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The Value Of This Article Is $1,345,678, But I Am Giving It To You For Free

By April 29, 2014January 3rd, 2015Marketing Insights & Strategy
The Value Of This Article Is $1,345,678, But I Am Giving It To You For Free

Hi, business owner. It’s me, Ralph. I wrote to you not long ago about how much a WordPress site should cost and had a few things to say about content curation and “choppas.” I also had a few things to say about so called social media expert ninja guru shaman rock stars.

Well, I’m back. And this time, I want to talk about something that has always perplexed and amazed me in equal measure.

Psychological Pricing.

There is strong evidence to suggest that the psychology of providing a product at $9.99 is perceived to be a greater savings than an astronomically higher $10.00. That one penny difference has been shown time and time again to be the game changer.

I’ve heard this practice called deceptive, but I disagree. After all $9.99 is demonstrably lower than $10.00. I would say that this type of penny pinching is more about trying to gain a competitive edge over the competition.

But there are other forms of psychological pricing that are far less scrupulous. And I want to talk about it from the very narrow perspective of the marketing business. If you’re reading this article, chances are you’re interested in marketing of the digital sort. If you’re reading this article, chances are that you’ve seen products and services such as webinars or eBooks offered by scores of self-professed marketing professionals and experts.

I want to talk to you about that. Mostly because it’s been rubbing me the wrong way lately, but also because I have seen a lot of deception in this very niche and I want to warn you about it.

So What’s My Beef?

Recently, I was watching a video online from a marketing “professional.” I put the word professional in quotes because the only thing that I could see that qualified this individual as a professional was that she said so.

Note: I don’t want to use real names so I will use false names and genders from here forward.

Alice’s video claimed that she would show you how to manage your Facebook page and make it so you could run campaigns that would generate lots of passive income for you. She broke down the training into modules and then went on to describe the value of each module. Modules 1, she claimed, provided training that was valued at $4,500. Module 2 was another $1,000. Then there were bonuses. But only if you acted RIGHT NOW. Bonus #1, was worth $1,000. Bonus #2 another $1,500. Bonus #3 she admitted was reasonably new and hadn’t been priced yet, but “to be fair” she would “give it a fair price” of $1,000.

All said, this Facebook training program had an actual total value of over $9,000. But Alice, because she wants you to succeed, was offering the program for a one-time-only low cost of $497.

Wow. Alice is awesome. But the best is yet to come. Alice puts up a slide with the words “Why so low?” in a deep and apparently highly honest and not remotely deceptive red color. The next few slides convince me that Alice wants me to have the success that she has. She wants me to live the life of economic freedom that she has. She wants me to do whatever I want with my time like she does because I’ll have so much money flowing in.

Finally she tells me that tens of thousands of users have purchased her program.

Tens of thousands.

Ok. So let’s do some math. Let’s assume a low number of just 10,000 people signed up for her program. At $497 a pop that’s over 4.9 million dollars. That’s what one calls a good living.

It’s also what one calls bullshit.

Let me be clear. I don’t know Alice, but I do know a bunch of Alices out there. The Alices I know have read books or gone to seminars or purchased online training courses that teach them how to package, commoditize and sell, well. . . Nothing.

Or at least nothing that you couldn’t find yourself with a Google search and 15 seconds of your time.


Becky has an online training course. It’s several weeks long and has a curriculum. The value of this training course is $35,000. I’ll spare you the breakdown of all of the modules, weeks, packages, downloads, audio tracks and bonuses. Becky is very generous and is going to give you the entire training course for $1,999.

Think about it. If ten people signed up at $35,000, Becky would clear 350 large. But that’s not how she rolls. She’s of the people, yo. So she’s going to live with the 2 large that 10 of you will put out because. . .

Then there is Cara. Cara is “sooooooooooo excited” to tell you about the wealth you will generate with her social media training and downloadable eBook. But Cara is slightly different. Her program comes in “chapters” not “modules”. And hers is worth $9,678. But she’s not just going to give it away. It’s simply too valuable, she tells me. I’ll make too much money, she tells me. She’s going to only charge 3 installments of $147.

