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Deliberate Gray Area: Arbitrary Pricing
Today, as part of our ongoing “Deliberate Gray Area” series, we’re going to shine the glaring, confess-the-truth light on the shady marketing tactic of “Arbitrary Pricing”.
If you’ve spent any fair amount of time online searching for anything, chances are you’ve come across – or been barraged by – those flashy, tacky, long sales pages promising you’ll be richer than Oprah, as thin as a supermodel, and/or as famous as the Pope in less than one month with only 10 minutes of work per day.
“Hmm, interesting,” you think. But you’re still skeptical. So you scroll further down the page past the first “Order Now” button (because there will be about 15 of them before you reach just the halfway point) and are given every reason under the sun why
YOU MUST BUY THIS NOW!
For example:
- Well, we already established this is going to make you the RICHEST PERSON IN THE UNIVERSE with absolutely NO TIME, NO SKILLS (and no idea of what you’re doing). JUST $49 will solve all of this and negate the existence of all forms of learning and earning a living done.
- This is a LIMITED TIME OFFER! The seller threatens to remove this UNBELIEVABLE, MARKET-CHANGING OFFER that has every major corporation shaking in their boots, at anytime. Oh no! It could be gone forever, any second! It says so right here: THERE ARE ONLY 7 6 2 LEFT! (Although both you and I know that if you were to come back to this page 1 year from now, the page would still be here, hawking the same stuff…unless the seller is now using the domain for another “limited time offer”, which is actually the same product but in a new package. This is the scary tactic of “scarcity” which we addressed here.)
- And now, here comes the “real” deal: This product is actually worth $2,519.99! BUT JUST FOR YOU, you can STEAL IT FOR JUST $49! TODAY ONLY! Lucky you!
We call the last part arbitrary pricing. It is when a seller claims, without credible, unbiased, and substantial proof, that their product is worth as much as he says it is. This tactic is widely used and abused in internet and affiliate marketing.
For example, say you conduct a search on “How to Lose 10 lbs in 1 Month”. Your high school reunion is coming up and you want to look better than you did 15 years ago and certainly better than anyone else. Losing that last 10 pounds will do it. Simple enough, right? And Google agrees – there are 438,000 hits. Great! A few articles down the first page and it doesn’t take long before you come across a “guide”, an e-book promising to end all your dieting woes for life. You’re just about to jump on the bandwagon. Then – BAM – the guide book costs $59 “but is worth $99″.
???
Says who? It’s not like the book is a printed, physical hard copy thing. There were no printing costs involved besides how much ink costs for your home printer. It doesn’t have endorsements from anyone you know or hold in high regard. It doesn’t include any physical products with verifiable worth (i.e. a 3-month gym membership to your local gym, which you can verify costs $25/month). Where’s the value? In the fancy, convincing sales page that pressures you to buy the product?
Still, you give the book the benefit of the doubt and scrounge the $59 to buy it. You’re desperate (as the seller hoped you were) and will try anything. When you download the book, you realize the only reason it’s 100+ pages long, as the sales page was quick to point out, is because the writer used 18pt Helvetica font throughout the entire book, there are probably 15 pages worth of iStock photos, and he counted the Table of Contents and Appendix! Upon further reading, you realize that the information provided is nothing “groundbreaking”; in fact, it sounds eerily familiar to another e-book you recently bought. (Welcome to the shady world of PLR products.) You’ve been duped. You try to request a refund with your “30-day or your money back” guarantee that came with the book but alas, you’ve been emailing everyday for three weeks and haven’t received a single reply yet except for the dreaded autoresponder: “Thank you for your message. Due to the high demand of our awesome products, we are experiencing a high volume of messages. We will respond to you as soon as possible.” You soon figure out “soon” means “never”.
On the other hand, the product may very well do all it promised and now you are as thin and happy as could be. In that case, the guide probably was worth more than the actual and even the arbitrary price to you. But you didn’t know it until after you bought it. Here is where the gray area comes in.
Value is a subjective measurement. GMG considers arbitrary pricing “deliberate gray area” because sellers establish arbitrary pricing goal posts to increase their chances of scoring or, in other words, you buying their product. They purposefully claim that their products are worth more than their higher arbitrary price but sell them at their lesser arbitrary price because it elicits a desired buyer response. You, the buyer, feels a sense of urgency to buy the product and a sense of exclusivity to being able to buy the product for the discounted price.
This is a deliberate tactic commonly used in today’s marketing. Of course every seller has a right to price his products at will. But Good Money Group is about promoting honest tactics and exposing everything else that is anything but.
Sellers, if you cannot truthfully verify that your products are worth the $99 that you could sell them for or the $59 that you do sell them for, don’t sell them at that. Of course, your time and effort should be compensated but did you truly write the book from scratch or are you just combining words from different sources? If someone came to you with their last $59 in the world, could you honestly say with a clear conscience that your product is exactly what they’re looking for? Would you pay the price you are asking for?
