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Hey guys, welcome back to the game. Today's a throwback episode where I go over a handful of things

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specifically around pricing and the downstream effects it has on the business in terms of the

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customers that you bring in and what kind of team you can attract as a result, which can spin

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the long-term wheel for a sustainable competitive advantage. And I think that there's a little bit

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of nuance that I dive into in more detail here around the different viewpoints between rich and poor

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people and how that can have huge cascading effects in the business. Enjoy. When people are

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poor, they tend to sell out of their own wallet. They sell using their perception of what money is.

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And so they think something's expensive and therefore they don't want to be offensive to

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whoever they're selling to. But what that is is fundamentally a selfish viewpoint because you're

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never putting yourself in the other person's shoes and the other person might have all the money

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in the world and just want to solve a specific problem. And so what I want to walk through today is

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why charging more has five significant benefits to your customers that actually make you a

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better service provider by charging more money. And it'll give you five specific benefits

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around your actual business itself that'll make your business more successful. And if you don't

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know who I am, my name's Alex Mosy, I'm an acquisition.com. We run a portfolio company that does

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over $200 million a year. And I make these because I want you to make lots and lots of money and

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then hopefully someday partner with us. Beyond that, it's just to make you more money. All right,

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so I've ever seen this meme that's like the customer says, well, what exactly am I going to be

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getting for $50? And then it has the rich customers like wire set. Let me know what next steps are.

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Right. It's this wildly different viewpoint that poor people have versus rich people. And at the

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same time, I made three tweets in a row that each one of them massively outperform and it was so

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weird to me that this was like a novel concept. And I said, solve rich people problems. They pay

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better. And if you solve rich people problems, they will make you one of them. And when you solve

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rich people problems, you get to charge rich people prices. And so it's this interesting concept

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that a lot of people miss out on. And part of the reason that a $50 person is said, well, what exactly

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am I be getting? If somebody's got $100 in their bank account, you're asking for 50% of their net

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worth. Right. And so for them, it's a very important decision, but it's also completely ridiculous.

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And unfortunately, this still might be half the population. Doesn't mean necessarily should sell

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to them. Right. And at the same degree, that $50,000 might have been less than 1% of that other

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persons net worth. So they just didn't even care. It would have been the equivalent of trying to

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sell a dollar to that person as $100 in their bank account. Right. And the thing is is that you can only

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go to zero. Right. Like you can only be so poor. Right. But you can be infinitely rich. And so

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your upside is uncapped, but your downside is zero. And so when you deal with rich people,

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you have unlimited upside, which is why they are better customers. Now, like I said, there's

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five things I want to talk about from the customer perspective. And my whole goal of this is to

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actually sell you on one, increasing your prices, but two, increasing the quality of your customers.

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Because if you increase the quality of your customers, you increase the quality of your business.

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And in a very real way, the smarter the people you sell to, the actually better the client results

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are. Alright. So let's dive into the five. So number one, when you charge more money for your

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products or services, you get an increased emotional investment. Right. Because on the flip side,

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if you decrease your price, people care less about your products and services. So if you ever have

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anything that you have, you require something on behalf of the other person, which almost all

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products and services do, even physical products and services people have to open a box. They've

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just set it up, et cetera. And so if you have a very low cost item, people won't even give it the

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time of day. They won't even try enough that even if your product or service is good,

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they never even gave it a shot. And so when you raise the price, you raise their emotional

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investment. And in a real way, you actually increase the likelihood that they get results.

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So the second way is that it increases their perceived value. So I tell this story a lot,

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but I'll tell you right now. So there was a research study where they had three bottles of wine.

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Alright. They had a cheap wine. They had a mid price wine. And they had an expensive wine. And

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they had people try them out. And they had them rank them based on what they thought. And so people

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said, oh, I think the most expensive wine is the best. The middle price is the middle. And the

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cheapest wine was the worst. And that's not that surprising, except when the research has explained

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that all three wines were the same. And so in a very real way, when you raise your prices,

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you do actually make something that's more valuable. Because if that's what we're trying to get at,

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which is value, price confers value to your product. A more expensive thing is perceived in real

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terms as more valuable, even if the actual core product is the same. Why would you not want to make

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your thing more valuable? The third is results for your customers. If you increase their emotional

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investment, you increase their perceived value, what ends up happening? They actually do get better

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results. They do have a better wine experience. They do when they sign up for the gym for personal

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training versus a $10 a month thing, they get better results. And so if you want to get people

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the results that you promise, or you claim that you're going to get them, then you should stack

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every single chip in your favor that's going to get them the result that you're promising.

