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Creating New Offerings–or Revising Your Old? Grab Wine. Listen Up.

In: Money Talk

Don't ever buy wine with me.

I'm warning you.

I'll be the jerk all the way over in the corner in Aisle 7 trying to buy the obscure, unpronounceable wine that no one's ever heard of–partly because it helps me with my All-American complex (you know, the one where you realize you're not exotic at ALL), and partly because snooty wine labels with edges that have been HAND SINGED by the blaze of an elderly Italian man in a faraway land are sort of sexy.

(Did anyone else just finally understand why they made the past tense of “sing” into “sang” and not “singed?” Can you imagine if we all ran around confusing the meaning of “to utter a series of sounds” with “to light shit on fire?” All hell would break LOOSE.)

Of course, I blame my fascination with delicious wines on Will. He's Seth Godin's former protĂ©gĂ© and he was also my partner in crime while in Buenos Aires just a couple months ago. (No true crimes were committed. Not even crimes of passion—yet another two points deducted from the exotic meter. Then again, I'm also not in jail…so I guess I can take those points back and file that one under “Better that way.”)

We soon found ourselves dining in one of Argentina's loveliest restaurants having not one, but TWO $100 bottles of Pulenta's Reserve Malbec–possibly the best money I've ever spent. Right next to the $200 roller blades I saved up to buy in the 7th grade, of course.

So, now I'm spoiled.

And while I don't run around buying $100 bottles of wine every day, it's interesting (read: disastrous) how now, a $50 bottle of wine seems almost…inexpensive.

Sort of like when you walk into a store and see a tee-shirt that costs $100–you're thinking, “Yeah, okay. Who pays that for a tee-shirt?”

So you mosey around the store some more, check out some chick's ass, and then come across a $50 tee-shirt.

And then… it happens.

All the sudden you sort of feel like it's a good deal. Because now, $50 seems inexpensive. But is it really inexpensive? No. It's still expensive. It's just…relatively not.

And THAT'S what you need to consider when you're making your own offerings.

Pricing is relative. Fees are relative. The cost of everything is relative. And that includes what you're selling.

Relative to your competitors' offerings, yes.

But more importantly?

Relative to your own offerings.

Had you walked into that store and saw the $50 tee shirt as the most expensive, you might still view that as being too expensive. But because you had something more expensive to compare it to, you use that point of reference to make subsequent judgments about the cost of everything else.

As a result, you may find yourself buying a $50 tee-shirt that you may not have purchased under other conditions.

It's called anchoring, and it's very real.

And the reason it matters is this: Not just high-end tee-shirt stores do this. You should, too.

I always tell my clients to give their customers three purchasing options—one level at a higher price point than you expect to make on average, one that's the number you'd be happy making per client, and one that's your minimum survival fee per client.


Because you'll find that most clients won't want to “go overboard” by purchasing your most expensive, but they also won't want the cheapest option, either. So most will opt for the middle road—which is why that needs to be the number you'll be happy making per client.

And that middle road fee?

Will seem like a deal compared to what they'd have to spend for the most expensive option—which is a great thing, because now you've both won.


Leave 'em with just a mid-level and a less expensive one? And you'll find they choose the less expensive one more often.

And then you've both lost out.

And losing sucks.

Just ask the kids I dusted once upon a time with those sweet, sweet roller blades.

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