Here is why do gurus price their products so high?

60 replies
Ok guys I have a little something that i talk about. In about last 2 weeks, i have seen about 4 or 5 people on the forum who seem to have a problem with high priced products.

Now I don't wanna be a guru a** kisser but I am here to defend the gurus and come up with a reason to why they actually do it and why nothing's wrong with it.

Here's the reason: Because the product owners want to hit million a dollar day.

You don't make a million dollars by selling a $7 ebook.

Why? Here's why:

At $1997:
1,000,000 / 7 = 500.7 Sales

So at $1997 you only need about 500 sales to make a million bucks.

At $7:
1,000,000 / 7 = 142857 Sales

At $7 however, you need 142,857 sales to make the same amount of money.

I am willing to bet that it's always easy to find 500 people who are willing to give you $1997 than it is to find about 143,000 people who are willing to give you $7 each.

And to all the people who think a product is not "worth" the price and the price is a "rip off" let me tell you something. The product owner is the one who decides how much he should sell his product for.

For example, most Macbooks are more expensive than PC notebooks. Now the main idea is the same. PC is a computer and Mac is a computer and i am ready to bet that it doesn't cost apple more to build a Mac than it costs HP to build PC notebook but still apple is charging more.

Can you run around saying apple is a rip-off?

I don't think so.

Now i think this guru talk has wasted a ton of my time so I will end it here and get back to my life. I just had to get this off my chest.
#gurus #high #price #products
  • Profile picture of the author Rob Howard
    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
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    • Profile picture of the author havplenty
      Originally Posted by ccmusicman View Post

      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.
      You mean the salesletter don't you?
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      • Profile picture of the author Mohammad Afaq
        Certainly not because the products are worth that much or are high quality or are the real key to making money online.
        I disagree. The products mostly are worth the price IF you take action and do the stuff they teach.

        But, if paying $1997 kicks your butt into action when a $7 WSO will not, then it is money well spent.
        In my opinion, you cannot compare Frank Kern's List Control to a $7 WSO. These high-ticket products provide solid information and are not rehashed like "most" WSOs out there (Mind you I never said rehashing was bad).
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  • Profile picture of the author geegel
    To keep the answer short: Because they can
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  • Profile picture of the author Lisa Gergets
    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".
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  • Profile picture of the author KevinFranz
    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."
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    • Profile picture of the author jonathan8
      Originally Posted by KevinFranz View Post

      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."
      its So true
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  • Profile picture of the author kakaboo
    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.
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    • Profile picture of the author TyBrown
      Originally Posted by kakaboo View Post

      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.
      I can't agree with this. I don't know anything about the iPhone but if they are selling them for $1,000 and people are buying them then they are obviously worth $1000. Perhaps not to you, but they are worth that much. If they were pricing them at $1000 and they weren't selling then it would be easy to say that they aren't worth that much.

      Value is and will always be determined by whether or not people are willing to pay the price. Nothing more and nothing less.

      You also mention that prices are high because of branding and not quality. This can be true, but for a very short period. If you do a great job at branding and a lousy job at fulfillment you will no longer be able to command the high prices.

      These are true concepts in a free market economy.
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      • Profile picture of the author Rex.T
        Originally Posted by TyBrown View Post

        I can't agree with this. I don't know anything about the iPhone but if they are selling them for $1,000 and people are buying them then they are obviously worth $1000. Perhaps not to you, but they are worth that much. If they were pricing them at $1000 and they weren't selling then it would be easy to say that they aren't worth that much.

        Value is and will always be determined by whether or not people are willing to pay the price. Nothing more and nothing less.

        You also mention that prices are high because of branding and not quality. This can be true, but for a very short period. If you do a great job at branding and a lousy job at fulfillment you will no longer be able to command the high prices.

        These are true concepts in a free market economy.
        It all depends on what's defined as value.

        To kakaboo, probably value meant what can the iphone do...ie phone calls, games, 'pda' etc.

        To the buyers, value could also include 'personal satisfaction', happiness, etc....the emotional value attached to the product.

        It's always a willing buyer and willing seller.

        Before John Reese broke the 1M milestone, I don't think there are that many (or any) IM products above the 4figure range. It only happened after the JR record breaking launch.

        Does that mean that prior to his launch, all the IM products were not worth the 4 figure? Certainly not!

        Does it mean that all the current launches are worth the 4 figure? Certainly not!