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And the price is one of those things. And so some people want to lower their price because I want

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to help everybody. But you're actually not. You're not helping everybody because most of those

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people aren't going to be emotionally invested. They're not going to proceed as valuable. They're

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not going to get the results that you so promised, which means that you have to draw a line in the

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sand and say, I can only help the people who are swimming towards me. So the fourth thing is that

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when you raise your prices, you actually track less demanding customers. And so anybody who's

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ever been in client services can attest to this. But the higher the price tag, the more expensive

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the contract, the more upfront someone pays their bills, the fewer payment plans you have to set

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up. The easier the customer is to deal with. And if you've ever had this, like the paid and

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full upfront, hey, can I save a little bit if I pay an all cash today? That customer, that one

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is the easiest one to deal with. The one that you have to arm wrestle for an hour to get $50

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on a payment plan over 24 months. This investment is so important that they're going to milk the life

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out of you to get every penny's worth out of you. And it's like, sometimes it's not worth it.

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Because just like what you, prices, what you pay, values, what you get on the flip side,

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just because someone pays you money, you may be underwater in what you have to deliver. So just

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because someone's willing to pay you doesn't mean that you should take it. The fifth benefit that

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your customers will get as a result of raising your prices is that you actually have more money

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that you can deliver on your promises for. So imagine you've got a hard-cost thing that costs

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five bucks, right? And you can add and subtract zeros here. I'm just using simple numbers.

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So if you have five bucks to do the thing, right? And you charge eight bucks,

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we only have three dollars left to run the rest of your business, provide service, etc.

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Right? Like you don't have a lot of room there. Now imagine you charge $50 for that same five

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dollar thing. You have $45 of additional gross profit that or additional be $42 of additional

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gross profit that you can now use to blow the other competitors' experience out of the water.

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Like you can, in a very real way, deliver two, three, four times the value. And in many times,

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if you do deliver two, three, four times the value, the customer gets a better experience. And so

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if our whole business here is actually trying to provide value, then we want to increase the

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emotional investment of the customer. We want to increase the perceived value. We want to have

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the least at the least demanding person possible have the most possible revenue we can have

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to deliver the results that the person actually wants. And so if we make these promises,

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we should stack as many of the chips as we can in our favor. And one of the biggest ones is the price.

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Now, let's talk about the business side because there's five significant things that will change

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when you start raising your prices in the business. Number one is that like the example I gave,

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if you had an eight dollar thing that cost you five bucks, you have three dollars in gross profit,

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and you've got to run everything also off of those three dollars. So if you were just the most

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efficient person in the world, right, let's maybe just run on half of that, which is $15,

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or sorry, $1.50 left, right? We're already paper thin here, right? On the flip side, when you

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have a significantly higher price, you have way more room to make mistakes. And I say that because

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no one's perfect, we all make mistakes in business. And what you don't want is mistakes that you

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can't recover from. And having a premium price product or a luxury product that has a lot of

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margin there allows you to make mistakes. And as businesses are seasonal and you have macroeconomic

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environments, the people who don't have that padding are the ones that go under. And so having that

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padding in a real way can increase the likelihood that you can play the game in a long run.

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The second thing is that as a business, it actually increases your perceived value of self. Like,

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what do you think about when you think about, you know, a Walmart versus a Saxo Thabney or a

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Neiman Marcus, right? They occupy different spaces in your mind. And if you're the business owner

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of that business, then having a higher perceived value of self, which a lot of times when people are

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starting out, they don't think they're worth very much. And sometimes they're right. But the thing is

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is that you still need to charge a certain amount so that you can have the excess resources to get

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better. If you never have any money left over, you can never reinvest in yourself. You can't

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reinvest in your employees. I'm getting a little bit ahead of myself in terms of things that you can

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do. But while this leads naturally to the next one, which is when you have extra cash left over,

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you can reinvest in your product, right? You can actually research and you can test out new

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things. You can make prototypes. You can test out new divisions of service. You can attract higher

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level talent to your business. If you have no margin, the best people aren't going to work for

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you. Why? Because they're going to go to the real business owner who understands how margin

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needs to work so they can attract the best talent. And then now you're not only being out

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competed by that person in terms of profits, but they also can scale way better than you because

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they have decentralized decision making because they have lots of smart people all working together

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because they priced the product right and they're dealing with the right types of customers.

