February 28, 2018

Low prices are scary

Yesterday, you were presented with a problem:

“If you had a $30,000 budget to hire a keynote speaker for a ’make or break’ event, would you hire Alice who charges $35,000 or Bob who charges $1,500-$2,500?”

Of the replies, almost everyone picked Alice, even though she’s more the ten times more pricey.

I, too, would pick Alice. Here’s my reasoning:

Yes, Alice and Bob appear to have essentially identical qualifications on their websites. And yes, I would potentially pocket an extra $25k or so by hiring Bob.

But Bob’s price is so low that it makes me think he’s an amateur when it comes to speaking engagements.

I’d be nervous that he might:

...and a million other things.

None of these things might come to pass. Bob might be an excellent public speaker. But his PRICE indicates otherwise.

Even if my fears are never realized I would worry about them happening from the moment I hired Bob until the moment he walked off stage.

Simply put, Bob’s low price scares me.

Price is a powerful indicator of value. It’s the one marketing signal that you can be sure every single one of your buyers will understand implicitly.

Underprice your expertise at your own peril.