Podcast Summary: The Game with Alex Hormozi
Episode 23: Continuity Offer. Discount + One Time Fee. | $100M Lost Chapters Audiobook
Date: November 14, 2025
Host: Alex Hormozi
Main Theme / Purpose
In this episode, Alex Hormozi shares a pivotal lesson from his entrepreneurial journey about structuring offers by combining a discounted initial period with a one-time fee. He details how this approach impacts customer acquisition, increases customer commitment, and helps offset costs—delivering powerful insights for entrepreneurs looking to grow recurring service businesses profitably and sustainably.
Key Discussion Points & Insights
1. Origin of the Offer Structure ([00:00–03:30])
- A Random Encounter:
Alex narrates an encounter in 2015 with “Owen,” a manager from a failed gym, who proposed bringing a team of trainers to Alex’s gym.- Owen’s pitch: Owen wanted to use Alex’s facility, asking only for a discounted first month for new clients and an enrollment fee to be given as commission to his sales team.
- Alex’s initial skepticism:
“He just didn’t seem trustworthy… I didn’t want a foreign group of trainers and salespeople… representing my company.” (Alex Hormozi, 01:35)
- Takeaway:
Alex rejected the partnership but was struck by the psychological power and financial logic in the “discount + fee” offer structure.
2. Mechanics of the Offer: Discount + One Time Fee ([03:30–07:00])
-
Structure Explained:
- Customers get a discounted rate (“hook”) on the first term of the service.
- Simultaneously, they pay a one-time fee up front — often labeled as “setup,” “enrollment,” etc.
- The upfront fee can be “made up,” waived, or charged at the salesperson’s discretion for flexibility.
- This structure is flexible and can be adapted for any business type.
-
Why It Works:
- A discount attracts customers and lowers acquisition friction.
- The one-time fee covers acquisition costs and embeds commitment.
“It both attracted customers with a discount and liquidated commissions and acquisition costs through a fee.” (Alex Hormozi, 04:20)
3. Practical Examples ([07:00–09:30])
-
Recurring Service Offers:
- Example: First month “$100” (discounted), plus a $1,900 setup fee. Total first payment: $2,000, then standard recurring charges.
-
Defined-End Program Offers:
-
Example: 12-week program, advertised as “$1,000/month for three months,” but “88% off” first month ($120), then a $1,000 setup fee.
-
Total first payment: $1,120, followed by normal recurring payments.
-
Sales Flexibility:
“You just separate the recurring from the upfront and then it allows you to be more flexible with your advertising details.” (Alex Hormozi, 08:44)
-
-
Compliance Reminder:
“Always obey the advertising rules within your area and of your time period.” (Alex Hormozi, 09:05)
4. Impact on Customer Behavior & Business Health ([09:30–13:00])
-
Lowers Churn, Raises Commitment:
- Higher one-time fees create a “barrier to exit”; clients are less likely to cancel.
- Example from a tanning business: $100 sign-up fee for a $10/month plan led to much lower churn than a $19 down/$19 a month plan.
“When people pay, they pay attention.” (Alex Hormozi, 10:50)
-
Especially Valuable for Results-Driven Services:
- If client participation is key (i.e., showing up, providing info, changing habits), upfront fees build “skin in the game.”
-
Premium vs. Recurring Balance:
- Case: Online weight loss coach charges $5,000 upfront, $267/month thereafter.
- Result: Clients log >2 years on average, compared to industry’s 4-month average.
“This large upfront sum gets the client invested in the process and makes leaving almost insane.” (Alex Hormozi, 12:30)
5. Implementing the Fee Structure ([13:00–14:30])
-
Be Upfront and Honest:
- Always explain the rationale for the fee—even if it’s “made up,” tie it to legitimate setup activities.
- It creates clarity and justifies the value for customers.
-
Four Steps to Creating a One-Time Fee: ([13:50])
- Pick your fee name
- Pick your fee price
- Pick your reason why
- Start charging it, discounting it, or waiving it
Notable Quotes & Memorable Moments
-
On Resistance to “Free”:
“Depending on the strength of the salesperson, this offer will tend to surprise fewer people since they already came in expecting to pay something.” (Alex Hormozi, 05:34)
-
On Churn:
“The higher the one time startup fee, the lower the churn, the higher the barrier to entry — so too becomes the higher the barrier to exit.” (Alex Hormozi, 09:40)
-
On Value Perception:
“When people pay, they pay attention. This is especially important for services where you require something to be done by the customer...” (Alex Hormozi, 10:50)
-
On Fee Flexibility:
“Waiving made up fees can also help you generate more goodwill than just signing someone up directly.” (Alex Hormozi, 14:35)
Timestamps for Important Segments
- 00:00–03:30: Story of the first encounter with the “discount + fee” model
- 03:30–07:00: Deep dive: How discount + one time fee offers are structured; why they work
- 07:00–09:30: Specific business examples, applications, and compliance notes
- 09:30–13:00: Effects on customer retention, psychology, and business metrics
- 13:00–14:30: Step-by-step implementation and communication of fees
- 14:30–End: Summary points and practical flexibility
Recap & Takeaways
- The “discounted trial + one-time fee” offer is a powerful method to attract customers, recoup customer acquisition costs, and drive commitment.
- The fee doesn’t have to be “real”—but always give a reason for it and communicate its value.
- This flexible model works for both recurring and finite duration offers, can be manipulated by salespeople as a closing tool, and meaningfully increases customer lifetime value.
- Even if you don’t apply the model directly, thinking through fees and discounts can uncover new profit streams or retention levers for practically any business.
If you’re looking to strengthen your recurring revenue, boost customer commitment, and open up new monetization avenues, Alex’s breakdown of the “Discount + One Time Fee” model is a playbook worth revisiting.