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The Price Does Not Matter - Story Inside.

by Morgan Richman
17 replies
I have heard a really good story that illustrates the point of PRICE DOES NOT MATTER. I don't remember where I heard it actually...

So, here's the story:

There was this one guy who wanted to buy a washing machine, so he went windowshoping and found a machine that he liked. He went into a store and started talking to the clerk.

"how much is this?" he asks.

"oh, that one is $3.000"

"$3000?" said the guy, totally shocked "Are you crazy?!"

And he left the store.

On the way home he passed by his favorite car dealership and saw that his favorite Porsche was on sale because it was the manager's birthday. Instead of $150.000, it cost just $75.000 (now, I have no idea how much a Porsche is, I know nothing about cars, so I am just making these numbers up)

anyway, he gets into the dealership, whips out his credit card and buys it.

Now, why did this guy buy a $75.000 car if he didn't want to spend $3.000 on the washing machine? Was it because he didn't have the money? Of coruse not. He didn't think twice about spending 25 times as much for a car that he wanted, so what was the problem?

The problem was that the guy didn't see $3000 worth of VALUE in the washing machine but he certainly saw $75.000 of VALUE in the car. Tu put it in simple terms, the washing machine was not worth $3000 for him

Do you know now how the price does not really matter?

As long as people see the value in your offer that justifies the price, they're going to pay for it. So, remember this: products and services are never too expensive. They are just not valuable enough.

MorganRichman

P.S.: EDIT: Solution: Don't lower the price. Add value instead.
#inside #matter #price #story
  • Profile picture of the author TristanPerry
    Great post

    Part of a sales pitch is showing your potential customer that your product is of a high quality, and so has a relatively high price attached to it.

    You cannot simply say "This product has these features: x, y, z. You can buy it today for just $1,000."

    You need to make your customers want your product. Even make them think your product will be priced much higher that it actually is (so that when they actually see your price they'll be surprised and hopefully buy it straight away)
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    • Profile picture of the author Morgan Richman
      That's what they do with those crazy launches. They build up so much value and anticipation that you're thinking you're going to have to pay a billion dollars for the product and when it's "only" $1997, you're like... "No Way! It's so cheap!"

      MorganRichman

      Originally Posted by TristanPerry View Post

      Great post

      Part of a sales pitch is showing your potential customer that your product is of a high quality, and so has a relatively high price attached to it.

      You cannot simply say "This product has these features: x, y, z. You can buy it today for just $1,000."

      You need to make your customers want your product. Even make them think your product will be priced much higher that it actually is (so that when they actually see your price they'll be surprised and hopefully buy it straight away)
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  • Profile picture of the author TLTheLiberator
    If you're selling your own products this is very good advice.

    TL
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    "It's easier to fool people than to convince them that they have been fooled. -- Mark Twain

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  • Profile picture of the author Paul Hancox
    Excellent advice, Morgan.

    That was basically the point I was trying to make in Do You Value Your Content? I see writers lowering their prices to compete with the article mills that churn out writing at $0.01 a word, when all they often need to do is demonstrate the VALUE of their writing.

    When you compete solely on price, it's usually a race to the bottom.

    Also, did you notice how the price of the Porsche was framed? It was seen as a reduction from $150k to $75k.

    In other words, he perceived he was getting 150K of VALUE for "just" 75K.
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    • Profile picture of the author SMS
      Since Mr Hancox is being so modest and self effacing, may I add that he has written the (hands-down) best ebook I have ever read. It is called Write To More Money and is geared towards freelance writers, however I think anybody involved in selling products and services online will benefit from the pearls of wisdom in that book.

      Morgan, thanks a million for crystalizing the concept of value so very clearly.

      Originally Posted by Paul Hancox View Post

      Excellent advice, Morgan.

      That was basically the point I was trying to make in Do You Value Your Content? I see writers lowering their prices to compete with the article mills that churn out writing at $0.01 a word, when all they often need to do is demonstrate the VALUE of their writing.

      When you compete solely on price, it's usually a race to the bottom.

      Also, did you notice how the price of the Porsche was framed? It was seen as a reduction from $150k to $75k.

      In other words, he perceived he was getting 150K of VALUE for "just" 75K.
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    • Profile picture of the author Morgan Richman
      Exactly.

      Great point about the frame. I love salesmanship. LOVE IT.

      Thanks Paul.
      MorganRichman

      Originally Posted by Paul Hancox View Post

      Excellent advice, Morgan.

      That was basically the point I was trying to make in Do You Value Your Content? I see writers lowering their prices to compete with the article mills that churn out writing at $0.01 a word, when all they often need to do is demonstrate the VALUE of their writing.

      When you compete solely on price, it's usually a race to the bottom.

      Also, did you notice how the price of the Porsche was framed? It was seen as a reduction from $150k to $75k.

      In other words, he perceived he was getting 150K of VALUE for "just" 75K.
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    • Profile picture of the author Morgan Richman
      Great point. In other words, people don't hire Kern because he's cheap. They hire him because he's good, if you know what I'm sayin'...

      MorganRichman

      Originally Posted by Paul McQuillan View Post

      Also, when people get something they think is a great value they are
      likely to come back to you for some more.
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      • Profile picture of the author Lance K
        Good story.

        I've hammered on this point before (A LOT).

        It's all about perceived value. Because perception is reality.
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        • Profile picture of the author Morgan Richman
          Amen to that, brothah! Perception is reality. This one goes in my quotebook. Actually I am stealing it off ya. Do you mind?

          MorganRichman

          Originally Posted by Lance K View Post

          Good story.

          I've hammered on this point before (A LOT).

          It's all about perceived value. Because perception is reality.
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          • Profile picture of the author Lance K
            Originally Posted by Morgan Richman View Post

            Amen to that, brothah! Perception is reality. This one goes in my quotebook. Actually I am stealing it off ya. Do you mind?

            MorganRichman
            I don't mind. I can't remember where I heard it first, but I can assure you I didn't come up with it.
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            "You can have everything in life you want if you will just help enough other people get what they want."
            ~ Zig Ziglar
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            • Profile picture of the author Morgan Richman
              Great. Thank you. I will use it!

              MorganRichman

              Originally Posted by Lance K View Post

              I don't mind. I can't remember where I heard it first, but I can assure you I didn't come up with it.
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      • Profile picture of the author Morgan Richman
        Isn't that just plain crazy? What I want to do one of these days is take one of my product lines and keep raising prices just to see when people start breaking. I am really curious what's going to happen...

        Also... I have a confession to make... I.... well... Ok.... I am just going to come right out and say it... I... looked at your blog... ehm...

        MorganRichman

        Originally Posted by Paul McQuillan View Post

        Exactly, the people that buy Kern's stuff for $2,000 somehow end up buying his next $2000 doo-dad.

        He convinced them to spend $2k the first time, and that is the hardest. Now
        people are like 'MASS CONTROL 6 COMES OUT IN 2 DAYS, I CAN'T WAIT!!!!'

        They can't wait to give him another $2k
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  • Profile picture of the author Louise Green
    Very inspiring stuff here.

    Desire is the ultimate marketing tool.
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  • Profile picture of the author crissanteiro
    This is a great parable. Thank you. It really illustrates the point.
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