2 builders who never spoke to each other

Change what the thing is so the price can change

A format carries its own ceiling, and no amount of quality inside an ebook makes buyers pay what they would pay for a course. The escape is to stop being that format: add components until the product is a different category, move the material to video where perceived value is higher for less work, or repackage general advice as task shaped pieces buyers arrive already wanting. Costly signals around the offer, from selective admission to the surroundings it is delivered in, do the same job for services.

The method

1. 01

   You cannot charge a premium for something the buyer files under a cheap format, because the format sets the price ceiling regardless of the content inside it.

2. 02

   Break out of the cheap format by selling from your own site and adding components until it is a different kind of product: tutorials, an icon set, palettes, font recommendations, a component library.

3. 03

   Set price by how substitutable you are to your specific audience rather than by what similar products cost: a mass audience swaps you out over a few dollars, while dedicated followers see no substitute.

4. 04

   Add deliberately expensive-looking rituals and surroundings to raise the perceived value of an offering that is otherwise identical to a cheap one.

5. 05

   Refuse some applicants or customers, because turning people away is itself a signal that what you sell is worth having.

What it returned

• $70

  Buyers anchor on what an ebook costs on Amazon, so a $70 ebook is unsellable

• $10

  Peter Thiel's business book sells for $10 to a general audience while Adam Wathan and Steve Schoger's design book sells for $79 to their following, after both took six months to write

• $50

  Universities charge tens of thousands for content available for $50 online by adding selective admissions, grand buildings, artwork and a gowned ceremony

• Refactoring UI stopped being an ebook and became a full design package, which removed the price constraint

Sources

• 2017 year in reviewJustin Jackson · justinjackson.ca · Tiny Marketing Wins · undated
• Good businesses have marginJustin Jackson · justinjackson.ca · Optimize for margin · undated
• How I make my moneyJustin Jackson · justinjackson.ca · Suzie asks: out of the four platforms, which is the most time / labor intensive? · undated
• Refactoring UI: A lesson in high pricesHarry Dry · Marketing Examples · Step 2 - Escape the context of an e-book · undated
• Costly Signalling TheoryHarry Dry · Marketing Examples · The Costly signalling of Universities · undated