Lead gen

Lead generation (Hormozi Core Four)

When to use

Any task shaped like "get more engaged leads": designing a lead magnet, picking or scaling an acquisition channel, planning outreach/content/ads, building referral or affiliate programs, or diagnosing an empty pipeline. Assumes a core offer already exists; if the offer itself is weak, fix that first.

The procedure

Phase 1 — Define the unit: engaged leads

1. A lead is anyone you can contact. An engaged lead is someone who showed interest (opted in, replied, booked). Engaged leads are the only output that counts — never impressions, followers, or list size.
2. Before designing anything, write down: current engaged leads per week, per channel. If nobody can answer this, instrument it first.

Phase 2 — Design the lead magnet (7 steps)

Advertise the core offer directly when it's cheap and impulse-friendly; use a lead magnet when it's expensive or considered. A lead magnet is a complete solution to a narrow problem that, once solved, reveals the problem your core offer solves.

1. Pick the problem and person. Narrow, meaningful, and its next revealed problem must be one your core offer solves.
2. Pick the solution type (one of three): reveal their problem (diagnosis/audit — best when waiting makes it worse), sample or trial (best for recurring offers), or one step of a multi-step process.
3. Pick the delivery vehicle (one of four): software/tool, information, service, or physical product. 3 types x 4 vehicles = up to 12 magnets per problem; rotate them.
4. Test the name — headline first, then image, then subheadline. The headline is ~80% of the ad spend's leverage.
5. Make it easy to consume — offer every format you can (video, audio, text, tool); multi-format lifts take rates 2-4x.
6. Make it darn good — give away the secrets, sell the implementation. It must be good enough to charge for; most consumers never buy, but all of them judge you on it.
7. Make the CTA obvious: say exactly what to do, plus a real reason to do it now (ethical scarcity = advertise actual capacity limits; deadlines; any stated reason beats none).

Phase 3 — Pick channels with the Core Four 2x2

Audience is warm (has permission) or cold (strangers); delivery is 1-to-1 or 1-to-many. That yields the only four moves — there is no fifth channel:

	1-to-1 (private)	1-to-many (public)
Warm	Warm outreach	Free content
Cold	Cold outreach	Paid ads

Selection logic:

• Start with warm outreach (fastest first customers, zero cost).
• Then: more time than money -> post content; more money than time -> cold outreach or paid ads.
• Do paid ads last — the other three teach the skills and fund the losses.
• Channels compound; a business doing content + ads gets more from both. But max one channel before adding the next.
• Diagnosing "not enough leads": you are not doing the Core Four with enough volume or enough skill — in that order. Audit which of the four you run, at what daily volume, before proposing anything new.

Phase 4 — Scale with More -> Better -> New (in that order)

1. More: crank volume to capacity. Rule of 100: 100 primary actions/day, 100 days straight (100 warm reach outs; 100 min creating content + 1+ post; 100 cold reach outs; 100 min on ads at your reverse-engineered budget). Graduate to Open To Goal: commit to outcomes, not attempts.
2. Better: when more breaks, split-test the constraint — the funnel step with the biggest drop-off. One test per week per platform, log every result, four failed attempts then move to the next constraint.
3. New: only when more/better returns fall below what a new spot would yield. Order: new placements -> new platforms -> new Core Four activity.
4. Test at real scale: sample sizes must resolve a ~0.5% response rate (5,000 flyers, not 300).

Phase 5 — Layer lead getters (the cascade)

Lead getters are not a fifth channel — you run the Core Four to recruit them, then they run it for you. Natural order:

1. Customers (referrals) — the only exponential channel. Growth = referrals in minus churn out. No referrals means: product not good enough, or nobody asked. Build goodwill (value minus price), then ask as an offer (two-sided incentive, ask at the moment of purchase, referral events, unlockable bonuses).
2. Employees — train with the 3Ds: Document (checklist good enough that a stranger gets your results), Demonstrate, Duplicate. Reward direction-following; when results are bad, fix the checklist, not the person. Track payroll / engaged leads.
3. Agencies — hire to learn a new method or platform, never as a permanent outsource: explicit teach-me clause, ~6-month deadline, run your team in parallel, cancel when in-house beats them.
4. Affiliates — businesses that already have your leads. Qualify them by investment, pay tiered % of max-allowable CAC, activate with a fully-prepared launch (whisper -> tease -> shout), keep them via integration (they give away or sell your lead magnet).

