Introduction: The Truth About Pricing
Melina Palmer: Welcome to episode five of The Brainy Business, understanding the psychology of why people buy. This episode is called the truth about pricing. You won’t want to miss this one. So let’s jump right in.
Announcer: You are listening to The Brainy Business podcast where we dig into the psychology of why people buy and help you incorporate behavioral economics into your business, making it more now here’s your host, Melina Palmer.
Melina Palmer: Hello everyone. My name is Melina Palmer and I want to welcome you to The Brainy Business podcast. On this episode, I am going to tell you the truth about pricing the dirty little secret people don’t want you to know. And while it may feel like we’re taking the long road to get there, I want you to know that is absolutely intentional. And, the foundations I set in this episode will help bring it all together and give you those aha moments when we get to the end. Also, there is a freebie worksheet to accompany this episode because like I said, there are a lot of concepts being talked about in this one. You can download that by going to thebrainybusiness.com/five because this is episode five. I’ll bring it up again at the end. And if you can’t download it now, no worries. Listening to everything first is a great approach as well. Whatever works for you.
Insights from the eWomen Network International Conference
Melina Palmer: All right, here we go. At the time of this recording, I just got back from a conference for female entrepreneurs in Dallas, Texas. As a matter of fact, I was so inspired by what I witnessed there that I wrote the first draft of this episode script while flying home at 34,000ft. I know conferences aren’t for everyone, but being able to meet new people, form connections, and learn from others is really invigorating for me. Don’t get me wrong, I am exhausted by the end, but it’s so worth it. I suppose that given my chosen profession, which involves a lot of public speaking and flying to attend conferences and meeting a lot of new people, this is a very good thing. It’s almost like I planned it that way. Wink wink. The conference I’m returning from was particularly inspiring for many reasons. It was the eWomen Network International conference, which had nearly 1000 female entrepreneurs and a few guys that get it, as they like to say, together for three and a half days of focused networking and learning. To any of you listening right now who I met at the conference, hello. Thank you for taking the time to tune in and learn from the podcast today. I appreciate you joining in. If you’re not familiar with eWomen Network, there’s a link in the show notes and as always, I will not call out every time I have more details in the notes because it gets distracting. Just know that if you think I should look that up or what was the name of that study? Or I reference a previous episode, check the show notes because there’s probably more information available there. You can find the notes within the app. You’re listening to this on or by visiting thebrainybusiness.com/five because again, this is episode five and if you check the show notes and don’t find what you’re looking for, please send an email to Melina@thebrainybusiness.com and I will be happy to dig into the research for you and send you some studies or other information.
The Art of Selling: Lessons from Conference Presenters
Melina Palmer: One thing I really love to do at conferences or any events with speakers is to see how people position their offers or otherwise discuss their services. I probably don’t have to tell you that skills in this area differ greatly between the novice and the expert, and I’m sure their wallets show that different as well. The true masters of selling from stage are fascinating to watch, don’t you think? Especially if you know what to look for. And more often than not, they follow a similar pattern. And that’s the pattern I’m going to unlock for you in this episode. They’re able to weave in or sprinkle little tidbits throughout the discussion or presentation, so you don’t even realize how much you want them to make an offer to you
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Melina Palmer: as they’re talking. By the end, you’re practically begging them to sell you something and you don’t even recognize how much they have you on a hook. If a novice was to make the same offer, you might turn to your neighbor and say, can you believe this guy? Who does he think he is? No one in their right mind would pay that for this junk. Next week’s episode is going to dig into using behavioral economics to be a better presenter. But as you will learn in this episode, and the reason I brought this up today is it’s actually built on the same foundation as all pricing, which, as you know, I am, demystifying for you in this episode. As I mentioned in episode one, I am a lifelong learner. I’m sure that doesn’t come as much of a surprise to anyone listening, whether you heard that episode or not, but if you didn’t, I recommend checking it out. For me, everything I see is a learning opportunity. Remember last week’s episode about questioning everything? It’s really a philosophy I live by and I am constantly questioning the world around me. I appreciate my husband for many, many reasons, but one of them is that he puts up with me and actually finds my compulsions to be endearing, which I appreciate. It takes me longer than most people to walk through an airport terminal or down the street because I am constantly diverting my attention from one advertisement or logo or message or conversation to the next. I often stop to take pictures and make notes in my phone for future episodes, blog posts, video ideas. Or I might even stop and, take a few minutes to do a quick live