        So it all boils down to a willing buyer willing seller.

        Guess what happens when noone wants to buy a 4 figure product anymore?

        And guess what happens when another genius comes along and pushes the boundary even higher and price it at the mid 4 figure to 5 figure even?
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  • Profile picture of the author Mr.S
    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.
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    • Profile picture of the author Zero
      Because the information they provide can make you a 100 or 1000 times the money on what you paid for it.

      Because its the only way you'll ever make real money online, not by promoting low priced clickbank products. Its a complete waste of effort.

      Mr.S
      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.
      I'm pretty sure you'll find high ticket items in markets like Real estate/property market, the financial markets....
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      • Profile picture of the author A Bary
        Originally Posted by Zero View Post

        Because the information they provide can make you a 100 or 1000 times the money on what you paid for it.

        Because its the only way you'll ever make real money online, not by promoting low priced clickbank products. Its a complete waste of effort.

        Mr.S


        I'm pretty sure you'll find high ticket items in markets like Real estate/property market, the financial markets....

        Great..but the only problem is..most of these products are being sold as a "magic bullet" for newbies, their ticket to the "millionaires" life style...


        The sad fact is, many newbies will mix their credit cards and put themselves into debt to buy the "god-sent" gurus products...to end up with a set of DVDs/CDs in a fancy box that they don't know exactly what to do with...

        Many of these products are great and will make you a ton of money, ONLY IF..you have what it takes to apply what you learn from them...

        Most of these products are not "newbies-friendly", and need a certain level of experience/'budget to profit from, however, they are promoted as being the "newbie-ticket" to riches...


        If you're selling a $1997 product, at least tell the unsuspecting newbie it's not the magic bullet, because it's not..
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        • Profile picture of the author Black Hat Cat
          Banned
          Originally Posted by goldmind123 View Post

          Great..but the only problem is..most of these products are being sold as a "magic bullet" for newbies, their ticket to the "millionaires" life style...

          Many of these products are great and will make you a ton of money, ONLY IF..you have what it takes to apply what you learn from them...

          Most of these products are not "newbies-friendly", and need a certain level of experience/'budget to profit from, however, they are promoted as being the "newbie-ticket" to riches...


          If you're selling a $1997 product, at least tell the unsuspecting newbie it's not the magic bullet, because it's not..
          This is the standard, bogus excuse used by many these days that sounds good in theory, but seldom is the case in reality. I don't think I have ever seen a $2,000 product that says you'll get rich simply by buying said product, with no work required.

          The sad fact is, many newbies will mix their credit cards and put themselves into debt to buy the "god-sent" gurus products...to end up with a set of DVDs/CDs in a fancy box that they don't know exactly what to do with...
          For any poor, innocent newbies out there who don't know what to do with the box of dvds/cds you received from the evil guru, it's pretty simple.....you watch them. Duh.
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          • Profile picture of the author Mohammad Afaq
            Originally Posted by Black Hat Cat View Post

            This is the standard, bogus excuse used by many these days that sounds good in theory, but seldom is the case in reality. I don't think I have ever seen a $2,000 product that says you'll get rich simply by buying said product, with no work required.



            For any poor, innocent newbies out there who don't know what to do with the box of dvds/cds you received from the evil guru, it's pretty simple.....you watch them. Duh.
            For any poor, innocent newbies out there who don't know what to do with the box of dvds/cds you received from the evil guru, it's pretty simple.....you watch them. Duh.
            LOL

            I love your sense of humor
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  • Profile picture of the author JHC81
    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
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  • Profile picture of the author JohnLeonard
    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.
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  • Profile picture of the author Bruce NewMedia
    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
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  • Profile picture of the author petelta
    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.
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  • Profile picture of the author webfighter
    Originally Posted by Mohammad Afaq View Post


    At $1997:
    1,000,000 / 7 = 500.7 Sales

    So at $1997 you only need about 500 sales to make a million bucks.

    At $7:
    1,000,000 / 7 = 142857 Sales

    At $7 however, you need 142,857 sales to make the same amount of money.
    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?"
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    • Profile picture of the author teaball
      Guru products that are high priced are priced according to what the market will bear.

      In the last 2 years, I have seen several launches fail to sell out. I have seen several products that are way past usefulness ... like two recent high priced guru member site platforms, with the "we do everything for you" lockup that touts, "this is the same platform we have made millions with ... blah blah"

      Most guru products aren't sophisticated, ground breaking, cutting edge, state of the art, or my favorite "cash sucking", products or services.

