The Game with Alex Hormozi
Throwback: Billionaire Recession Advice: Sell to the Rich | Ep 852
Fri, 14 Mar 2025
Wanna scale your business? Click here.Welcome to The Game w/ Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition Mentioned in this episode:Get access to the free $100M Scaling Roadmap at www.acquisition.com/roadmap
Chapter 1: What are the benefits of charging more for your products?
Chapter 2: Why do rich and poor customers have different perspectives on pricing?
And you can't say your product's the best if you're trying to do it on margin and you don't have the money to reinvest in good people, reinvest in keeping it innovative at the front of the market. you can't do it, right? And so I'm a big believer in just making big promises and then delivering on big promises. Like that is the types of businesses that I like to build.
And when you have all of these higher paying, lower demanding, happier customers, your perception of the real impact you're actually making goes up. And so your conviction over the entire business and your mission of like, I actually came here to help people, starts to become reinforced. And it becomes this snowball that starts rolling.
And you have these testimonials and these reviews that start rolling in. And the momentum builds. On the flip side, if you don't have that, you have less margin. It becomes this vicious cycle in the other direction where you're not getting these testimonials.
All you're getting is chargebacks and refunds from these demanding customers that had unrealistic expectations because it was such a high percentage of their net worth. There was nothing that was going to save them from themselves. And so you have two stories that you can play out. And solving rich people problems allow you to charge rich people prices. They pay better.
They're easier to work with. And ultimately, they allow you to build a business that can withstand different seasons and be in a position to succeed long run. This is very fortuitous timing-wise, but the time of this being made, the richest man in the world, everyone's like, what about big tech? What about AI? And believe me, I think it's scary shit.
So the richest man in the world right now is not big tech, it's not big pharma, all the things that the news wants to talk about. It's a man selling $10,000 purses. All right, if you don't know who he is, his name is Bernard Arnault. He owns most of the major luxury brands that you've heard of.
So if you've ever been to a luxury mall, and if you haven't, I really strollingly recommend that you go to one. Because it might not be in your neighborhood, it might not even be close to your city, but you should go. Because what will happen is it will stretch your mind in terms of what you believe is possible.
If you don't make a lot of money and you see a purse for $10,000, and you see a jacket for $50,000, it changes something about how you see reality. And I would urge you to not say, those people are ridiculous. I can't believe someone would spend money on that. What I want you to do is actually empathize with the buyer. what kind of person would spend $50,000 on a jacket?
Well, what conditions would have to be true in order for that to make sense? Because think about this. A lot of people are like rich people are crazy, but rich people are the ones with all the money. So they must have done something differently than poor people. So try and think about why would it make sense to this person?
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Chapter 4: What are some key differences between rich and poor customers?
It's a different experience. You're like, well, why don't they do that at, why don't they do that at Tilly's? You know, why don't they do that at fucking Aeropostale? Right? I don't know. Is that a kid's story? It was probably not. Whatever. Hollister. That's probably a kid's story. Fine. I don't even know what are cheap stores, American Eagle? All right, American Eagle.
Yeah, H&M, yeah, Forever 21, there you go. Do they offer that there? Of course not, right? And so if you're thinking about this, like who's gonna get a better experience? Like the clothing at the nice stores is way better quality, right? There's no one gonna argue that. The experience at the way better stores is significantly nicer. Guess what you don't try and do?
You're going to have somebody who's assigned to you. And the moment you walk in the door, what can I get for you? And they become basically your concierge for the entire experience you have there. And they can have and deliver that better experience because of the premium and luxury prices they charge. And so if I had the choice of two businesses where I've got a super messy rack
that's sitting there and people just have to clamor and fight over it versus the white glove champagne, how can I help you experience? I tend to want to serve those types of customers, charge those types of prices, make those types of profits and make those types of promises and deliver on them and work with
My employees and team, really smart people who also want to deal with those types of people. And so in a real way, like it isn't in crowd and an out crowd. People who are in that world recognize other people who understand that world. And if I can get you to think like they think, then you will be able to sell to them. Rich people have all the money.
And so if you want to go get the money, go to where the money's at. There's only one way to win in a low-priced business. You have to build your entire business from the ground up, day one, based on having a significant operational advantage. You have to build your core strategic advantage as we will be the lowest-priced person. Do not compete on best value.
You either got to go premium or you got to go luxury. Luxury is your price is so high, it confers status to the buyer because your brand is strong. Premium, which is where most people is where I recommend you go, is actually just deliver significantly better in a real way service, all right?
Now, here the point is that your price, like if you're an amazing marketing agency, you're not conferring status to the business by being expensive. You're not luxury, right? Luxury often is in consumer goods. So if you're in a business services type business, you're not really going to be there. It's much more about, I want the best. I want the most bang, not for the dollar.
I just want the most bang. The most bang for the dollar is best value. And this is where the graveyard of most businesses sit. They try and offer a little bit more for a little bit less. And they look at the next guy comes in, he tries to offer a little bit more for a little bit less. And then eventually you can't offer any more for any less.
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