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Whereas you're sitting here dealing with fires all day because of people haggling over $50

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with employees who can't string sentences together because you can't pay anybody who's worth a

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shit to actually work for you to terrible life. I know because I lived it. So just don't make

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that mistake. Like start off high and allow the extra profits to increase your perceived value

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self. Hope you attract the better customers. Have the profits to reinvest in the business itself.

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Attract better quality employees. Increase the conviction of your sales team if you do sell

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because think about it. If they're selling the shit product and they see the other guy on the

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market who's more expensive, the only thing they're going to have is we'll wear a lot cheaper.

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They know you're not better. But if you're the salesperson you can approach and say well yeah,

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I mean if you want you can try that one first and then come back to us because that's what

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everyone else does right or you can not make them stick and actually save yourself a little bit

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money and instead of buying twice just buy nice ones and solve the problem for good. And so the

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salespeople can enter these phone calls or these conversations with the conviction that they're

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actually going to help this person and that is the best way to sell is having the full conviction

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that your product is the best and you can't say your product's the best if you're trying to do it

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on margin and you don't have the money to reinvesting good people reinvesting keeping it innovative

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at the at the front of the market. You can't do it, right? And so I'm a big believer in just

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making big promises and then delivering on big promises. Like that is the types of businesses that

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I like to build. And when you have all of these higher paying, lower demanding, happier customers,

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your perception of the real impact you're actually making goes up. And so your conviction over the

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entire business and your mission of like I actually came here to help people starts to become

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reinforced and it becomes this snowball that starts rolling and you have these testimonials and

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these reviews that start rolling in and the momentum builds. On the flip side if you don't have

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that you have less margin and it becomes this vicious cycle in the other direction where you're

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not getting these testimonials or you're getting his chargebacks and refunds from these demanding

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customers that had unrealistic expectations because it was such a high percentage of their

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network. There was nothing that was going to save them from themselves, right? And so you have

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two stories that you can play out and solving rich people problems allowed to charge rich people

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prices. They pay better, they're easier to work with and ultimately they allow you to build a

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business that can withstand different seasons and be in a position to succeed long run.

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This is very fortuitous timing wise, but the time this is being made, the richest man in the world,

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everyone's like, what about big tech? What about AI? And I believe me, I think it's scary,

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shit. So the richest man in the world right now is not big tech, it's not big pharma, all the things

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that the news wants to talk about. It's a man selling $10,000 per se. All right, if you don't know

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who he is, his name is Bernard or no, he owns most of the major luxury brands that you've heard of.

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So if you've never been to a luxury mall and if you haven't, I really strongly recommend that

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you go to one because it might not be in your neighborhood. It might not even be close to your city,

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but you should go because what will happen is it will stretch your mind in terms of what you

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believe is possible. If you don't make a lot of money and you see a purse for $10,000 and you see a

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jacket for $50,000, it changes something about how you see reality. You're like, and I would urge you

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to not say those people are ridiculous. I can't believe someone would spend money on that.

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What I want you to do is actually empathize with the buyer. What kind of person would spend $50,000

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on a jacket? Well, what conditions would have to be true in order for that to make sense? Because

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think about this. A lot of people are like rich people are crazy, but rich people are the ones with

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all the money. So they must have done something differently than poor people. So try and think about

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why would it make sense to this person? Well, if I can pick from all jackets and I have so much

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that the difference between a $100 jacket and a $50,000 jacket in relative terms is a $10 difference

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to me in my wealth, then I just want the best jacket. And so I'm willing to just pay whatever it is

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because if you had a significantly better jacket for $10 more in your own net worth, you probably

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would be willing to pay for it. And so do they. It's just that they have more zeros. And so Bernardo

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know capitalized on this. And so there's four distinct positions you can have in any marketplace.

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You can have bargain, which is the absolute cheapest one, which typically is poor quality in general,

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poor experience, but barely, barely gets the job done, but it gets the job done, but barely.

