How to Raise Your Rates By Offering Less Value (Yes, LESS value)

by Derek Halpern | Follow Him on Twitter Here

How to Raise Prices

What if I said you are worth more when you can do less?

You’d think I was nuts, right?

Right.

Heck, I’d think I was crazy, too.

But new research slaps us both in the face, and in this new video, I show you how to increase your prices by offering LESS value.

How to Increase Your Prices By 26% (The Secret is to Offer Less Value)

Do you know someone who can take advantage of the insights revealed by this new research? Someone who is looking for a job? Someone who is a freelancer? Send them a personal email with a link to this video. They’ll thank you for it… as will I :-).

On that note, here’s what I’d like you to do next:

1. Leave a comment letting me know how you plan to take action on this new insight. Or if you’re struggling with how to apply it, describe your problem in the comment section.

2. If you like psychology research, follow me on Twitter here because I often share links to research I don’t put on my blog.

3. And most important, if you’re not on the email list, get on it. That’s where I share the GOOD stuff.

If you enjoyed this article, get email updates (it's free).

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  1. Kimberlee Weaver, Stephen M. Garcia, and Norbert Schwarz Journal of Consumer Research Vol. 39, No. 3 (October 2012), pp. 445-460. Original source.

{ 142 comments… read them below or add one }

Sean Mysel

This is true of home values here in San Diego, there’s a high scale neighborhood near where I live that had one house that was beat to hell, all the other houses were in top shape. The shanty dragged all the other home values down with it.

Seems to me the best way to run with this is to go with your “A” services/products and completely rid yourself of anything that is marginal even if it adds something to the mix.

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Derek Halpern

The big point here, which I didn’t say, was that average things drag down the value of excellent things.

And your example about housing is a perfect demonstration of that.

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Ryan Hache

I think our subconscious mind does a quick average of the hotel’s value without us knowing it.

5 star + 3 star must mean the hotel on average must be a 4 star.. ish..

Just featuring the 5 star pool leaves the customer to assume the rest and from what the’ve seen they can only assume their is probably a 5 star restaurant in a hotel with a pool that nice and their snap judgment says this hotel’s perceived value must be 5.

loving the new style videos, always good for a laugh, keep them coming..

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Erik v/d Ven

You’re absolutely right. When I personally see a 5 star pool and a 3 star restaurant, I might think that the restaurant sucks, in contrast to the pool. If you get rid of the 3 stars, I might think the restaurant must be as good because of the 5 stars pool. I’m not a psychologist, but it dous sounds very logical to me, haha.

Again, great video Derek! Great you keep the videos not too serious, makes it more fun to watch. Keep up the great work!

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Tarun Gehani

Interesting research. I’m not sure if only highlighting a 5-star pool (vs. highlighting the pool and the 3-star restaurant) in your advertisement is really offering less value.

In my opinion, it’s just highlighting your top feature: the pool.

I would assume that consumers are likely to pay more for a 5-star pool (because of high perceived value) than for the pool and the (not as great) restaurant. I think the 3-star restaurant (in this survey/research) actually hurt the hotel’s advertisement by bringing it down to a 4-star rating.

Agree?

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Gerard McLean

Agree. A pool (even a 3-star one) might have more value to the customer base than a 5-star restaurant. Just these two variables without understanding the customer base is moot.

As an example, soccer teams place more value on a pool and almost no value on a restaurant, regardless of stars. You could have a huge rusty tank of water, call it a pool and they are there. But a restaurant of any stars just say that the bill will be higher.

But I agree that most businesses stuff WAY too many features into ads.

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Derek Halpern

I think you’re all looking for ways where this research does not work. This research actually had 8 separate studies. I only used one of them in the video simply because talking math for 45 minutes would put most people to sleep.

Instead of looking for “gotchas,” you need to realize one thing: Saying more is worse than saying less… especially when you’re highlighting things where you’re just “average” at best.

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Amy

I agree as well. The 4 star average suggests lower quality, not more value. If the restaurant is not listed in the ad, customers aren’t going to assume the hotel doesn’t have one. If anything, they’ll assume it’s also 5 stars. That’s different than offering less value.

I see people mess this up when they add too many credentials and titles to their name (MA, BA, AA) which just looks like they’re trying hard to pad it. Or when businesses feature a microwave in the break room as a selling point- is that really the best you have to offer? Instant lower perceived value.