video in The Brainy Business Facebook page if we’re not in too much of a hurry. As I said, he is a saint. So for all of you who like the content you’ve been getting from me, be sure to thank my husband Aaron because his patience is a big reason. All of this information makes it to you while I’m someone who stops and consciously evaluates all these items, I still don’t know all of what my subconscious is taking in while I’m engrossed in an interesting advertisement. Similarly, even though you don’t stop and take a picture of an unusual sign in the airport or at a restaurant, it doesn’t mean your subconscious isn’t evaluating it. Remember everyone, 99% of your brain’s processing is subconscious. It’s looking at all the messaging around you. A lot of it is selling you things and deciding when to stop and flag your conscious brain with an oh my gosh, we need that message. This can be done through a witty line, an interesting picture, or a scent. Have you ever walked past a bakery and found yourself eating a gooey chocolate chip cookie just a few minutes later? You might not have planned on spending $3.25 on a giant cookie. And in reality, it’s overpriced when you think about the ingredients and baking them at home. But it was there and your subconscious wanted it now. And that’s a selling technique. Just like presenters on a stage, television commercials, or in print advertisements, messaging on your website, or a pricing sheet. It’s not a coincidence that you can smell the cookies halfway around the block. You might think it’s just a result of the baking process. Sorry to burst your bubble, but that is simply not the case. Remember back in episode two, the top five wording mistakes businesses make? When I talked about anticipation, the dopamine release, the joy in your brain happens during the anticipation phase, not when you actually get the item starting to smell. Freshly baked chocolate chip cookies, the sweet brown sugar and light hint of saltiness wafting in the breeze gets your subconscious brain very excited. Regardless of what’s going on around you or how interesting the conversation was you were having with your best friend. It will flag your conscious brain and say, look around. Where’s that smell coming from? I know I smell cookies. Where are they? The scent dopamine search cycle continues until you finally see the store. By the time you arrive, the anticipation has built to a point that you might not be able to stop yourself walking in. And when you see a line, you may think, whoa, those
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Melina Palmer: may be good cookies. People are willing to wait for them. They must be really good. And then someone walks up and offers you a free sample while letting you know that for today only, they’re putting on a special. She hands you a flyer that says, buy three, get one free. Before you know it, you and your friend are both eating cookies, each with an extra for later. Now, I, want you to stop and think about that experience. A lot of things happened here, and whether you recognize it or not, the order things happened in is very important. For example, if it had happened in reverse, would you have bought any cookies at all? Lets say you’re walking down the street with your best friend, engrossed in a great conversation. Maybe you haven’t seen each other in a while and she’s telling you a funny story about something that just happened at work. Suddenly some salesperson shoves a flyer in your face and says, today only cookie special. Four for the price of three. Want to get some cookies for the family? I have samples. You would likely be very irritated with this person and think, how rude. Couldn’t he see we were having a conversation? I mean, gosh, do we look like we want cookies right now? And then your friend might get back to the previous work anecdote. Or maybe now you’ve started a new conversation about rude salespeople and begin to one up each other about ridiculous experiences. By the time you get in front of the door of the bakery and smell chocolate chip cookies, you might be so irritated that you would say, yeah, right. There is no way I’m buying cookies from those guys. I’m going to do a Yelp review on how rude they were. I bet they aren’t that good. Anyway, same bakery, same offer, completely different experience. And why? The smell of the cookies got your subconscious buying brain excited and made you interested in getting something sweet. By the time you found the sign for the bakery, you were practically begging them to sell you a cookie. And then they gave you a sample and a discount. How nice of them. And it’s such a great deal and it’s today only and your conscious brain is going to quickly logic its way into submitting to the will of your subconscious. This is an example of an expert and a novice sales approach. As you can see, it’s about nuance. Even if the first cookies were more expensive than the second story, it wouldn’t have mattered. Those second cookies could have been $0.50 each and you would not have bought them. Similarly, the price of the cookies in the first example was a final consideration. They could have been very expensive specialty cookies, and you already bought them in your mind before you found and walked in the front door. If you were to tie this back to your own business, which experience is closer to what your customers are getting from you? Are you accosting them in the middle of the street and shoving a flyer in their face, or are you drawing them in with the irresistible scent of gooey chocolate chip cookies? You might be thinking to yourself, but Melina, I sell services. I don’t have the luxury of a delectable treat as my product. To draw people in or my customers find me on the Internet sent is a non issue. So none of this applies.