      99.9% are just Marketing 101 techniques with a few apps assigned to do some work. You still have to come up with product, content or a service ... just like brick and mortar. Then you have to get traffic and conversions (aka, sales).

      So, how do they get the BIG BUX for their average products? Well, if you have never had a marketing course, have never done any type of marketing, then you can be influenced to buy the next "secret" to success without ever having to do any work or read a book or do some research into what works and what doesn't.

      Big clue? The value of high priced tools, techniques, etc. is quickly seen by how much value it returns over a set period of time ... like a year or two.

      This may make you sick. But consider this, a high priced item that 'works' is likely to have been tested successfully ON YOU! YOU are now being sold what worked on you!

      So, it is like somebody extracting your body's organs and then being told you need a few organs, and "Oh, by the way, we have a few body parts here that we think will be a perfect match!"

      Selling marketing software tools to the marketing ignorant is a great internet phenomena. It's been going on for about 10 years. It doesn't seem to be slowing down at all.

      I suggest learning marketing, then you will find few internet related marketing products that are innovative, can't-do-without, must-have. The first thing you will learn about marketing is that it is a huge field that includes research and measuring, advertising, branding, and on and on. And, even more daunting, is that marketing is a small part of operating a business, big or small.

      I wonder why nobody is teaching people how to run a business. Now that would be a real service. I guess it just doen't have the sizzle and pop of "Get On the First Page of ..." Too unglamorous ... It's not viewed as a shortcut ... even though it is THE shortcut ... do the work... then execute... be prepared for failure and learning and start again... wash, rinse, repeat.

      Try marketing to yourself first. Maybe read Cialdini's "Persuasion" more than few times. Try finding a need, (like one you have) and then fill it.
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    • Profile picture of the author affhelper
      it's also how you package your product and how you deliver it. By saying deliver it I don't mean the format, but how you present it to your customers.

      You can create a product that doesn't have any new info in it for most, but
      if you have a good teaching style and the charisma it might make people
      take action and get them results.
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      • Profile picture of the author teaball
        Originally Posted by affhelper View Post

        it's also how you package your product and how you deliver it. By saying deliver it I don't mean the format, but how you present it to your customers.

        You can create a product that doesn't have any new info in it for most, but
        if you have a good teaching style and the charisma it might make people
        take action and get them results.
        Have you ever bought the generic cereal for 1/2 the price? It's made by one of the huge cereal makers. Packaging in popular breakfast cereal IS the product.

        So, I agree with you but still somebody created the product, didn't they? Who would buy tasteless shredded wheat if it hadn't been pounded into people's brains that it was sooooo goood! Even better with our frosted sugar on it! Sugar is gooood!
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  • Profile picture of the author ikosuave
    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.
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  • Profile picture of the author jbsmith
    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.
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    • Profile picture of the author Muhammad Hassan
      They do it for the same reason as anybody else
      that sells IM products - to make money.

      They make money from the product launch - but
      not all the money as a sizable chunk goes to
      JV (joint venture) partners.

      They make money from future product launches
      because of perceived value. A person thinks: if
      2000 people paid them $1,999 then what they
      say must be worth listening to, otherwise, why
      would so many people pay that amount of money.
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  • Profile picture of the author Online Bliss
    To keep the answer short: Because they can
    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.
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  • Profile picture of the author MichaelHiles
    Why is Lexus really just a Toyota with a different hood emblem anyway?

    Jack Trout once wrote a book with Al Reis called "Positioning".
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    • Profile picture of the author mumuCute
      Originally Posted by MichaelHiles View Post

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

      Jack Trout once wrote a book with Al Reis called "Positioning".
      positioning the brand of guru in customer(internet marketer), and because the guru's is expert and focus.
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  • Profile picture of the author kindsvater
    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?
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  • Profile picture of the author Andrew_Cheyne
    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!
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    • Profile picture of the author Mohammad Afaq
      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!
      This couldn't have been said better.

      Accept my friend request
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  • Profile picture of the author starmo
    Why? Because they can. *cue the scary sounding movie music*
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  • Profile picture of the author paulie888
    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
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  • Profile picture of the author Oxbloom
    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.
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    • Profile picture of the author Fazal Mayar
      You are right about that Mohammad.

