Your Competitor Is Cheaper”
The speaker addresses the objection that a competitor is cheaper by reframing the conversation around risk-adjusted return. Rather than focusing on price alone, they argue that a lower-cost option carries greater risk of failing to deliver results. The penny stock vs. Apple stock analogy is used to illustrate this point.
Summary
In this brief transcript, the speaker tackles a common sales objection: that a competitor offers a lower price. Rather than conceding or defending on price alone, the speaker reframes the entire comparison around the concept of risk-adjusted return.
The core argument is that while a competitor may indeed cost less, they are also less likely to help the customer achieve their goal. This means the cheaper option is not necessarily the smarter financial decision — it is actually a riskier one when outcomes are factored in.
To make this concrete, the speaker uses a financial analogy: comparing a penny stock to Apple stock. A penny stock is cheaper to buy and theoretically offers a higher upside (e.g., 100x return), but the probability of achieving that return is extremely low. Apple stock, while more expensive, offers a much more reliable path to a solid return, such as 10%. The speaker argues that the risk-adjusted return favors the more expensive, more reliable option — and suggests this is exactly how customers should think about choosing between vendors.
Key Insights
- The speaker argues that the relevant comparison is not price alone but risk-adjusted return — a cheaper competitor is also less likely to help the customer hit their goal.
- The speaker reframes a cheaper competitor as a riskier choice, not a safer or smarter one, because lower cost correlates with lower probability of success.
- The speaker uses a penny stock vs. Apple stock analogy to illustrate that a lower-priced option with higher theoretical upside can still be the inferior risk-adjusted investment.
- The speaker explicitly acknowledges that yes, there is always someone cheaper, but positions this acknowledgment as the starting point for reframing rather than a concession.
- The speaker suggests that a 10% return on a reliable investment (Apple) represents better risk-adjusted value than a potential 100x return on an unreliable one (penny stock), directly mirroring how vendor selection should be evaluated.
Topics
Transcript
[0:00] There's absolutely someone who is less, for sure. But the question is it not [music] that it's more or less, but what's the risk-adjusted return? Which is that they cost less, but they're also less likely to help you hit your goal. And so it's actually a riskier move. So if you were buy a penny stock, it's cheaper than buying, you know, some [music] stock in Apple. But the risk-adjusted return is way higher in you getting a 10% return on Apple than you getting a 100x return on this penny [music] stock. That's how I'd frame it.
Full transcript available for MurmurCast members
Sign Up to AccessMore from Alex Hormozi
Why His Close Rate Won't Budge...
A business owner running a marketing and sales company struggles with a low close rate on sales calls, where prospects either can't afford the first payment or can't get financing approved. The advisor suggests the issue may be a lead qualification problem rather than a sales problem. Adding funnel qualifications is proposed as the key solution to improve profitability.
How I Define Culture In An Organisation
The speaker defines organizational culture as the spoken and unspoken rules that govern reinforcement — determining what gets rewarded, ignored, or punished. They outline two approaches to codifying culture: a comprehensive rule-based codification or a faster values-based approach using a few core statements. Values are described as 'chunked up rules' that, when unpacked, reveal underlying behaviors.
Profit Is Unnatural
A mentor described as a 70-something year old billionaire shared the counterintuitive idea that profit is unnatural. He argued that businesses naturally drift toward spending away their profits over time, and that maintaining profitability requires deliberate, ruthless expense control by a dedicated person.
My Founder Story
Alex Hormozi recounts his entrepreneurial journey from a consulting job to building a portfolio of companies generating over $250 million in aggregate annual revenue. He details his failures, pivots, and major exits, including selling Gym Launch and Prestige Labs for $46.2 million. The transcript serves as both a personal origin story and a pitch for his brand, acquisition.com.
Make Failure Unreasonable
The speaker argues that volume and consistency of effort makes success statistically inevitable. They contend that the bar for success is low because most people never try, and those who do give up too quickly or work with inconsistent cadence. Consistency alone is enough to outcompete nearly everyone.