The Game w/ Alex Hormozi – Ep 943

Part 6: Downsell Offers | $100M Money Models Audiobook
Date: August 19, 2025
Host: Alex Hormozi

Overview of the Episode

In this episode, Alex Hormozi dives deep into the world of downsell offers—strategies you can use when a customer says "no" to your primary offer. The focus is on finding the highest-value solution for a customer's budget without devaluing your brand or product. Alex details his personal rules, live examples, and actionable frameworks for payment plan downsells, trials with penalties, and feature-based downsells, all with the goal of maximizing profit and customer fit—turning more “no’s” into “yeses” without undermining trust.

Key Discussion Points & Insights

1. What is Downselling? (00:00–03:30)

• Definition: Any offer made after someone says no is a downsell.
• Purpose: Tweak the original offer—change what’s being sold, the price, the payment structure, or features—to match the customer’s budget or needs.

Alex’s Two Main Downsell Approaches:

• Change how much/how they pay (e.g., payment plan).
• Change what they get (e.g., reduce quantity, quality, or remove features).

“Downselling tweaks the original offer to find the highest value solution for the customer's budget.”
— Alex Hormozi (00:30)

2. How NOT to Downsell (03:31–06:40)

• Key Warning: Never offer the same thing for less; it kills trust.
• Example: A car salesperson keeps dropping the price on insurance; customer loses trust in all pricing.
• Big Lesson: Discounting the same offer feels manipulative and jeopardizes future business.

"At first I said no because it was too much money. By the end, I said no because I didn’t trust the guy."
— Alex Hormozi’s friend’s story (04:30)

3. Rules of Downselling (06:41–10:20)

• No means No—for That Offer: "No" doesn’t mean full rejection—just for the current offer.
• Treat Downselling as Collaborative: It’s a process of trades, not pressure.
• Offer Alternatives, Not Offense: It’s not offensive to present options that serve the customer better; it’s a service.

"Just because they rejected this offer doesn't mean they've rejected you… See it for what it is: an opportunity."
— Alex Hormozi (07:15)

• Never Just Drop the Price: That’s discounting, not downselling.
• Have Downsells Ready: Limit them to variations of what you already sell.

4. Three Core Downsell Processes (10:21–11:33)

1. Payment Plan Downsell: Change how they pay.
2. Trial With Penalty Downsell: “Try it for free” contingent on specific actions.
3. Feature Downsell: Change what they get.

5. Payment Plan Downsell: Step-by-Step (11:34–38:50)

Breakdown:

• Start by Rewarding Upfront Payments: Present a higher "interest-included" price, give a discount for full payment.
• Third Party Financing, Credit Card, Layaway: Let customers use external means for flexibility.
• Half Now, Half Later: Schedule payments based on their pay cycles.
• Check Genuine Interest: Use a 1–10 scale—only proceed if they're at least an 8.
• Three Payments, Evenly Spread: Offer to break payments into three or align them with service duration.
• Free Trial as Last Resort: If all else fails, offer a trial with penalty structure.

"Payment plan downsells work no matter how many zeros the price tag has. I’ve made tens of millions of dollars with them, and I still use them to this day."
— Alex Hormozi (19:45)

Implementation Tactics:

• Seesaw Downselling: Offer binary choices (giant vs tiny payments); incentivize bigger down payments.
• Payment Plan Upsells: Offer paid-in-full discounts during plan period.
• Align Payment Schedules with Income: Reduce declined payments by billing on clients' paydays.

Data Insight:

• Moving from monthly to quarterly or annual billing dramatically reduces churn rates (Subscription churn stats, 34:50).

6. Trial With Penalty Downsell (38:51–56:30)

Definition:

• Customers get the trial for free only if they meet specific requirements. If not, they pay a fee.

Key Steps:

1. Offer trial only after initial offers fail.
2. Always get a credit card on file before explaining fees.
3. Sell the idea of staying and paying after the trial.
4. Explain how penalties keep them accountable and help them get results.
5. Make check-ins mandatory—these are upsell opportunities.

“Trials with penalties get more paying customers than normal free trials because they use your product more and actually get value from it.”
— Alex Hormozi (54:20)

Examples:

• B2B: Free onboarding only if all training is completed; otherwise, pay an onboarding fee.
• B2C: Fitness program trial contingent on attending sessions, posting updates, etc.

