Here is why do gurus price their products so high?

Yes, I was going to come in here and say the exact same thing.

I have never seen a guru product that has sucked. Note I'm talking about the syndicate: Kern, Walker, Diess, and others like Russle Brunson, etc.

They sell top dollar products, because they ARE worth that much.

I mean, if you think about it - say a WSO you buy for 7 dollars adds a technique that enables you to make 10,000 dollars.

How much is the WSO worth?

7 dollars?

or

10,000 dollars?

The same goes with any IM related product - it's value SHOULD BE directly related to the money it helps you make.

It's hard to put a dollar amount on information - but I imagine that this forum's information alone has enabled me to make well over 6 figures - thus this forums info is easily worth 6 figures.

This is why I don't purchase products based on price - i based on expected return. The big question is "Will this product really help me make more money?". If I really think it will, I will invest in it regardless of how much it is.

Rob

To keep the answer short: Because they can

They charge that much because they CAN...they've positioned themselves so that the perceived value of their products is very high.

Note I said "perceived".

Whenever folks complain about prices, I always remember the Jim Rohn quote (that he attributed to his mentor, Earl Schoaff.)

"The problem is not that prices are too high. The problem is that YOU can't afford it."

You should just use Apple as an analogy. Iphones are priced over a few hundred dollars , sometimes even up to 1k when it (the functions) is obviously not worth as much as that..

Most products are priced highly because of their branding rather than the quality of service it provides.

Of course they can because they position themselves as an authority in that niche. Try to come up with IM product and charge 2k for it. If you are not known in that niche there is a very little chance people will buy from you, there is a little chance people will even hear from you. You need affiliate to promote in order to hit $1,000,000 . If you are not known even though you product might be great you might not succeed. So in order to be able to charge these kind of money become known authority in your niche. Also IM niche is a very specific one, I don't think you can charge so much for products in any other niche. Please correct me if I am wrong.

They price it so high because people wouldn't buy it if it was cheap, $7.00 screams at you junk but $70.00 says I'm worth it

The Guru prices are directly related to the value of the product they are selling.....
Was Mass Control worth 2000 bucks? Sure it was and is....

If you use it....Is your goal to know a lot of things about IM? Or is it to use the things you have learned?

If you implement (the products should provide you with a motivation to take action) you, likely, will be successful.

Would I trade 2K for 20K+some work? Yes, every single time......

But if you buy a product and don't use it, that's on you.

They are also priced on the high side, because of affiliate commissions.

The GURU is going to pay out say, 50% in commissions, so they will automatically be pricing the product higher to cover that cost. ...and also I'd agree they price high because they can.
_____
Bruce

Exactly!!! It's all about positioning and of course the actual material. You also have to keep in mind that these products produce marketers who will make much more in return.

As always it's about return on investment. If you can take the $2k course from Frank Kern and turn it into a monthly income of $5,000, I don't see why that initial $2k wasn't worth it.

This is the same thing I teach to my offline consulting students. I'm always asked how I can ask for a $20k check from the first day plus a recurring monthly charge for my consulting. I try and show them that it's not about the cost at the start, but about what you can produce for them. If I can increase a lawyers revenue by 10% in 12 months and that business already revenues $1 million...I just increased their business by $100,000. I think paying $20,000 for $80,000 in return is definitely worth it. I'm selling them money at a discount.

Also, people associate the actual value with the price tag. Even though you might be able to find the same material in a $97 product, people are going to see the $2k products as being more valuable just because they are $2k. We all expect to get more from the higher price tags. It's just consumer nature.

Typo

Coming back to the point, I do agree in whole with you. Maybe we need a similar post on questions that ask "If this makes you $xxx, why would you sell it for $xx or $x?"

Here's the two reasons I see...

1) LIST size
2) Guru status

That's it...

They talk, the industry listens. If you are that well known, and have that size of a list, plus all the extras they give their affiliates, you are bound to get a ton of traffic and thus conversions, even on HIGH PRICED items.

The MacBook example is perfect. The MacBook is EXACTLY one of DELL's laptops and, yet, DELL charges less than half!