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The next is best value. All right, so this is the difference between like a Walmart and a target,

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right? Target is better value. It's got brighter lights. It's cleaner in theory, right? And it's

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just a little bit better, right? It's the best value for the buck. The third position in the market

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place is premium. So it's the best versus that's the that's the high end Lexus, right? That's the

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BMW. These are premium products. They're above average based on price. It's not the best value,

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but is better than the best value. And then the fourth position in the marketplace is luxury,

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where the price has no cap. And part of the value of the product itself is the cost that people

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know you paid to get it. So Bernardino lives in this luxury bubble. It's where people associate

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their status with the purchase they made. And what an amazing position to be in. He's like, so I

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just raise my prices even more, and people want to buy more. And so there's called veblin goods

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in economics. They actually defy the supply demand curve rules, because typically when you raise

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prices, you decrease volume, but in luxury goods, when you raise prices, you increase how many

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you sell. And that creates this unbelievable amount of profit, which is what has now propelled

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him to be the single richest man in the world. Something to learn from this guy. And so the number

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one question that I got from all the the tweet responses I had from those three or four tweets in

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a row I made about about solving rich people problems is, well, what are rich people problems?

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It's a great question. So rich people have the same problems that poor people do. They just

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want them solved differently. And if we go back to our trusted value equation, the big thing we want

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is we want to deliver a big dream outcome, right? We want to deliver an outcome that they want.

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Number one, number two, we want them to believe with very high confidence that if they work with us,

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they're going to get what we promised. On the bottom side, they want it to be incredibly fast. So

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as soon as they pay, they want to get. And then they want to have as little effort and sacrifice

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as soon as possible. And with the rich speed and convenience are paramount because the money is

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never an issue. It's how much you're going to ask of my time and how painful you're going to make

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this for me. And so if you think about the white collar echelon, you've got investment bankers,

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you've got management consultants, all right? At the highest level in my opinion of this kind of white

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collar world who deal with rich clients. The banking world fundamentally goes to rich people and says,

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I'm going to allow you to give me a billion dollars. And I'm going to take that billion dollars.

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And I'm going to give you back five billion dollars in 10 years or five years or whatever. And they're

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like, okay, well, what do I have to do? And they're like, nothing. You just write me the check.

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Like, okay, so I write you the check. And then there's nothing else I have to do.

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Correct. Well, what's my perceived likelihood of achievement? How do I know this is going to happen?

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Well, here are the other three funds I've done. And I've averaged X over five years in each of

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these ones. Okay. So you've done this three times over 15 years. And you've had that each time.

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It's pretty high perceived likelihood of achievement. The dream outcome is I want to make way more money.

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And I'm going to do it without any time or effort on my part. Here you go. That is how billions of

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dollars are made because they find what what problem does a rich person have? What what can they

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can do with their money, right? Which is why investment vehicles and investment opportunities

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appeal to the wealthy. And the more passive you can make it, the less time involvement they have,

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the more turnkey it is, the higher the likelihood that you have a tracker that they're going to get

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what you have promised, they'll write you an unlimited check. If you can get 20% returns like

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clockwork with virtually no risk, you can tap into literally unlimited money. Anyone, massive amounts.

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And I keep going here was risk, right? If you find a way that there basically is no risk,

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and you can get 20% returns twice the stock market, you can have as much money as you want.

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Now here's where the little wrinkle comes in for those types of solutions. Many times you can find

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those things, but the opportunity can't take unlimited money. So buddy of mine, it figured out

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a short term revolving credit line thing for specific businesses that can't get credit lines,

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but they had assets in excess of the credit line, meaning if they defaulted for whatever reason,

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they could claim assets that were worth more. So his asset backed loans. And so he was able to get

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50% annual returns, but he maxed out that entire market with like 20 million dollars of liquidity,

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that little niche that he had found in business. But 20 million dollars may be more than what you

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currently are working with. And he structured his fund so that he would get 20% of the upside.

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And so if he takes 20 million dollars and he does 50% growth every year, right? He's able to

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grow to whatever it is. I don't know, a hundred million bucks at the end of this. And he gets 20%

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so he makes 20 million dollars. And so for many of you watching this, you'd be like, I'd be happy

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with 20 million dollars. And so all you have to do is find ways to solve rich people problems. And

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that's a big investment bubble. But let's let's go down to like day-to-day types of businesses.

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Rich people will want off in the same services as poor people because they are humans. But the way

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they want it delivered is going to be focusing on the bottom two variables of value, effort and sacrifice

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and time. Rich people will always pay for speed. And so if you don't have a fast option,

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or if you look at a marketplace and there's lots of slow stuff, the easiest way to appeal to the

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rich is just do the same thing in half the time. Whatever the services, if it's dry cleaning

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and they can do it in a day, return it by end of day, right? And the effort and sacrifice, if you

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were in any kind of home services type business, a lot of the issues there is English speaking

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people, right? A lot of people don't speak very good English. They would pay the premium to just

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know that one, their stuff's not going to get stolen, two, the stuff's going to be done consistently

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every time. And three, they're going to be speaking to somebody who understands them immediately.