Implementation Notes:

• Consider breaking up penalties by infraction, not a lump sum.
• If someone refuses to leave a card, do not proceed—this is not your ideal customer.

7. Feature Downsell (56:31–77:00)

Core Idea:

• Lower price by removing features, not by discounting.
• Remove quantities, qualities, or entire features—each should have a clear value attached.
• Removing high-value features (like a satisfaction guarantee) reframes the original offer as a better deal.

"We get a price objection. We just say: if you don’t want the option to get your money back, you can pay less, or you can keep your money back guarantee. Which would you prefer?"
— Alex Hormozi (60:05)

Types of Feature Downsells:

• Quantity: Fewer sessions/products/months.
• Quality: Downgraded materials/services (e.g., vinyl vs leather seats).
• Support/Service: Fewer channels, slower response times, group vs one-on-one.
• Guarantees: Remove money-back or shorten coverage.
• DIY Options: Offer self-serve vs done-for-you.

Strategic Upsell Effect:

• Showing what they lose by downsizing often makes the main offer more attractive.

Naming Packages:

• Give aspirational names to top-tier packages, e.g., “Whale Package”, name the lowest level “the minimum.”
• This framing helps nudge customers back up the value ladder.

Current Customers:

• Proactively reduce price/features if they’re not using certain parts—improves retention and lifetime value.

8. Additional Tactical Tips (77:01–End)

• Bartering: Offer a discount in exchange for reviews, referrals, or testimonials.
• Alternating Downsells: Switch between payment plan and feature removals for relentless value matching.
• Always Confirm Desire: After two steps, always check if they still actually want the product.

“People who demand to pay less for the same thing are business terrorists. I don’t negotiate with terrorists.”
— Alex Hormozi (74:12)

• Free Orientations: Use as a lead magnet after all else fails—then upsell DIY products.

Notable Quotes & Memorable Moments

• Trust Issues from Discounting the Same Offer:
  "By the end, I said no because I didn’t trust the guy." (04:30)

• Sales Mindset Reframe:
  "No means no for this thing, not no for everything." (07:10)

• On Ethically Structuring Payment Flexibility:
  "Dropping your price is not really downselling, it’s discounting…don’t just change the price to get someone to buy." (09:45)

• Benefits of Payment Plan Downsells:
  "Payment plans get more buyers because customers pay less in the moment. They also boost your profits because customers still pay full price over time." (22:05)

• On Feature-Based Downselling:
  "Feature downsells lower prices by removing stuff. You take something away, lower the price, and ask: How about now?" (62:01)

• Standardizing Your Downsell Process:
  "Once you solve the same problems for the same type of customer, you learn what they find the most valuable. Then you can standardize your feature downsell process." (69:00)

Timestamps for Key Segments

• 00:00–03:30 — What is Downselling?
• 03:31–06:40 — How NOT to Downsell: Car Insurance Story
• 06:41–10:20 — Rules of Downselling
• 10:21–11:33 — Three Core Downsell Processes (Overview)
• 11:34–38:50 — Payment Plan Downsells: Step-By-Step Process
• 38:51–56:30 — Trial with Penalty: Accountability-based Free Trials
• 56:31–77:00 — Feature Downsell: Reducing Features, Not Just Price
• 77:01–End — Tactical Tips, Barter Offers, Proactive Retention

Conclusion & Final Takeaways

Alex Hormozi’s downsell framework emphasizes that sales doesn’t end at "no." Instead, he presents a robust structure for gently but effectively tweaking your offers—to maximize profit, build trust, and better serve your customers. Whether through payment plans, trial periods with accountability, or removing/recombining features to lower the price, Alex’s actionable frameworks enhance both conversions and long-term customer value.

"Downsells give you another shot at getting customers by turning no’s into yeses. It’s less about having 100 different products for the same offer, and more about having 100 different offers for the same product."
— Alex Hormozi (77:36)

Bonus:
Alex references additional free training videos for those wanting more depth, available at acquisition.com.

For deeper dives:

• Listen to cited episode 202 for live feature downsell scripts.
• Watch Alex’s free videos for modeled step-downs in real sales.
• Apply these frameworks progressively—maximize value, minimize churn, and close more customers.