Issue #2075
- WEALTHY: How to make your product’s price seem cheap (even if it’s not) (Michael Masterson)
- HEALTHY: Are you sacrificing your heart health to prevent osteoporosis? (Dr. Al Sears)
- WISE: William James on quality
ALSO IN THIS ISSUE:
- When short sales copy is better than long, part 1 (Bob Bly)
- The importance of "moral authority" in business
- It’s Good to Know… about multi-tasking
- Add "sop" to your vocabulary
Revealed: Probably The Biggest Red Herring in History!
While the World’s Been Stock Watching (and losing!), The Elite Quietly Play a Different Game with Different Rules…
Feeling cheated and disillusioned by the stock market? Sure, you may have made a good trade here… but then lost on another. The people dutifully pour their hard-earned cash into investment banks to put into the stock market for them… and those investment banks gladly oblige, for a fat fee… which they invest somewhere else! I’m no conspiracy theorist, but in my opinion the stock market is really a diversion for the masses… a distraction from where the BIG and consistent money is made… in the world’s money mountain. And when I say “Money Mountain”, I speak quite literally… the BIGGEST mountain of money on the planet.
- Patrick Coffey
"Where quality is the thing sought after, the thing of supreme quality is cheap, whatever the price one has to pay for it."
William James
How the Difference Between Liverwurst and Pate Can Help You Make More Sales
By Michael Masterson
Nothing sells better than price. No matter how valuable your product is… or how clever your marketing is… nothing will increase your customer base faster than underpricing your competition.
This secret is often overlooked, but it’s the most reliable way to grow a brand-new small business or revive a business that’s on the verge of failing.
Once you’ve established a substantial customer base by using this tactic, you will want to gradually increase the quality of your product/service and gradually raise your prices. And while you’re doing that, you may reach a point where you can no longer compete on price… but the quality of your product isn’t yet good enough to attract luxury buyers.
What do you do then? You make your price seem cheap – even if it’s not.
Back in the late 1960s, I worked at a company that sold aluminum siding. The typical "package" we sold retailed at $2,800. That was a lot of money back in 1967, especially in the working-class neighborhoods we sold in. Like all good selling pitches, ours focused on the benefits first. We did a very good job of helping our prospects imagine how much better, easier, and fuller their lives would be once the asbestos shingles that covered their homes were hidden beneath a fine, shiny facade of bright, white aluminum.
It’s what happened after we made those big promises that I want to talk about today – what my boss, Harvey Fisher, used to do after the sale was made. By "after the sale was made," I mean after the prospect had emotionally committed to owning the aluminum siding but before he found out how expensive it was.
This is a critical part of any sales presentation, but it’s especially sensitive when the potential customer has little or no idea of the product’s price. The challenge: Now that you’ve lodged a hook deep into his heart, how do you get his brain to interpret your price as a good deal?
An inexperienced salesperson might want to break the price to the prospect slowly – by, for example, first quoting the cost of the gutters and leaders (say, $400), then the cost of the underhangs and fascia (another $400), then the windows and doors ($800), and, finally, the siding itself ($1,000). But, though logical, I learned from Harvey that this method doesn’t work very well. "If you want to make the price of a liverwurst look cheap," he used to tell me, "say it’s pate."
If I didn’t understand what he meant the first time I heard him say that, the principle became clear when I saw Harvey in action. After getting some young couple to "imagine" how much nicer their house would look clad in aluminum, how much the neighbors would admire them, and how generally happy they’d be, he’d ask them, "Now, Mr. and Mrs. Smith, tell me this… how much would you guess it would cost you to cover your house in solid oak?"
"Oak?" they would ask. "But we thought…"
"I’m serious," Harvey would insist. "How much would it cost?"
It was the husbands who always ventured the first guess. "I don’t know. Maybe $5,000?"
"$5,000?" Harvey would look at the wife. "Do you think you could do it for $5,000?"
"Gee, I don’t know. Probably not."
The number would go up. $6,000. $7,000. $8,000. At each new estimate, Harvey would shake his head sadly and say, "You should be so lucky."
Harvey would pause for a good while, giving the frazzled couple a chance to imagine how they were going to come up with the $10,000 this was bound to cost, and then "hit them with the zinger" (as he liked to call it): "Let me give you 10 good reasons why aluminum siding is better than solid oak!"
It wasn’t logical, but it was effective. By the time Harvey finished enumerating the 10 reasons aluminum was better than oak, they were mentally prepared to spend $10,000. When Harvey told them they’d have to fork out only $2,800, they practically jumped with joy.