Buyers, be aware of pricing claims that do not show proof of quality or value, especially online. With the help of social media, online reviews and forums, and group-verified purchasing, you have every right and capability of being fully informed before you purchase. You don’t have to be an ignoramus duped by the cunning sales page. If your instinct says that this product is worth its salt in gold then buy it. But if you have questions prior to purchase, ask them prior to purchase. Don’t rely entirely on “money back” guarantees. Look online for web reviews on your product (although some of those can be intentionally botched by competitors as well) and email the seller with questions you have. It’s better safe than sorry. Continuing to be ignorant or complacent consumers only strengthens the grip of dishonest sellers. I’ve seen several products that were near identical, that claimed to do things they couldn’t, and that stretched the truth to serve the seller’s true motive, which isn’t to help you but to help themselves to your money.
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All I Really Need to Know I Learned in Kindergarten: A Guide for Lifetime Integrity
It’s my husband’s big 3-0 birthday this weekend and I wanted to do an article that spoke a bit about him because a lot of what Good Money Group is about – values, helping others, personal development – are things he inspires me to live. A wonderfully simple man whose only four wishes in life are “a family, a house, a good job to provide for my family and house, and good health to enjoy them all”, he knows exactly where his heart is and does not want for anything more. He is supportive, diligent, a selfless giver, unassuming, unpretentious, without pretext or judgment, and – this is the first reason I noticed him and the reason that closed the deal for me – he is absolutely, hands-down one of the most kind and goodhearted people I have ever met.
You’ve probably seen those “All I Need to Know I Learned in Kindergarten” books or posters. My aunt, who is an elementary school teacher, had one hanging in her classroom. It still is one of the most honest and clever reminders of simple life can be if we just treat others with kindness and respect. It’s sad that, as grown-ups, we tend to forget about the simple things. We search instead for professional and personal success, happiness, the “answers” to life, the “keys” to life. In so doing, we forget that we already know, deep down inside of us, what we ought to do and how we can be happy. Wouldn’t it be great to sit together and read this with your family in the morning? Or post it as a reminder to your co-workers around the office watering hole? Wouldn’t it be reassuring to walk into your bank or utilities company – someone presumed to be too “grown-up” for “childish nonsense” – and be greeted with this simple mantra:
Photo credit: Pinellas County Schools
Based on the book of the same title by Robert Fulghum, the poster is an excerpt from the book, which is a collection of short essays, and reads:
All I really need to know I learned in Kindergarten
All I really need to know about how to live and what to do and how to be I learned in kindergarten.
Wisdom was not at the top of the graduate-school mountain, but there in the sandpile at Sunday School.
These are things I learned:
Share everything.
Play fair.
Don’t hit people.
Put things back where you found them.
Clean up your own mess.
Don’t take things that aren’t yours.
Say you’re sorry when you hurt somebody.
Wash your hands before you eat.
Flush.
Warm cookies and cold milk are good for you.
Live a balanced life – learn some and think some and draw and paint and sing and dance and play and work every day some.
Take a nap every afternoon.
What you go out into the world, watch out for traffic, hold hands, and stick together.
Be aware of wonder.
Remember the little seed in the Styrofoam cup: The roots go down and the plant goes up and nobody really knows how or why, but we are all like that.
Goldfish and hamsters and white mice and even the little seed in the Styrofoam cup – they all die. So do we.
And then remember the Dick-and-Jane books and the first word you learned – the biggest word of all – LOOK.
Everything you need to know is there somewhere.
The Golden Rule and love and basic sanitation.
Ecology and politics and equality and sane living.
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Take any one of those items and extrapolate it into sophisticated adult terms and apply it to your family life or your work or your government or your world and it holds true and clear and firm. Think of what a better world it would be if we all – the whole world – had cookies and milk about three o’clock every afternoon and then lay down with our blankies for a nap. Or if all governments had as a basic policy to always put things back where they found them and to clean up their own mess.
And it is still true, no matter how old you are – when you go out into the world, it is best to hold hands and stick together.
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This is the kind of honest simplicity my husband brings into our home and the kind that I strive to emulate and teach our children. This is what I am thankful to him for, on his birthday and everyday.
I think, too, these are the things we should remember the most and live the best. This is knowledge and kindness we should all share. These are the simple lessons – kindness, hard work, thoughtfulness, cleanliness, confidence, courage – we should use throughout our life.
Credit: © Robert Fulghum, 1990.
Found in Robert Fulghum, All I Really Need To Know I Learned In Kindergarten, Villard Books: New York, 1990, page 6-7.
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Selling is Easier Than You Think
Read any sales and marketing books, attend any marketing conferences or courses, or frequent any “How to Sell” websites and you’ll soon be bombarded by a bevvy of sales and marketing tactics, maneuvers, and strategies. Among them:
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