| name | hormozi-continuity |
| description | WHAT: Alex Hormozi's Continuity Models framework — 5 ways to apply continuity discounts plus billing optimization, cancellation handling, and maximizing LTV. From $100M Money Models.
WHEN: When applying hormozi continuity knowledge |
Hormozi Continuity
hormozi-continuity
Core Principle
"Continuity offers are tough to advertise profitably. Nobody wants to make a recurring commitment to something they haven't tried."
The key insight: Attract customers with trials and bonuses first, then upsell to continuity. Use continuity discounts strategically to balance cash-up-front vs. recurring revenue.
The 5 Ways to Apply Continuity Discounts
1. Up Front
Apply the discount up front and push out the term.
How it works: Customer gets discount immediately, term starts after free period.
Best for: Industries with enforceable contracts (cell phones, storage, real estate, equipment)
Example: "Sign up for 2 years, get the first 3 months free"
Note: This gets customers but delays cash. Higher churn risk.
2. At the End
Apply the entire discount at the end and push out the term.
How it works: Customer earns free time by making all payments on schedule.
Best for: Reducing churn — customers feel they "earned" the discount
Example: "Make all 12 payments on time, get 3 months free at the end"
3. Spread Over Time
Apply the discount across the entire term.
How it works: Discount amount divided evenly across all payments.
Example: $600 discount on a 12-month commitment = $50/month discount
Pro tip: "If they make all payments on time, they can keep the discount for life after term ends."
4. After First or Second Payments
Customer pays a few times, then receives the discount.
How it works: Collects some cash upfront before giving discount.
Example: "First + last month up front, then discounted rate"
Why: Ensures valid payment method and covers some delivery costs.
5. Lifetime Discount at Churn Point
Let customers earn a lifetime discount after your average churn period.
How it works: Set the "earned discount" period at your highest cancellation point.
Example: Average customer cancels at month 4. Offer "Lifetime 20% discount after month 4."
Why: Turns the churn point into a loyalty milestone.
Billing Optimization
The Weekly Billing Trick
"There are 12 months in a year, but the year has 13 four-week cycles. That's an 8.3% difference."
| Billing | Annual Revenue |
|---|
| Monthly ($100) | $1,200 |
| Every 4 weeks ($100) | $1,300 |
Impact: If your margin is 20%, weekly billing increases profit by 41% for the same work.
Processing Fee Technique
Add a "processing fee" that you waive if they give a second form of payment.
Script:
"Do you want to save the processing fee? Give us a second form of payment in case anything happens to the first."
Result: Reduces payment failures + gets ACH if possible (cheapest transaction method).
Continuity Bonus Offers
The Structure
- One-time bonus — High-value item they get FREE when they join
- Continuity membership — Recurring subscription
Key: Advertise the BONUS, not the membership.
| Weak | Strong |
|---|
| "Join our membership program" | "Get $800 in free dog toys when you join our monthly plan" |
Types of Bonuses
| Bonus Type | Example |
|---|
| Complimentary | Free nutrition service with fitness membership |
| Upgrade | Gold membership when you buy bronze |
| Physical | Hat, shirt, tool with digital product |
| Digital | Past newsletters, templates, recordings |
| Access | VIP access to events, earlier dates |
Rules for Bonuses
- Keep bonuses related to your core offer
- Make bonuses stuff you already have and do
- Price anchor the bonus value (make it believable)
- Use titles (Silver, Gold, Diamond) to gamify loyalty
Pricing for Continuity vs. Cash
The Continuity Sweet Spot
| Continuity Rate | Standalone Multiplier | Example |
|---|
| 50% choose continuity | 1.33x | $399 standalone vs $299/mo |
| 60% choose continuity | 1.66x | $499 standalone vs $299/mo |
| 70% choose continuity | 2x | $600 standalone vs $299/mo |
| 80% choose continuity | 2.33x | $699 standalone vs $299/mo |
| 90% choose continuity | 2.66x | $799 standalone vs $299/mo |
Principle: The larger the standalone price vs. continuity, the more people choose continuity.
Bulk Continuity Upsells
"Buy 5 Months, Get 1 Free"
- Only 1 in 8 needs to take this for 50% profit increase
- Larger discount = more people take it
Cancellation Policies
The Best Policy
Cancellation fee = discount they received
"If they got $600 in discounts, they can pay $600 whenever they want to cancel."
Why: Puts them back to month-to-month rate. Simple to explain.
Exit Interview Strategy
- Customer wants to cancel
- Offer to waive fee if they do exit interview
- Save 1/3 to 1/2 of cancelers
- Get feedback to fix problems
Handling Complaints
- Get more angry about the problem than they are
- Solve what you can
- Offer rollover upsell to higher tier if available
Key Questions for Continuity
/prompts:
- "Which of the 5 continuity discount methods fits my business model?"
- "What's my average churn point? How can I turn it into an earned discount?"
- "Should I front-load (more signups, more churn) or back-load (fewer signups, lower churn)?"
- "What's a compelling bonus I already have that could attract continuity members?"
- "How can I use weekly billing instead of monthly to capture 8.3% more revenue?"
- "What's my second payment method strategy to reduce failed payments?"
- "What cancellation policy protects my discounts while being fair?"
- "How do I advertise the BONUS instead of the membership?"
Source
From $100M Money Models by Alex Hormozi, Chapter: "Continuity Discount Offers"
Core concepts:
- 5 ways to apply continuity discounts
- Weekly billing optimization
- Processing fee technique
- Continuity bonus structure
- Cancellation policies
Transcript source: ~/Downloads/100MMoneyModels.txt (Docker: /home/GOD/100MMoneyModels.txt)
Related Skills
hormozi-money-models — The four types of offers (includes continuity)hormozi-offer-stacking — Stacking multiple offershormozi-lead-generation — Getting leads in the doorhormozi-cfa — Customer Financed Acquisition math