The First Truth About Pricing: Understanding Customer Value
Melina Palmer: And I’m sure you know what I’m going to say right now. Right? Sorry, no sale. And yes, the pun was intended. The hard truth is, it does not matter, and that is just an excuse. People who are great at this masters in selling those people they say could sell sand in the desert will find a way to get you excited about absolutely anything through any medium and have you begging them to let you buy it. There’s a reason that the pet rock made a million dollars, right? It wasn’t about the item that was being sold. So don’t believe me? Let me give you an example. When I was looking at ways to reach more people through my business, to share this knowledge with as many people as quickly as possible, I seriously considered a membership site before I landed on a podcast. I do a lot of public speaking, so I reach people that way. But having something shareable and easily accessed without me needing to fly across the country for a one time event makes it easier to reach more people. While I was evaluating this, I had conversations
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Melina Palmer: with a lot of people, including some entrepreneurs, because I knew that was a group I wanted to directly impact. In my opinion, they need this information more than anyone, and it will take a long time to trickle down to small businesses if someone doesn’t stand up and say, I want to help you like I am. I remember one person I spoke to, someone I’ve known for a long time and very much respect. Who said I had good information to share? But entrepreneurs would not be willing to invest $20 a month in a membership group because it was too expensive, regardless of the information being provided. Meanwhile, I know lots of people with membership sites. Some of them charge 50 or $100 a month and are successful. So why would my site be different? Here’s why. And this is real truth number one about pricing. This is your first introduction to the core takeaway of this episode. So if you tuned out for a bit or lost focus for a second and it happens, no judgment, it’s time to come back to me.
Melina Palmer: You want to hear this next piece of information and write it down if you can. When it comes to price, if you are the right fit, if you are solving a real problem for the person that you’re positioning this for in a way they can understand, your customers will find a way to pay for it. You just need to draw them in with your own take on freshly baked cookies. Let me give you an example. The conference I just attended fills its stage with great presenters. They are masters and they know how to sell. In one case, the details of an eight month coaching program were being outlined. All the perks you get if you sign up before the conference ends and the whole audience was furiously taking notes or pictures of slides on their phones. When the speaker paused and said, are there any questions about all this? Someone in the audience stood up and shouted, yeah, how much is it and where do I sign up? In reality, I actually watched this happen in multiple sessions. People so excited to buy that they would stand and shout, where do I sign up? And these were not inexpensive offerings. I’m talking thousands and in some case, tens of thousands of dollars. Those same entrepreneurs, I was told, would not be able to afford or invest $20 a month for a program. We’re begging to pay tens of thousands for an eight month program. As a note, I’m not talking about value or saying there’s anything wrong with any of the presenters or their offers or that they’re good or not. I’m saying the delivery matters regardless of what you’re offering and at what price point. I think it’s probably true that those same entrepreneurs in that space would not have jumped for joy and begged to pay dollar 20 a month for my membership site because the approach was wrong for my business at the time. People need to understand the importance of behavioral economics and what it really is before they will care enough to take a step that costs them any amount of money because the scent of the cookies has to come first. Hence a free, shareable podcast. The good news is, I have broken down the approach for you into a formula you can replicate. No matter what your business is, whatever you are selling, whatever the price point, this is how masters get people interested in their products. And you can do it too.
