Alex Hormozi: Your Inflow Is Your Bottleneck

Last updated: Jun 14, 2023

The video discusses how the inflow of customers can become a bottleneck for businesses, particularly service-based ones, and how maximizing the inflow is crucial for scaling and growth.

This video by Alex Hormozi was published on Dec 1, 2020.
Video length: 17:23.

In this video, Alex Hormozi discusses how many businesses have goals to reach a certain number of customers, but fail to follow the simple math required to get there.

He explains that often the bottleneck is the inflow of new customers, and businesses need to focus on maximizing their inflow in order to scale quickly.

He also discusses the importance of accepting the back-end churn that comes with service-based businesses and using the advantage of easy in, easy out to scale quickly.

  • The inflow of customers can become a bottleneck for businesses, particularly service-based ones.
  • Maximizing the inflow is crucial for scaling and growth.
  • At a basic level, there are acceptable metrics for retention and lifetime value.
  • Many businesses pause because there is too much inflow, and they can't handle the lead flow and appointments.
  • Most people have goals but are disconnected from the actions required to get there.
  • If you're not where you want to be, it's often because your inflow is your bottleneck.
  • You need to be able to sign up people week in and week out to scale your business.
  • Efficiency is key to maximizing inflow.
  • It's important to confront the cost of achieving your goals and make adjustments accordingly or realize that it's not actually your priority.

Your Inflow Is Your Bottleneck (ALEX HORMOZI) - YouTube

Alex Hormozi: Your Inflow Is Your Bottleneck 001

Introduction

  • Alex Hormozi is discussing how the inflow of customers can become a bottleneck for businesses, particularly service-based ones.
  • Maximizing the inflow is crucial for scaling and growth.
  • Many businesses have goals for membership numbers but don't follow the simple math of getting there.
Alex Hormozi: Your Inflow Is Your Bottleneck 002

Acceptable Metrics

  • At a basic level, there are acceptable metrics for retention and lifetime value.
  • Service-based businesses will never get their churn below one percent.
  • If you want to be massive, you need to grow off everything, including organic, outbound, and paid acquisition.
  • Most businesses don't follow the simple math of getting to their membership goals.
  • The inflow is often the cap for businesses.
Alex Hormozi: Your Inflow Is Your Bottleneck 003

Too Much Inflow

  • Many businesses pause because there is too much inflow, and they can't handle the lead flow and appointments.
  • People often want a full gym until they see what's required to get a full gym.
  • Businesses need to be prepared to sell all day if they want to grow.
  • Accept that there will be a back-end churn with service-based businesses.
  • Maximizing the inflow is one of the primary advantages of being a service provider.
Alex Hormozi: Your Inflow Is Your Bottleneck 005

Your Inflow Is Your Bottleneck (ALEX HORMOZI) - YouTube

Example

  • The top client signed up 130 new clients in the last two and a half weeks.
  • If you want a 200, 300, 400, or 500 person facility, you need to sign up 20 new clients a week.
  • Easy in and easy out is how services work, and there will be back-end churn.
  • Businesses need to maximize the fact that they can scale quickly with services.
  • Maximizing the inflow is crucial for scaling and growth.
Alex Hormozi: Your Inflow Is Your Bottleneck 006

The Importance of Maximizing Inflow

  • Maximizing inflow is crucial for scaling and growth.
  • Even if someone signs up for recurring, it doesn't mean they'll stick until they really commit.
  • If you can only take on 10 new potential prospects per week and you want to get to 300 members, you have to convert 75% of them week in and week out.
  • Most gyms don't have the capacity to get 20 or 30 new customers a month.
  • If you want to get to 500 or 400 members, you have to accept the fact that you're going to be selling all day.
Alex Hormozi: Your Inflow Is Your Bottleneck 007

Doing the Math

  • Most people have goals but are disconnected from the actions required to get there.
  • You need to know your turn rate and look backwards to figure out how many new customers you need to sign up each month.
  • If you're losing 20 customers a month and you want to get to 400, you may need to sell 60 trials a month.
  • If you can't sign up enough new customers, you will never grow.
  • You need to be able to manage your schedule and your team's schedule to handle the influx of new customers.
Alex Hormozi: Your Inflow Is Your Bottleneck 009

Operational Preparation

  • If you're not where you want to be, it's often because your inflow is your bottleneck.
  • You need to operationally prepare yourself for what it actually looks like to sign up a hundred people in a month.
  • If you want to get to a certain number of members, it's just math backwards.
  • Most people have not done the math to figure out how many new customers they need to sign up each month.
  • You need to be able to handle the influx of new customers and manage your team's schedule accordingly.
Alex Hormozi: Your Inflow Is Your Bottleneck 010

The Importance of Sales and Fulfillment

  • You need to be able to sign up people week in and week out to scale your business.
  • You need to be able to handle both sales and fulfillment concurrently.
  • You need to have a schedule that includes outbound outreach, onboarding, orientations, and sales appointments.
  • You need to disperse the meetings that have to happen in order to make the entire model work.
  • You need to be able to manage your team's schedule to handle both sales and fulfillment.
Alex Hormozi: Your Inflow Is Your Bottleneck 011

The Importance of Maximizing Inflow

  • The inflow of customers can become a bottleneck for businesses, particularly service-based ones.
  • Maximizing the inflow is crucial for scaling and growth.
  • Meeting with more people leads to more sales.
  • It's important to have a plan for how many people to meet with each day.
  • Efficiency is key to maximizing inflow.
Alex Hormozi: Your Inflow Is Your Bottleneck 013

The Math of Scaling

  • Meeting with 30 people per week leads to 120 client conversations per month.
  • Half of those conversations lead to conversions.
  • Half of those who convert show up for their appointments.
  • To grow, you need to double the number of appointments and conversions.
  • Dealing with the math is crucial for growth.
Alex Hormozi: Your Inflow Is Your Bottleneck 014

The Emotional Side of Sales

  • Some people can't handle the emotional beating of having people say no.
  • Experienced salespeople understand that it's not about them, it's about the customer.
  • Champions have short memories and bounce back fast from losses.
  • It's important to remember that people come with their own preconceived notions to the call.
  • Don't get butt hurt if someone says no.
Alex Hormozi: Your Inflow Is Your Bottleneck 015

The Importance of Priorities and Planning

  • It's important to confront the cost of achieving your goals.
  • Make adjustments accordingly or realize that it's not actually your priority.
  • Priorities are just priorities, there's never really conflicting priorities.
  • Figure out which things are more important to you.
  • Delegate time and appropriate on a calendar when things need to get done.
Alex Hormozi: Your Inflow Is Your Bottleneck 017

Your Inflow Is Your Bottleneck

  • Maximizing inflow is crucial for scaling and growth.
  • Long-term membership is the goal, but it starts with a trial or front-end program.
  • Converting customers takes time, and it's important to block out time for sales.
  • Acceptable metrics need to be established to work backwards into how much time and people are required to reach goals.
  • Improvements are important, but waiting for them will prevent progress.
  • Money and time math need to be considered to break bottlenecks and reach goals.

Watch the video on YouTube:
Your Inflow Is Your Bottleneck (ALEX HORMOZI) - YouTube

Related summaries of videos: