How to Beat the Competition Without Lowering Your Prices

Many of us feel like we're in a market space where people don't value what we do and it feels like we're commoditized and a lot of you have been taught or have taught yourself some crazy rule in the universe where if the market gets tricky the way you win clients is to do what? So when we lower our price what does the other person think if they lose the business to you? They lower their price and what do you do? Lower your price and then before you know it you pay the client to do the work. How long can you run a company when you pay the client to do the work? However much cash you have at the bank. When that's done your credit card and then you're done done. And I'm reading this book Implementing Value Pricing. It's written by Ronald Baker. Highly recommend you read this book if you want to be a master of pricing and he says in the book there's no such thing as commodity. You just lack imagination. You lack imagination and he gives a couple examples that will blow your mind. So in the example he talks about like a head of lettuce or cabbage or something which you buy at the supermarket, right? You go in there and basically one head of lettuce is the same as another head of lettuce if it's organic, if it's fresh. You don't buy one that's necessarily more expensive if you can't see the difference, right? And so you might be thinking I can't differentiate what I do from a competitor. I'm like the head of lettuce. They just buy the cheapest one because they can't see one design firm versus the next one marketing firm versus the next, right? He says so let's apply a little imagination here. So I don't know if you've noticed but people have started to sell hand leaf pre-washed triple rinsed bags of lettuce. How much is that? So one head of lettuce that's the cheapest version of it but applying a little creativity and labor you make it more convenient. My wife buys the bags. I buy the bags because I just grab it throw in a bowl and I can eat it, okay? And this is going to hint at an idea in a little bit. So that bag of lettuce goes for more money than the head and if you take the head and you split up to two or three things you can sell three bags for four times as much money. Everybody follow so far? And you're like okay that's it. That's pretty cool. And then what they do is somebody's like you know what if we put the like why do people even want lettuce in the first place? Why do people buy lettuce? Make a salad. You want a salad. So like why don't we throw in some croutons, a little cheese on it and have a package of dressing and now instead of charging you you know 79 cents for a head of lettuce we're going to charge you 12 dollars. And then I well why would people buy this one? Well let's go license Wolfgang Puck and call it Puck Express and put that sticker on it and say you know it's Wolfgang's dressing and let's sell that for 14 dollars. And so you kind of have to and it doesn't end it can just go into infinity if you want, right? Because in Japan anybody been to Japan before? Do you ever go to a supermarket? They have like $150 cantaloupe. I don't know what that cantaloupe tastes like but it better be good. So I understand that these are like lovingly cared by Japanese farmers. I know what they're doing. They're talking to it at night. They're like telling bedtime stories. I don't know but it's $150 cantaloupe. I don't get it. So there is no limit to what you can charge. It's just you have to say and you have to come to terms. I lack the imagination to describe this, okay? And let's take it further. He says can anything be more a commodity than money? Like who here would buy $1 for me for $1.10? Even $1.01. Would you even buy a dollar for me for $1.01? No because the face value is $1. He goes you lack imagination. Huh? I could sign it. You're right. So now you're using a little creativity, right? Okay. Now he's like a stock certificate or a stock you know you buy. It has a price. It goes up and down. He says there's a company that charges you more for a stock than you could buy in the market and who would who would do that? So here's what they figured out. They found that there are grandparents who want to give their grandchildren something for their birthday, for mitzvah, for Christmas, whatever it is and they want to be able to print the certificate of the stock and frame it and they sell the stock for more than what it's worth. Now the company only buys blue chip stocks like Disney, like Apple, whatever. So the stock might be $99 at that day but they're going to sell it to you for between $150 to $250 depending on the quality of the frame. Isn't that amazing? A total commodity that has no real value other than the value of what what it represents in the market. By using a little bit of imagination they can charge a lot more. Now this is the part that's going to hurt your soul a little bit. Ask yourself do you lack imagination? Okay now why would people pay more for something than they need to? Why? Well there's an answer. It's because if it's immediate, like we pay more for things if we get the results immediately, right? I buy a salad, I got a hand leaf, I got to wash it, I got to spin it dry, that takes time. So time to purchase to my mouth, make it faster, I'll pay you more, right? Now Alex Ramosi who wrote the book 100 Million Dollar Offer, also another book you probably need to pick up, I will be teaching lots of concepts from this and if you like the concepts that I'm sharing with you today, I highly encourage you to support the authors. I'm not trying to take money from people, please buy the books and support them. So as often as I can I will mention who they are and we'll repeat it, okay? Alex Ramosi talks about this. So there is pain that we feel and we want to get the solution as fast as possible. So if you look at like meditation, it's going to take time to practice, to learn, it's a whole thing and you want to clear your mind, right? Or you can take, is it Prozac? And you can get that instantly. So if you're a meditation teacher, you run meditation workshops, maybe that entire industry is worth 100 million dollars where Prozac is a multi-billion dollar industry because the time to result is short and it's guaranteed. So there's two variables and I'll talk about this more later, is time delay which will influence price and certainty of outcome. If I meditate, I get distracted, I'm not sure, does this work, I don't believe in it, it takes a really long time to master, right? Somebody can do it in seconds, somebody will take three hours to do it but the Prozac will put you in that happy state really fast, it's guaranteed. So when you think about your product, your service or whatever it is that you're doing, try to reduce the time to satisfaction and completion and try to increase the certainty of the outcome happening. Now if you put yourself in everyday life, every time somebody gives you a money-back guarantee, you're more likely to buy because the certainty of outcome is there. But if you're going to do a guarantee, there has to be a way for you to do it so you don't get killed. But think about that and every time I've had a client who's going to spend a couple hundred thousand dollars with us, sit on the fence like, oh I'm not sure Chris and we've done everything we can to convince them, the last thing I do is I throw in the guarantee and every time I've done that, I've done it twice, they close. So use it wisely, use it for the right moment, not to get the job but to secure it and there's a difference.