Do people really only value offers they’ve paid for?
In this episode of the podcast, we’re diving into a hot topic that fires me up: Do people really only value offers they’ve paid for?
This common advice can mislead your marketing and sales, so we’re going to set things straight.
Shall we do it?
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The impact of pricing on value
Today, I want to unpack this idea that people value offers more if they pay for them, and the secondary advice to charge for what you might usually offer for free, so that people will actually value and complete it.
I’m sure you’ve encountered these assertions that high ticket clients are superior and people seeking freebies are just wasting time. Some experts suggest charging for webinars rather than offering them free. While those strategies might work, they’re often presented with blanket statements that carry judgment and privilege. The misconception is that if people pay, or spend more, they value it more… and therefore are more likely to complete whatever they’ve purchased.
Yes, there is psychological evidence that price influences the perceived value of a product, but it’s not the full story.
Challenging blanket marketing advice
It’s crucial to challenge these two common strategies: raising prices to increase people’s perceived value, and charging for what could be free to attract “high-intent” customers.
For instance, the idea that charging $25 for a webinar makes attendees more likely to act is flawed. Correlation doesn’t equal causation—there’s much more at play in customer behaviour.
Privilege and judgement detox
Now, let’s address the issue of privilege and judgment in these pricing strategies. Charging for a 5-day challenge because it supposedly attracts more committed participants can be misguided. If the free challenge isn’t converting, adding a price won’t fix that. If people aren’t finishing the challenge, again – charging for it won’t fix the design issue with the challenge itself.
The real issue might be it fails to move people closer to readiness to purchase or the sales pitch needs work. Overloading a challenge with information and too much homework might also keep people from achieving their goals, and being ready for what’s next.
It’s about creating a well-structured product and a strong upsell, not simply adding a price tag to fix it. You can’t solve a design issue with a pricing solution.
Prices aren’t the only factor
Often, marketing strategies that focus on increasing engagement by charging more overlook more effective methods. Price doesn’t equate to value. It’s just one piece of a broader marketing strategy. For instance, discernment—what people understand as valuable, is vital. Let’s explore this with some examples.
When you buy a discounted dress for a fraction of the original price… but you don’t love it, it may sit in your closet unused. Meanwhile, another dress you got for free that fits you perfectly might become a favourite. You value it more because it suits you, not because of the cost. The same principle applies to offers in business. People prioritise based on importance, not just price.
Make strategic marketing decisions
Our strategic thinking must lead our decision-making regarding lead magnets, price tags, and offers. Putting a price on something hoping for more engagement isn’t always the solution. Consider the role each offer plays in your business model and the broader picture. For example, if your goal is list growth, making an offer free might serve you better. I don’t want to push you one way or the other – rather I would prefer you make informed decisions about whether to charge, and of course what to charge.
Your role is to express the value of resources and offers effectively. Instead of assuming that price alone drives completion, consider what truly instigates action. Strategies like emphasising benefits, setting reminders, or simplifying processes are effective. Sometimes, overwhelming your audience with extras can result in them not using your offer at all.
Focus on clarity and helping them reach their goals smoothly.
Build your strategy skills
Ultimately, this comes down to building your skills and effectiveness in making strategic decisions. Rather than trying to band-aid issues with pricing strategy, learn how to discern why something does or doesn’t get your audience’s attention and high completion rates.
If you want to grow your list with a lead magnet, charging for it can significantly reduce the number of people who sign up – and if it still doesn’t get the conversion into an upsell, you’ve now reduced TWO of your business results by charging for it. It takes time and practice to build your skills.
Importantly: Don’t follow blanket advice from strategy ‘experts’ who don’t know enough about your business.
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AND DON’T FORGET – there are DAILY podcast episodes for the 12 days of #Tashmas! See you tomorrow for another practical episode, and another special gift.
Thank you so much for joining me for this episode of the podcast!
Until next time, I cannot WAIT to see you SHINE.
