Offer a small number of slots (e.g., five people) for a one-on-one or small group experience [00:05:30].
- Defined Outcome: Focus on a specific, highly desired outcome that the clients will achieve [00:05:40].
- Guaranteed Success: Provide a guarantee, such as “I’ll keep working with you for free until you achieve it” [00:05:44]. This reassures customers that their investment ensures the desired result [00:05:52].
- Upfront Payment: Require clients to prepay for the entire period to generate immediate cash flow [00:06:09].
This type of offer doesn’t require a discount; its value comes from the exclusive access in addition to the service and expertise [00:06:15]. It’s an effective way to generate five, ten, twenty, or even fifty thousand dollars depending on your business size [00:06:27].
Maintaining Demand and Goodwill
When implementing this strategy, it’s crucial to maintain “pent-up demand” [00:06:40]. Instead of selling all available slots (e.g., 100), sell only a fraction (e.g., 20) [00:06:54]. This leaves the vast majority (80%) of the demand still present, ensuring that future offers will also sell out [00:06:56].
Always strive to keep some goodwill in reserve [00:07:50]. By continually growing your base of potential customers and only “skimming a tiny amount off the top,” you ensure sustained sales without exhausting your audience [00:07:31]. This approach is more sustainable than constantly trying to liquidate all demand and then rebuilding it from scratch [00:07:20].
Utilizing access offers allows for implied urgency and scarcity with a very high-ticket premium [00:07:57]. It often attracts the best customers who are less demanding and lead to excellent testimonials and outcomes [00:08:03].