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And they don't have to repeat themselves. And then say an entire sentence in English and say,

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comprenday, or see, right? They don't want that. And this is in America. So whatever your

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native tongue of your country is, apply that thinking to whatever the service is. You just want to

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make sure that whatever the rich person's native tongue is, is you're making it as easy and

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effortless as possible for them to communicate with you in whatever way they want. And so if you

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only have a phone number, well, be the person that can accept anything so that if they email you,

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if they shoot you a text, if they WhatsApp you, if they phone call, you can accept anything

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because you've made it more easy and convenient and effortless for them to communicate with you.

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And so I want you to think through these value equation variables because that is fundamentally

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how you deal with rich people is that they just want it to be effortless. They don't want to think

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about it. And they will pay you through the nose to do it because for them, it's not through the

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nose because you need to make sure you're selling out of there while I'm not yours.

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Hey guys, real quick, if you're new to the podcast, I have a book on Amazon. It's called

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$100 million dollars offers that over 8,000 five star reviews and it has almost a perfect score.

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You can get it for 99 cents on Kindle. The reason I bring it up is that I put over a thousand

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hours into writing that book and it's my biggest gift for our community. So it's my very shameless

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way of trying to get you to like me more and ultimately make more dollars so that later on in your

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business career, I can push the bar number with you. So that's my gift. Go check it out.

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Amazon and back to the show.

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One of the main things I want to hit here is how you sell to rich people, okay? The big thing

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that poor people do when they're trying to sell in general is again, they sell it at their own

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wallet. When I say that, it's like, if you're poor, you think this means a lot and so you feel like

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you have to justify your price all the time. If I hear that, I might automatically know that this

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person is a probably poor, b, doesn't do with many rich people. And so they will weed you out

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knowing that you don't know how to deal with people like them. Real talk. When you sell to

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rich people, the benefits for them are always around it being the best, not it being the best value.

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It's not I want to get the most bang for my buck. It's I just want the most bang, period. And I

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want it to be as easy and effortless as humanly possible. So I went to a fur coat store when I was

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in Park City. And I actually met one of the best salespeople I've ever met. I got a really

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good overcome from him that I'll tell you right now because I think it's awesome. Laila was

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trying on these fur coats because I think they're ridiculous and I love that stuff. And we at the time

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lived in Austin, Texas. So it's hot all the time. There's literally never a point where you could wear

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a fur coat in Austin. And she said, you know, it's not about the money. She's like, I just don't

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think I'm ever going to wear this thing. And he said, well, if they were free, would you take one?

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And she was like, well, good point. He's like, well, then it's not not about the money.

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And he just redirected it back to the price. Now, what's interesting is it's not once during

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the entire conversation that we had there, did he ever mention that the fur coat was going to be

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waterproof? Not never did he mention that it was going to be the warmest jacket, right? Because

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it's not going to beat the Gore tech, you know, Arcteric spider, you know, whatever, you know,

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double triple platinum, right, fake down that can't be destroyed in flames, right? It's never that,

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right? All he was talking about was how we were going to look and feel with this jacket or how

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Layla was going to look and feel at events and basically getting her to imagine what the experience

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would look like after experiencing the product, right? And so if you're dealing with rich people

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on a regular basis, you have to think about the things that they're going to do and how they're

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going to experience the product, not the way you think you would experience it. And so this is where,

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you know, there's the golden rule, which is treat other people the way you want to be treated,

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but that's not actually the best rule for selling. You want to treat people the way they want to be

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treated, right? Which is the platinum rule, which if you've ever heard of that stuff. And so it's

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really coming from a place of empathy. And if right now you don't have a lot of money and you have

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like a little bit of distaste for rich people, I like from the bottom of my heart, you have to

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get rid of that because you cannot become something you hate. And so if you want to make more money,

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you have to empathize first with how did this person get there? What is their worldview? And how do

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they see things? Because it's the first step to being able to walk around in their shoes and make

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products and services that are actually going to serve them because they ultimately, if you think

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about the biggest companies in the world, although many people who are poor use Facebook,

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where does Facebook make its money? Advertisers. Big businesses. And those people act like rich people.