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Paul Simister

I agree. I think the implied deduction is that a hotel with a 5 star pool has 5 star quality everywhere else. It’s like the famous David Ogilvy advertisement for a Rolls Royce that talked about how quiet the engine was.

Of course things may get different when the potential heads to TripAdvisor and sees all the bad reviews where the restaurant food and service didn’t come up to expectations.

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Joe Hage

You capture it there in the video. The “3″ diminishes the value of the “5.”

If there’s a “5″ pool, I assume a “5″ everything.

That’s not less value. That’s just focusing on the best.

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Jen

That was my thought too Joe. If the featured pool is 5 star, I will assume that the rest of the hotel is the same quality.

On the down side, once I get there I might be disappointed with the experience when I find out that the restaurant (and whatever else) isn’t also 5 star. I would feel ripped off if I’d paid for 5 star, would write a poor review, and talk people out of going there.

Derek Halpern

That’s the main point.

Gil

Joe,
Good point. To put it succinctly less is more…in some cases. Derek good job, as usual. Hope to catch you at one of your speaking gigs someday.

Peter Tanham

It seems like the real takeaway from the study is to highlight the best feature and *let people assume* that all other features are just as good.

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Marya | Writing Happiness

Agreed!

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Piers | Kickstarters'HQ

Isn’t this actually intentionally misleading people? Call me old fashioned, but I believe being honest and providing quality are better long term strategies than the alternatives. The trouble is that with much direct marketing research (including the one referenced in this video), that they tend to focus only on short term results, which ironically, often tend to damage long term results.

For example, if you let people assume your restaurant is 5 star, then they come, stay, are disgruntled and end up badmouthing you across the internet. This doesn’t seem like a winning strategy to me.

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Venisha

You have a good arguement in a way but I d on’t necessarily think it is misleading just because you are focusing on one particular thing rather then many.

In all reality if someone is searching for a hotel with a 5 star pool because thats something that is a priority for them. Maybe the restaurant doesnt matter because they plan on eating at different places during their trip. Its not important. As long as what you are focusing on is actually the stars you ranked it as then you are not lying to people. I just bought a camera and my main focus was hd quality so thats what I searched for. Not weather the quality of the mic sucked or not. I mean they all suck but that wasnt a priority for me. If a hotel features a pool and I cant swim, then that feature doesnt really matter and I would move on to the next hotel. Its basically whatever fills your needs I guess is what Im trying to say. :-)

Chef Kendra

I agreed 100% with Venisha. If you tell the truth about the point you are highlighting you are being an honest broker in my book.

Derek Halpern

That is not the real takeaway from this video. The real takeaway from this video is this: Average things drag down the value of superior things… when grouped together.

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Derek Halpern

You’re on point.

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Venisha
R.J.

I haven’t watched the video yet…I will later this morning.

I am curious how you do the video thumbnails? I notice that you get the text in there, but I don’t see the text on the actual video, so I am curious how you managed to do that.

Thanks a ton for your blog… I love it!

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David

I also want to know that

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Camille Dangerfield

You can design the thumbnail image to your liking in photoshop or whatever design software you use and just upload it to YouTube as a custom thumbnail.

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R.J.

I did some Googling and figured it out…

1) Go to My Channel, and make sure you are set for United States.

2) Join YouTube Partners (google it).

3) After you enable monetization, a “Custom Thumbnail” button was enabled under the 3 random thumbnails on the Edit video screen.

Enjoy.

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Josef Holm

For all those who don’t have a Youtube partner account or can’t get one, there’s another neat trick to add custom thumbnails to your video. The guys at Reelseo made a very helpful tutorial: http://www.youtube.com/watch?v=k9T3MhCnDeQ

Piers | Kickstarters'HQ

I found that to make the “Custom Thumbnail” button appear, we also had to do Google’s identity verification thing where you give them your phone number and address. We couldn’t add thumbnails (despite being partners) for the longest time. Then I gave Google my personal info to rent a movie on Youtube Movies, which required giving my phone number. Instantly they stopped bugging me for a phone number to allow HD video uploads over 15 minutes, and the custom thumbnail button appeared.

Lesson learned.

