In 2019, a plain ripe banana was duct-taped to a wall, captioned the “Comedian”, and sold off as art for $120,000 or almost Php7M in an Art Basel auction.
In that same year, a kilo of bananas in the Philippines was selling for Php50 or $0.80, not even a fraction of the price of the single banana duct-taped to the wall.
But how?
,
There are a few books on this subject that truly excite me, and 100M Offers by Alex Hormozi is at the top of my list.
Whether you are someone who plans to start a business or has been doing business for awhile, the book 100M Offers will totally change your game, how you view selling and give you a fresh perspective on how humans think and make decisions.
Here are 7 Tips & Strategies from the book- 100M Offers: How To Make Offers So Good, People Feel Stupid Saying No.
1. Start with the “Who” before the “What”.
Many of those who want to open up a business always start with the question- “What should I sell?” or “What service should I offer?”
It is tempting to do what everyone else is doing- open a sari-sari store of course.
A sari-sari store sells commodities, which means you will be selling items that are also available everywhere, and you will have to compete based on price.
As for me, I only want to sell to people with money.
I decided that I want to earn dollars. So my “offer” and the way I position my services is aimed at small business owners who pay in dollars.
Seasoned entrepreneurs don’t really start buying inventory or creating the product until they know there are people who want to buy them.
To make your life easier, just sell something that people already need or want.
People usually talk in terms of problems…about aches and pains and everything they are unhappy about.
“I am fat. I am not beautiful enough. I have no money. My husband has another woman. I have no time to do the things I love. Nobody loves me...etc.”
Humans think they suffer a lot, and so business opportunities are really endless, if you think about it.
The higher the degree of pain you are able to solve, the higher the price you can charge.
2. What kind of “offer” makes people feel stupid for saying NO?
A “Great Offer” is one that would make it very difficult for a potential customer to say “no” to whatever you're selling.
A “Great Offer”, is one that is made to someone who desperately needs it at the time he needs it and has the means to pay for it.
When done correctly, a “great offer” will allow you to sell in a vacuum or in a category of one.
For simple folk like you and me, this just means that your “offer” cannot be compared to anything in the market, and forces customers to make a decision based on “value” instead of price.
When a customer starts comparing your product to another based on price and chooses the cheaper one, then he has regarded your product or service as a “commodity”, just like the rows of laundry soap in the grocery shelf.
When a customer makes a decision based on value, he will hold your product in his hands and tell himself, there is nothing else that I can compare this to, so I must accept the price that is being charged.
When selling anything, the goal is to de-commoditize your offer so you can sell in the category of one, so that your product is incomparable to anything in the market.
And this concept is applicable to any product whether you’re selling papaya soap or a banana duct-taped to the wall.
3. Why You Should Charge a Lot of Money
Many business owners think that charging “too much” is bad.
The reality is that, yes, you should never charge more than your product is “worth”.
But “worth” or “value” can mean so many things for different people.
For simplicity’s sake, let’s say a parent’s child was dying and someone saved his life, then this person’s services are automatically priceless, and the parent might even sell his house to pay him.
An item is only expensive if it does not live up to its promise. Also, everything is expensive for someone who has no money.
So, first, do not sell something that does not deliver its promise. Second, do not sell to people who do not have money.
You are going to laugh because it is that simple.
Getting people to buy is NOT the reason why you started a business. Making money is.
And lowering price is a one-way road to destruction for most — you can only go down to Php 0.00, but you can go infinitely high in the other direction.
When you decrease your price, you-
...Decrease your clients’ perceived value of your product or service since it can’t be that good if it’s so cheap
...Attract the worst clients who are never satisfied until your service is free
...Destroy any margin you have left to be able to actually provide an exceptional experience, hire the best people and invest in your people
So if you love your customers and your employees, do not sell for cheap.
4. Higher Price Means Higher Value (Literally)
In a blind taste test, researchers asked consumers to rate three wines: a low-priced wine, a medium-priced wine and an expensive wine.
