I had a friend tell me the other day that reality is 90% perception. This is a school of thought that I subscribe to myself, considering that we each approach any given thing from our own individual frame of reference. Those references might include past experience, personal investment, assumptions made through association of others' experiences, etc.
In regards to Internet Marketing, you hear a lot of talk of perceived value. That talk is mostly from the sellers end, discussing the benefits of a higher perceived value on digital or information products that are sold online...
The concept is that if you place a higher ticket price on your info product, the buyer will subconciously place a higher value on that product in regards to quality. The pricing factor alone can also lend to the level of respect that visitor develops for the seller, or an assumption of expertise and/or authority status.
But there are two sides to this coin of perception, and the one I want to discuss today - in this post - is how that perceived value plays a part in the results you get from the info-products that you buy online.
For the record, I am not a big fan of high-ticket info products. Particularly when the affiliate commission is set to 50% and when that commission rate is public knowledge. You can read my full rant on that here (published in early 2005).
Obviously there are points on this topic that can range from the stance of seller, to affiliate, to buyer. But the point that I want to discuss here is how perceived value can play a part in the products that you buy. "You" meaning you, me, and anyone else reading along.
It came up earlier this week in a conversation about Stompernet, due to the price point of membership - which is almost $800/month. I did not directly promote the membership given my stance on high-ticket affiliate promotions, but several people did ask my take on the pricing - and whether I thought it was worth every penny, or just plain ridiculous.
So here's my official take on that:
When a person pays $800/month to learn something… they will match that dollar with their attention, and actually work harder to launch their successful venture - based on that one motivating factor alone (their investment in it).
Take two people - Person A and Person B. Person A chooses to join Stompernet to learn the ropes, and Person B chooses to learn Internet Marketing on their own - through a variety of free or inexpensive sources.
All other things being equal, Person A is more likely to succeed. Spending $800/month creates a sense of urgency within that person that is a driving force to actually complete Step 1, Step 2, Step 3 and so on.
Basically, it induces follow-through.
That's not to downplay the value that Stompernet offers their members, not by any means. Its not your typical membership site. I'm merely using it as an example since its been such a hot topic lately.
But stop for a second and consider the value of follow-through. Try to put a price tag on the benefits of achieving the number goal in your life at this very moment. That puts it in a whole new light, doesnt it?
Consider this second comparison:
You talk to a close friend about once a week about your most personal thoughts and feelings. They offer advice and together you come to some reasonable conclusions and possible solutions.
You talk to a coach or therapist each week, at a rate of $175/hour. Together you come to some reasonable conclusions and possible solutions.
Which scenario is more likely to induce action? The second, of course. Even if both conversations are equal in all other elements, you are more likely to take forward action when you have a substantial investment involved. Period.
For that reason, the price tag alone can be more of a positive than a negative. Its simply a mentality, or a perception, but it holds true.
Ask yourself this: How often are you going to spend more than $100... without making sure that you get value out of that investment?
And so, it could be said that the value of a product is actually entirely up to you. The perceived value is directly related to the results you get from that product - whether it be a service, an ebook, or even an event. And those results are generally based on your investment in that product.
Let that one sink in.
If you look at the price on a product, specifically a product that involves an investment in self, and you choose to pass based on price point alone... that may be more an indication that you are not ready to move forward than it is a perception about the value of the actual product.
There are a lot of psychological factors involved with pricing - on both ends. Just consider the story from the popular One Minute Millionaire
book 😉
Your thoughts are of course welcomed...
Best,
About Lynn Terry
Great post, Lynn. I'm discovering this is true myself because I paid $200 for private coaching and I'm working very hard to make sure I complete those steps, specifically because it's a big investment for me.
Can't imagine paying $800/month, though. Maybe someday!
Great example Christina. During the course of your coaching, have you found that you knew some of the steps or had already learned some of the things you are now putting into action?
My guess is "yes". Coaching can be great for 2 reasons - for getting specific help with goal setting and goal achievement, and also as a point of accountability to self.