It's somewhat of a cool factor.

Interesting - so many of you think it is because they were a guru that they can charge 1997 or more for a product. What about the impact of entering a market WITH a $1997 product? Doesn't that set you aside right away?

For those of you who watched Frank Kern's videos around capturing the dog training niche - he entered that market already cluttered with lots of low-end products and decided to be different, add audio and video and market it up-scale...you avoid "sticker blindness", brand yourself as MORE of an expert, pay more to partners and affiliates meaning you immediately become their chosen partner AND you make more money...Cha Ching!

But don't discount that you can't do it because you aren not a GURU, you just need to decide you WILL do it, capture the biggest desire your customer has and given em a system to use to fulfill that desire...then there will be one more GURU - you.

geegel,
You beat me to it.
The quality of these widgets they sell are superior
however the cost does seem a little too much most of the time.

Why is Lexus really just a Toyota with a different hood emblem anyway?

Jack Trout once wrote a book with Al Reis called "Positioning".

From a certain recording of "syndicate" members talking about pricing:

• To pay for big affiliate commissions.
• Only a few sales are needed for a big pay day.
• There's a sucker born every minute.

Certainly not because the products are worth that much or are high quality or are the real key to making money online.

But, if paying $1997 kicks your butt into action when a $7 WSO will not, then it is money well spent.

Keep in mind not all "gurus" are out to rip you off. This forum is a great example of that. Someone remind me, what was Allen's last $1997 product?

I have never bought a Guru's high priced item,

My precieved notion of these high priced items is that they are mainly for people who are already semi-established in their niches. For people who are taking their business to the next level..

In this case spending 2000 bucks is well worth it. But for some of these guys who are screaming rip-off it is probably because it is not worth it to them. If you are a newbie trying to build your list up to 500 people and drive a hundred people to your website in a day then it is not worth it to spend a couple grand on getting to that goal.

On the other hand, if you are semi-established making a medium living on internet marketing you need to build up to the dream of making 6 figures online right?

I am a fond believer in the theory that you are heavily influenced by who you hang with. If you are in a group with a number of other established I.M.ers you are bound to get somthing from that "Mastermind Group"

I hope I'm not getting too off point, but think about it in a sports analogy... If you pay thousands of dollars to get a NBA or NFL coach to teach you how to play better so you can go out and make your high school team its probably not worth it, but if instead you go out an make the Pro's then its money well spent!

Why? Because they can. *cue the scary sounding movie music*

No product out there is going to be the magic bullet that instantly and effortlessly catapults you into earning lots of money overnight. Period.

That doesn't mean that these 'Guru' products are worthless though, because you shouldn't look at it purely as an expense. If the knowledge is applied properly and executed according to plan, then this 'expense' (this should actually be reclassified as an investment) should result in a return on investment. If that 'Guru' product costs $2,000 or $3,000 and it results in a $20,000 return in short amount of time, then it'd obviously be worth the cost of admission, wouldn't it?

Paul

It's nothing more and nothing less than simple QBA (quantitative business analysis). That's the art of adjusting your pricing in accordance with supply and demand, so that you choose the price that will bring you the most possible cash.

Put simply, a Guru selling something for $1997 believes he will sell enough at that price that he'll earn more than he would by selling it at $7. Or $97. Or $497. Or $9997.

All pricing is about finding that sweet spot where the number you can sell, multiplied by the price you charge, results in the greatest possible return.

Oxbloom and Michael have nailed it.

Some of the comments here shows exactly that the positioning is working; referring to them as 'gurus' is just one example.

You can get the same knowledge from a lot of cheaper or even free sources from authors with even more experience in the subjects these guys are teaching. They just market it so people believe they have the best answer.

Maybe because they are the expert? Experts fee...

I think it's also relative to your experience and the knowledge you seek to boost your biz to the next level.

Example: Newbie who's only heard about list building may/may not benefit from Kern's list control. Not sure. I would assume ANY new knowledge on a subject is good, but at $2k (or whatever it goes for) not sure.

The overall sentiment of this thread is what "gurus" dream of...they've got you hook through cheek! You'll continue to line their pockets which is cool for them.