Harvey’s trick has a long history in the business of selling. It’s been a mainstay of many of the best salespeople I know. I’ve used it myself to make tens of millions of dollars worth of sales.
Yes, it’s very powerful. It’s also very effective and surprisingly adaptable. In fact, it should probably be a key part of every sales presentation that is made by you or your business.
In his book Influence: The Psychology of Persuasion, Robert Cialdini puts a label to this technique. He calls it "the principle of contrast" and illustrates it with a story from Leo Rosten about the Drubeck brothers, Sid and Harry, who owned a menswear shop in Rosten’s neighborhood while he was growing up in the 1930s:
"Whenever the salesman, Sid, had a new customer trying on suits in front of the shop’s three-sided mirror, he would admit to a hearing problem, and, as they talked, he would repeatedly request that the man speak more loudly to him. Once the customer had found a suit he liked and asked for the price, Sid would call to his brother, the head tailor, at the back of the room: ‘Harry, how much for this suit?’ Looking up from his work – and greatly exaggerating the suit’s true price – Harry would call back: ‘For that beautiful all-wool suit, $42.’ Pretending not to have heard and cupping his hand to his ear, Sid would ask again. Once more, Harry would reply ‘$42.’ At this point, Sid would turn to the customer and report: ‘He says $22.’ Many a man would hurry to buy the suit and scramble out of the shop with his ‘bargain’ before poor Sid discovered the ‘mistake.’"
It’s not always true, but most people… most of the time… like a bargain. We not only want what we want and what we hope it will give us, we also want to pay the "right" price for it. The best way to make the price of your product or service seem "right" is to compare it to something similar that costs more. If you happen to sell inexpensive CZ diamonds, this isn’t difficult. The stones you can sell for $5 or $10 apiece look every bit as good as the authentic ones going for 1,000 times that price.
But if the price you are asking isn’t such an obvious bargain, you need to be more creative. Instead of comparing your product to a similar one that costs the same, find (or create) something special about your product that makes it unique. I did that early in my career when I compared subscribing to the $100 newsletter I was selling to joining an expensive investment club (which sounded as if it should cost $1,000). I’ve done it hundreds of times since in all sorts of ways. You can too.
Cialdini’s principle of contrast is also used to create additional sales. It’s done in direct marketing all the time by selling the main item at one price, and then additional similar items at a discount.
When I shop at Saks, Al, my regular salesman, uses the principle of contrast to get me to spend a ton of money on "accessories." Here’s how he does it:
First, he sells me on the suit – for $1,000 or more. I’m ready to pull out my wallet, but Al’s not finished with me. He takes me over to the shirt counter to show me some shirts that "will go sensationally" with the suit I just bought. These shirts are expensive… usually more than $100 each. I don’t normally pay that much for a shirt, but after laying out so much on the suit, they seem cheap. When Al is done selling me two or three overpriced (but, by contrast, seemingly cheap) shirts, he hits me with the $70 ties. I’m lucky to get out of Al’s grasp at twice the price of the suit.
CP, a real-estate broker I deal with, uses the principle of contrast to get his clients to buy more real estate. If I tell him I’m in the market for a two-bedroom house off Atlantic Avenue for about $350,000, he’ll be sure to first show me at least one or two so-so two-bedroom houses that are overpriced at $400,000 and $425,000. After those disappointments, I’ll be thrilled when he shows me one for a mere $375,000 – $25,000 more than I was prepared to pay, but a bargain in contrast to what I had just seen.
This technique works. Are you using it effectively in your business?
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How Long Should Your Sales Copy Be?, Part 1
By Bob Bly
Since time immemorial – or at least for the quarter century I’ve been in direct marketing – people have vigorously debated the merits of long vs. short sales copy.
I don’t pretend that I can settle the debate once and for all, but I’ve found that there are two major factors determining whether long or short copy will work best for a particular sales promotion: emotion and involvement.
Emotion refers to the degree to which the purchase is emotional. Buying a diamond engagement ring is highly emotional; buying paper clips is not.
Involvement refers to the amount of time, effort, and consideration that goes into the purchase. As with most large purchases, a lot of time, effort, and consideration goes into the selection and purchase of a diamond engagement ring. But most of us grab the first box of paper clips on the shelf of the stationery store, without giving it a second thought.
To use these two criteria to get a rough guideline for determining copy length, rate them as high or low.
For instance, the purchase of a diamond engagement ring is highly emotional and it’s something your customer is going to give a lot of thought to. So you’d need a lot of copy to do a good job of selling it. On the other hand, paper clips are more of an impulse purchase. When you need them, you go to the store and pick up a box. No emotion and very little thought goes into this purchase – and a long, passionate sales letter probably wouldn’t sell more of them.
