How TO Make A TON Of Money (in just a few minutes)
Summary
TLDRThis video script offers a strategy for pricing products to maximize sales and profits. It suggests marking the price of your main product at 10x, 50x, or 100x its current value to create a high price anchor. This psychological tactic makes lower-priced items seem more attractive by comparison. The video also discusses the importance of understanding the value customers perceive in a product, emphasizing that if they see the value, they will find a way to afford it. It advises creating a pricing menu with the most expensive option at the top to make other options appear more reasonable, and tailoring prices to different customer segments based on the value provided.
Takeaways
- 💰 Pricing Strategy: Aim to sell more expensive items to increase profits, as there's strategic advantage in being the most expensive in the market.
- 📈 Price Anchoring: Use the highest price as an anchor to make other products seem more reasonably priced in comparison.
- 🔄 Avoiding Price Competition: Don't compete on price alone; instead, focus on operational efficiency and providing unique value.
- 👔 Personal Experience: The speaker shares a personal story about being price anchored with a suit, illustrating the concept in action.
- 📊 Psychological Pricing: Understand that customers are influenced by the psychology of pricing, and use this to guide your pricing structure.
- 🍿 Small, Medium, Large: Use the example of tiered pricing (small, medium, large) to show how customers are influenced by the middle option.
- 💡 Value Perception: Emphasize the importance of perceived value over the actual price, and how understanding value can motivate customers to spend more.
- 🚗 Ferrari Analogy: Use the example of a drastically underpriced Ferrari to illustrate how customers will find a way to pay if they believe in the value.
- 🎁 High-End Offerings: Include a very high-priced option in your offerings to attract 'whales' or high-spending customers.
- 📈 Price Elasticity: Recognize that customers are willing to spend more when they see the value, and adjust your pricing to reflect this.
- 🏆 Customized Pricing: Tailor your pricing to meet the needs and perceived value for different customer personas or segments.
Q & A
What is the main idea of the video script?
-The main idea of the video script is to teach viewers how to price their products or services to maximize sales and profits, focusing on the concept of price anchoring and offering high-priced items to attract customers who value quality over cost.
What does the speaker suggest doing with the average price of the product you sell?
-The speaker suggests multiplying the average price of your product by 10, 50, or 100 times to create a high-priced anchor product that can influence the perceived value of your other products.
Why is there a strategic benefit to being the most expensive in the marketplace?
-There is a strategic benefit to being the most expensive because it allows you to position your product as a premium option, which can attract customers who are willing to pay more for higher quality or perceived value.
What is the only strategic benefit to being the lowest cost person in the marketplace?
-The only strategic benefit to being the lowest cost person in the marketplace is if you have built your entire business around operational efficiency and automation, allowing you to provide the same product or service for less.
What is price anchoring and how does it work in the context of the script?
-Price anchoring is a psychological effect where the first price presented influences the perception of subsequent prices. In the script, it's used to establish a high-priced product first, making other products seem more reasonably priced by comparison.
Why does the speaker mention the example of buying a suit and the experience of price anchoring?
-The speaker uses the suit-buying example to illustrate how price anchoring works in a real-world scenario, showing how a high initial price can make subsequent, lower prices seem like a better deal.
What is the significance of having a 'small, medium, large' pricing structure?
-The 'small, medium, large' pricing structure is significant because it allows businesses to strategically position their products, with the medium option often being the most popular choice due to its perceived value compared to the cheapest and most expensive options.
How should businesses price their products if they want to appeal to high-value customers?
-Businesses should consider offering a premium, high-priced product at the top of their pricing menu to appeal to high-value customers, even if they expect only a small percentage of sales from this option.
What is the importance of understanding the value proposition when selling expensive items?
-Understanding the value proposition is crucial when selling expensive items because it helps customers see the worth of the product, making them more likely to invest in it despite the high price.
Why might a business want to have a very high-priced item on their menu even if they don't expect to sell it?
-A very high-priced item on the menu can serve as a price anchor, making other items seem more affordable and can also attract 'whales' or high-spending customers who are willing to pay for premium products.
How can businesses segment their pricing to meet the needs of different customers?
-Businesses can segment their pricing by offering different tiers of products or services, such as bronze, silver, and gold packages, to cater to the varying needs and budgets of different customer personas.
Outlines
💰 Pricing Strategies for High-Value Sales
The speaker introduces a strategy for increasing sales by pricing products at higher levels to attract customers who are willing to pay for premium quality. They suggest writing down the average price of the product being sold, then calculating what it would be at 10x, 50x, and 100x that price. The speaker emphasizes the importance of positioning as the most expensive option in the market to capture a strategic advantage, as being the cheapest is only beneficial if built on operational efficiency. They also discuss the concept of 'price anchoring,' where presenting an extremely high-priced item first can make subsequent, lower-priced items seem like a better deal. The speaker uses the example of a suit store to illustrate how this works in practice.
