Price to Value | Ep 345

The Game with Alex Hormozi

Alex Hormozi

Entrepreneurship, Education, Business, How To

4.9 • 4.4K Ratings

🗓️ 11 November 2021

⏱️ 9 minutes

🔗️ Recording | iTunes | RSS

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Summary

Set yourself up for success with this ratio! Today, Alex (@AlexHormozi) talks about how the most successful framework involves only three important lines that will dramatically bring in more value and money to your company and the different combinations of these lines.

Welcome to The Game Podcast where we talk about how to get more customers, make more profit per customer, and keep them longer, and the many failures and lessons we have learned along the way to $100M in sales. We've got roll-up-your-sleeves kind of hustle with a little bit of cleverness and a lot of heart.

Timestamps:

(1:53) - Almost every business follows these three lines: “how much you sell it for”, “how much value does the person get”, and “how much it costs you”

(3:19) - Here are some everyday examples of the different combinations that exist based on the levels they have

(6:28) - This is the golden ratio: find a way to provide something excessively valuable, that costs you almost nothing to make, and creates customer surplus. The more you follow this ratio, the more viral your business will become

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Transcript

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0:00.0	Real quick, you guys already know that I don't run any ads on this and I don't sell anything.
0:04.5	And so the only ask that I can ever have are you guys that you help me spread the words we
0:07.9	cannot more entrepreneurs, make more money, feed their families, make better products,
0:11.9	and have better experiences for their employees and customers. And the only way we do that is if
0:16.3	you can rate and review and share this podcast. So the single thing that I have to do is you can
0:21.0	leave a review, take you 10 seconds or one type of the thumb, it would mean the absolute world to
0:25.0	me and more importantly it may change the world of someone else.
0:55.0	And how dramatically will impact how much money you make and ultimately the value of the company that you
0:59.6	ultimately built. So if you don't know my name is my name is Alex from Rosia and acquisition.com.
1:05.7	We do about $85 million a year and I have nothing to sell you. This is a rune sponsored episode. So
1:10.6	if I'm less chipper than normal, that is why we think our sponsors as always. And so these are
1:17.2	the three lines that I think everyone needs to understand. All right, so line number one right here.
1:22.0	I'm going to make sure that you guess. So if you can guess right now, we do to these lines are
1:26.0	going to represent you have price, you have value, and you have cost of goods. All right. So every
1:33.6	line has every business has these three lines within everything that they sell. You have how much
1:38.1	you sell it for, you have how much value the person gets, and you have what it costs you. And what
1:43.6	I want to show you is a mental framework in the interplay between these things and how dramatically
1:48.4	you can shift your business. So this is the value line. This is what they are getting. This is
1:55.2	the price line. This is how much you charge. This is the cost of goods line, which is how much it
2:00.9	costs you to fulfill on this value, right? Right? Okay. So here's where it gets kind of cool.
2:10.3	If we move our price up, see how little value we have here. This means that we have a low
2:17.6	customer surplus. Customer surplus is the excess between what they pay and what they get.
	...

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