Hormozi talkin about auctions??
Here's a very interesting email I got (The Mozi Minute). It doesn't specifically talk about auctions, but man does it encapsule the whole mindset behind them. The whole idea of getting what they will pay upfront, and then offering them the lesser option on the back (in this case it was subsriptions/memberships) is spot on with the domino effect AFTER the auction is over. As well as the sunk cost bias making the subscription/membership cost pale in comparison to the reward. WoW... crazy how this aligns with what we are doing. Here's the email: "Words I like: Motivation has an expiration date. Offer the most when motivation is highest. Mozi Minute: Big Head, Long Tail Many businesses offer trials and low-ticket offers. This is fine if your goal is automated conversion. We do it at Skool everyday - there's nothing wrong with it. But if you have a sales person - which 80% of you do... Do not start with a trial Your prospects are most excited about solving their problem the moment they decide to fix it. That's when you should charge the most. Not after a trial. Not after they cool off. Right then. The Big Head, Long Tail Model: Charge a lot upfront when motivation peaks. Then add lower-priced continuity on the backend. Big purchase happens when pain is highest. Recurring revenue comes after they're committed. Why This Crushes Trials: (Again, if you have a salesperson). 1. Offsets CAC ImmediatelyYou get paid upfront.While competitors spend $300 to acquire someone paying $49/month (hoping they stick around), you collect $500-$1000 on day one. This means you can outspend them.They’ll have to turn off their ad campaigns while you keep eating up market share. 2. Captures Peak MotivationSomeone drowning doesn't want swimming lessons.They want out of the water.When prospects are desperate, sell them the complete solution. 3. Gets Them More InvestedBig upfront payment = high commitment = better results.They show up. They do the work. They get results. 4. It’s in their best interest to get them to invest more in themselves.Your team will also enjoy working with more committed people. 5. Screens For Better CustomersPeople willing to pay $500-$1000 upfront are serious buyers.They have money. They have urgency.With trials, you’ll get more tire kickers which can wear down staff. 6. Higher LTV, Lower ChurnSunk cost bias works in your favor.After paying $1000 upfront, they're not canceling the $99/month membership.The continuity fee feels like nothing by comparison.