Crafting an Irresistible Introduction: The Top of the Funnel
Melina Palmer: To keep the bakery analogy going, let’s start with the scent of the cookies. What is your item that gets people to stop and say ooh and want more? Think of this as the top of your sales funnel. The billboard, Instagram Story, Facebook live podcast, or clickable image in a feed. How do people hear about you? Why would they come to your website or Facebook page or YouTube channel or whatever it is you’re trying to get them to do? Begging them and shoving logic in their face does not work. Remember the cookie flyer? In that case, you got irritated and shunned the whole establishment. This is also why you can’t jump right in with pricing. If you start out with the price and then plan to follow up with a bunch of reasons why it’s a good one, or why they will like it, or what the value is, they will have already tuned you out and moved on, just like that poor kid forced to hand out samples in the street. You need something nearly irresistible to your ideal client. What do they care about? What will draw their subconscious mind in so
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Melina Palmer: it’s interested enough to flag the conscious and get them to actively look for you and engage when they do find you. It needs to be really, really good to break through the clutter. And remember, scent isn’t the only tool at your disposal. After all, we have five senses, smell, sight, taste, touch, and sound. Our minds are trained to notice when something is out of the norm, which is why videos in your social media feed will cause you to pause, perhaps only for a second, but that can be all it takes. If the video is interesting enough and once the movement stops you, your subconscious will scan the headline, think, do I care about this? And then you have an opportunity to move them one more tiny step forward. Similarly, a commercial with no sound is surprising and jarring. It’s more likely to catch attention, but studies have shown it only helps with retention when it’s relevant to the brand message. So make sure whatever tactic you choose is on point with your brand and the ultimate offer you are making. If the brand gets confused, it will dismiss and move on, which can actually be worse in the long run.
Engaging All Five Senses for Increased Interest and Perceived Ownership
Melina Palmer: So consider your business. How could you incorporate one of the five senses into your own irresistible introduction to stand out, building anticipation and excitement? Remember, even for boring products or services, this works. The cotton Candy grapes segment in episode two is a perfect example of this. You can apply this to any product, service, or industry and increase conversions. Again on this episode, I am not going to get into the stage presentation. Come back next week for episode six to learn more about that. It uses the same formula, but in a slightly different way. Okay, now that you have their interest, what are they going to get? What are you giving them to keep that interest and help them to learn a little bit more about you? If you’re selling services, this is your lead magnet. Revisit episode three. If you want more information on why lead magnets work and tips on finding the right one for you. If you have the luxury of a food item and in person customers, let them taste something. Think of Costco free samples. How many things have you ended up buying at Costco, even though you swore you wouldn’t, just because the sample was there and it was just so delicious, you couldn’t stop yourself. Or the kids tried something and you couldn’t stop yourself from buying it. If you sell furniture and someone is interested in a couch, make sure they sit on something as similar as possible and touch the fabric. Show them a photo of what it would look like in their house. Do a rendering with their actual layout if you can. You get the point. So why does this work? If you have attended one of my presentations, you have likely heard me talk about loss aversion and perceived ownership. I, will do some full episodes about each one because there’s a lot to say about them. But in this episode, I’m just going to scratch the surface a little bit. Our brains are hardwired to latch onto things and not want to lose them. Think of small children or the seagulls in Finding Nemo, shouting, mine, mine. And whether we like it or not, our brains will claim ownership over things incredibly quickly and not want to give them up. This is greatly increased by the power of touch, which is why in the furniture example, I mentioned giving them a fabric to touch and a couch to help experience what it would be like if they owned the item. A great example of this is the overnight test drive. Have you ever done this? Have you been given this great opportunity to take a car home for a drive? You might have thought that was so nice of the dealership to let you use that car for a night. I mean, you didn’t pay for it, yet you haven’t committed to anything. You could crash that, and that’s not on you. That’s you know, 2030, 40, $50,000 that they’re just giving you to take back. And you don’t owe them anything. They maybe even gave you a gift card to take your family out to dinner. They encouraged you to make sure it fits in the garage, see that the car seats fit all these things, and you thought they were being nice. But what they know is the chances that you’re going to buy that car go up significantly if you are taking it home. You wake up in the morning, you see it in the garage, you don’t want to
