Alex Hormozi: I made $100,000 by sending this letter to my customers...

The video is about how to raise prices on existing customers in a tactical way by sending a price increase letter that focuses on the value provided and ties the increase to a promise of values.

This video by Alex Hormozi was published on Jul 19, 2021.
Video length: 08:22.

In this video, Alex Hormozi explains how to raise prices on existing customers in a tactical way.

He emphasizes the importance of pricing as the number one lever to make more profit and provides a process for raising prices through a price increase letter. The letter should focus on the value the business provides, what they are currently doing, what they plan to do in the future, and tie the increase to a promise of values.

Hormozi also suggests communicating the price increase in an attractive way, such as breaking it down to a weekly or daily cost.

• Raising prices on existing customers is important to increase profit
• Send a price increase letter that focuses on the value provided and ties the increase to a promise of values
• Communicate the price in a way that's attractive
• Getting rid of problem customers can be beneficial
• Pricing is the number one lever on making money

I made $100,000 by sending this letter to my customers... - YouTube

Introduction

• It's important to raise prices on existing customers in a tactical way
• Raising prices on new customers is necessary to reinvest in the business, cover capital expenses, or make more money
• Pricing is the number one lever on making money
• Raising prices on existing customers can upset them, but it's important to do so to increase profit

The Right Way to Raise Prices

• Send a price increase letter that focuses on the value provided and ties the increase to a promise of values
• The wrong way is to send an email out saying "we're raising our prices, screw you"
• When Alex did this in his gym, he tripled his price and kept two-thirds of his customers at three times the price
• The goal is to get rid of problem customers and keep only the people who love you
• The way to do this is through a price increase letter

The Format of the Price Increase Letter

• The letter should be about the prospect, not about you
• Start by saying why you're writing the letter
• Talk about what you're currently doing to provide value
• Tell them what's coming and what you want to add
• Tie the increase to a promise of values that no one can contest
• Communicate the price in a way that's attractive, such as breaking it down to weekly or daily costs

I made $100,000 by sending this letter to my customers... - YouTube

Conclusion

• Raising prices on existing customers is important to increase profit
• Send a price increase letter that focuses on the value provided and ties the increase to a promise of values
• Communicate the price in a way that's attractive
• Getting rid of problem customers can be beneficial
• Remember that pricing is the number one lever on making money

How to raise prices on existing customers

• Maximize the value provided by listing all the things the business is doing that the customer may not know about.
• Tie the price increase to a promise of future values and benefits for the customer.
• Explain that the price increase is necessary for the business to maintain its integrity and invest in growth.
• Add a PS at the end of the letter to give perspective and open the door for discussion for customers who may be materially affected by the increase.
• Make the announcement via video and direct mail, and turn off comments to manage and mitigate any negativity.
• Stick with the decision to raise prices, even if some customers leave, as the increase in profit can outweigh the loss of customers.

The structure of the price increase letter

• Set the stage for why the business is raising prices.
• List all the things the business is currently doing that the customer may not know about.
• Explain the future of the business and the benefits that the customer will enjoy.
• Explain how the benefits will impact the customer in a real way.
• End with values and perspective to give the customer a bigger picture and anchor for the discussion.
• Include a PS at the end to open the door for discussion for customers who may be materially affected by the increase.

Watch the video on YouTube:
I made $100,000 by sending this letter to my customers... - YouTube