Tomorrow, I’ll tell you about five other factors that can help you determine how long your sales copy should be.
[Ed. Note: Master copywriter and best-selling author Bob Bly is the editor of ETR's Direct Marketing Masters Edition. a program to help you start your own successful direct-mail business. Sign up for Bob's e-zine, The Direct Response Letter and get more than $100 in free bonuses.]
You Don’t Need Drugs to Have Strong Bones
By Al Sears, MD
Before you reach for pills to help protect your bones, here’s something you should know. An FDA-approved drug used to treat osteoporosis has potentially deadly side effects.
Two research reports published in the New England Journal of Medicine indicate that there’s a link between the drugs Fosamax and Reclast and irregular heartbeats in women who take them. This condition, called "atrial fibrillation," may be lethal for people already at risk of stroke.
Here’s something else your doctor may not tell you: There are perfectly safe, natural ways to boost your bone density. Here’s a simple two-step process to reverse the effects of osteoporosis:
1. Exercise.
When you exercise, your muscles pull on your bones. This pressure creates a challenge that your body responds to by increasing bone density.
The best way to increase bone density and reduce fractures is with body-weight exercises (like calisthenics) and resistance training. Do these exercises two or three times a week. But even low-intensity exercise, like walking, can strengthen your bones. Thirty minutes of walking per day will lower your risk of fracture by 30 percent.
2. Take a vitamin D supplement.
I recommend 400 IU per day. Vitamin D helps your body absorb calcium and maintain bone density. Without vitamin D, all your calcium supplements are worthless! The best source of vitamin D is the sun – 10 to 15 minutes of exposure a day should be enough. When winter rolls around, take cod liver oil. It’s by far the best supplemental source of vitamin D.
[Ed. Note: Dr. Sears is a practicing physician and leading expert in heart health. For bone-building calisthenics and a 10-minute exercise routine, check out Dr. Sears' PACE® program HERE.]
Worth Quoting: Stephen Covey on Striving for Moral Authority
"I’m in favor of achievements – degrees and wealth and that sort of thing. Still, those achievements convey formal authority but not always moral authority. The only way to acquire moral authority is through your character and contribution, to live in such a way as to merit the confidence and the trust of other people.
"Moral authority is especially important to business. This is because in order to reduce costs, increase production, and nurture a culture of innovation – all of which are important criteria in today’s global economy – you’ve got to have high trust among your workers and partners. Why? Because everyone involved needs to sacrifice. If you don’t have high trust, none of those things will happen. You can’t fake high trust."
(Source: Business 2.0)
It’s Good to Know: About Multi-Tasking
If you’ve ever been accused of being a workaholic, take heart: You may not be nearly as bad as you could be.
According to a Staples survey of 300 small-business owners and executives, work has wormed its way into almost every aspect of life outside the office – sometimes making good use of otherwise wasted time, sometimes interfering with personal life. Consider these statistics…
- 18 percent of those surveyed admit to reading work-related material in the bathroom.
- 21 percent work four to five times a week while eating dinner.
- 49 percent check e-mail and make work-related calls while driving.
- 51 percent work on holidays.
- 66 percent work after hours and at night.
- 68 percent make work-related calls and e-mails and do other work on their days off.
Looking For a Rat-Race “Escape Plan”?
Q: How do you know when gas prices have spiraled totally out of control?
A: When gas station owners start boycotting their own businesses!
With the national “regular” average price topping $3.25 a gallon, A.P. reports some owners are closing down shop in protest to their own suppliers.
Meanwhile, millions of U.S.A. commuters are paying through the nose just to get to work and back. And paying, and paying…
Sick of spending upwards of $40 to fill the tank? Tired of life passing you by from behind the steering wheel?
Maybe it’s time to think about your “Plan B”.
Maybe it’s time to vow you’re getting out of the rat race, and you’re going to do something about it RIGHT NOW.
Interested? Well here’s your personal Rat Race “Express Escape Plan".
- Charlie Byrne
Word to the Wise: Sop
A "sop" – Old English for "bread soaked in liquid" – is a bribe, a concession given to mollify or placate.
Example (as used by David Kamp in The New York Times): "But if we’re stuck with the children’s menu, there’s no reason it can’t be improved upon and made less of a sop to cosseted little fried-food addicts."
[Ed. Note: Become a more persuasive writer and speaker ... build your self-confidence and intellect ... increase your attractiveness to others ... just by spending 10 VERY enjoyable minutes a day with ETR's new Words to the Wise CD Library.]
Michael Masterson
Copyright ETR, LLC, 2007
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