Hi Desmond - What do you fear, specifically?
Advertising is an interesting example. I rarely pay for advertising outside of using Google Adwords ocassionally or perhaps buying a text link here and there. I'd love to hear more from you on that one...
Stompernet is not catering to a wide market. I'm 27, with about $13,000 in debt from school, I have a fiance, I rent, and I own a cat.
Stompernet is not for my market.
Stompernet is for people with expendable income, as $800 for a lot of people is a mortgage payment. If I was a complete newbie in my situation, lets say, for that price tag I would expect a real person in my office 3 times a week, holding my hand, doing my dishes, and launching my first few PPC campaigns for me. I would expect a contract with a guaranteed ROI within the first 30 days.
It's way too much money for a big chunk of the market. But the perception of the price tag will intrigue many many people, the price seems so outrageous that it has to work, right? I feel thats what most people will think once they start googling stompernet.
For the young professionals like myself though, perception doesn't play as important of a role with a product/service like this. It's not realistic, nor smart to invest that much money on something virtual, something intangible.
Great post, got me thinking.
Thank you Elijah. Excellent points of course. Its great to hear an actual perspective on a specific price point such as Stompernet, which makes such a good example.
One aspect that often gets overlooked when analyzing an investment, is the amount of time that would need to also be invested in order to extract the value out of that product (or service, or event, etc).
As you pointed out in your comment, your expectations include what Stompernet can do for you. But in reality, a substantial amount of time would need to be invested on the buyers end to get true value out of the membership.
This is one of the factors that I consider heavily before making any decision or any purchase, given that I dont have a lot of additional time to invest at the moment. I'm curious how many of you feel the same about that - whether that plays a part in your decision making process as well.
It's so true. When people are just getting started out with an internet venture (like myself 5 months ago) they get caught up in the hype, the promises, and the sales copy. Underneath all that one needs to realize that making a living from home is no different than starting a business anywhere else. You have an investment of time, and an investment of money. What makes the internet so appealing though is the fact that the monetary investment is minimal compared to opening up a restaurant. Time and how to manage it, is where the challenge kicks in.
"The amount of time in order to extract the value..." I love the way you word things! Excellent.
Thank you - and I agree. You can literally start an online business for under $10 (the cost of a domain name and hosting setup using this HostGator coupon code).
The real investment comes in terms of time, energy & creativity. The key is in placing a value on those elements, and using them as wisely as people tend to use their money...
hey Lynn,
I liked the point of view you have- but i just think it all depends on each individual person.
It takes time to write quality unique content for a site.
If i had 800 dollars laying around right now I'll tell you what i would do:
I would find an excellent writer who wrote great unique content for me. I'd spend that kind of money on the seo'd content for my site.
Then i would set up my site. I would do some ppc advertising. I would optmiize my entire site.
I wouldn't spend all that on educating myself as i have found awesome free information or even low priced great ebooks and videos to learn from at my own pace.
Each person is different but I've found that if we just know where and how to search we can great training for an affordable price.
But as i said --each person and situation is different. So,it does make sense for those people that already have a lot of money to sign up for a pricey program as this one.
That way it doesn't take as long for them to learn and understand the whole picture.
all the best,
Eren
I like the way you think, Eren 😉
HOW you invest your money (or your time, for that matter) is the key to reaching your goals. I believe that is one of the more difficult pieces of the puzzle for those starting out, since they dont know where to start or what could potentially bring the desired results. But once you have a handle on your project, and what it will take to launch it, the key is in staying super-focused in regards to your "investments".
Bottom line: you'd be smart to spend your $800 staying focused on the project at hand.
Hi Lynn,
Great post.
Just like "beauty is in the eye of the beholder", value is in the eye of the beholder too.
In both cases, effective marketing allows you to shape those perceptions so that the beholder sees what you want them to see.
There's been a whole lot of good marketing going on, even before the internet.
Look at all the married people in this world... some of them did an outstanding job of marketing themselves to their spouse 🙂
-Johnny