Are these "guru" products worth the price? Only if someone buys at that price. Although I've not bought any high-priced ticket items, I have a hard time believing they're worth $2k+. Keep in mind, these guys are thinking, "OK, I want $1mm...I got x-potential with other 'guru' lists....right, $2k it is!".

How the hell else can one price a product? To say, "yes, if you implement it and make $20k off a $2k investment, it was worth it right?". Well, that's like saying, "if I eat this meal I'll be satiated". ANY bloody product you buy if you put time/money/effort into it should show some return....ANY!

So, I don't buy the "if a guru says it's $2k, it's worth it" argument. If I've got $2k sitting around itching to be spent, and it's of no concern, then $2k is a drop anyway. Is it worth it? That's purely subjective and it's precisely this subjectivism that WHEN someone pays the price tag, THEN it's worth it.

People who buy at that price tag will usually shout "yes, totally worth it" cause they want validation. Subjectivism for you, new yacht for said guru.

Easy

Actually Apple is kind of a ripoff if you think about it in technical terms. The Mac is essentially a PC too.. only real difference is that you can't tamper with it and there's a different OS. It's a fact that if you used the same amount of money to buy a mac to build your own DIY custom PC you'll get specs that'll be far better than the mac.

The reason why these gurus and Apple get to charge so much is because of their NAME. It's the brand name that they have built up over the years that enable them to charge so high and people will still buy because of what the NAME means. You're not just buying a mac you're buying a lifestyle and to be part of a community.

Truth is.. there's nothing really new under the sun.. even in the $1997 guru products.. It's all MARKETING.

I think it's impossible to make a blanket, all-encompassing statement that generalizes whether these Guru products are worth the price or not. One could fall into the trap of automatically making assumptions without even taking a look at what is being offered.

Some may say that this is a marketing gimmick or strategy, but ultimately a product purchase is going to make sound business sense if it produces a return on your investment in it. No sane and rational business person is going to argue against this premise.

The issue here is determining whether the product is right for you. Is it aimed at you, and do you have the right skill set and inclination to follow through with it? There is no "one size fits all" product out there, and people have to resist the temptation to buy based solely on all the hype if the product is not right for them.

Ultimately, it is up to you to investigate and determine if the "Guru" product you're considering is right for you and fits in with your current business model. Don't buy into the hype and get blinded by it, figure out if this is something you'll follow through with and implement!

Paul

In some of the interviews I've watched/listened to, people have also mentioned the fact that higher priced items tend to result in fewer returns. You're effectively "separating the wheat from the chaff" when pricing high, so anyone who buys it is likely to really want it.

With lower-priced products, you get a lot more people looking for the ONE thing that's going to make a difference for them and willing to spend their last 10 bucks to get it. If it's not the right thing, they'll return it.

The higher price = fewer returns things doesn't just apply to guru stuff, luxury product sellers in all sorts of niches report fewer complaints and returns. Part of this is probably due to stuff like better craftsmanship or status symbolism, but a lot of it is the fact that their customers have plenty to spend and aren't worried if something turns out to be a dud.

3 main reasons that I see.

1) Because they can make more with fewer sales.
2) To be able to give higher affiliate commissions so the other big list owners will actually mail for them.
3) The reason I haven't seen mentioned yet: To get a list of people willing to pay $2,000 so they can upsell them even further and offer $10,000 + coaching or seminars.

Just simple marketing law i guess, when there's demand and low supply means higher price. In this case, it is up to the owner of the product to decide the value of supply.

Not to mention the 50% something for affiliate commission, I'll say product pricing is a tricky question.

@Paul - Like I said, it's subjective. You personally might buy a product at $10k and scream from the rooftop how excited you are, how it's worth it. If you're new to the ideas, then to YOU it will be well worth it and at the end of the day, if you're happy then that's what counts cause it's your cash you're parting with. Right? (subjective) That's all I'm saying. Yes, it's "good marketing" and I'm all for it. Just saying that to put a price tag on something is down to the author, what the market is willing to pay, and reasons Chad and others have mentioned.