📈 Tailoring Pricing to Customer Segments
In this paragraph, the speaker discusses the importance of understanding different customer segments and tailoring pricing to meet their needs and perceptions of value. They suggest using a tiered pricing model, such as small, medium, large, to indicate which product is likely to sell the most. The speaker explains that some customers will always opt for the cheapest option, while others are influenced by the relative pricing and may choose a middle or higher-priced option if it seems like a better deal. They stress the importance of creating a sense of value and offering a deal that customers perceive as a bargain. The speaker also touches on the idea of offering extremely high-priced items to attract 'whales' or high-spending customers, and the psychological impact of having a very expensive item on the menu, even if it's not expected to sell.
Mindmap
Keywords
💡Pricing Strategy
💡Price Anchoring
💡Operational Efficiency
💡Value Proposition
💡Psychological Pricing
💡Market Positioning
💡Product Differentiation
💡Customer Segmentation
💡Conversion Rate Optimization
💡Perceived Value
💡Whales
Highlights
The video promises to teach viewers how to price items to increase sales of high-priced products.
Suggests writing down the average price of what you sell and multiplying it by 10x, 50x, and 100x to set higher price points.
Advocates for selling more expensive items as a strategy to make more money, rather than competing on price.
Being the most expensive in the market can have strategic benefits, unlike being the second-cheapest.
The importance of building a business around operational efficiency if aiming to be the lowest cost provider.
The concept of price anchoring to influence customers' perception of value.
Using price anchoring to make subsequent lower-priced items seem like a better deal.
The psychological impact of pricing on customers' purchasing decisions.
The strategy of listing the most expensive item first in a pricing menu to make other options seem cheaper.
The use of 'small, medium, large' pricing strategy to indicate which product is most likely to sell.
The idea that customers are more likely to buy the middle-priced option in a range.
The importance of understanding that all prices are arbitrary and can be adjusted to influence sales.
The belief that customers want to buy great deals, not just cheap items.
The notion that if customers understand the value, they will find a way to pay for expensive items.
The concept of offering a high-priced item with the expectation that it will sell occasionally to 'whales'.
The idea of using high-priced items as a way to teach yourself about the value customers place on your offerings.
The strategy of segmenting customers based on their willingness to pay for different levels of value.
The importance of pricing based on the value delivered to a specific customer avatar or persona.
Transcripts
everybody's watching this video i'm
about to make you a ton of money in a
few minutes i'm gonna walk down exactly
how you can price stuff to get more
people to buy really expensive things
that you sell and if you don't sell
something really expensive you're gonna
want to by the end of this video right
now if you can write down on a piece of
paper what the average price of the
thing that you sell is let's say it's a
hundred bucks what i want you to do is i
want you to put 10x i want you to put
50x i would put 100x next to it now once
you write the price of what that would
be if your main thing's 100 bucks 10x is
a thousand 50x is 5 000. 100x is 10 000.
it doesn't matter what business you have
if you want to make lots of money
sell more expensive stuff there's no
strategic benefit to being the second
cheapest person in the marketplace but
there is for being the most expensive
there's only one strategic benefit to
being the lowest cost person in the
marketplace which means that you went in
with that strategy and you built an
entire business around operational
efficiency automation and you built the
whole strategy of the business on being
able to provide the same thing for less
if you did not do that and are simply
trying to do the same business as other
people and compete on price you will
lose you will have no profit left over
and you will get price to the point of
breakeven and you will just run a
non-profit thank you that's probably not
why you got into business no matter what
you sell you should have something
that's 10 50 100 times more expensive
than thing you're currently selling when
i bought my first nice suit for myself a
friend of mine was like fashionable and
he like took me to the store or whatever
i put a suit on i remember checking the
price tag and it was thirteen thousand
dollars homie didn't have thirteen
thousand dollars and i was like [ __ ] and
then what they did is after i took that
off they put me in a suit that was like
twenty nine hundred bucks or twenty 2
500 and i was like okay i can get with
this right i didn't realize it then but
they had completely price anchored me
and that was 100 the strategy was get
put you in the most expensive suit and
then you're like geez but the thing is
is that some guys will look at that and
the right guy will be like done i'm in
price anchors have two benefits and this
isn't the only point of the video this
is the first point for everybody who
isn't going to buy the really expensive
10x 50x 100x thing you anchor the rest
of your pricing against that first price
so you're showing them this thing kind
of like ripping off the band-aids like
stretching the length through which they
see your pricing if i say a thousand
dollars first and then i say a hundred
thousand dollars it's like [ __ ] that's
huge but if i say a thousand dollars
first and then i say
