Kfleming
New Contributor
I actually originally posted this on my blog about a year ago and received a great response. Hopefully its ok with MJ if I repost it here, since I know he has an apperciation for beautiful cars:smxB:
Are You a Honda Civic or an Aston Martin?
The world revolves around perceived value.
One of my previous business partners was a major player in the auto industry for a long time, her family owned a network of car dealerships. Hilary taught me about the concept of “perceived value†and how people are willing to pay much more for something they perceive as being more valuable, even though there is no more physical value (materials). Sure an Aston Martin is hand built, but does it cost close to the $250,000 price tag in materials to build?
Probably not.
This goes for most, if not all high end cars. It has been reported that Porsche makes $26,000 per car sold – all perceived value. Why can Apple charge $500 more for a computer than their competitors? Exactly.
The same goes for the online world. There are social media consultants out there who charge $200 a day, but I know of one who charges $22,000 a day. How does he get away with it? He must do a few seriously impressive magic tricks right?
Chris Brogan can charge whatever he wants because people will pay it. He’s become a master at building value for his services through his blog and speaking engagements.
If you are doing consulting of any kind need become a master of perceived value, you’re only worth as much as YOU decide.
When I was in high school I did a lot of web design for people. At the time, I was just happy to make $20 an hour which was much more than my friends were making working at the mall. However what I didn’t know at the time was my clients were getting the better end of the deal. I soon realized that other web designers were charging two or three times more for the same work. The problem was that I couldn’t suddenly raise my rates because I received most of my work via word of mouth, and people knew how much I charged before contacting me.
This is why understanding percieved value before you start your business is so important. You don’t want to get locked into an hourly rate and miss out on a ton of money.
People who launch digital products also need to understand this concept. Did you ever wonder why ebooks have those obnoxiously long sales pages? It’s all about building value. This is why most of these products offer 3 or 4 “free†bonuses with your purchase. With physical products you have materials and packaging that creates value, however with digital products it’s ALL perceived value.
Before you create a new service, or digital product ask yourself – do you want to be an Aston Martin or Honda Civic today? - ChangeTheWorld.me
Are You a Honda Civic or an Aston Martin?
The world revolves around perceived value.
One of my previous business partners was a major player in the auto industry for a long time, her family owned a network of car dealerships. Hilary taught me about the concept of “perceived value†and how people are willing to pay much more for something they perceive as being more valuable, even though there is no more physical value (materials). Sure an Aston Martin is hand built, but does it cost close to the $250,000 price tag in materials to build?
Probably not.
This goes for most, if not all high end cars. It has been reported that Porsche makes $26,000 per car sold – all perceived value. Why can Apple charge $500 more for a computer than their competitors? Exactly.
The same goes for the online world. There are social media consultants out there who charge $200 a day, but I know of one who charges $22,000 a day. How does he get away with it? He must do a few seriously impressive magic tricks right?
Chris Brogan can charge whatever he wants because people will pay it. He’s become a master at building value for his services through his blog and speaking engagements.
If you are doing consulting of any kind need become a master of perceived value, you’re only worth as much as YOU decide.
When I was in high school I did a lot of web design for people. At the time, I was just happy to make $20 an hour which was much more than my friends were making working at the mall. However what I didn’t know at the time was my clients were getting the better end of the deal. I soon realized that other web designers were charging two or three times more for the same work. The problem was that I couldn’t suddenly raise my rates because I received most of my work via word of mouth, and people knew how much I charged before contacting me.
This is why understanding percieved value before you start your business is so important. You don’t want to get locked into an hourly rate and miss out on a ton of money.
People who launch digital products also need to understand this concept. Did you ever wonder why ebooks have those obnoxiously long sales pages? It’s all about building value. This is why most of these products offer 3 or 4 “free†bonuses with your purchase. With physical products you have materials and packaging that creates value, however with digital products it’s ALL perceived value.
Before you create a new service, or digital product ask yourself – do you want to be an Aston Martin or Honda Civic today? - ChangeTheWorld.me
Dislike ads? Become a Fastlane member:
Subscribe today and surround yourself with winners and millionaire mentors, not those broke friends who only want to drink beer and play video games. :-)
Membership Required: Upgrade to Expose Nearly 1,000,000 Posts
Ready to Unleash the Millionaire Entrepreneur in You?
Become a member of the Fastlane Forum, the private community founded by best-selling author and multi-millionaire entrepreneur MJ DeMarco. Since 2007, MJ DeMarco has poured his heart and soul into the Fastlane Forum, helping entrepreneurs reclaim their time, win their financial freedom, and live their best life.
With more than 39,000 posts packed with insights, strategies, and advice, you’re not just a member—you’re stepping into MJ’s inner-circle, a place where you’ll never be left alone.
Become a member and gain immediate access to...
- Active Community: Ever join a community only to find it DEAD? Not at Fastlane! As you can see from our home page, life-changing content is posted dozens of times daily.
- Exclusive Insights: Direct access to MJ DeMarco’s daily contributions and wisdom.
- Powerful Networking Opportunities: Connect with a diverse group of successful entrepreneurs who can offer mentorship, collaboration, and opportunities.
- Proven Strategies: Learn from the best in the business, with actionable advice and strategies that can accelerate your success.
"You are the average of the five people you surround yourself with the most..."
Who are you surrounding yourself with? Surround yourself with millionaire success. Join Fastlane today!
Join Today