David - Beachbody Coach & Online Fitness Trainer

Dude, awesome video. Tons of work put into it, I can’t tell. Keeps the viewer entertained and informed.

As far as using this info for my own benefit. I can just focus on the results I get for people. Doesn’t matter how I do it.

Thanks.

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Liz

Derek, this is brilliant! Omitting the average and focusing on the best is totally on point. Another aspect – I suspect – is that it’s easier to really create desire and deep interest around one big idea. If I see the hotel ad and I fixate on the pool, I end up getting excited about that one thing and wanting to take action. If an ad highlights too many things, I my brain codes it differently (oh look, a hotel) versus really attaching to one exciting thing (I have to get in that pool!). So my motivation to take action is completely different. Love these episodes. Keep them coming!

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Derek Halpern

Glad you enjoyed the videos Liz!

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Moj

Terrific. You said it so succintly. I am a consultant to a marketing client. They are presenting a Winterfest, and even the Groupon salesperson wants them to tout more.
If people would learn to VALUE what they are selling. If you have to present a laundry list of assets, then you do not really what you are presenting.

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Steve

I’m beginning a gutting & re-thinking of my website. This idea will be a central guideline for the process. I’m also going to apply this idea to my negotiations with potential customers in emails & phone calls. Over-explaining is an achilles heel of mine.

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Joey

Dude, this is totally true. Last year in mid November I offered a condensed version of one of my products. Instead of 8 Modules, I gave them 3 Modules. It sold faster and easier than the full version, and I left it at the same price point.

It’s crazy cause it’s actually less value but like you say, they paid for it cause it was the best of the set.

Need to get ya on my podcast show brotha. I think we’d vibe real good for the audience ;-)

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Kairu

This all makes a lot of sense. It is something that has been known through the ages but seams to have been forgotten in a lot of north american business. The world of monopolies has caused many great companies to go from a master in their field to a jack of all trades.

I am one for diversity and new experiences but when offering a service it is important to give your customer top quality. This can be easily related to restaurant experiences. When you walk into a restaurant with a hundred choices you know the quality will be low. You are likely only there to appease the family and save a few bucks but when you walk into a restaurant where the server walks up and shows you your only two choices of the day you know your are going to get quality and will be willing to pay more for it.

Another great post as always. I cant wait for your next video.

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Brian Bennis

Less is definitely more. It’s perfectly illustrated for any business in the Getting Real book by the software people at 37signals. You can read it for free here – http://gettingreal.37signals.com/ – skip through the obvious pitches for their software and you’ll find some fantastic tips.

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Andy

er… usually I am blown away by your ideas and I try them with much success and end up passing them on to my friends and associates.

However this time, I think your logic is flawed considerably to the point of logical fallacy (false cause).

You say those that advertised the 5* pool without advertsing the 3* restaurant performed better and theorise that this is a less valuable proposition. I disagree…

a Hotel advertises a 5* pool – I (the typical human) assumes a 5* restaurant and probably 5* rooms and 5* service. Nice! I’ll pay for that.

a Hotel advertises a 5* pool and a 3* resteraunt – I (the typical human) wonders if they only have 2* rooms and if the 5* pool might be full of pee.

So I feel the first Hotel offers a high value proposition simply by ignoring the lower values it has. It is advertising as a 5* hotel, not a 3* with a nice pool (that might be full of pee) – hence the extra $26/room/night.

I am outraged ;)

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Marya | Writing Happiness

I agree. But I am not outraged. ;)

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Brandon Morino

Agreed. You’re playing on the weakness of humanity to readily “assume” and project what might not be there. It’s like having an amazing appetizer, then presuming the main course, wine, and dessert are equally as great, since they all come from the same kitchen.

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Bobbi Emel

Derek, you’re so freakin’ cute I can hardly stand it. Love your videos!

This was really interesting and, even though I don’t have a product yet, it gives me a lot to think about when I’m developing one. Thanks!

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Mary Pinizzotto

Quality over Quantity – love that truth! Thanks for the very obvious, but often overlooked WiZdom Derek.

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Ravi Ahuja

Hello Derek, Thank you for another great video. It can be great showing your great things and will surly help me on blog.

I am little afraid of you and I have shared your post and subscribed to your mailing list. (just kidding) I like your blog and the topics you cover.

