PRICING: CHARGE WHAT IT’S WORTH Flashcards
What does Alex want to show in this chapter?
how to create and communicate value, aka the “worth-it-ness” of an offer.
In order to understand how to make a ___________ ________, you must ___________ ________.
compelling offer;
understand value.
The reason people buy anything is
to get a (perceived) deal.
When someone buys something they believe what they are getting (VALUE) is
worth more than what they are giving in exchange for it (PRICE).
What happens when the value they receive dips below what they are paying,
they stop buying from you.
What does Alex quote Warren Buffet by saying?
“Price is what you pay. Value is what you get.”
The simplest way to increase the gap between price to value is by _________ ____ ______. It’s also, most of the time,
lowering the price;
the wrong decision for the business.
Getting people to buy is NOT
the objective of a business. Making money is. And lowering price is the road to destruction for most.
Dan Kennedy said
“There is no strategic benefit to being the second cheapest in the marketplace, but there is for being the most expensive.”
So the goal of our GSO will be to get more people to
say yes at a higher price by increasing our value to price discrepancy.
In other words, we will raise our price only
after we have sufficiently increased our value.
This way, they still get a great deal (think buying $100,000 of value for $10,000). It’s ‘money at a discount.’
Most business owners are not competing on price or value. In fact, they’re not actually competing on anything at all.
Their pricing process typically goes something like this:
- Look at marketplace
- See what everyone else offers
- Take the average
- Go slightly below to remain “competitive”
- Provide what their competitors offer with a “little more”
- End up at a value proposition of “more for less”
What is the big secret about copying competitors?
those competitors they are copying are dead broke. So why on earth copy them?
Pricing where the market is means
you’re pricing for market efficiency.
In plain words, pricing this way means
you are providing a service at just above what it costs for you to stay above water.
We are not trying to stay barely above water. We are trying to
make egregious amounts of money that will have your relatives asking if what you are doing is legal.
There is no strategic benefit to being the _________-_________ _______ ________ in your marketplace.
second-lowest priced player
Alex sees charging high prices as not only a very smart business decision, but
a moral one.
Premium pricing is the only choice that will allow you to truly provide
the most value, with a unique and strong position in the marketplace.
Virtuous cycle of price chart
Alex uses this framework in most of the materials he releases because
it needs to be consistently reinforced.
The forces of the marketplace will ______ on your ______ ______. You must
grate;
belief system;
stay strong and ignore them!
When you decrease your price, you . . . . . .
Decrease your clients’ emotional investment since it didn’t cost them much . . .
Decrease your clients’ perceived value of your service since it can’t be that good if it’s so cheap, or priced the same as everyone else . . .
Decrease your clients results because they do not value your service and are not invested . . .
Attract the worst clients who are never satisfied until your service is free . . .
Destroy any margin you have left to be able to actually provide an exceptional experience, hire the best people, invest in your people, pamper your clients, invest in growth, invest in more locations or more scale, and everything else that you had hoped in the goal of helping more people solve whatever problem it is that you solve.
When you raise your prices, you . . . . . .
Increase your clients’ emotional investment . . .
Increase your clients’ perceived value of your service . . .
Increase your clients’ results because they value your service and are invested . . .
Attract the best clients who are the easiest to satisfy and actually cost less to fulfill, and who are the most likely to actually receive and perceive the most relative value . . .
Multiply your margin because you have money to invest in systems to create efficiency; smart people; improved customer experience; scale your business; and, most importantly of all, to keep watching the number in your personal bank account go up, month after month, even with reinvesting in your business.
When you raise your price, you increase the
value the consumer receives without changing anything else about your product.
In a blind taste test, customers tasted 3 differently priced wines. What happened?
They all rated the most expensive as the best tasting. They were all the same wine. This demonstrates the relationship between price and perceived value.
Higher Price Means
Higher Value (Literally)
the goal isn’t just to be slightly above the market price — the goal is to be
so much higher that a consumer thinks to themselves, “This is so much more expensive, there must be something entirely different going on here.”
if you offer a service where a customer must do something in order to achieve the result,
they must be invested. The more invested they are, the more likely they are to achieve a positive result.
price your services or product in such a way that it
stings a little when they buy.
Those who pay the most,
pay the most attention
if your customers are more adherent and follow through, and if they achieve better results with your service than your competition, then
you are in a very real way providing more value than anyone else. This is how you win.
You must be so confident in your delivery, because ____ _____ _____ __ __ ____ _____, that you know
you have done it so many times;
that this person will succeed.
If you lack any conviction
you MUST outwork your self-doubt
In order to charge so much, you must
learn to create tremendous value