Crazy, right?

It’s Crazy

The reason this nonsense sounds crazy is because it is. Let me tell you what I know, but before I do, let me offer you, the business owner, some advice. Don’t buy this crap. At least not without meeting two very important criteria.

Criteria 1: The thing being taught is essentially unlearnable anywhere else. You don’t need to pay hundreds of dollars to learn Facebook. Seriously. You don’t. And that eBook – it’s just a collection of a few posts that are already on the seller’s blog and are available for free. Except it has a cover with clip art.

Criteria 2: If you are going to buy a package online make sure it’s from someone reputable and that you can confirm the reputation of that individual independently. Even in that case, what you will get will likely be stuff that you could have gotten for free anyway.

So What Do I Know?

So here’s why this happens. There are two kinds of marketing service providers in the world. There are the marketing providers that run businesses and the ones that don’t.

The ones who run businesses can’t support their businesses on a $147 gimmick. That gimmick doesn’t meet payroll or pay the business insurance or fund infrastructure. They have to rely on servicing clients well and establishing long term relationships.

The others are dedicated to “passive income.” This concept in the marketing biz goes like this: package a thing in a manner that requires as little labor as possible and then resell it many times in perpetuity until you don’t have enough space to put all of your yachts in.

The problem, of course, is that this isn’t how the real world works. First, there are too many marketing ninja warriors out there selling a small handful of variations of the same thing. The market is entirely saturated. What ends up happening most of the time is that this voluminous subset of marketers start marketing their wares to other marketers in an effort to boost their perceived influence. The end result is that marketers end up selling to marketers who in turn repackage and sell to other marketers who in turn sell to other marketers. And so goes the circle of life.

The end result is an industry that is essentially canibalizing itself.

But What About The Pricing? Isn’t A Deal A Deal?

If you think that the thing you just bought for $147 dollars but was actually worth $4,500 was actually a deal then you, my beloved, should send me an email because I have a barrel full of bridges that I want to sell you.

If something was so valuable that people would pay $5,000 for it, then people would pay $5,000. If something is being sold for $147, but the seller tells you that it’s really worth $5,000, then it’s probably not worth either. I know that’s a pretty broad accusation, but let me admit something to you.

I’m Guilty.

All those stupid packages and books that I’m ranting against? I’ve bought a ton of them. Not because they had anything to offer me, but because I have a morbid curiosity. You know that guy who buys the severed head props from horror movies? That’s me. Except with marketing swag.

I just can’t help myself. I’m entirely fascinated by how people can use words and string them together into nonsensical bullshit to try to sell you something you don’t need at a price that is higher than its worth while convincing you that the price is lower than it’s worth.

With all of this said, do yourself a favor when spending your money: don’t spend it on products and services that are very clearly too good to be true. I promise you that not every marketing thing-a-magic out there will change your life.

Some may. Most won’t.

I know it’s hard to tell which are which, but when in doubt, err on the conservative side. Incidentally, do you know why a huckster will charge you $1.99 for his eBook instead of $30? Because at $30 you’ll think about it and may not buy it. At $1.99 you’ll spend it without regrets. “Hey, at least it was only 2 bucks.” Enough suckers like you and that husker could make a good living.

Value is what you make of it, not what some person you’ll never know who secretly doesn’t want you to know the truth behind the curtain tells you it is.

If this article seemed less about marketing and more about me getting something off my chest, I’d like to share with you my new online program about getting things off your chest. It’s valued at $5,000, but if you act now . . .

Join the discussion 16 Comments

  • Oh my gosh Ralph, I’ve got this bookmarked as one of my favourite posts of all time! I once lamented to a friend and associate my distaste for the only-today-act-now-special-deal-for-the-amazing-low-price-of sales pitch, but her response was this: “get over yourself. It works.” And sadly, it does.