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Michael Salerno

Derek, you did it again. This truth has been shared by experts for many years at the Boston Product Management Association, a non-profit 501(c) I co-founded and is now a leading educational service for product professionals. I have seen the benefits of this wisdom in practice time and time again. Keep up the great work!

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Caroline J

LOL – So what’s with the black underpants?
Excellent video.

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Christiano Kwena

Hilarious comment,

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Sergio Felix

I think is Derek’s way of saying “this is my pattern interruption right here”. ;-)

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Andre

That’s really a good point to leave the average “advantages” out and focus only on the best things your product / service has to offer.

I think it’s more good positioning than offering less value – but I agree: That would not have made such a catchy title. ;-)

Rock on!

André

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Kat

Hilarious. True.

This also makes me think of the zillion and one marketing videos/presentations I’ve seen that add tons of Bonuses to the end…

Do you think this waters things down further?

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Arnobio

Very cool. I immediately changed a couple of things on my resume, and will keep it in mind for a presentation I am giving tomorrow on a business plan.

Thanks for that!

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Jeffery Lam

The example of hotel ads marketing mentioned in the video perfectly reflect the psychology of an ordinary consumers.

If you give them to much of things to see and compare, they will try to dig out every problems and complaints they can find. While, if you give them your “best shot”, they most likely will be blown away and make up their mind to take action.

I am going to implement this into my business by this weekend.

Thanks Derek for this awesome tips :)

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Kiesha - Weblogbetter

Hi Derek,
Lol @ the Zoolander underwear trick! I almost fell out of my chair! lol!!

Anyway,
I totally get this! You always have such an insightful perspective on things. I think I’m guilty of trying to offer more, but that’s about to change.

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Miikka Kukkosuo

Excellent reminder and well presented, thanks Derek!
Especially in sales, people tend to throw everything at you and the only result is that you just become confused and its hard to compare choices. I’d say typically when your product/service is really good at something, the top feature/quality alone gives customers justification for the (higher) price, and all the rest is just nice to have, or basics that need to be there. Also the key to branding is that you choose and focus on the specific thing that distincts you from the competition. Confused customers don’t buy.

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Rumi

I got mad on you when I got the email with subject to offer less value. But you made me smile and remember that this is not your way to do busisness. Thank you for pointing out to stress on the most valuable and forgetting the average. Very nice video too :)

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Janet

Hi Ya

Great information. We have always been lead to believe that listing as many benefits as possible is the key to getting people to buy from you. However I have always had a issue with listing the benefits because I seem to only focus on the biggest most effective benefit, but worried that this is not enough because of the above. Now the way you explained it makes total sense and i can now just get to the point of my product or service much quicker.

Blessings

Janet

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Camille Dangerfield

Thanks Derek! I’m in the process of developing my 1st product and this advice is EXACTLY what I needed to here.

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Jordan Coeyman

Derek, thank you. I’m in the process of trying to price my first time product.

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Lisa

Ha! Your timing was perfect. I’m just about to write an email to a potential client, outlining what I do and offering ideas. And yes, I was planning on over-explaining, big time! Glad I decided to watch this video first — I’m only going to offer my BEST ideas — the ones that cost the most. :)

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Dave Rosenthal

Excellent Stuff! Ties in nicely with what I’ve been learning about how to build service packages..less details are better. I estimate making Zillions from your advice…thanks Derek.

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Lisa

And you know what else? I just realized I recently had this exact experience as a consumer. Guy came to my house to do a sales presentation on windows. He said it would take an hour. TWO AND A HALF FREAKING HOURS LATER, it’s past my kids’ bedtime and I’m KICKING him out — he still wasn’t even done! Not only did I not buy his windows, I left a bad review on yelp and I gave bad feedback on the follow-up call. The windows seemed nice but I would never buy from a company that’s so disrespectful of my time. Also, I was totally confused by the end of the presentation. The fact that he was doing demonstrations involving nails, heat lamps, and hammers with my toddler right there didn’t help much either.

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Cynthia Schames

What a simple, but incredibly useful point: just tell people the BEST stuff about your offering.
Starting today, I’ll be testing out this strategy in email prospecting by focusing on one key value proposition as opposed to listing four or five ways we’re different from the status quo .
I’ll let you know how it works out!