You also say, "but ultimately a product purchase is going to make sound business sense if it produces a return on your investment in it." However NO product will give a return on investment on its own, it's what YOU do with it. Don't mean to be pedantic about it but it's what one does with a product that produces results.

@Mohammad - Sorry, didn't mean to offend (if I did) using the word "validation". Also, I'm not offended by your comment at all. Afterall, we are just sharing our points of view so to me, this thread isn't about who's right/wrong. To some it may be though.

I should have clarified as well that I have spent $3k+ on products before (and well over that over the past 5 years of my IM "education") it just wasn't particularly one of the "gurus" high-ticket products. Some have been utter crap, slapped together non-sense and you can't deny some people do that. I have spent $500 here and there on some smaller guru's stuff, just not $2k-$10k specifically on a well-known gurus stuff. Now I feel I'm trying to justify my opinion when in fact, whether I've spent money or not doesn't necessarily mean MY opinion is incorrect.

Some products I gained a lot of knowledge and was happy with the purchase. I took action, etc. etc. To ME it was worth it. Others maybe not. Subjective again.

As most know, some products are undervalued, ie you pay $97 or whatever and it's probably worth 10x that. Conversely, you can spend $2k on something and it's worth 10% that price. Make sense?

I think just because someone says, "this is over priced naff" doesn't mean they're wrong. Or, you wouldn't have people complaining, people getting sued by the FTC and so on. Gotta wonder right?

I personally would be happy to pay a "premium" if I felt the info was not only stuff I didn't know, but helped me quickly learn about a subject/method and excel at it. Sure beats scouring the web for incomplete info and piecing it together over months/years. But, you'll never know until you buy the product.

I only recently saw Kern's core influence video (the 2nd one) where he says (paraphrased) "If you want the $3mm house, the Ferrari, the $30k holidays, then you need to charge $2k and only need a few sales a day...etc. etc.". I know it's a couple years old, and maybe I took the video too literally, but to me that's a funny way to validate the price.

Now obviously from a product producer's POV, you want to earn as much as possible but I find the price is based on "I want this lifestyle so I'll charge this much to get it". Is there anything wrong with that line of thinking? Not necessarily, because if the market is over the moon with it, you've hit a home run.

Neither of us are right or wrong, other than to ourselves. It's opinions we're sharing right?

Gurus price their products that way, simply because this is the value they feel the product is worth all things considered, Internet marketing gives a large leeway for a subjective price

Because they can and because the market bears the price fee.

Higher prices attract a certain type of client:
- they complain less
- they are happier with their purchase
- they tell their friends

Why do you think Apple has a higher customer
satisfaction?

Hint: it's not just product quality.

Tyrus

As many have said in this thread already... Price can easily suggest quality.

As a quick example: About 10 years ago one of the big perfume houses decided to create and launch what you could call an 'entry level' fragrance which was about half the price of their lowest priced perfume.

It bombed.

So they took it off the market ...but for only 6mths. Because after that gap they relaunched it without ANY changes but at more than double the price ...and it sold like hot cakes!

(Unfortunately I forget the name of the perfume ...because after all I am a man so remembering such things is a challenge! )

However... it's also just like the Cialdini example in his book Influence where a shop assistant was asked to mark down a non-selling product - but instead of cutting the price in half, the assistant misread the message from their boss and DOUBLED the price...

The result: The previously bad-selling product sold out.

So $1997 has it's advantages ...but of course the product provider has to still deliver a quality product or he/she will quickly run out of opportunities for selling $1997.

The interesting question for me is how I think many people would be just as happy buying the same product whether it was offered at $997 or $1997 ...in other words, if you were able to do a closed-market study (so buyers did not know about the other price point) and then did a satisfaction survey, I reckon the product satisfaction would be the same whether bought at $997 or $1997.

Which leaves the moral question... If a product is 'worth' $997 is it immoral or unethical to sell it at $1997?

hmmmmmmm...

Great thread!

Michael

No doubt. Keepin it real brother Mohammad!

The big question is "Can I make more than $1997 with the knowledge I have gained here"?