Podcast Summary: The Game with Alex Hormozi

Episode 6: Discount Promotions | $100M Lost Chapters Audiobook
Date: November 14, 2025
Host: Alex Hormozi

Episode Overview

In this episode, Alex Hormozi explores the art and strategy of discount promotions as a customer acquisition tool—as featured in an unreleased chapter from his "$100M Offers" book series. He breaks down how discounts work psychologically, the mechanics of structuring effective promos, the essential pros and cons of discounting versus free offers, and shares tested frameworks for maximizing their impact (without damaging your margins or brand). The episode is framed both as an educational monologue and an interactive dialogue, mimicking common questions entrepreneurs ask about using discounts.

Key Discussion Points & Insights

1. The Psychology of Discounting

(00:00-02:15)

• Discounts transform “wants” into “haves” by heightening urgency through perceived value gaps.
• Alex distinguishes between marginal (5-25%) discounts—which he finds ineffective—and major (50%+) discounts, which can meaningfully change buying behavior.
• Quote:

  “Honestly, I’m not a big believer in marginal discounts, say 5 to 25% off. It’s just not enough to drive real behavior, in my opinion, and basically just cuts into margin.” (01:00)

2. Four Ways to Display Discounts

(02:15-05:27)
Alex introduces an actionable framework showing there isn’t just one way to present a discount—how you frame it changes its power. Using a “lemonade bundle” example, he outlines the following formats:

• Percentage Off:
  "New client special: 87% off first visit"
• Absolute Amount Off:
  "$181 off first visit (normally $210)"
• Relative Equivalent Off:
  "Save a steak dinner! Less than going out to lunch."
• Discounted Price (simple):
  "$29 new client special"

Key Point: Different presentations work on different audiences, products, or services—so test all four.

• Pro Tip: Use absolute prices for products/services people already understand; otherwise, an explicit "before and after" works better.

  “If you discount something that people don’t understand, the offer won’t be effective.” (05:20)

3. Strategic Advantages of Discount Offers

(05:27-13:40)
Alex walks through a rapid-fire Q&A, addressing why and when to use discounts, particularly vs. "free" offers:

Main Pros:

• Legal Flexibility: Discounts sidestep "free offer" marketing restrictions in some regulated industries. (06:10)
• Upfront Cashflow: Even a small payment helps offset costs and filters for more motivated prospects.
• Mental “Buy-In”: Customers expect to pay, easing the sales process for teams with psychological hangups about “free” leads.

  “This is more of a mental benefit than anything, in my opinion. [...] Giving them something where they feel like the prospects are coming in ready to spend money makes them more invested in the selling process.” (09:05)

• Two-Step Sales: Discounted offers help prequalify and pave the way for upsells, including the valuable card-on-file advantage.

  “It paves the way for making future sales more seamless. And I can charge penalties for other things [...] which is important when you have a service where the time or cost of the individual is real, like a doctor’s time." (11:10)

Case Study Example:

• A $19 “heavy metals test consultation” leads to easier upsell for a $2,100 detox program since you already have the card on file and trust established.

4. Operational Benefits & The ‘5-Minute Appointment’ Method

(13:40-16:50)
Alex recommends minimizing high-value resource risk (like a dentist’s time) by structuring the discounted intro offer around admin or assistant time. The follow-up upsell, only for qualified leads, saves staff effort and increases conversion rates.

• Quote:

  “Give away lower cost time if you can... My preference is to not give away the doctor’s time and instead operationally fix the first visit so it’s something a front desk admin or assistant can handle.” (15:25)

5. The Big Cons of Discounting

(16:50-20:10)

Main Cons:

• Giving Away the Farm:
  If you constantly discount your core offer, customers will wait for deals—eroding perceived value.

  “If we always discount our core offer, people will become trained to buy only at discounted times. No bueno.” (17:05)

• Attracting Bargain Hoppers:
  Structuring discounts poorly can bring in “deal chasers” who never intend to buy your main offer (the classic Groupon trap). Correct structure means using discounts to qualify leads—not close final sales.

6. Best Use Cases for Discount Front-Ends

(20:10-23:10)

• Works best with well-understood services (e.g., gyms, dentists, salons) where the “typical price” is known.

• Discount offers directly decrease “no show” rates—since customers have “skin in the game.”

• For complex/high-ticket services: use discounts on a smaller, well-defined front-end piece, then upsell.

• Quote:

  “If a customer doesn’t know what they’re getting a discount on, it doesn’t really make much sense because they have nothing to compare it to.” (21:50)

7. Final Takeaway and Frameworks

(23:10-End)

• If customer response is sluggish, supercharge your front end (first customer touch) with a massively compelling, low-resistance offer—whether free or at a steep discount.

• Always know your margin math, and design acquisition to first generate flow (“get leads”), then monetize (“upsell”), then worry about adding friction for profitability.

• Leverage your industry knowledge to structure irresistible “foot in the door” offers and predict your customers’ next needs.

• Quote:

  “Fundamentally, to make this process work, you must know your business and your product better than your customers do. [...] All businesses capitalize on an information advantage.” (24:35)

Notable Quotes & Memorable Moments

• “Discounts can massively increase the take rate on all offers. These are wildly powerful. I cannot overstate them.” — Alex, (21:23)
• “You’d be amazed at how many more people will buy when they don’t have to take their card out. It’s why Amazon’s one click purchasing, Disney’s Money wristband and so many other institutions attempt to eliminate this friction.” — Alex, (13:10)
• “Easier to upsell than to sell. Some people call this the foot in the door principle.” — Alex, (14:53)

Key Timestamps

• 00:00–02:15 — The psychology behind discounts and why big discounts matter
• 02:15–05:27 — The four ways to display discounts
• 05:27–13:40 — Q&A: Pros of discounts vs. free offers, the two-step sale, and card-on-file logic
• 13:40–16:50 — Operationalizing discounts and the “5-minute appointment” hack
• 16:50–20:10 — Cons: “Giving away the farm” and dealing with bargain hoppers
• 20:10–23:10 — Where discounting works best, especially for well-understood services
• 23:10–End — Final frameworks and mindset for designing winning customer acquisition strategies

Summary Takeaway

Alex makes a powerful case for using major, properly structured discount offers—not as a crutch but as a precision tool to acquire customers, establish value, and set up seamless, higher-ticket upsells. The right front-end offer, particularly in understood markets, can transform your funnel by skyrocketing conversions and almost eliminating no-shows. The secret: be strategic, always benchmark and test, and remember you’re engineering a multi-step relationship—not just one sale.