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They want it to be as seamless as possible and they will write it on an unlimited check. They'll say,

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hey, you know what? Facebook, we need to drop 300 million in Q4 because we have to get it off

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our balance sheet. Buddy, mine deals with 4200 companies. And here's what's crazy. His advertising

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agency actually has to front the ad spend. And so he, if they say, hey, I need you to for this

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month in December, I need you to drop 300 million on Facebook ads. He has to front the 300 million

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for the ads, all right? But the thing is is that he has to do it that way because he needs to be

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as easy as humanly possible. But remember, they're good for it, right? And so he actually has to have

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a revolving credit line in the billions with a bank. And so what's crazy is that he charges 6%

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of all advertising dollars as his fee on top of whatever his normal fee is. And so when they drop

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300 million, he gets 6%. Not bad. He gets 18 million bucks just for fronting the cash.

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And so all he has to do is constantly look at credit lines that are less than six so you can

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arbitrage on the money. And so my point here is that rich people have different problems.

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The best thing to do is study luxury brands. If you aren't in an area or you're born in an area

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that doesn't have a lot of nice stuff, I would highly encourage you to at least make a day trip

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out to the really nice part of town, the nice mall. And walk around the stores there. And this

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is unfortunate, but you will get treated differently how you dress in those places. I walk in like this

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and they always treat me like shit, but I kind of like it. So I'm twisted in my own way.

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Like I like the surprise. Of course, I'm the main shopper that they have there. But going there,

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dress like you're not a weirdo. And like look around, like look at the service. Like when you shop at

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a high end store, they'll bring you bottled water that's fizzy. Then they'll have different selections

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of waters. They'll offer you champagne while you shop. They'll offer you scotch while you shop.

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It's a different experience. You're like, well, why don't they do that at, why don't they do

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that at Tillies? You know, why don't they do that at Fuck Arrow pushed off, right? I don't know,

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is that a kid's store? It was probably not. Whatever. Hollister. That's probably a kid's store.

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I don't even know what what are what are cheap store American Eagle. All right. Very good eagle.

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Yeah. H&M. Yeah. Yeah. Framer 21. There you go. Do they offer that there? Of course not, right?

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And so if you're thinking about this, like who's going to get a better experience? Like the clothing

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at the nice stores is way better quality, right? There's no going to argue that. The experience at

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the way better stores is significantly nicer. Guess what you don't try and do? Like you're going to

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have somebody who's assigned to you in the moment you walk in the door. What can I get for you?

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Right? And they become your basically your concierge for the entire experience you have there.

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And they can have and deliver that better experience because of the premium and luxury prices they

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charge. And so if I had the choice of two businesses where I've got a super messy rack that's

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sitting there and people just have to clamor and fight over it versus the white glove,

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champagne, you know, how can I help you experience? I tend to want to serve those types of

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customers, charge those types of prices, make those types of profits and make those types of

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promises and deliver on them and work with my employees and team, really smart people who also

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want to deal with those types of people. And so in a real way, like it isn't in crowd in an

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out crowd, people who are in that world recognize other people who understand that world.

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And if I can get you to think like they think, then you will be able to sell to them.

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Rich people have all the money. And so if you want to go get the money, go to where the money is at.

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There's only one way to win in a low price business. You have to build your entire business from

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the ground up day one based on having a significant operational advantage. You have to build your

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core strategic advantage as we will be the lowest priced person. Do not compete on best value.

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You either got to go premium or you got to go luxury. All right, luxury is your price is so

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high. It can first status to the buyer because your brand is strong. Premium, which is where most

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people is where I recommend you go, is actually just deliver significantly better in a real way service.

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All right, now here the point is that your price, like if you're an amazing marketing agency,

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you're not conferring status to the business by being expensive. You're not luxury, right?

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Luxury often is in consumer goods. So if you're in a business service type business,

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you're not really going to be there. It's much more about, I want the best. I want the most

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bang, not for the dollar. I just want the most bang. All right, the most bang for the dollar is

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best value. And this is where the graveyard of most businesses sit. They try and offer a little

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bit more for a little bit less. And they look at the next act comes in, you try to offer a little

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bit more for a little bit less. And then eventually you can't offer any more for any less and you

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just stay in what I consider a capitalist nonprofit. You just don't make any money and you do it for

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years and it crushes your soul because you kept trying to do a little bit more for a little bit less

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because you're selling the wrong person. And so if you're going to get into the price game,

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you got to go for the absolute bottom and build your business from the ground up only off of

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remote workers, automate as much as humanly possible. You come into it like the first answer is

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always how can I automate it? Not who do I hire or how do I outsource it? It's always how do I

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automate it, right? And then the second is if I absolutely can't automate it, I'll have to bring

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someone off shore. That's a different business model than you probably have and might not even be

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a business you're interested in. And the problem is there can only be one low price leader. The

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cheapest person. There's no advantage. And this is from Dan Kennedy. There's no advantage to be in

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the second cheapest person in the marketplace. But there isn't advantage to being the most expensive.

