hormozi-continuity

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.

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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.

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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"

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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."

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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.

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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.

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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.

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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).

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Continuity Bonus Offers

The Structure

1. One-time bonus — High-value item they get FREE when they join
2. 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

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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.

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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

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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

1. Customer wants to cancel
2. Offer to waive fee if they do exit interview
3. Save 1/3 to 1/2 of cancelers
4. 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

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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?"

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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)

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Related Skills

• hormozi-money-models — The four types of offers (includes continuity)
• hormozi-offer-stacking — Stacking multiple offers
• hormozi-lead-generation — Getting leads in the door
• hormozi-cfa — Customer Financed Acquisition math