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Kumar Gauraw

Derek,

I love your research based insightful videos. I am not very keen on watching videos, but I can’t skip your videos because I know, there is something of value is coming if I just keep watching.

Thank you for sharing this awesome tip.

Regards,
Kumar

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Jared

Video no play! Not in Safari, Chrome, or YouTube.

YouTube says: “An error occurred. Please try again.”

I did.

Still no work.

Please fix.

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Sarah Jordan

Your videos are always entertaining. I really enjoyed this one.

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Martin

Great point and it does seem to fly in the face of what many marketing people are doing today. This is really just a matter of perspective. A 3 star restaurant could be a very high value feature to many people. However mentioning both the 5 star pool and 3 star restaurant together brings the perceived value of the 3 stars down when compared to 5 stars. A really interesting thing would have been to also have a group with only the Restaurant mentioned so it did not have to compete with the pool. What this really shows is the value of split testing to better understand the market.

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Joe Cassandra

You do always have the best thumbnails for your video, this advice definitely holds true. I’ve felt pressured to update my site a couple times a week with new articles, but I know that if I do that, I’m not going to have great quality stuff. Perhaps it sacrifices traffic/rankings early on, but that’s a risk I’m going to take!

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Jared

Video no play!

Not on Firefox, Safari, or Chrome.

And NOT on YouTube.

Same responses after many, many times.

How do the rest of you see it? And I don’t.

Please fix?

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Susan Kuhn

Brilliant! So the awesomesauce is where its at, eh? I’d go on, but….

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Brankica

I can not believe you pulled out the underwear trick. I have to say this is my favorite video you’ve ever done :)
And that is pretty cool logic about displaying only 5 star features. I think I would pay more for the ad with the pool only!

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Milan Jara

The underwear trick demonstrates how less means more for some :-) or is it that the underwear is 3 star and…

Now seriously, what would happen if they did not mention the restaurant is only 3 star and instead they would say Italian Restaurant?

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Alvin

Absolutely on the money!
I’m sure you can find a place to apply and prove
Pareto’s Principle – The 80-20 Rule…

Alvin

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Carrie Smith

Once again, my mind is blown! I’m changing the Hire Me page on my freelance site to reflect this advice. EPIC stuff.

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Deb Lamb

Very interesting concept! That is something I will tweak on my services page and focus on one thing that is 5-star! I’ve never thought about it like that. That is one reason I follow you, you have great stuff! Thanks for sharing your brilliant information!

Deb :)
Ghostwriter

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David

Hey,

At the end of the video don’t you think you were going against the very research that you presented?

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Maybe just offer ONE of your best instead?

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Renee

Love this reminder, Derek! And I love your enthusiasm!

I think this idea goes along with the idea that when someone says yes to your products/services, STOP TALKING! Many of us blow it in sales conversations by continuing to try to convince. But, in reality it just brings up questions for the buyer that they hadn’t been thinking of.

As in the case of the hotel, the 5-star pool alone makes me assume that everything about the hotel is 5-star. But, when you mention 3-star restaurant, I start to wonder what else in the place is 3-star … or lower!

Awesome, as usual!

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Juliana

Sure, advertising your highest quality features makes sense. But one element that is missing here is the effect of one feature versus two features, regardless of the quality. This test should be run again with two equally high value (or two equally low value) features. THEN, compare the effect of two feature ad versus the one feature ad. I have reviewed research about how much a person can absorb. This definitely speaks to quality BUT I wonder if it speaks more to the effect of single feature offers which take less brain bandwidth to absorb than two or more features. Our brains like short cuts… more features actually goes against our brain’s preference.

Derek, I’m a persuasion psych pro. You got some good stuff. But I’d love to debate you. Would be fun!

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Pat Kappes

Great video! This is exactly what a couple clients I’m working with right now need to hear.

In our crazy, busy world our brains can only absorb so much – so why not make it easy on your customers and give them one awesome thing to consider instead of several sub-awesome things that may just lead to overload and abandon.

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Teresa

Makes sense. Don’t go with mediocre, only offer what you have that is solid
and you know is the best you can give.

Offering more *value* is highly subjective and
everyone has a different value system.

For example; I’ve learned a TON from Chris Brogan, about prioritizing ((service)) and that *value*
seems prevalent in all aspects of his business and clearly serves him well!