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And so when you sell to rich people, you get to charge rich people prices. They pay better.

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And if you solve their problems, they will make you one of them. So when you do with better

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customers because you've raised your prices, you're going to attract better people because the rich

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people are attracted to higher prices. They seek them out like bloodhounds. I actually want to know

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what the most expensive thing is because I know that the business owner who said it up that way

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understands how I want to be treated. But not a thought about it like that. I literally look for

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the most expensive thing because I just assume it's going to be the best. And most times I'm right

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because that's how most businesses that cater to wealthy people operate. They know what the rich

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person is looking for. They want to speed convenience and they wanted to just deliver exactly how it

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is and not think about it again. All right. They don't want to haggle. They just want to hear.

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Get the extra 20%. I don't care. Like I just want to be in and out and I'm done. All right. And so

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what happens is when you deal with richer people, you have way less demanding clients. The nice thing

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is that when they spend money, they're actually emotionally invested. So when you raise the price,

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people get more emotionally invested. On top of that, they perceive the value as higher just from

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the price alone. All right. There's a big experiment they ran where they had three bottles of wine,

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cheap, middle priced, expensive. They had people try them out and they had them rank them and people

382
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rank them as best was the most expensive, middle was middle. And the cheapest one was the worst.

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Here's what's crazy. The researchers pulled off the covers of the wines and showed them that all

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three wines were the same. And so in a very real way, the price actually increased the value of

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the wine itself. And so when you raise the price, you actually increase the quality of your product.

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On top of that, if you ever have a product or service where you have to get the person to do

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something, which is most products or services, then the higher quality customer you attract,

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in a real way, the better the likely that they will achieve the result because more able people

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can afford more. And so you will increase the percentage of people who are happy and can follow

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through because they are more able. And so you have higher success rates because you attracted

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better quality customers. And so if we want to stack the chips in our favor to make big promises,

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deliver on big promises, have clients that aren't a pain in the ass, right? Deliver results as we

393
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said, we were going to and make more profit along the way. The pathway is up, not down.

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Now, from a business perspective, when you have more profit in the core thing that you have,

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you can reinvest and staying innovative. You can do research and development. You can have

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beta runs and beta products and prototypes. You can do that because you have excess profit.

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On top of that, you can invest in having a superior experience because you have the excess cash

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to give them white glove service, right? On top of that, your conviction in what you sell that when

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00:33:33.200 --> 00:33:39.280
you say, I'm going to deliver this thing and you can, is strengthened because conviction is where

400
00:33:39.280 --> 00:33:43.920
all sales comes from, right? You have to believe what you say. Most people don't actually believe.

401
00:33:43.920 --> 00:33:50.080
And so the thing is is poor people think if when you close a sale, you think, gotcha, you're fucked

402
00:33:50.160 --> 00:33:58.480
up because you actually think that you are ripping off your customers. And so if you, so you need

403
00:33:58.480 --> 00:34:04.080
to change that, like if you don't, if you feel that way, you need to change it because there's

404
00:34:04.080 --> 00:34:10.800
two emotions that you should feel. One is, oh fuck, now the work starts. And the second is,

405
00:34:10.800 --> 00:34:16.000
I'm really glad I can help this person. Like, I get it because I've sold when I was poor.

406
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Like, I understand when you're like, I fucking need to pay bills. I get it. But the thing is,

407
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is like, you have to pull yourself out of that to get out of that because again, wealthy people

408
00:34:25.920 --> 00:34:31.440
can smell that. Like, I love this term commission breath, right? Is that they can smell that the only

409
00:34:31.440 --> 00:34:37.200
reason you're trying to sell them is for you, not for them. And so when you have the most profit,

410
00:34:37.200 --> 00:34:41.120
you can reinvest in the experience. You can reinvest in the product. And most importantly,

411
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you can reinvest in attracting the best talent because how do you scale a business? It's not going

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to be you. You're going to have to have a team. And would you rather have a team of people who

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don't value themselves and don't want to make a lot of money? Or do you want to have a team of

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people who are ambitious, who have big dreams for themselves, who want to learn, and they want

415
00:34:57.920 --> 00:35:03.360
to learn from somebody who's making money? And they will ask for more than people who don't value

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themselves. But here's what's crazy. The biggest cross-cutting tactic Henry Ford said he did

417
00:35:09.120 --> 00:35:13.520
was that he doubled his minimum wage compared to everybody else who he competed against.