      However, some gurus just create hypey salesletter and promises the world but their porduct is just rehashing or a bad product. However, there are gurus out there that really provide quality....and it's them who can overprice. I don't think a simple software or a single ebook should be overpriced but rather a membership that offers good services for newbies. As someone else mentioned as well, if you have authority in a niche, you can also put a high price for your product (which is the case for most Gurus).
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  • Profile picture of the author Fraggler
    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.
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  • Profile picture of the author Randy Daugherty
    Maybe because they are the expert? Experts fee...
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    • Profile picture of the author trini
      Because:

      They are perceived as Gurus- due to their past success and the High pricing feeds the affiliate and bonus frenzy.

      The best of the gurus can only share their experience, knowledge and skills.
      It is only when the buyer gets down to the implementation stage that they can move from "knowing" to doing.

      It is as true today as it was centuries ago:
      Let the Buyer beware!

      Take a timeout from the Launch Heat and Ask yourself these

      3 Power questions.

      1- Have you bought similiar products in the past? if yes what action have you taken based on that information?

      2. How does the product fit into your business model?

      3. Have you bought anything from the seller in the past? what's his quality been like.

      Heck, just taking a timeout from the Launch NLP will help you to make a wiser buying decision.

      Stay Sunny,

      Michelle
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  • Profile picture of the author promo_guy
    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
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    • Profile picture of the author Mohammad Afaq
      Originally Posted by promo_guy View Post

      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
      Don't take it personal but here's the problem i have with your response.

      If you haven't bought any high ticket products then how come you are jumping to a conclusion that these products are not worth it and when i or the buyers of the product sing hymns of praise it is just because we need validation?

      I am not trying to single you out here but i have a problem with anyone who comes out with a comment if this nature so please don't take any offense to this post.
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  • Profile picture of the author Paul Ho
    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.
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  • Profile picture of the author paulie888
    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
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  • Profile picture of the author Jillycakes
    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.
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    • Profile picture of the author paulie888
      Originally Posted by Jillycakes View Post

      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.
      Another reason that there are fewer returns is that with a high-priced Guru product (I'd classify that as anything $2,000 and up) the typical buyer doesn't enter lightly into a purchase just wanting to kick tires and see what it's all about. I'd say that with the high price point there'd be a substantial number of buyers who are committed and willing to take action, and this results in greater satisfaction and lower returns.

      I'm sure there are product junkies around who buy even high priced Guru products, but I'd venture to say they're in the minority. The typical person buying a $2000+ course probably has a stronger commitment to perusing the material and taking action on it (as opposed to your typical Clickbank buyer picking up the latest IM system at $77 or $97).

      Paul
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  • 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.
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    • Profile picture of the author paulie888
      Originally Posted by Chad Heffelfinger View Post

      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.
      This is just smart marketing, I'm sure they have a complete product funnel lined up before they ever launch the product. I don't see any issues with this as long as there is value provided every step of the way.
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      • Originally Posted by paulie888 View Post

        This is just smart marketing, I'm sure they have a complete product funnel lined up before they ever launch the product. I don't see any issues with this as long as there is value provided every step of the way.
        Yes, it is smart marketing that nobody has mentioned yet as being part of the reasoning. I never said there was any problem with it at all, I was just pointing out the fact that that's part of the reasoning, and yes, they should and most likely do have the funnel all planned out ahead of time.
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        • Profile picture of the author paulie888
          Originally Posted by Chad Heffelfinger View Post

          Yes, it is smart marketing that nobody has mentioned yet as being part of the reasoning. I never said there was any problem with it at all, I was just pointing out the fact that that's part of the reasoning, and yes, they should and most likely do have the funnel all planned out ahead of time.
          I have received calls for these types of high-dollar upsells before, and the thing I really take issue with is when the Gurus outsource their high-ticket coaching to some training company that employs people who don't have the actual "in the trenches" experience and knowledge to effectively coach someone until they experience success.
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  • Profile picture of the author dejurs2000
    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.
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  • Profile picture of the author promo_guy
    @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?
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  • Profile picture of the author dagaul101
    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
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  • Because they can and because the market bears the price fee.
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  • Profile picture of the author Tyrus Antas
    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
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  • Profile picture of the author MChriston
    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
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  • Profile picture of the author John Durham
    No doubt. Keepin it real brother Mohammad!

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