“When people say no to paying full price now, they usually are totally okay paying it over time. I still don’t understand how it works. But it does.”
Hormozi said this in his Money Models course, while explaining down-selling.
I realized, this is exactly what behavioral scientists use when they try to help people save more - same exact principle. Same human brain.
There’s a study called Save More Tomorrow™ by Richard Thaler and Shlomo Benartzi.
Instead of asking people to start saving right now (which for most is too painful), the program asks them at the present moment to commit to increasing savings from future raises. The “pain” of giving up income now is delayed, so it’s less painful upfront. Over time, saving rates rose dramatically. In one of the implementations, rates went from about 3.5% of salary to ~13.6% over 40 months.
What’s really going on in the brain / decision-making, the “biases” at play:
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Present bias: We overweigh what happens now versus what happens later. If saving or paying something now feels painful, we put it off, even if future benefit is much bigger.
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Future discounting (or hyperbolic discounting): Related to present bias, this is how we “discount” rewards (or costs) the further into the future they are. Something tomorrow matters much less to us than something today.
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Naivete vs. sophistication: Some people realize that they tend to procrastinate or defer costs, others don’t. If you’re naive, you don’t even believe you’ll act differently in the future; if you’re sophisticated, you see the bias and try to plan around it.
So Hormozi’s “puzzle”, it turns out, has a simple, human-bias-based explanation.
It works in sales just like it works for savings, or anything else.
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For my business
How can I lower the entry barrier now (make the full cost feel small or delayed), so clients can say yes with less friction, and accept the same “price tag” later? -
For myself personally
How can I use this to make myself take on hard things? For example: commit now to doing something later (so the harder part feels further away). Begin with minimal effort and escalate, rather than trying to force big change immediately? But then, put guardrails in place to not procrastinate further? (Clients sign agreements to follow through, as do people saving) -
For you, dear reader
Are you asking people (clients, partners, yourself) too much up front? Could you make the first “ask” lighter, and defer the rest in a way that still works?
And what if we reframe the question not as how to make people accept "price" now, but how to meet people where they are today, and guide them gently into the “future self” that will benefit them even more?