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Melina Palmer: lose it. Your brain has already taken ownership over that car and has started to build an entire life where you’re the type of person that now drives this great, wonderful new car with its smell and the feel of the leather and the seats and all of these things have caused you to feel like you own it and your brain doesn’t want to let it go. Involving the senses can help stimulate the brain’s ownership response, so how can you use that to your advantage? Even something as simple as saying picture this can have an impact, and watching other people experience things can help as well. Our brains have what are called mirror neurons that allow us to empathize and experience with someone else, which is why you might recoil at the sight of someone getting a paper cut. And don’t worry, mirror neurons will definitely get their own episode too. Now that your customer is experiencing a feeling of ownership built on top of an aversion to losses, incorporating the today only special makes it that much more urgent. This is the concept of scarcity. There are lots and lots and lots of studies and reports and articles on scarcity, and it’s probably something you’ve heard of before. Because of that, I’m not including a link to this concept in the show notes, but if you would like for me to point you in the right direction, send me an email Melina@thebrainybusiness.com and I would be happy to put something together for you. What I can tell you is FOMO, or fear of missing out. For those of you who aren’t up on your acronyms, caught on for a reason, this is a real thing, and it is a huge motivator. Knowing that the opportunity is fleeting will make your subconscious brain go crazy, especially if it is already excited and doesn’t want to lose the item it has built a vision around. Remember, the order of these things mattered, and I’m presenting them in this way intentionally. Next time you’re buying something online, say, from Ticketmaster or Rent the Runway notice if they have a countdown clock start when you put an item in your cart. I know for sure those two do that, which is why I mentioned them specifically. Can you feel your anxiety spike? Your heart rate increase? You may realize your wallet is on the other side of the house and run to get it before the countdown gets down too far. Fumbling as you struggle to get your credit card out, as if you couldn’t type those 16 digits in the remaining 14 minutes and 52 seconds. That clock triggers something in your subconscious brain and makes you jump on opportunities you might otherwise delay on. Another example of this for an in person experience would be last year when I bought my wedding gown, they had an offer of 10% off and an accessory credit. In my case of $200, if you bought a dress on the first visit, the minute you left, the offer was gone, and you would pay full price even if you called on the way home. I’m guessing I was not the only one to take advantage of that particular offer. And if you’ve ever watched shows like Say Yes to the Dress or all these things that are out in the world now, people tend to be very indecisive when it comes to wedding purchases, so getting people to buy a dress on their first visit is sort of unheard of. Unless maybe you had been to a bunch of other places and this was the last one on your stop. But even then, there’s a lot of debate and trying to evaluate things and fear of regret and all these things that come into play. So being able to get people to buy right away is a huge benefit for that store.
The Power of Framing: How You Say It Matters
Melina Palmer: All right, here is the last piece in the cookie story. And as, with most brain rules, this will seem silly, but studies show that phrases or offers that rhyme or otherwise sound good will be more convincing and, sound more authoritative than those that don’t. Daniel Kahneman has some great examples of this in his book, Thinking, Fast and Slow, which I will summarize here. You likely didn’t even notice that when I introduced both of the cookie offers earlier in the episode. In the good offer, they said, buy three, get one free, and the other said four for the price of three. They’re saying the same
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Melina Palmer: thing, but your brain doesn’t hear them the same way. This is called framing. Here’s a little test to prove my point. I’m going to say two sentences, and you think about which one you will remember and feel is more wise. The fifth month’s plants are most likely to come after it rains the previous month, or April showers bring Mayflowers same thing and yet completely different. Similarly, people are more willing to buy beef for yogurt or ground turkey that is 90% fat free than the one that is labeled 10% fat. Doctors and patients will opt in on procedures that have an 85% success rate versus a, 15% chance you’re not going to make it. Framing is everything. It isn’t what you say, it’s how you say it, just like it isn’t what you’re selling, it’s how you sell it. It’s not about the cookie, and it often isn’t about price either. All the stuff that leads up to the offer and the pricing matters more than the numbers themselves. However, as this episode is about pricing, I will also give you some tips on how to present the items when it’s time to lay them out. It is absolutely possible to do all the right things in that cookie scenario and then kill the sale with the wrong price. For example, in cookie scenario number one, if you had made your way into the bakery, had the sample, and then saw their cookies were $100 each, you probably would have found it easier to walk away. So here are my two biggest, biggest tips on presenting prices and a little bit about how they work together.
