# Pricing (Hormozi)

Study notes. Paraphrase and short quotes, each with a source link and timestamp. Acquisition.com course audio and YouTube captions are machine transcribed, so check the source before quoting word for word.

## 1. Sell to rich people first; don't be in the middle
* Sell to rich people until you have the money to sell all the poor people. The middle is where you get killed. Tesla example: Roadster first, mass model last. Selling cheap needs huge volume and infrastructure. [13 Years Of Brutally Honest Business Advice in 90 Mins (2024-05-11), 00:00:00](https://www.youtube.com/watch?v=KhFlD54nQrY&t=0s) [13 Years Of Brutally Honest Business Advice in 90 Mins (2024-05-11), 00:00:31](https://www.youtube.com/watch?v=KhFlD54nQrY&t=31s)
* Rich people pay for time above all else; through the value equation, the richer the buyer, the more guaranteed they want it. [13 Years Of Brutally Honest Business Advice in 90 Mins (2024-05-11), 00:07:38](https://www.youtube.com/watch?v=KhFlD54nQrY&t=458s)
* X post: "Being the best is a business plan. Being the cheapest is a business plan. Just don't be in the middle." [X post 2026-10-31](https://x.com/AlexHormozi/status/2116546148207141358)

## 2. Six ways to increase lifetime gross profit (LTGP)
* He redefines lifetime value as lifetime gross profit: what is left after cost to deliver, not revenue. [6 Hacks To Make More Money [Increase LTV] Without More Customers (2021-04-20), 00:00:31](https://www.youtube.com/watch?v=Q2VUuUGfpNY&t=31s) [6 Hacks To Make More Money [Increase LTV] Without More Customers (2021-04-20), 00:01:04](https://www.youtube.com/watch?v=Q2VUuUGfpNY&t=64s)
* The six: (1) increase price, (2) decrease cost to deliver, (3) increase purchase frequency, (4) upsell (more or better of the same), (5) cross sell (the next adjacent need), (6) downsell (monetize people who would otherwise say no, including referring them out for a commission). [6 Hacks To Make More Money [Increase LTV] Without More Customers (2021-04-20), 00:02:08](https://www.youtube.com/watch?v=Q2VUuUGfpNY&t=128s) [6 Hacks To Make More Money [Increase LTV] Without More Customers (2021-04-20), 00:03:49](https://www.youtube.com/watch?v=Q2VUuUGfpNY&t=229s) [6 Hacks To Make More Money [Increase LTV] Without More Customers (2021-04-20), 00:04:23](https://www.youtube.com/watch?v=Q2VUuUGfpNY&t=263s) [6 Hacks To Make More Money [Increase LTV] Without More Customers (2021-04-20), 00:05:26](https://www.youtube.com/watch?v=Q2VUuUGfpNY&t=326s)
* Price is the most powerful and most underused lever. Most owners copy the market average, the secret that they don't know is that everyone else is broke; model mature big businesses' pricing, not small ones. [6 Hacks To Make More Money [Increase LTV] Without More Customers (2021-04-20), 00:08:37](https://www.youtube.com/watch?v=Q2VUuUGfpNY&t=517s) [6 Hacks To Make More Money [Increase LTV] Without More Customers (2021-04-20), 00:09:08](https://www.youtube.com/watch?v=Q2VUuUGfpNY&t=548s)
* Example math he gives: cost 10, price 20 to 30 doubles the gross profit per customer. [6 Hacks To Make More Money [Increase LTV] Without More Customers (2021-04-20), 00:10:14](https://www.youtube.com/watch?v=Q2VUuUGfpNY&t=614s)
* Price itself creates allure (a $20 Chanel purse would not be cool). [6 Hacks To Make More Money [Increase LTV] Without More Customers (2021-04-20), 00:02:08](https://www.youtube.com/watch?v=Q2VUuUGfpNY&t=128s)

