Podcast Summary: Building a $3,000,000 Business for a Stranger in 57 Mins | Cash Cows | Ep 867

Release Date: April 9, 2025

Introduction

In Episode 867 of The Game with Alex Hormozi, entrepreneur and business strategist Alex Hormozi sits down with Ben, the co-founder of Unfiltered Hospitality. Ben shares insights into his journey of building a successful cocktail consulting business, the challenges he's facing in scaling, and the strategic recommendations Alex provides to transform his operations and revenue streams.

Business Overview

Ben introduces Unfiltered Hospitality, a company specializing in bar and beverage program development. In 2024, the business achieved $1.1 million in revenue with a net profit of $123,000, reflecting an 11.3% net margin. Over four and a half years, they have assisted over 200 bars and restaurants in launching or elevating their concepts.

[00:44] Ben: "In 2024, we did 1.1 million in revenue, 123,000 in net profit, so about 11.3% in net margins."

Identifying the Problem

Despite moderate success, Ben faces significant challenges in achieving consistent revenue growth. His business experiences unpredictable revenue streams, resulting in months with high profits followed by periods with little to no sales. The primary issue identified is the high Customer Acquisition Cost (CAC) of $12,000, which far exceeds the expected Lifetime Value (LTV) of customers. Additionally, less than 20% of clients opt for upsells, indicating a potential mismatch in offers and lead qualifications.

[03:27] Ben: "Less than 20%."

[04:35] Ben: "Lack of consistency really feels awful. I don't know what next month is going to be."

Offer Optimization

Alex emphasizes the critical need to optimize Ben's offer to align better with his target market. He suggests lowering the entry price point to make the initial sale easier and building trust before upselling to higher-ticket services. Alex introduces the concept of a "Grand Slam Offer," aiming for a structured progression from low to high-value services to maximize customer retention and profitability.

[04:35] Alex Hormozi: "Number two, we have a super expensive cost to repair our customer. There's definitely an offer mismatch between what is being advertised and what they're selling."

Sales Funnel Redesign

A significant portion of the discussion revolves around revamping Ben's sales funnel. Alex recommends implementing a lead magnet to generate high-quality leads and reduce friction in the conversion process. By introducing a lower-priced initial offer (e.g., $5,800) that delivers immediate value, Ben can build trust and demonstrate ROI, thereby facilitating easier upsells to the $30,000 core offer.

[05:58] Alex Hormozi: "We're going to run that as an A/B test. Just run some ads... you collect this information twice in this funnel. I don't know."

Marketing Strategies

To attract the right clientele, Alex advises refining Ben's advertising strategy by clearly defining and targeting the ideal customer avatar—restaurant owners generating over $4 million in annual revenue. He underscores the importance of pain-based hooks in ad copy to resonate with potential clients' specific challenges, thereby increasing the likelihood of conversion.

[09:08] Alex Hormozi: "So I would say $30,000 is super expensive for just a straight call funnel. Very tough."

Growth Recommendations

Alex outlines a comprehensive plan for Ben to scale his business:

1. Funnel Redesign: Reorganize the sales funnel to include effective lead magnets and reduce friction.
2. Offer Structuring: Introduce a $5,800 pricing booster as an entry-level offer to facilitate easier initial sales.
3. Sales Process Enhancement: Transition from multiple sales calls to a one-call close strategy, predominantly handled by the founder to maintain high conversion rates.
4. Marketing Budget Adjustment: Increase marketing spend to align with the revamped funnel and higher lead volume expectations.

[28:31] Ben: "Got it. So I think the changes that Alex recommended for the funnel make a ton of sense."

[34:24] Alex Hormozi: "So what I'm referencing here is that I budget two times the cash I collect from the customer in 30 days when I'm testing new ads."

Addressing Customer Churn

Ben admits a significant issue with customer retention, noting that clients typically discontinue services after two quarters. Alex identifies this as a sign that the value delivery is insufficient and recommends enhancing the ongoing value propositions to ensure clients perceive continuous benefits.

[36:00] Alex Hormozi: "If you can't fix churn, there's no point in doing any of this."

Implementation and Action Plan

Alex provides a step-by-step implementation guide:

1. Simultaneous Funnel Redesign and Lead Magnet Deployment: Begin by overhauling the sales funnel while introducing a compelling lead magnet tailored to the ideal avatar.
2. Ad Callouts and Campaign Testing: Launch targeted ad campaigns with clear avatars and messaging, and conduct A/B testing to identify the most effective strategies.
3. Sales Process Overhaul: Transition to a founder-led, one-call close approach to maximize conversion rates and reduce CAC.
4. Continuous Monitoring and Optimization: Regularly assess funnel performance, ad effectiveness, and customer feedback to refine strategies and ensure sustained growth.

[56:14] Ben: "Love it. It's a lot of what I want to do."

Conclusion

The episode concludes with Ben expressing his confidence and appreciation for Alex's strategic guidance. He acknowledges the clarity and feasibility of implementing the recommended changes, which are poised to significantly enhance his business's scalability and profitability.

[57:05] Ben: "You figured it out, right? Yeah, got it."

Key Takeaways

• Optimize Offers: Align pricing and value propositions with the target market to reduce CAC and enhance LTV.
• Revamp Sales Funnels: Incorporate effective lead magnets and streamline the conversion process to attract and retain high-quality leads.
• Founder-Led Sales: Utilize the founder's expertise in initial sales calls to maintain high conversion rates and gather valuable customer insights.
• Continuous Improvement: Regularly assess and refine marketing and sales strategies to adapt to market dynamics and ensure sustained growth.

Notable Quotes

• Ben on Revenue Goals

  "[01:06] Ben: My goal, 3 million by the end of 2020."

• Alex on Offer Optimization

  "[04:35] Alex Hormozi: Number two, we have a super expensive cost to repair our customer."

• Ben on Overcoming Challenges

  "[36:00] Ben: Like we are not showing them the value. We're not demonstrating it in a meaningful way."

• Alex on Sales Strategy

  "[48:23] Alex Hormozi: So you're basically going to be able to stack potentially probably a double of your current revenue from this source."

Final Thoughts

This episode serves as a valuable blueprint for entrepreneurs facing similar challenges in scaling their businesses. Alex Hormozi's actionable insights and strategic recommendations offer a clear pathway to overcoming obstacles related to offer alignment, sales funnel efficiency, and customer retention, ultimately paving the way for significant revenue growth.