Deconstructing Tai Lopez’s Success
Tai Lopez is one of the most polarizing figures in Internet marketing.
One one hand, he’s despised, even loathed by many.
On the other hand, he’s also followed and even loved by many people.
You don’t get to 3.1 million IG followers without doing something right.
This post is an objective analysis of what Tai Lopez is doing. Because even though Tai Lopez is hated by many, he is one of the most interesting subjects in Internet Marketing to study, AND there is a lot to be learned from how Lopez does his marketing.
First off, is Tai Lopez really a scam?
If you consider Tai Lopez to be a scam then you basically will have to consider almost any entrepreneurial or informational content also a scam.
The reason for this is the 90/10 principle. Unfortunately, 90% of the people reading Tai Lopez’s content will NOT have success. However, this would be true of almost any content, because only 10% of people will actually take action.
That 90% will be outspoken. Instead of just actually working on their business, they take to Reddit and other social media sites to complain about it not working. They decry that it’s all a “scam.” Word spreads and Tai Lopez gets a reputation amongst the general populace that his stuff is basic “knowledge.”
One of the main claims is that his information that he sells is readily available for free on the Internet. Yes that’s true. However, it’s also true of almost any knowledge sold on the Internet.
HOWEVER, the reason why people (and why you) should buy courses is NOT because the information isn’t available for free. Buying a course saves you the time and effort of actually having to go out there and aimlessly Google for information, without knowing the credibility of the information.
But is Tai credible? Is his information / numbers actually legitimate?
In most of his courses, Tai doesn’t actually profess to be the sole expert on the topic. He enlists experts in other fields to teach them, while he’s more of a moderator. If you look at his courses on crypto and real estate, this is exactly what he does.
One thing that Tai can definitely teach is social media & marketing, which makes him a credible teacher for that topic.
Most common users of social media think that Tai just “buys” his views and popularity. But to buy as many views as Tai Lopez has requires a LOT of capital. If his ads weren’t profitable, there’s absolutely no way he could keep buying those ads.
While I can’t confirm nor deny whether Tai lies directly in any of his content, it’s pretty obvious that Tai does have money.
Does he actually have the house / cars? Or does he rent them?
His house is rented (month to month), but his cars are either leased or purchased. When you show off your cars as often as Tai does, it costs more to rent them short-term than it does to just lease or purchase.
According to Zillow, his house costs roughly $77k / month to rent, and is worth $22m to purchase. Another site estimated it at $160k / month to rent. It’s safe to say that renting a house in that neighborhood costs his company around $100k per month, or $1.2m per year.
Even if all the cars are leased, that’s easily another $200k – $500k / year in car payments.
To get to the level of decadence that Tai portrays in his videos, he easily clears 7-figures, and most likely he’s making 8, maybe even 9-figures revenue annually. One insider in LA told me that in 2017 he was doing roughly $24m per year in PROFIT, but I can’t confirm nor deny whether this is actually true.
But isn’t he a douche? Why does he use cars and houses and girls in his marketing?
The unfortunate truth of life is that people, especially young people, respond extremely well to displays of wealth. Even if you hate it, at a macro level it’s just an effective form of marketing.
In the Internet marketing world, it’s extremely hard to stand out because all content is essentially re-used. It’s an echo chamber. The way Lopez decides to stand out is to use attention grabbers and scroll stoppers like girls, cars, and mansions. It’s similar to the strategy used by guys like Dan Bilzerian to advertise his weed company.
But isn’t he a pyramid scheme? Aka he makes money by teaching others how to make money?
It is true that Tai Lopez and the Internet Marketing world in general is somewhat of a pyramid scheme. But the same thing could be said about guys like Pat Flynn, who makes money as an affiliate marketer, but doesn’t get the same amount of flack as Tai Lopez because he doesn’t advertise major shows of wealth.
What marketing lessons CAN be learned from Tai Lopez?
Attention is one of the most important things in marketing. Whether you’re talking about Facebook ads or general marketing.
You don’t NEED to use Lamborghinis but you do have to find a way to make your potential customer stop scrolling when he’s on social media.
Persuasion is tactical. Tai Lopez uses several of Cialdini’s principles of “persuasion” in all his videos.
- Reciprocity – Tai Lopez creates a LOT of free content. He gives you free content, and in exchange you give him your credit card.