418
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What happened? He was able to take all the top talent from everyone else to work for him.

419
00:35:19.520 --> 00:35:22.880
And here's one of the secrets that you probably don't know, and I'm going to tell you right now,

420
00:35:22.880 --> 00:35:29.200
is that A level talent costs twice as much as B level talent, but produces five times the output,

421
00:35:30.080 --> 00:35:36.320
ten times, a hundred times the output, so much more. And A level talent comes batteries included.

422
00:35:36.320 --> 00:35:41.680
They come with a map installed, like a Tesla. They know where they're going, they know the route,

423
00:35:41.680 --> 00:35:44.720
and they already have the motivation to get there, and you just need to get out of their way.

424
00:35:44.720 --> 00:35:48.880
You need to empower them to do what they need to do. But you can't attract those people if you don't

425
00:35:48.880 --> 00:35:53.760
have the profits. And so keep trying to lower your price, keep trying to do best value, do a little

426
00:35:53.760 --> 00:36:00.080
bit more for a little bit less. You ward off the best customers. You ward off the best talent because

427
00:36:00.080 --> 00:36:05.440
they all know each other. Because oftentimes the best talent are people who value premium products

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00:36:05.440 --> 00:36:11.280
and services. And they want to work for a company that they would buy from. And the last one is a lot

429
00:36:11.280 --> 00:36:16.000
of people's prices are a reflection of their value of themselves. And I think there's a big

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00:36:16.000 --> 00:36:20.480
thing that we have to separate here is that you can value yourself and understand that you are not

431
00:36:20.480 --> 00:36:24.960
as good yet. I'm a big believer in what I consider the Chick-fil-A model of pricing,

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00:36:25.600 --> 00:36:31.200
which is it's either free or it's full price. There are no discounts. And that's why when people

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00:36:31.200 --> 00:36:36.400
are starting out, I encourage them to do as many free services as they can. There's a lot of value

434
00:36:36.640 --> 00:36:40.880
that. One is you get a lot of experience. Two, there's lower stakes. Three, you can ask for things in

435
00:36:40.880 --> 00:36:45.680
return that are tangential value. You can get reviews. You can get testimonials. You can get feedback.

436
00:36:45.680 --> 00:36:50.720
All of these things help make you better. And everyone's so they're so short-sighted. Because what

437
00:36:50.720 --> 00:36:54.480
happens is if you're in the beginning and you suck, if you're first five people, you basically rip

438
00:36:54.480 --> 00:36:58.480
off because you're sucking at it and you're trying to learn with them, like your first five customers

439
00:36:58.480 --> 00:37:02.880
don't like you. Like that's a tough way to start. And your perception of business will be shifted by

440
00:37:03.600 --> 00:37:07.120
that. And so if you have a very different dynamic where you're just giving and you're giving away

441
00:37:07.120 --> 00:37:12.560
stuff for free, you're giving away services for free, right? You will have a very different dynamic

442
00:37:12.560 --> 00:37:16.640
and you will learn how to provide value in a different way. And then what happens is once you get

443
00:37:16.640 --> 00:37:21.280
to a point where people are like, I want more of this and you can't even satisfy the demand,

444
00:37:21.280 --> 00:37:26.160
then you go full price. Because now you've you've gotten the reps in, you know how to over-deliver,

445
00:37:26.160 --> 00:37:30.160
you know what an actually good relationship with a customer feels like because it should feel like

446
00:37:30.160 --> 00:37:34.000
a partnership. It should feel like we're working together on this and it shouldn't feel like master's

447
00:37:34.000 --> 00:37:38.960
life, right? It shouldn't feel like you're pulling the cash out of there, you know like ripping the

448
00:37:38.960 --> 00:37:41.840
cash out of there while it shouldn't feel that way. It should feel like, hey, we're both aligned

449
00:37:41.840 --> 00:37:46.400
here. We're really partners in this in this work together. And when you have that vibe and you have

450
00:37:46.400 --> 00:37:53.040
the track record, you will be able to say no to bad customers and ultimately saved your mindset

451
00:37:53.040 --> 00:37:56.080
and all of your employees from dealing with them too. Because one of the easiest ways to lose

452
00:37:56.080 --> 00:38:07.280
good talent is sell bad customers.