## 3. Never lower your prices (his $5M mistake)
* He cut a $42,000 per year program's weekly price to lower churn and added services; overhead rose and he says that one decision lost $5 million a year. [NEVER lower your prices... (2021-10-04), 00:01:05](https://www.youtube.com/watch?v=BZQtuK-ucDM&t=65s) [NEVER lower your prices... (2021-10-04), 00:02:46](https://www.youtube.com/watch?v=BZQtuK-ucDM&t=166s)
* The reverse: moving $99 a month boot camp members to $299 a month kept about 2/3 of customers, lowered fulfillment cost and more than doubled profit. [NEVER lower your prices... (2021-10-04), 00:04:30](https://www.youtube.com/watch?v=BZQtuK-ucDM&t=270s) [NEVER lower your prices... (2021-10-04), 00:05:06](https://www.youtube.com/watch?v=BZQtuK-ucDM&t=306s)
* Lesson: serve fewer people at higher prices; most times when you lower your prices, you make a lot less money, especially in service businesses. [NEVER lower your prices... (2021-10-04), 00:05:40](https://www.youtube.com/watch?v=BZQtuK-ucDM&t=340s) [NEVER lower your prices... (2021-10-04), 00:07:21](https://www.youtube.com/watch?v=BZQtuK-ucDM&t=441s)

## 4. How to raise prices without losing sales (price anchor, uneven split, prepay discount)
* Sales staff have an emotional home base price they are comfortable saying. [How I RAISE PRICES without losing sales...(using this psychological trick) (2021-06-30), 00:00:33](https://www.youtube.com/watch?v=GO6VCcLlnLs&t=33s) [How I RAISE PRICES without losing sales...(using this psychological trick) (2021-06-30), 00:03:45](https://www.youtube.com/watch?v=GO6VCcLlnLs&t=225s)
* To move from 2,000 to 3,000: anchor at 4,000, offer it as an uneven split (for example 4k today and 2k in 30 days style splits, more cash up front), then offer a small prepay discount so paying in full today is only slightly more than the comfort number. [How I RAISE PRICES without losing sales...(using this psychological trick) (2021-06-30), 00:01:05](https://www.youtube.com/watch?v=GO6VCcLlnLs&t=65s) [How I RAISE PRICES without losing sales...(using this psychological trick) (2021-06-30), 00:02:10](https://www.youtube.com/watch?v=GO6VCcLlnLs&t=130s) [How I RAISE PRICES without losing sales...(using this psychological trick) (2021-06-30), 00:05:22](https://www.youtube.com/watch?v=GO6VCcLlnLs&t=322s)
* Always clear the pipe: announce the increase ahead of time. Owning price increases is one of the easiest ways to create true scarcity and urgency, and the team closes faster before the date. [How I RAISE PRICES without losing sales...(using this psychological trick) (2021-06-30), 00:05:53](https://www.youtube.com/watch?v=GO6VCcLlnLs&t=353s)

## 5. Charge exorbitant prices by controlling supply
* Supply and demand: cut supply and raise price; most people cut supply but keep the low price. [How To Charge Exorbitant Prices (2021-06-16), 00:03:44](https://www.youtube.com/watch?v=iFhiK5zORGk&t=224s)
* His example: three people at $100,000 for a day beats five at $20,000, with less operational drag and more room to over deliver. [How To Charge Exorbitant Prices (2021-06-16), 00:05:21](https://www.youtube.com/watch?v=iFhiK5zORGk&t=321s)
* Marketing is stimulating demand; use waiting lists and caps; it's completely up to you what full capacity means. [How To Charge Exorbitant Prices (2021-06-16), 00:04:49](https://www.youtube.com/watch?v=iFhiK5zORGk&t=289s) [How To Charge Exorbitant Prices (2021-06-16), 00:06:25](https://www.youtube.com/watch?v=iFhiK5zORGk&t=385s) [How To Charge Exorbitant Prices (2021-06-16), 00:06:56](https://www.youtube.com/watch?v=iFhiK5zORGk&t=416s)

## 6. Brand premium
* You can measure brand strength by how far above the commoditized price you can charge (Nike vs generic). [13 Years Of Brutally Honest Business Advice in 90 Mins (2024-05-11), 00:56:33](https://www.youtube.com/watch?v=KhFlD54nQrY&t=3393s)

## 7. Pricing checklist (official free PDF)
* Be more expensive than everyone else "by enough that it causes consumer to pause"; high price = higher value; higher prices get people better results. Then maximize the value equation (dream outcome, perceived likelihood, time, effort). [Acquisition.com free PDF: pricing-value-checklist](https://www.acquisition.com/files/pricing-value-checklist.pdf)

