I got a nice email from Ramit Sethi today:
A few days ago, I threw a party in my NYC apartment. I went to the nearby liquor to buy some drinks, and when I got to the vodka area, I started trying to decide which brand to get.
Absolut? Ketel One? Grey Goose? Vladimir?
Interestingly, I know all the research about taste-testing for drinks. When you subject people to a double-blind test, they essentially cannot tell the difference between vodkas, wines, or soft drinks. In fact, I wrote about this extensively in my book, where I cited a famous wine study where the world’s top experts could not even tell the difference between white wine and red wine when the drinks were disguised.
So there I was, standing at the counter deciding which vodka to buy, steeped in research, knowing full well that my friends wouldn’t be able to tell the difference in taste.
Yet I still bought one of the most expensive bottles.
This will be useful to you when you sell your services to earn more money on the side.
The bottles ranged from about $10 to $40/bottle. In my budget, $30 makes no difference to me. Yet I was throwing a party for friends. I was a little nervous to show off my new apartment. I was in a rush. All of these things add up.
What went through my head — as someone who has extensively studied the research behind marketing and decision-making?
“Yeah…I know all the research…but I have a nice apartment, and what if my friends think I skimped on the drinks? It’s only $30…I might as well get the good stuff….damn, I’m running late…this lady has been watching me stand here for 9 minutes and probably thinks I’m a weirdo…I should just get this one and go.”
Notice what’s going on?
I’m not stupid. I know that “premium” vodkas cost more, with essentially no difference in product, and the owners take the extra money as pure profit. I knew all of this logically….yet it didn’t matter.
No matter how educated or smart you are, you are STILL subject to the same influences as anyone else. I’m influenced by social approval…and scarcity…and price.
And so are the people you’re trying to sell your services to.
If you like that, you may want to join Ramit’s Earn1K course.
Does price always matter to you?