    At the beginning of my online journey I too collected severed heads:) I thought I was doing myself this huge favour by gobbling up “wisdom”: in fact, it often wasn’t wisdom at all, but packaged lunch meat. I quite dislike what I call the “linger longer” type of sales pitch that goes on and on and on…bonus 1, bonus 2, act now…
    It puts me in mind of the carny at the sideshow, barking out and pulling/pushing (not drawing) people in.

    Oh, and when you get that Flux Capacitor built, I’ll “act now” 😉 Cheers! Kaarina

  • cynthia says:

    LOL. This made me smile …I was invited to do attend a livestream for a marketing weekend event, and one of the marketing coach’s slides included promoting himself for one VIP day that cost….$10,000!! No kidding! $10,000! I wouldn’t pay that kind of $ if I could spend a day with Andrew Carnegie (well, okay, maybe for Andy). No doubt he later discounted it for only three payments of $99.99.

    • I’ve been hearing more and more about “coaches” selling seminars and then using that time to pitch other products. That’s brutal. If paid money to go to a seminar to be pitched other products, I would totally go gamma ray Hulk on someone.

  • disqus_32dbcv30MY says:

    Thanks for getting this off my chest… you forgot bill, john & joe

  • Ralph, well said 😉 The guys that can charge $10,000 for seminars, or products, etc….charge $10,000. The guys that put out $100 value products – no shame in that – should charge $100. I’m one for straight shooting. No scarcity, because that’s a game that you’ll always lose to karma. We live in abundance, meaning that no shortage exists anywhere, although APPEARANCES may indicate differently. Charge fair value, and that’s that. Love the post. I’ll share it on kingged(dot)com to boost your traffic. Thanks Ralph!

  • Sheryl McFarlane says:

    I loved this! I’ve been following IM ‘gurus’ for a couple of years now and this hits the nail so hard on the head. I’ve seen all sorts of wild claims by all sorts of wild folks and some seem to be very well respected too, but I find it hard to believe that they are all earning millions of dollars a year. I know if I made a couple of cool mill I would be out enjoying myself and not making more courses!

  • Sunday says:

    Hi Ralph,
    You have made some valuable points about psychological pricing! Most times marketers do this with impunity without recourse to the knowledge of the writer. However, one thing I will not fail to remark is that most buyers are easily swirled by low price and “FREE”.
    The two criteria of buying any of such products are points on. They can be practicalized for increase!

    This comment was shared in where this article was found.

    Sunday – contributor

  • Tinu says:

    1- Marry me. I have a crush on smart people who write sentences like “it’s also what one calls bullshit.”
    2- Psychological pricing is one thing. Psychological pricing that FLAT OUT LIES is another! Why can’t people just look up the ACTUAL value of the service or bonus is and work with that? It amazes me how solvable some of these problems would be if people would do their home work instead of mindlessly copying other people.

  • Ralph, I so wish I had written this post! It’s just brilliant. When I was first starting my business, I bought more than my fair share of these books. I hate to admit it, but it wasn’t out of curiosity. I was looking for an answer. Or, if I’m honest, I was looking for *the* answer. You know the one? The super secret solution to all of your business woes? That one elusive piece of information that can save you from yourself? Yep, that was me. I fell for all of the lines, all of the limited time offers, all those crazy saved-but-never-read bonuses, and all of the “just imagine what it would feel like to not have to struggle with [insert whatever is keeping you up at night] anymore?”

    Two experiences coincided to bring my to my senses. First, a bonus gift from the launch of an ebook turned into the sales call from hell. The woman selling her services was so aggressive and so obviously manipulative, that my latent bullshit meter was given a much-needed kickstart. After multiple conversations, she told me that the reason she was so successful was that she didn’t take no for an answer. I let her know that this time, she would have no choice. I hung up the phone. The second experience was even more eye-opening. I got to know a man who, online, appeared to have it all. But his online personal was almost entirely made up of smoke and mirrors. It reminded me to just do the work I do, to enjoy the challenge and the process, and to stop looking for secret short-cuts. Here’s to BS-free marketing!