Premium High-Ticket Offers Drive Business Growth and Profitability

Key Quotes

"So first either sell extremely expensive stuff to a select few or sell something super cheap to everyone the middle is where people die so fundamentally all businesses have the cost of getting customers and what you make from those customers as the core economic arbitrage that makes it a business you have a more efficient way of taking resources and allocating them to get superior throughput on the other side that's literally what a business is"

Alex Hormozi explains that businesses thrive by focusing on either high-ticket sales to a niche market or low-cost offerings to a broad audience. He identifies the core economic principle of a business as the arbitrage between customer acquisition costs and customer lifetime value, emphasizing efficiency in resource allocation for superior results.

"having worked with thousands of businesses now i can tell you that it is significantly easier when you're starting to sell extremely expensive to a select few and the reason for that is that you have to make enough money to be able to serve the masses so if you look at tesla as a great case study for this tesla started with a 250 000 roadster clearly selling to a select few and it was like a beta test car"

Alex Hormozi asserts that beginning with high-priced offerings for a limited clientele is generally easier for new businesses. He uses Tesla's strategy of launching with the expensive Roadster to fund the development of more accessible models like the Model S and Model 3 as an example of this approach.

"one of the simplest ways to create an expensive offer is to sell your time one on one even if it's unscalable now i'll give you a personal story and then i'm going to sell you on why i think this is actually useful when i started my personal training business which was a gym on huntington beach i had a client who wanted personal training"

Alex Hormozi suggests that selling one-on-one time is a straightforward method to create a high-value, albeit unscalable, offer. He illustrates this with his experience in a personal training business where a single client's consistent engagement provided significant cash flow.

"number one is that you will learn more from fewer high value clients all right and if you're around those higher value clients you will work with better people and it will shift your belief set about who really is in the market right like if you've ever struggled to sell a 50 membership as someone who has it's insane when all of a sudden someone's like here's 15 000 you're like what just happened 15 000 that's 3 000 50 sales that i'd have to make in order to get 15 000 that's how absurd that is but when that happens again and again it shifts how you see money and what services you think about creating"

Alex Hormozi argues that engaging with fewer, high-value clients leads to greater learning and a positive shift in one's financial beliefs. He contrasts the difficulty of selling a low-priced item with the transformative experience of receiving a substantial payment, which alters perceptions of market potential and service creation.

"the idea here is that as long as the thing that you sell your hourly rate for is more than you currently own you will make more next point when you are doing one on one especially in the beginning you have significantly more flexibility and delivery that means because it's one on one you can change things on the fly and also when you have fewer clients you can make these kind of quick iterations"

Alex Hormozi posits that profitability increases when the value of what you sell hourly exceeds your current earnings. He also highlights that one-on-one services, particularly early on, offer considerable flexibility for on-the-fly adjustments and rapid iteration due to a smaller client base.

"the reason one on one is so powerful is because the supply is so is so contracted so fixed it's so small and so it forces as long as you don't have limiting beliefs which is what i'm trying to make this for you it forces you to raise your price and so the next one and this is controversial you make the money nobody else does if you trade your time for money you have a 100 margin it's fantastic"

Alex Hormozi explains that the power of one-on-one services stems from their highly restricted supply, which, absent limiting beliefs, compels price increases. He controversially states that trading time for money can yield a 100% profit margin, as the revenue generated beyond personal expenses is pure gain.

"now what else happens when you have a super high ticket unscalable premium one on one experience you lift your entire brand because if you charge 10 000 an hour something absurd doesn't matter and the thing that you have is 100 you can then have a very natural narrative of listen a lot of people can't afford to work with me one on one that's totally cool i've taken the lessons i have here and put them into a scalable format for everyone it literally increases the perceived value not just from the anchor effect but from the narrative the association the branding that occurs as a result"

Alex Hormozi details how a high-ticket, unscalable one-on-one service elevates a brand's perceived value. He explains that this premium offering creates a natural narrative for more accessible, scalable products, leveraging the anchor effect and brand association to enhance overall market perception.

"the big hack and this is also new with some of the ai stuff that's out there is go into the books that people are buying in your niche and then extract the reviews and then get the quotes that are specific to their pain and so one of the really interesting things about copy is that if you can articulate someone's problem better than they can they will inherently believe that you can solve it"

Alex Hormozi proposes using AI to extract customer pain points from niche book reviews, suggesting that articulating a problem more effectively than the customer can builds inherent trust in one's ability to solve it. This technique is presented as a powerful copywriting hack for persuasion.

"the reason that this is important is that it will motivate someone's action to buy more than just about anything else so you're not going to sell someone who's wealthy on how much money you're going to save them you'll sell someone who's wealthy based on how much time you're going to save them even more because money has an implicit value their time is the one that over time will become significantly more valuable than the money"

Alex Hormozi emphasizes that speed, or reducing latency, is a primary motivator for purchasing decisions, especially for wealthy individuals. He argues that saving clients time is more persuasive than saving them money, as time becomes increasingly valuable relative to money over the long term.

"the tldr big picture is that no matter what no matter how many customers you have if you simply make a 10 times more expensive offer you will have a percentage likelihood that is greater than zero that someone will buy and when that happens you will be reinforced for