a hundred dollars or ten dollars that
sounds like less if you have a pricing
menu for a membership for example of any
kind you want to have the most expensive
one first not the least expensive one
and then everything else will look
cheaper by comparison if you do it with
wine you can do with software you can do
with memberships it works in every
situation because it works on psychology
now let's talk about the other side of
the equation all right so we've got the
anchor and then we've got other options
of pricing so how do we organize the
other two options good question i like
to use the small medium large example to
kind of like break this down so you can
use this as small medium large popcorn
small medium large cokes whatever but
let's say you've got 10 bucks five bucks
and you've got this middle price where
you put this middle price will indicate
which product gets sold the most of a
certain percentage people always buy the
cheapest thing because that's who they
are and that's fine the next people are
influenced by the pricing in general so
if i have a five dollar thing and a ten
dollar thing i can make this medium six
bucks so i make my medium a dollar more
than my small and it seems like a great
price but the thing is to ever forget is
that we make up all the prices all of
these are made up so we got 510 and we
got six or 650 or 6.99 and we're gonna
get a lot of people are gonna buy this
one now
if i bump this to here nine dollars and
i make this 10
what are people going to do a lot of
people are gonna buy this one because by
comparison it's like wait just for a
dollar more i get twice of the small
well that sounds like a great deal and
so fundamentally people want to buy
great deals they don't want to buy cheap
stuff think about the difference there
price is what you pay value is what you
get the deal is the discrepancy between
the two for example and this is a big
one this is a i want to break this
belief for you if right now you sell
expensive stuff five thousand dollar
things or ten thousand dollar things if
i were giving you a ferrari
brand new and i said it's ten grand and
i'm walking up to people on the street
and they believe that i was actually
going to give them the ferrari
how hard do you think it would be for
them to come up with 10 grand
what would they do
they would call their friends they'd
call their family they would take out of
their credit cards they'd take a loan
why because they know it's worth more
than 10 grand whenever you are selling
something expensive the reason someone
is not buying it is simply because they
do not understand the value because if
they understand the value and they
believe that you're giving them a
ferrari they will find a way to get the
money i want to banish this whole
concept of like they can't afford it
everyone can afford it if they believe
the value is there and so the idea is
not that we're giving cheap stuff away
we want the value relative to the price
to be a huge bargain when you're coming
up with the stuff that you're going to
sell the first thing that i want
everybody to do 10x 50x100x pick one and
then figure out what you would have to
fulfill to make it worth that they are
getting a ferrari for 10 grand and
that's how you get people to say yes
over and over again and the other thing
is is that it'll start to teach you that
people are willing to spend more when
they see the value the other benefit of
having this huge price anchor is that
whales will buy it so a certain
percentage of population just like i
said certain percentage population
always buys the cheap thing because
that's who they are there's another
percentage of the population that always
buys the most expensive thing because
that's who they are it doesn't hurt you
at all to have something that's super
expensive on your menu put it there with
the expectation that you're never gonna
sell
and be surprised when you do if you
didn't get a gasp from the price you
didn't go high enough you want that gas
because that gap shows that you've
broken the rubber band of pricing that
they associated with what they expected
your product or service to be priced at
and so if you're like oh it's 100 grand
they're like whoa i was not expecting
that you're like oh no worries and then
you can explain why it's worth it but
then it's like you know what i think we
can do 80 of that for 10 because that's
our our silver that make more sense for
you yeah that would make a ton of sense
for me now if silver's 10 bronze is 8
and gold is 100 you need to sell a lot
of 10ks because now it seems like
nothing it depends on the customer or
segmentation but one of the big mistakes
i see people do is that they'll have
like 100 a month 110 a month and 120 a
month you want to meet buying personas
so you might have a hundred dollar a
month you might have a 200 a month you
might have a thousand dollar a month
because the people and the needs between
those customers are different so you
want to price based on the value
delivered to a specific avatar like if
i'm selling something to coca-cola it's
going to be more valuable to coca-cola
than it is to a local brewery so you can
price it accordingly if you are a cro
expert conversion rate optimization and
you can help an e-commerce store buy 10
if the store is making a million bucks a
year 10 is 100 grand if the store is
doing 100 million dollars a year 10 is
10 million you literally can provide
more value to them because of who they
are not because of who you are so 10x
50x100x think about what you provided
for each of those levels put that at the
top of your menu be the first thing that
you explain to people expect 1 out of 20
to say yes to it and for everybody else
to feel much more comfortable taking the
other options bye
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