Aha – the perennial question – more money please…! The financial wizards would argue, for instance, that you pay more for a luxury car – such as a Rolls Royce – than a standard vehicle like a Ford Focus because of all the luxurious refinements and added “value” in the Rolls. A Ford Focus will set you back about £11,000; a Rolls-Royce starts at 20 times that…! Yet, both can only legally travel at a maximum of 70mph. Both will get you from A to B in the same amount of time. Both work the same way – put foot on pedal, steer wheel, look out of front windscreen. Functionally, they are the same. Inside, yes, they are different. But is the extra padding on the seating, the added extra of the wine cabinet and the quieter running of the engine actually worth an extra £200,000…?
Here they are talking about cars, but this is true of every product. Even if two products have the same functions, one could be priced much higher. Take two automatic trading platforms which promise the same things but at different prices. Which one would you choose? We think that the higher priced one will offer better or extra features. But it is not always so. Check online and find a useful reference before making your decision.QProfit is priced reasonably but offers great features.
Do you think those extras actually cost anything approaching that? So why do people pay such vastly inflated prices for a roller? When your logical brain kicks into play, you realise the additional value you derive from the car is nowhere near the same as the required extra money. Yet, year on year, thousands of people cough up. So what twists their minds away from logic so they part with so much additional cash?
The answer comes in an experiment conducted on a TV show in New York with magicians Penn and Teller. They had people in a plush restaurant offered a variety of different options for bottled water with their meals. Naturally, the bottles ranged in price, with some being rather expensive – $7 per bottle. Yet the contents of the bottles were identical – they were all tap water. People paid $7 for a bottle of tap water…! Not only that, in another TV experiment, people were offered samples of water such as Evian and other well-known brands to taste. Almost half the participants all rated one particular water as the clear winner in terms of taste. You guessed it, the water they liked the most was plain tap water.
Several “blind tasting” experiments on water have led to similar discoveries. When people are given water to taste, they prefer ordinary tap water to any bottled stuff. So, why are they prepared to pay $7 for it?
It’s simple – because they expect to. When people are shown a really fancy bottle, they simply expect to pay more, so they do. When a typical combustion engine, four wheels and a few seats are wrapped up with a Rolls Royce body, they simply expect to pay more for it than when it has a Ford badge stuck on it.
What this all means is that if you want more money, you need to package your offer in such a way that people simply expect to pay more. For instance, merely wrapping a DVD box in shrink-wrap causes people to expect to pay more for it. You can raise the price of a DVD in a shop simply by slipping it in a cardboard cover. The more you make it look like it is should be expensive, the more people pay because they expect it to cost more.
So, if you want people to pay more for the work detailed in your proposals, for example, print them out on quality paper, rather than email them. Bind them in nice covers and get them hand delivered in a suitably “posh” wrapping, perhaps together with a box of chocolates as a “thank you” for the opportunity. The extra costs to you might be £50. But the recipient reckons what you are offering is bound to be much more expensive and so would not be surprised by the high fees you are suggesting inside…!
Essentially, if you want people to pay you more, you have to look like you should be paid more. Online, that means making your website look good – rather than like a typical scrolling sales letter, for instance. You could sell the same ebook – but at a much higher price than the competition, providing you package your offer in a way that makes people expect it to be costly.