Throughout the study, the participants rated the wines with the prices visible. They rated them, unsurprisingly, in order of their price, with the most expensive being the “best,” the second most expensive being “second best,” and the third, cheapest option, being rated as “cheap wine.”
What the tasters didn’t know is that the researchers gave them the exact same wine all three times. Yet, the tasters reported a wide discrepancy between the “high priced” wine and the “cheap” wine.
You would think it’s funny but this is how many people perceive “value”.
“It is so expensive, therefore it must be of the best quality.”
In essence, raising your prices can directly enhance the “value” you provide.
People want to buy expensive things. They just need a reason.
And the goal isn’t just to be slightly above the market price — the goal is to be so much higher that a consumer thinks to themselves, “This is so much more expensive, there must be something entirely different going on here.”
That is how you create your own market, a monopoly, “a category of one”.
And trust me, there is always a market for products that sell at any price range.
There are people who buy Php500 bags and there are people who buy Php5,000 bags.
You just need to decide which market you want to sell to.
You might say, this isn’t easy.
Of course, your product must deliver.
You must be so confident in your delivery, because you have tried your own product several times, and you know your customer will get results.
5. What does the customer really want?
Customers are people like you and me.
And there are 2 main reasons why we buy anything- because we want to fulfill a dream/desire, or we want to eliminate a pain and solve a problem.
Between the two, anything that can eliminate pain or solve a problem is always worth more.
Ladies don’t just buy clothes because they need to wear them. Most often, people buy clothes because they think it makes them look good and ultimately make them more desirable.
What would you pay for a dress that makes your waistline look 20 inches?
The desire to be accepted in society is so great that people will spend hundreds of thousands on beauty treatments, or luxury cars and similar status symbols just to feel they have value and worth.
In reality, you are not selling an item, you are selling a promise that if they buy your clothes, they will look more attractive and be more desirable.
The perceived value through the customers’ eyes is what makes people buy,
6. Shoulder all the risk. (Guarantees)
We are all buyers and sellers at some point. And just like us, our customers
have doubts and fears about our product.
If you can clearly articulate these fears, and are willing to shoulder the risk for them, then people will feel stupid for saying “no” to your offer.
For example, many clients might be hesitant to pay the price for a high cost service, but a bold and strong offer will say-
“ My VA course costs $1000. It only teaches one thing, how to send emails. But in 30 days, I guarantee that you will land your first $2000 paying client, and you only need to pay when you get paid.”
This offer is not only bold but it is also very clear. All aspiring VA’s (Virtual Assistants) know this offer is for them, they know how much they need to pay and most importantly, they are assured there is no risk on their part.
And the reason you are so bold with your guarantee is because you believe in your product or service.
Don’t sell anything that you don’t really believe in. If you can’t make yourself believe in what you’re selling, you will not be able to convince anyone.
7. Logical vs Psychological Solutions
Most people will try and solve problems using logical solutions.
Don’t worry. I do this a lot too.
Logical solutions have usually been tried...because they’re logical (it’s what everyone would try and do).
As business owners and entrepreneurs, we should approach problems in unconventional ways and find psychological solutions, rather than logical ones.
Because if there were a logical solution, then the problem would have already been solved.
Thousands of weight loss products and programs already exist in the market, yet people still complain about being fat.
Psychological problems cannot be solved with logical solutions.
Here are some examples inspired by Rory Sutherland, CMO of Ogilvy Advertising:
Problem: People in the building complain the elevator moves too slow.
Logical solution: Make elevator faster
Psychological solution: Add floor to ceiling mirrors so people are distracted staring at themselves and forget how long they were on the elevator
Problem: Customers say the product is too expensive.
Logical solution: Make it cheaper.
Psychological solution: Make less of the product, then increase the price which causes people to want it more.
In conclusion, most of the tips and strategies in this blog specifically refer to products and services that are not treated as “commodities”.
This is not to say that you cannot de-commoditize your product even if you want to open a “sari–sari” store.
The principles in this blog apply to the core of every human need. So you can use them in any situation.