Alex Hormozi: How I RAISE PRICES without losing sales...(using this psychological trick)

The video is about a psychological trick that Alex Hormozi uses to raise prices without losing sales in his businesses.

This video by Alex Hormozi was published on Jun 30, 2021.
Video length: 07:15.

In this video, Alex Hormozi shares his process for raising prices without losing sales.

He explains that one of the fears of raising prices is that the sales team won't have conviction or the market won't bear the price, but he has a process that has worked well for him. He outlines a strategy where he bumps up the top price by an additional percentage and offers a prepayment discount, allowing customers to have an emotional comfort zone while still increasing profitability.

He emphasizes the importance of meeting customers where they're at and giving them their home base number, anchoring a higher price point, and offering a prepayment discount.

• Raising prices is a profitable business strategy.
• A process has been developed to raise prices without losing sales.
• The strategy involves bumping up the top price, making it the anchor price, offering installment payments, and pre-payment discounts.
• Using uneven splits can keep more cash upfront.
• Offering a pre-payment discount can encourage customers to pay the higher price.

How I RAISE PRICES without losing sales...(using this psychological trick) - YouTube

Introduction

• Raising prices is a great way to increase profitability in a business.
• Fear of losing sales is a common concern when raising prices.
• A process has been developed to raise prices without losing sales.

The Strategy

• Bump the top price up by an additional percentage.
• Make the new price the anchor price.
• Offer the option to pay the original price in two installments.
• Offer a discount for pre-paying the higher price.
• Use uneven splits to keep more cash up front.

Takeaways

• Give customers an emotional comfort zone by offering a home base price.
• Anchor the price higher than the desired price.
• Offer a pre-payment discount to encourage customers to pay the higher price.
• Use uneven splits to keep more cash up front.
• Minor price increases can be split into smaller payments to encourage upfront payment.

How I RAISE PRICES without losing sales...(using this psychological trick) - YouTube

Conclusion

• Raising prices can be done without losing sales.
• Using a process can help alleviate fears of losing sales.
• Offering a pre-payment discount can encourage customers to pay the higher price.

How to Raise Prices without Losing Sales

• Offer a prepayment discount to give customers a sense of home base and incentivize them to pay upfront.
• Jump over the price you plan to set and use a higher price anchor to make the prepayment discount seem more attractive.
• Make the comfort price compared to the prepayment discount only marginal to encourage customers to pay upfront.
• Raise prices successfully, get more people to prepay, and make the sales team feel confident and convicted about the pricing.
• Clear the pipeline and announce price increases to create true scarcity and urgency, motivate the team to close more deals faster, and get a nice boost of cash flow before making the change.

Watch the video on YouTube:
How I RAISE PRICES without losing sales...(using this psychological trick) - YouTube