Target: 25%+ of customers from referrals before scaling hard — fix the product before pouring on volume.

Rules and quick reference

• LTGP:CAC >= 3:1 — lifetime gross profit (never revenue LTV) over acquisition cost. Below 3:1, don't scale.
• CAC diagnosis: CAC near industry average -> problem is the business model, raise LTGP; CAC far above average (>3x) -> problem is the advertising.
• Sales-vs-ads splitter: "Do the engaged leads have the problem I solve and the money to spend?" Yes but not buying = sales problem, not a lead problem.
• Client Financed Acquisition: collect CAC + fulfillment cost from each customer within 30 days (upsell, annual prepay, onboarding fee) -> scale self-funds. Profitable-but-cash-starved is the default failure mode of paid acquisition.
• Give:ask ratio: stay well above ~4:1 (TV's 3.5:1 is the extraction floor). Growth mode: give until they ask; give in public, ask in private. If unsure what to promote, promote the lead magnet.
• Paid ads money rules: track before spending anything; testing budget per ad = up to 2x one customer's 30-day cash (1x if zero leads); scale budget = customers wanted x CAC, padded +20%.
• Ad anatomy: callout (win the first 5 seconds) + value angles (What x Who x When) + explicit CTA.
• Timeline honesty: 3-6 months to crack a new channel for someone experienced (~a year first time); 5-10 years to a $100M machine. Don't quit at 1/42 of the dose.

Channel	Daily volume	Order-of-magnitude prior (his era — see caveats)
Warm outreach	100 reach outs, 3 attempts each, A-C-A replies	~1 in 5 reply; ~1 customer per 100 reach outs
Content	100 min creating, 1+ post	Measure followers + reach monthly; constant cadence
Cold outreach	100 reach outs (list -> personalize -> big fast value)	~3% of list -> engaged leads; ~20% pickup; ~20% DM reply
Paid ads	100 min on ads, run 100 days	Lose small on most tests; scale the rare winner

Where it doesn't transfer

• The numbers are calibrated to his world: high-ticket ($299-$42k), near-100%-gross-margin info/coaching/licensing products, US, 2016-2022. At 20-40% gross margin or long-cycle B2B, 3:1 gets tight, 30-day payback may mean over-monetizing fragile new customers, and 40% affiliate payouts don't exist. Keep the lenses (LTGP:CAC, payback period), recalibrate every number.
• Cold channels aged badly. The benchmark response rates are pre-spam-filter, pre-automation-crackdown; expect 3-10x worse today. Naive volume now burns domains, accounts, and brand — the personalization half of his cold playbook survived, the automation half didn't. Volume still beats timidity; blast-and-re-blast doesn't.
• High-ticket sales theatrics (fake-reason CTAs, gift-card urgency, price ratchets) erode trust in B2B and community products. Keep the ethical version: real capacity limits, real deadlines, founding-member pricing.
• Believe the referral chapter, not the sales copy. "Advertising lets you have a terrible product and still make money" is contradicted in-book: referrals-minus-churn is the only exponential channel, and it runs on product quality. When they conflict, product quality wins.
• Affiliate machinery shrinks for most software/services to: partner with businesses that already have your leads, pay on outcomes, fully prepare their launch.
• Treat every case study as an existence proof (survivor-selected portfolio), not an expected value.

Source

Compiled from $100M Leads — Alex Hormozi (2023). The skill is the procedure; the book carries the depth (worked examples, edge cases, the author's reasoning). If this stage is where your venture lives right now, buy and read it.