Price is More Important Than You Think
“Ugh, I’m so screwed.”
I just arrived at my friend’s after a long, stressful drive in traffic. He offers me a glass of whiskey. I’m not a big drinker, but I do enjoy a glass of whiskey at the end of a long day.
He pours me a glass, on the rocks, and I take the first sip.
“Wow! What is this?”
“Maker’s Mark,” he says.
I’ve never heard of it. The only whiskey I know, the one that I keep at home, is Basil Haydens. It’s pretty expensive.
But this Maker’s Mark is really, really good. I love it. Maybe even better than Basil. Which means it’s probably REALLY expensive.
I’m screwed.
Now I have a choice: either spend much more than I’m used to, or keep drinking an inferior product.
A few days later I’m home and decide to pick up some of that Maker’s Mark.
As I approach the whiskey aisle I’m trying to guess how much it’s going to cost. I’m thinking at least 20-30% more than my regular stuff.
That’s when I see it. Maker’s Mark. And…
It’s half the price of Basil.
I can’t believe it. I’m literally slack jawed. And my first thought is, “I guess this Maker’s Mark isn’t as good as Basil after all.”
So I turn to find a bottle of Basil instead, when I catch myself.
Wait a second… what am I doing?!
Just because something is less expensive doesn’t mean it’s worse. I already tasted the damn thing, and loved it!
What’s happening here?
Price is a Story
Most things don’t cost what they’re worth. They cost what we are willing to pay for them.
And what we’re willing to pay for something depends on the story. The story the seller tells, the stories society tells us, and the story we tell ourselves.
We assume that a higher price tag means a better product or service. Sometimes it does. But not always.
When an artist duct taped a banana to the wall and sold it for $120,000 - was it actually worth that?
It depends on what you think you’re buying. If you’re buying a piece of fruit, probably not. If you’re buying the craziest story to tell your friends the rest of your life, then possibly.
What should you do with this information?
First, buy things because you like them or they solve a problem for you, not because they cost more than other things.
It would have been foolish to buy another bottle of Basil Hayden’s just because it cost more, when I actually liked the cheaper product better.
Second, if you’re in business, you can use price as part of the story you weave. If you’re a magician, speaker, coach, consultant, juggler - some customers are looking for the lowest possible price. That’s part of the story they want to live in.
Other customers are looking for something with a high price tag because they can brag to their boss or their friends about how successful they are. That’s also a story.
Both of those stories are valid.
You get to decide which story you’re inviting your customers, clients, or audience into. Price isn’t the whole game, but it’s a big part of it.
Don’t just charge your worth. Just what your customers believe you’re worth, and feel good about paying.