- Scarcity – Makes claims that only the first 100 people can get this training. Pretty much everyone does this now so it’s not that effective anymore, but can still be effective for people who don’t have much exposure to internet marketing.
- Authority – Finds experts to teach subjects, always references highly credentialed studies in his videos. Also his displays of wealth create authority, especially with younger viewers.
- Consistency – People like to be consistent with things they’ve done or promised. Tai asks for small micro-commitments before he asks for the sale. Essentially, he’ll keep giving you free content, and as you go deeper into the funnel with his content, he finally asks for the sale. For example, with the 67 steps program, he goes from 3-minute YouTube video to email to longer 45 minute video to the sale at the very end. Getting these micro-commitments, and increasing the commitment, from your customer makes it much more likely they will purchase from you.
- Liking – You purchase things from people you like. Tai Lopez, despite what Reddit thinks, is actually very well-liked with his target audience. People also tend to like people who are similar to them, and Tai Lopez frames himself as a “common man” who came from rags to riches.
- Consensus – Similar to social proof, basically people look to the actions of others to determine their own actions. So when you say 1,000 people have bought my program already, it makes others want to buy your product more. Adding a bunch of testimonials from real users (his testimonials are all done very convincingly) helps add to the social proof in his video.
If we analyze his here in my garage video, we can also see a few of the things that Tai purposely did to help launch that video into meme-status.
- Lower production quality can sometimes be better than high production quality. In this instance, he wanted to portray himself as the “every man” and make the video seem very organic. Lower production quality, in an ad medium where most ads are now super high production quality, actually makes him stand out a lot more.
- But since low production quality videos generally also lower the authority of the piece, Tai subtly gives himself authority by mentioning his Tedx talk, him living in the Hollywood hills, his Lamborghini, and his book shelf filled with 2,000 books. Even though he’s definitely bragging, the casual nature of his brag doesn’t set off as many red flags as if he just said, “I’m rich!”
- He also discusses that he likes his books more than his Lamborghini and basically says he only buys “materialistic things” because it’s a reminder that dreams are possible. This humanizes him to the viewer,
- Once he shows off his Lamborghini, he starts to humanize himself even more to the audience, bringing him to their level by telling a story where he says he was in a mobile home, completely broke, with no college degree. Him saying all that was super important because his target audience is probably the non-college grad who is broke, living on their parents’ couch.
- He then proceeds to say he got 5 mentors that taught him the skills he knows now. Then uses that moment to get the user to visit his website, saying he’ll give away the top 3 things his mentors taught him, absolutely free. Instead of just saying the 3 things in the video, this is an opportunity to pique the viewer’s interest and leave them on a “cliffhanger,” which captures their curiosity and leads them to enter their email on his website.
- The great thing about his ad thus far is he establishes himself first before he goes for the sale. Too many marketers don’t give enough authority before they offer up the close. If you haven’t built up that authority yet, the close rate is not going to be good.
- The last part of the video answers the viewer’s objections. He says, “this isn’t a get-rich quick scheme” and he asks the viewer to “not be like everyone else and be an optimist.” He also mentions here that his product is not for cynics and that he doesn’t need to reach everybody. This part of the video is actually very powerful because he does it super subtly and again it doesn’t ring red alarms when he says it. By this point, the average user is probably thinking very cynically in their head, but after being told they shouldn’t be a cynic, another voice pops up in their head which makes them think that “hmmm, being a cynic is actually bad, he has a point! Being an optimist is a much better way of living!” He adds a quote from Helen Keller to further increase his authority and further persuade you to be an optimist.
- When you make disqualifying statements, you might remove some part of your audience, but you’ll also make a specific part of your audience feel like they are the exact right customer for your product. Because you’ve narrowed down your messaging to the exact customer.
- Tai wearing glasses is a great move. Glasses not only imply that a person is smart, but also establishes that they are not a threat and again, brings him down to your level. It’s much easier to believe him than if he was say a really buff looking jock-type.
Tai Lopez is a very polarizing figure, but most of the hate he gets is from jealous keyboard jockeys who are tired of seeing his profitable ads everywhere.
His content isn’t revolutionary stuff, but his marketing tactics are on point.
Stop worrying about Tai Lopez ads and start making your own shit happen so you can get your own Lamborghini. Every minute wasted worrying about him is another minute you’re not making your own dreams come true.