Anchoring and Relativity: Strategic Pricing Presentation
Melina Palmer: To introduce this first concept, I’m going to reintroduce a story. In episode two, I talked about a study done using grocery store end cap displays, where in one case. So there was two basically identical signs. One said, Snickers, buy them for your freezer, and the other said, Snickers, buy 18 for your freezer. In this case, you would expect that the word them and the number 18, which are the only differences between the two, shouldn’t have that much of an impact. But in reality, when the number 18, which most of us can agree is a pretty ridiculous number of Snickers, and most are not buying that many, but the number 18, instead of the word them, resulted in a 38% increase in the sales of Snickers bars. And why is that? It’s because of this concept of anchoring and adjustment. Your brain will latch on to a number and then move up or down when it doesn’t have anything else to go on. So if you were to think about going through the grocery store, you see a sign. It probably doesn’t stand out to you too much when it says, Snickers, buy them for your freezer. Okay, fine. You know, I’ll get one, two, three. You know, them is plural, so I’ll get two or three Snickers bars. Fine. You know, put them in the freezer sounds good. In the other scenario, that number 18 is sort of like the scent of the cookie. It might stand out to your subconscious brain and make you think, 18. That’s a lot of Snickers bars. I don’t need that many. And now you’re thinking about what they have to offer, and you see the Snickers there. You think, oh, 18. I’m way better than all those other people that would get 18 Snickers bars. I’ll go ahead and just get six. And as you can see, six is far more than the two or three that you would have gotten in the them scenario. And it’s because that arbitrary, very likely number of 18 was set as an anchor and your brain adjusted from that point. If you’re asking people for money, you can often start with a high number first and work your way down. For example, if you’re trying to get a loan for a piece of equipment you know is going to be surprisingly expensive, do some research and find an item that’s even more expensive and a worse value and present it like this. I did some research, and, the top of the line commercial grade oven is $15,000. It has some great features, but I wanted to complete my due diligence, and I found another option that has a little bit less capacity, but should be sufficient for what we need
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Melina Palmer: to use it for, and it’s only $8,900. What do you think? One reason that previous example works really well is because it takes another concept into consideration called relativity. You see, our, brains have a really difficult time valuing one off items. In his book Predictably Irrational, Dan Ariely uses an example from an old advertisement selling subscriptions to The Economist. In the actual offer, they had three options. Digital only for $59, print only for $125, and print plus digital for the same $125. It probably seems obvious what people picked, right? 16 people picked digital only at 59. No one picked the ridiculous print only option, and 84 people picked the bundle. If you sold a product or service that no one wanted, what would you do? Say it was available for a year, and no one ever picked it up or showed any interest? You would probably get rid of it. Rationalize that it’s not worth time, effort, staff, focus, whatever. And if you’re a marketer, you would likely make a case for the white space you can gain if you got rid of that erroneous product. But what happened when they did that? In the test scenario, the prices and look of the ad remained exactly the same. They just pulled out the middle option. This time, 68 people chose digital only and 32 chose the bundle. Remember, it was 84 last time. What in the world happened when you pull out this seemingly erroneous option that nobody picked? You actually took away an item that allowed you to compare the other two. Digital only. And then a print plus digital bundle don’t let you know how much print would be by itself, and so you automatically assume it just must be the difference between the two items. And then you’ll sort of start to consciously evaluate why it’s better to get into this cheaper option. It’s an introductory. Eventually you can move your way up to this other piece, if you really like it and use it a lot and have print, and you’ll be able to save trees, whatever it is. But in that scenario, the only thing you can compare on is the overall price. And if price is the only thing from one product to the next, then people are going to go for that lower price option most of the time. Unless, you know, in that case, maybe those 32 people already had print or have had it in the past, they know how much it costs to know that that’s a good value. But you lost 50 people that would have been in this other scenario the time before. And I’m guessing that bundle was actually the most profitable item for The Economist.
