I live near San Francisco, so tasting menus are pretty common.
In fact, a $75 tasting menu in San Francisco is equivalent to the dollar menu at Mcdonald's.
We're used to paying $150+ per person for a tasting menu in our area.
If you roll with the elite, you'll pay $500+ at the French Laundry.
So, what's the big deal about the $75 tasting menu?
It's for your dog.
Only in San Francisco can you take your dog out to dinner so they can experience a gourmet tasting menu for only $75.
My neighbor used to cook gourmet meals for her dogs.
I'm sure the dogs ate better than she did, and she'd stand in line to let her dogs experience the $75 tasting menu.
This is a classic example of price anchoring which we've been talking about in the Mastermind Book Club.
In Predictably Irrational, author Dan Ariely talks about the power of first impressions when it comes to pricing.
A Mac laptop will cost you at least $2500.
You can buy a PC laptop for under $500.
Is the Mac laptop better because you're paying at least 5X more?
$2500 is the price anchor that's imprinted in your mind for a laptop.
According to Ariely, once consumers are willing to pay a certain price for one product, their willingness to pay for other items in the same product category is judged relative to that first price (the anchor).
I used to be a PC and Windows person.
I didn't see the value in paying 5X more for Apple products until...
The iPod was our first introduction to Apple products.
Of course, we had to get an iPhone after seeing Steve Jobs' presentation.
Next, I purchased an iPad just because.
Then an iMac or two.
Then the Mac laptops for the entire family (the kids wouldn't be caught dead with a PC laptop in college).
Now, my entire family is 100% Apple, and we don't mind paying extra.
When I started my membership site in 2014, I charged $37 per month so I could attract a core following.
Around 100 people paid me $37 every month for years and never left.
In 2019, I raised the price to $97 per month for new members.
New members stayed for a few months and then dropped out.
If they were familiar with the $37 price for my membership site, $37 was their price anchor.
For them to feel comfortable paying almost 3X more, they had to feel like they received at least 10X more value and that may not be enough.
The $97 product would have to be perceived as something totally new and better than the $37 product.
Set your pricing anchors high to imprint that price in your prospect's head.
As they see more offers from you, that initial price will be anchored in their mind.
We're talking about pricing and more in this month's Mastermind Book Club.
Our next live Mastermind Book Club call is Thursday, October 27th at 10 AM PT/1 PM ET.
>>> Join the discussion about Predictably Irrational
See you on the call.
