Expensive Is Good
Posted 01-02-2010 at 11:07 AM by Justin Quick
Tags influence, marketing, prices, psychology, sales
Wild turkeys make good moms.
All those little babies have to say is, "Cheep-cheep" and momma comes running.
That's all mom has to hear. "Cheep-cheep."
That sound is the only trigger for her behavior. One scientist took a stuffed polecat (the natural arch nemesis of the turkey) and put a tape player inside with a recording of a baby turkey.
The scientist pushed the stuffed polecat towards the mother turkey, to which the bird automatically responded with fearsome violence. Attacking the poor polecat.
Amazingly, when the tape played and the "cheep-cheep" sound came from the polecat, the turkey behaved just as if the polecat were one of her babies. She immediately began to clean and warm the stuffed polecat.
All Animals, Including Humans, Have These Types Of Automatic Reactions
In fact, it's a little unnerving to know a lot of what we do and think is automatic.
Triggered by some feature.
Triggered by some feature.
In psychology they're called fixed-action patterns. They are automatic. Mechanical. We are born with some (like automatically raising your hands if someone strikes at your face) and we learn others (taking coupons to the grocery store to be used believing they will get us a better price). If you really think about it, you don't know for sure that the coupon is getting you a better price. You assume it is.
Here is a psychologically ingrained principle in the mind of most humans you can exploit the hell out of.
Expensive Equals Good
Entrepreneurs, also being consumers, should know this. But few exploit it to their advantage because of their own price sensitivity or scarcity beliefs. If I ask you which car you'd rather have, an $80,000 car or a $20,000 car, which one would you rather have?
The $80,000 car, of course.
Even though you don't know the make, model, color, or any features, we assume the expensive one is better. It's natural.
Even though you don't know the make, model, color, or any features, we assume the expensive one is better. It's natural.
In Robert Cialdini's book Influence he tells a story about a friend-merchant of his that owns a jewelry shop getting many visits from well-to-do tourists. The merchant was having trouble selling tourqoise jewely at full price and finally got fed up trying to sell it.
She left a note for her employee to "sell the stuff for 1/2 the price." When the merchant returned a few days later, she was not surprised to see that all the merchandise had been sold.
She left a note for her employee to "sell the stuff for 1/2 the price." When the merchant returned a few days later, she was not surprised to see that all the merchandise had been sold.
What was amazing? The employee read the "1/2" as "2" - selling the merchandise for DOUBLE the original price.
Even Trump Does It
I was reading one of Donald Trump's books and he told a story of building these expensive condos. No matter what he did, what he tried, he couldn't sell them. He pulled up other condos currently selling and was amazed to find there were many more expensive than his.
What did he do?
He raised the prices. Didn't change the condos in any way. Nothing extra. Just raised the prices and they immediately sold.
Right about now...some of you are having strange feelings inside you. If you feel what these two merchants did was "wrong," you're not going to get very far in business. You have no right to place your beliefs on price and value in the heads of your customers. If it makes someone feel better to pay more, let them.
People are going to spend their money. Let it be with you.
Humans have a deeply deeply ingrained belief that,
"You get what you pay for."
In this increasingly fast-paced and complex world, we need shortcuts. People actively look for shortcuts and things that help them make decisions.
By having a high price, your product becomes the shortcut to satisfaction.
The customer figures it must be good. High quality.
In my Psychological Triggers speech, I talk about "forcing a decision." That most people have an incredibly difficult time making a decision. Even deciding what to eat for dinner.
Help them make the decision that your stuff is right for them by raising your prices.
The Opposite Of Expensive Is Cheap
If I say, "That thing was cheap" we assign more labels to that thing. Labels like "low quality, plastic, no-good, dirty, etc". You don't want to be cheap. Low prices are cheap. Cheap bad. Expensive good.
Everyone has had the experience of buying something cheap and getting exactly what they paid for.
Look...my point is this:
Hark unto me!
Many of you struggle trying to prove yourself in your market. You try to convey that you are the best, the smartest, the greatest, etc. The shortcut to people AUTOMATICALLY feeling that way about you, is to raise your prices.
I guarantee all people will think is, "He must be good."
SIDE TACTIC: One way to take advantage of this psychology without raising the price of a product is to copy what they do in retail. Let's say you have an introductory product you want people to buy to get to know you. You're curently selling it for $20. Instead change the price to "$20. Reduced from $50." This triggers the "better buy it now and get a bargain" reflex in shoppers.
Hope you liked that. Have a great day.
Here's to your higher fees!
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