How To Sell Anything To Anyone w/ Ron Baker

How do top brands like Apple and Starbucks continue to attract customers? Is it their brand that keeps customers coming back? Or are they just really good at figuring out what the average consumer would pay?

Assuming that we’re fairly rational logical creatures that you have two similarly spec laptops one from dell which is drastically different in price than apple so why does a rational person say same processor same amount of rams and video card why would i be willing to pay maybe 800 premium or maybe even more for something that has a logo on it what is the psychology

Behind that i think it shows you the power of brands people say brands are dead i think that’s the furthest thing from the truth i think brands are important they represent a promise you know the price does reflect something about how the company perceives its own value you never see apple go on sale you never see them offer you know may day parade sales or something

No because they keep their pricing integrity aligned with their value you never see apple justify price increases because their costs went up every day now you can read stories a starbucks is raising their price because the cost of coffee went up well i’m sorry i’m the customer i’m not starbucks cost accountant i don’t care about their internal costs and dear mr

Starbucks i’m not buying your costs i’m buying a great cup of coffee or a place to go so for you you make the determination on whether the cup of coffee from starbucks or anybody else is worth it to you so at some point they’re going to raise that cup of coffee to a price point when you’re like you know what the experience the feeling they get is a great place to

Go the friends i might bump into it’s just not worth it to me anymore and you the buyer you get to determine the value to you right absolutely and starbucks has to continuously cuss that and see how price sensitive their customers are and what the effect is on demand if they were to raise the price and trust me they know that they study that continuously i mean

It’s a continuous process but the point is that when i walk into a starbucks and spend five bucks on a latte i only did that because it was worth more than five dollars to me because if it wasn’t i could have stayed at home and made a cup of coffee for a dime and yeah starbucks coffee is good but is it 50 times more valuable than what i can make at home no so

Really what’s going on is anytime you see a transaction both the buyer and the seller are making a profit and how do we know this is very simple it’s a double thank you moment you get the coffee you hand over your five bucks you both say thank you if you both didn’t think you were doing profiting from that transaction wouldn’t one person say you’re welcome so is

It then possible for it to such a thing to exists as an unfair price this is why i have an ethics chapter in all the pricing books i’ve ever written because this the just price has been again go back to saint thomas aquinas for this and a bunch of greek philosophers i think a just price is one that buyer and seller freely agreed to now it’s easy for a third party

To come in afterwards and say well that was an unconsciousable price or you took advantage of the person that’s an unjust price obviously if there’s price fixing or any violation of antitrust that’s not a fair price but the problem with fare is there’s no definition of fair it’s what a willing buyer and seller agree upon i remember we had reed holden on who’s one

Of my pricing mentors on our show and he was complaining that he was at his second home somewhere throwing a big party and his ice maker went out on the refrigerator and he called a repairman and the guy said well i can come out same day couple hours but it’s going to be 300 and he thought that was unbelievably unfair and i said did you pay it and he said well

Yeah well then by definition you must have thought it was more profitable than the 300 you paid them so prices send signals about how we allocate resources for whatever reason their mindset or maybe a set of limiting beliefs tells them that this is not possible i can’t choose a field to specialize in because i’ll lose out on customers i can’t ask the customer for

More money or to value-based pricing because that doesn’t work you talk about this in terms of like self-esteem as a big part of pricing can you expand on that yeah self-esteem this is something that i learned early on after teaching this and publishing my first book was that i would get those types of reactions think a lot of professionals really question their

Ability to add value and i think that’s a self-limiting belief obviously i mean it’s not an expansive mindset to think that you don’t add value obviously if you’re serving customers and they’re paying you each dollar they pay you is kind of like an applause their certificates of performance you’ve served somebody else to the point where they voluntarily turn over

To you more cash or less cash than the value that you brought to them so obviously it’s a win-win but self-esteem or if you want to call it self-respect or something else is basically the reputation we have with ourselves that’s your first sale if you don’t believe you’re worth 10 times 20 times 100 times your hourly rate whatever that may be then guess what your

Customers will never think it either apple certainly doesn’t have that limiting belief any other like you mentioned luxury good company doesn’t have that limiting belief certainly porsche lamborghini i wish lamborghini had that limiting belief hey it’s just a car come on look i can look i can get a kia for 20 grand like come on you guys it’s just a car um no they

They understand their value but i do think self-esteem is a big thing i also think there’s some people who kind of been taught brought up money is the root of all evil you know and those types of whether it’s religious or some other type of thing you know the rich man will never get into the kingdom of evan and all that but it’s the love of money that’s the root of all evil

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How To Sell Anything To Anyone w/ Ron Baker By The Futur