Alex Hormozi: I cracked Netflix's RECURRING REVENUE model and make $100,000/day..

The video discusses how to increase the recurring revenue of a business by implementing eight different strategies, including increasing consumption and creating collateral.

This video by Alex Hormozi was published on Sep 10, 2021.
Video length: 15:50.

In this video, Alex Hormozi discusses how to increase the recurring revenue of a business, which he believes is the single greatest way to increase enterprise value.

He challenges the binary thinking of whether a business is a recurring revenue business or not, and instead suggests thinking about the extent to which a business is recurring. Hormozi then outlines eight Cs that can be implemented to make recurring revenue more sticky, starting with increasing consumption and securing collateral.

He emphasizes that each of these Cs is a continuum, and the goal is not to have all eight, but to improve each one to make the business more recurring.

• Recurring revenue is the best way to increase enterprise value.
• There are eight Cs to make recurring revenue more sticky.
• Every business can become a recurring revenue business.
• Increasing consumption is the goal to increase stickiness of recurring revenue.
• Collateral is a way to secure recurring revenue against something else.
• Community is a way to create recurring revenue by building a tribe.
• Customization is a way to create recurring revenue by offering personalized experiences.
• There are eight strategies to increase recurring revenue.
• Enforceable contracts can increase the stickiness of recurring revenue.

I cracked Netflix's RECURRING REVENUE model and make $100,000/day.. - YouTube

Introduction

• Adding recurring revenue is the best way to increase enterprise value.
• There are eight Cs to make recurring revenue more sticky.
• Every business can become a recurring revenue business.

Consumption

• Increasing consumption is the goal to increase stickiness of recurring revenue.
• Consumption can be physical or digital.
• Netflix and Spotify are examples of businesses with recurring revenue based on consumption.
• Think of how to improve the value of the product to make it more addictive.
• Creating better onboarding experiences can also increase consumption.

Collateral

• Collateral is a way to secure recurring revenue against something else.
• Physical collateral can be seen in storage businesses.
• Dropbox and Google Drive are examples of digital collateral.
• Creating collateral can make people want to continue to stay and pay.
• CRM is an example of a different version of collateral.

I cracked Netflix's RECURRING REVENUE model and make $100,000/day.. - YouTube

Community

• Community is a way to create recurring revenue by building a tribe.
• Creating a community can make people feel like they belong.
• People are more likely to stay and pay if they feel like they are part of a community.
• Creating a community can also lead to word-of-mouth marketing.
• Facebook groups and forums are examples of creating a community.

Customization

• Customization is a way to create recurring revenue by offering personalized experiences.
• People are willing to pay more for personalized experiences.
• Customization can also lead to word-of-mouth marketing.
• Offering different tiers of customization can also increase revenue.
• Spotify and Amazon are examples of businesses with customization options.

Increasing Stickiness of Continuity

• Increasing consumption of the product or service
• Creating collateral to increase the value of the product or service
• Increasing the cost of switching to another provider
• Increasing the sunk cost fallacy on the prospect
• Having a big upfront cost to drive recurring revenue on the back end

Decreasing Alternatives

• Decreasing the number of choices available to the consumer
• Using patents to decrease the alternatives
• Having a unique competitive advantage or trade secret
• Niching down to provide a unique combination of skills and resources

Control of Money Flow

• Having a lack of transparency in charges
• Charging fees before the consumer can see them
• Being overt with charges to make them less noticeable

Alignment with a Cause

• Having people aligned with the cause of the business
• Building movements within the business to associate identities with the cause
• Charity as a product to make people feel good about themselves

Increasing Recurring Revenue

• Recurring revenue is important for businesses because it creates a predictable income stream.
• There are eight strategies to increase recurring revenue:
• Consumption: Encourage customers to use more of the product or service.
• Value: Increase the perceived value of the product or service.
• Convenience: Make the product or service easier to use.
• Commitment: Create a sense of commitment in customers.
• Community: Build a community around the product or service.
• Contracts: Use enforceable contracts to increase stickiness.
• Collateral: Use collateral to make contracts enforceable.
• Control: Control the money flow to increase stickiness.

• Consumption: Encourage customers to use more of the product or service.
• Value: Increase the perceived value of the product or service.
• Convenience: Make the product or service easier to use.
• Commitment: Create a sense of commitment in customers.
• Community: Build a community around the product or service.
• Contracts: Use enforceable contracts to increase stickiness.
• Collateral: Use collateral to make contracts enforceable.
• Control: Control the money flow to increase stickiness.

Creating Stickier Recurring Revenue

• Stickier recurring revenue is important because it creates a more predictable income stream.
• There are several ways to create stickier recurring revenue:
• Cause: Align the product or service with a cause that customers identify with.
• Community: Build a strong community around the product or service.
• Contracts: Use enforceable contracts to increase stickiness.
• Collateral: Use collateral to make contracts enforceable.

• Cause: Align the product or service with a cause that customers identify with.
• Community: Build a strong community around the product or service.
• Contracts: Use enforceable contracts to increase stickiness.
• Collateral: Use collateral to make contracts enforceable.

Enforceable Contracts

• Enforceable contracts can increase the stickiness of recurring revenue.
• Contracts can be enforced through collateral or by making customers agree to a certain amount of time.
• Contracts can be packaged differently to increase stickiness.
• Contracts can be used to control the money flow.
• Contracts can be used to sell to higher quality prospects.

The Eight C's of Recurring Revenue

• The eight C's of recurring revenue are:
• Consumption
• Value
• Convenience
• Commitment
• Community
• Contracts
• Collateral
• Control
• Businesses should strive to check off each of these boxes to increase the recurring nature of their business.

• Consumption
• Value
• Convenience
• Commitment
• Community
• Contracts
• Collateral
• Control

Watch the video on YouTube:
I cracked Netflix's RECURRING REVENUE model and make $100,000/day.. - YouTube