From: alexhormozi
Effective audience targeting is a critical growth lever for businesses, especially those under $1 million in revenue, where most people are unaware of their existence [00:00:21]. Dedicated effort, such as the “Core Four” (Outreach, Content, or Ads), is necessary to move from obscurity to awareness [00:00:32]. Advertising, in particular, can lead to a “boom” or a “business order of magnitude change” by significantly increasing reach [00:00:54].
Perceiving the Marketplace
Many business owners mistakenly perceive their marketplace as limited, feeling sad when competitors enter and take “half the pie” [01:45:00]. In reality, the marketplace is “significantly bigger than you ever give it credit for” [02:06:08]. There are countless ways to communicate and reach different segments of the audience across various platforms [02:26:08]. Even in a competitive market, a small percentage of a large audience can make a business incredibly profitable [02:52:00].
Strategies for Audience Engagement
Shrink Your Competition by Growing Larger
Instead of trying to beat competitors, the strategy is to “shrink your competition” by growing so large that others become irrelevant by comparison [03:22:00]. This means building “the biggest absolute building” so your shadow blocks out others [05:21:00]. This requires consistent and pervasive outreach, content, and advertising across multiple channels [05:46:00]. It’s important to remember that most people are unaware of your existence, even if you feel like you’re advertising constantly [06:37:00]. You must become a master of variety in re-saying the same message in different ways, as people need to be reminded more than they need to be taught [06:55:00].
Clear, Not Clever, Communication
One of the strongest growth levers is to be clear, not clever in communication [10:19:00]. Research suggests that communicating in simpler language (e.g., at a third-grade level) allows a message to reach a higher percentage of the population by lowering the barrier to comprehension [10:48:00]. This doesn’t mean talking down to your audience; rather, it helps experts understand more easily and beginners understand for the first time [11:41:00].
To achieve this clarity:
- Language Grade Level: Run your emails, landing pages, and ad copy through a reading grade level app and aim for below fifth grade, or ideally third grade [13:30:00]. This can lead to significant increases in conversion rates by increasing comprehension [14:46:00].
- Analogies and Stories: Match analogies to the audience’s “history of learning” [14:17:00]. For a narrow audience (e.g., mechanics or realtors), use industry-specific analogies [13:33:00]. For a broader audience, use more universal human experiences like food, sleep, or driving [14:00:00]. The broader the audience, the broader the analogy and simpler the language [13:18:00].
Effective Ad Creation and Optimization Techniques
Hooks are paramount. The “hook is greater than everything” because no one will see your proof or offer without a compelling hook [19:27:00]. Obsessing over the first few seconds or the headline (as David Ogilvy suggests, “80 cents of your advertising dollar”) can drastically increase open rates, click-through rates, and overall engagement [21:50:00]. A proven hook formula is “Proof, Promise, Plan” [21:17:00].
Prioritizing Proof over Promise
While offers are important, “proof is your single highest priority as a business owner” [15:35:00]. A product with many positive reviews and moderate claims will outperform a product with bold promises but little social proof [16:02:00]. Initially, working for free to gather testimonials, reviews, and feedback is crucial for building conviction in your product and collecting positive feedback for advertising [16:39:00]. The most compelling way to advertise is to “show, don’t sell” [17:26:00]. The messenger (your past achievements) is inextricably linked to the message [18:06:00].
The Power of “More”
A significant growth lever is simply doing “more” of what is already working [23:40:00]. Instead of constantly seeking new strategies (“shiny object syndrome”), focus on scaling existing successes. This is about going from “one to end” rather than “zero to one” [24:11:00]. Doubling outreach, ad spend, or content frequency can yield a 2x, 3x, or even 4x improvement in business results, far exceeding the gains from optimization [25:18:00]. Perceived volatility in results is often a symptom of low volume [29:12:00].
Understanding Word of Mouth
Negative word of mouth is “significantly stronger and faster than positive” [30:48:00]. A bad experience can be spread to many more people than a good one [31:05:00]. This can cause customer acquisition costs to rise as fewer people respond to advertising due to negative perception [31:20:00]. To combat this, prioritize product quality and actively seek feedback, especially in the early stages, to build positive experiences before widely introducing your product [32:50:00].
Stealing from Yourself
Once something is working, “steal from yourself” by reusing proven concepts [33:39:00]. Businesses often get bored of their own effective messages before their customers do [34:43:00]. The ideal allocation of effort is:
- 70% Carbon Copy: Replicate what is already working [34:58:00].
- 20% Adjacent: Make slight variations (e.g., same hook, different background) [35:13:00].
- 10% Brand New: Experiment with completely new ideas [35:36:00]. Many entrepreneurs mistakenly flip this ratio, spending most of their time on new, untested ideas [35:52:00].
Identifying and Serving the Ideal Customer
The fundamental rule for ad targeting in business success is to target the correct audience [55:00:00]. Showing an amazing offer to the wrong people (e.g., winter coats in South Florida) will yield no results, regardless of offer quality [54:20:00].
Methods of Targeting:
- Outreach: Reach out to people who are actively suffering from the problem you solve or have a high likelihood of doing so. The narrower the problem, the smaller and more targeted the list [55:11:00].
- Paid Ads: Ad platforms are successful based on their targeting capabilities. Facebook, for instance, was so effective it felt “creepy” [55:24:00].
- Content: The algorithm serves content based on the creator’s appearance, speech, and what they say, influencing who sees it [55:44:00]. To attract a certain avatar, ensure the person in the ad looks like the avatar and that the communication style matches their way of talking [56:37:00].
“Fundamentally all marketing works as long as you get the targeting right.” [57:47:00]
Understanding Buyer Information Requirements:
Buyers exist on a continuum:
- Low Information Buyers: These are the “crazy people” who buy immediately [38:40:00]. Everyone competes for them, but this pool is significantly smaller [38:27:00]. Direct response marketing targets these buyers [38:50:00].
- High Information Buyers: This pool is “multiple orders of magnitude greater” [38:32:00]. They require more information before making a decision. To scale, businesses must educate a higher percentage of the audience [39:21:00].
Eugene Schwartz’s Five Levels of Awareness:
This framework helps tailor marketing to different audience segments:
- Unaware: People with no idea about anything [39:38:00]. Marketing should focus on broad curiosity (e.g., scientific breakthroughs) [40:06:00].
- Problem Aware: They have a pain point [39:42:00]. Marketing addresses specific problems (e.g., “Do you wake up to pee three times a night?“) [40:41:00].
- Solution Aware: They know of potential solutions and need help selecting [40:58:00].
- Product Aware: Aware of specific products at a micro-level [41:07:00].
- Most Aware: Typically existing customers [41:09:00]. Direct offers work best here [41:11:00].
Balancing Give vs. Ask (70/30 Rule):
To reach broader audiences and grow a brand, a critical balance is needed. New Balance, for example, successfully flipped their advertising budget from 30% broad awareness/70% direct sales to 70% broad awareness/30% direct sales [41:43:00]. This strategy focuses on “giving” value (storytelling, endorsements, education) rather than constantly “asking” for sales [43:00:00]. While the return may take time (e.g., 18 months for New Balance), it builds a sustainable, compounding “snowball” effect [43:31:00].
- B2C Businesses: Achieve this ratio through emotional stories, associations, endorsements from athletes and influencers, aligning product with values [45:10:00].
- B2B Businesses: Focus on sharing aspirational outcomes you or your business have achieved, outcomes your avatar has achieved with your help, and outcomes the prospect can achieve themselves through free content/education or free products/services [45:52:00]. Providing free resources brings people into your world, positioning you for future, larger engagements [47:18:00].
State the Facts and Tell the Truth
The best long-term strategy is to “state the facts and tell the truth” [48:35:00]. This forces the business to change reality by doing epic things, rather than exaggerating an underwhelming story [48:48:00].
Key Tactics:
- Show Only What You Can Show: Highlight unique aspects of your business that competitors may also do but don’t explicitly state [49:24:00]. Slice the data of your business to find what makes it unique (e.g., “It’s toasted” for cigarettes) [50:06:00].
- Say What Only You Can Say: Get narrower to be more unique. You don’t need to be the best in the world, just the best in a specific “puddle” [51:27:00]. Being perceived as the best in a specific niche (like Rockefeller buying the biggest oil refinery to claim market dominance) can have massive strategic value for market consolidation and reputation [52:23:00].
Measuring Progress
Masters of marketing have more ways to win, using a higher quality and quantity of metrics to measure progress [58:42:00]. Beginners often only look at binary outcomes or lagging indicators (e.g., sales down, churn up) [01:00:27]. Masters identify and track leading indicators and milestones at each stage of the customer journey (e.g., list quality, call pick-up rates, hook performance, offer conversion, second call show-up rates) [01:01:29]. This allows for continuous improvement and a clearer understanding of “directional correctness” towards success, even if the ultimate outcome isn’t immediately visible [01:02:25].
[[the_importance_of_targeting_the_right_audience | The importance of targeting the right audience]] is paramount for sustainable business growth and efficient marketing.