## 8. Pricing like private equity, and raising prices on existing customers
* A Vista pricing lead (Vista: the private equity firm he describes as the world's largest for software) told him their mantra is tripling their money in three years (three and three); he then explains how he applied the concept at Gym Launch. [Pricing Lessons From a Private Equity God (2020-10-08), 00:00:34](https://www.youtube.com/watch?v=hnfh2jqNVEQ&t=34s) [Pricing Lessons From a Private Equity God (2020-10-08), 00:01:39](https://www.youtube.com/watch?v=hnfh2jqNVEQ&t=99s)
* Raising prices on existing customers is different from raising them on new ones; his letter frames it around the customer, mentions the company's growth, and explains the costs incurred to provide the value. [How To Raise Your Prices [plus the letter I actually sent to customers] (2021-07-19), 00:00:00](https://www.youtube.com/watch?v=Gy-RmpRif-I&t=0s) [How To Raise Your Prices [plus the letter I actually sent to customers] (2021-07-19), 00:02:08](https://www.youtube.com/watch?v=Gy-RmpRif-I&t=128s) [How To Raise Your Prices [plus the letter I actually sent to customers] (2021-07-19), 00:03:13](https://www.youtube.com/watch?v=Gy-RmpRif-I&t=193s)
* Sticking point two: you either charge too little or you pay too much. [Business Was Hard Until I Understood These 4 Concepts (2024-07-15), 00:04:19](https://www.youtube.com/watch?v=F84olnKkseM&t=259s)

## 9. Speed incentives when supply constrained
* When supply constrained, add margin with paid speed incentives to move to the front of the line. Same work, more money. [How I Would Build a $10M Service Business (If I Had to Start Over) (2026-08-29), 00:20:28](https://www.youtube.com/watch?v=o64cI6tebnU&t=1228s)

## 10. Run pricing surveys early (I Built 4 Businesses In A Row)
* You want to run pricing surveys early; he says they unlocked four times the pricing power by repackaging how they charge (usage, recurring fees). [I Built 4 Businesses In A Row To Show It's Not Luck (2023-02-22), 00:09:36](https://www.youtube.com/watch?v=0mqqbuM9sAk&t=576s)
* At Gym Launch, supplement sales to each gym's members were set up to cover the cost to acquire a customer, and physical products add no extra fulfillment work for the service. [I Built 4 Businesses In A Row To Show It's Not Luck (2023-02-22), 00:05:19](https://www.youtube.com/watch?v=0mqqbuM9sAk&t=319s)

## 11. Price is the biggest lever on profit (How to Make Money So Fast It Feels ILLEGAL)
* You can't sell out of your wallet; sell off the value you create. That let him charge and profit far more than others in his space. [How to Make Money So Fast It Feels ILLEGAL (2024-12-05), 00:01:40](https://www.youtube.com/watch?v=k-3PoOT4vOM&t=100s)
* Price is the single largest lever on profit; he walks a $100 table example with $50 cost and other costs to show it. [How to Make Money So Fast It Feels ILLEGAL (2024-12-05), 00:06:29](https://www.youtube.com/watch?v=k-3PoOT4vOM&t=389s)
* Fast cash conversion cycle: collect cash back quickly so you can keep reinvesting; he credits it for going from about $1,000 in the bank in December 2016 to $10 million in sales ten months later. [How to Make Money So Fast It Feels ILLEGAL (2024-12-05), 00:11:28](https://www.youtube.com/watch?v=k-3PoOT4vOM&t=688s) [How to Make Money So Fast It Feels ILLEGAL (2024-12-05), 00:21:28](https://www.youtube.com/watch?v=k-3PoOT4vOM&t=1288s)

## 12. Always have an expensive option (If I Started A Business in 2026)
* His math: if 90 of 100 buyers take the cheap product and 10 take the expensive one, three quarters of the profit can come from the expensive thing; even in tiny tiny volumes, lots of zeros still add up. [If I Started A Business in 2026, I'd Do This (2025-12-06), 00:09:42](https://www.youtube.com/watch?v=uWdIgftpvBI&t=582s)
* Make the expensive version worth far more; pick the right avatar first, and describe their pain specifically, because pain and persuasion only exist in the specific, never the vague. [If I Started A Business in 2026, I'd Do This (2025-12-06), 00:11:53](https://www.youtube.com/watch?v=uWdIgftpvBI&t=713s) [If I Started A Business in 2026, I'd Do This (2025-12-06), 00:12:57](https://www.youtube.com/watch?v=uWdIgftpvBI&t=777s) [If I Started A Business in 2026, I'd Do This (2025-12-06), 00:14:02](https://www.youtube.com/watch?v=uWdIgftpvBI&t=842s)