Building Your Pricing Strategy: Three Options Approach
Melina Palmer: So for you, if you’re setting prices in your company, I usually recommend with my clients to provide three options, and you build them out in this way. First, start with the thing you actually want people to buy. Pick one item that is your best offer. It should be valuable to them and profitable for you. A, win win item that you would love to sell a lot of. List out all the benefits of it so you have points to use for value comparisons in the future. Steps. As a note, you’re not going to put all these features listed on anything again. Remember back in episode two, we don’t want to be too boring, we don’t want to put too much, but you will want to know that. So you can go into step two, which is building out a decoy. Your decoy item should be very similar to your best offer, but with an obviously worse value. For example, if you wanted to sell an, espresso machine and it cost $149, you should put one that’s double the size and twice the price next to it on the shelf to make the best offer and obviously better value. Remember, you don’t actually want to sell this thing. You should be prepared to offer it if anyone actually wants it. But its purpose in life is to help people realize why the best offer is in fact the best option for them. Finally, incorporate a third item that’s different from the other two to provide some balance. This could be something that incorporates your anchor, setting a high price to help the best item look even better in comparison, and provide an an option for those people who want to get even more from you. So if you offer VIP
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Melina Palmer: days or what I call deep dives, these can be included to show some contrast and be there for those who want them. But it’s more of an uncommon seller that you’d be excited about when people book. But you know it’s not what the bulk of people are going to get from you. In the cookie scenario, they might have had prices listed as $3.25 per each cookie. Buy three, get one free, so it’s $9.75 for four or $29.25 a dozen. The cost for a dozen is actually the same as if you did three of the buy three, get one free packages. But our subconscious brain doesn’t do math that simply, and unless you come in for a dozen to begin with, it will actually probably help you adapt to the idea of the price in the feature deal. Then buy three, get one free. So $9.75 for four cookies doesn’t seem as expensive as you probably realized in this episode. There is a lot going on in the brain even with the simplest of offers, and even one item being presented incorrectly can throw the whole system off balance. And because the cookie system can be applied to basically every product, service or offer, there are many nuances to be aware of and little tweaks that can be impactful on each one. In one case, you might want to turn up the scarcity and turn down the perceived ownership, for example. And as you may have noticed in my pricing examples in the commercial oven example, I used the anchor price first to make the thing you really wanted to get seem more affordable when you’re getting budget inside of an organization or something like that. But in the cookie sale, the price of a dozen came at the end. To really do this right, to be a master of selling, knowing the best approach takes a thorough understanding of the principles and how they work together when you turn up one and dial back another. And this is where I can help you. I’ve given you the tools to build your pricing sheet or pay page on your website, and you will see the benefits if you start to incorporate these learnings, even one or two of them, into your overall strategy. The freebie I mentioned earlier is a worksheet to help you build this out yourself. And you should go to thebrainybusiness.com/five to download your copy.
Conclusion and Next Steps
Melina Palmer: Now I think it’s time to wrap this one up. Thank you for listening to episode five of The Brainy Business podcast today. I hope you learned a lot of ways to apply these learnings in your business and that you now know the truth about pricing. If you liked this episode or any of the episodes, please consider subscribing to the podcast through iTunes or whatever player you listen on. It means the episodes come to you automatically each Friday when they come out, and you never miss a tip or a trick. And for everyone who has already rated and reviewed the podcast, thank you so much. The Brainy Business has officially reached five star status on iTunes with seven amazing reviews as of the time of this recording. I love reading these and I have been so honored to be called your favorite new podcast that knocks it out of the park. Or that you are excited to take advantage of this podcast and bring more profit to your business. That’s awesome. Or that you literally can’t afford to miss this podcast. Thank you all for your kind words and for helping others to find and hopefully decide to listen as well. Well, if you have not yet rated or left a review, I would love it if you did. I read them all and I appreciate them and I thank you. Whether you’re one of those seven who left a review already or someone who will be doing so in the future, just thank you. I appreciate you and I appreciate you taking the time to listen with me, and I do hope you tune in next week for episode six, which, as you know, will be about applying the lessons in this episode to help you be a better presenter or public speaker. Until then, just remember it’s not about the cookie. Thanks again for listening and learning with me, and remember to be thoughtful.
Announcer: Thank you for listening to The Brainy Business podcast. Melina offers virtual strategy sessions, workshops, and other services to help businesses be more brain
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Announcer: friendly. For more free resources, visit thebrainybusiness.com.
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