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Casey Dennison

Bad ass video Derek! It does make a lot of sense. If I were to see an ad that said 5 star Pool, I would be like “Sweet” and most likely be ready to pay out the ass to stay at that hotel with that big, bad ass pool. lol

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Adrian

Everything of yours I partake in is mind blowing and eye opening. I’ve put so many into practice like your being seen with someone famous makes you famous or putting their picture on your blog with yours in your side bar still accomplishes the goal. I sent a friend your social trigger video on that and he has seen an uptick in business. Many Thanks.

Maybe I am misunderstanding. In the video, you say 5star pool for one hotel and the other has a 5star restaraunt and a 3star pool? What if they only advertised the 5star restaraunt against the 5star pool? Who would win that?

Also, it greatly depends on your customer focus. If you are targeting more families with children then a pool of any sort will be better than other amenities. I wonder though if you are getting families and want to target others would advertising both have negative results? Should the hotel create two ads? One for the pool and the other for the food? I have been trying to preach quality or quantity for years. Great to see actual science proving who is right.

You Rock!

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Max

Well, this should be a no-brainer, but I admit that people (including me) apparently tend to forget this point.

Now I just have to persuade my bosses.
And it would be easier if I could show them your video, as a reference.

But, you know, that scene with the underpants may ruin the overall effect; the average marketing manager is a party pooper.

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Cason

Strangely I was more surprised that 74% chose to include both the pool and the restaurant in their ad. Great reminder anyway.

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Max

Oh, I forgot one thing… (sorry for double-commenting)

Indeed, a 3* restaurant is an AWESOME restaurant.
That’s because when someone tells “x-stars restaurant” he/she usually talks about Michelin Stars.

http://en.wikipedia.org/wiki/Michelin_Guide#Stars

This has very little to do with the concept you are expressing… just to let you know. :)

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Kaneisha

I love it! This is great news, because it plays into my laziness with writing loooong sales pages. I can just hyperfocus on the best of what I offer and then surprise them later with all the rest of the great things they get as well. Your videos are GREAT!

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hbrofman

I think there is another point here as well. It is one I have employed many times in the way we have sold our products. You need to be careful when you “bundle” component parts into your product message. Two things happen when you aren’t: 1) You potentially devalue your product in the eyes of the customer, in that the additional components are presumed necessary, because the product by itself does not otherwise provide ‘enough’ value. 2) You devalue the additional components. While the hotel pool is not a good example of this, it is still an important related concept. Today, there are many companies moving towards a model of commoditizing the products or services they purchase. When you bundle, you may find that what you believe is an apples to oranges comparison does not matter to them. In the end, to get the sale, you end up with price compression. The value-adds you have (especially if the others don’t) should be separate in order to realize their full, potential value.

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colbabe

Minimalism in a presentation is an excellent strategy. Give the average punters a range of differing positives and watch them pick over the items like cheapskates in a flea market. Give them just something top drawer to chew on and they will start asking you for the other positives – that’s a different game entirely and they will be much more inclined to accept your pitch against their own enquiry.

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Ashley Gwilliam

Derek,

Great video! My biggest takeaway was focusing on the best and leaving the rest. After watching this, it’s obvious that mentioning the 3-star restuarant in conjunction with the 5-star pool is creating a disconnect in the reader’s mind: Why didn’t they invest in a 5-star restaurant? What else is sub-par? Will the bedrooms have ugly decor?

Rather than try to answer all those questions/doubts, the reader just moves on. I’m curious though — How does this research relate to sales pages? Traditionally, we focus big-time on benefits. The more the better. And in this case, overwhelming a person with information can actually tip a decision in your favor. Something to think about.

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Tim

It’s about improving the perceived value, not necessarily weakening the overall value. Derek’s title is to pique your interest than suggesting you offer less actual value.

If you think about the main takeaway point – focus on your best qualities – it’s kind of a no brainer. For example, this is what you would do in an interview, right? You would highlight your strengths not rattle off your long list of mediocre qualities. Same with products.

Look beyond the number of stars and the features used in the study and consider the overall point. It’ll be more useful that way.

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Jo

Great advice! It’s tempting to try and add on more and more features and bonuses to a service or product – and you gave a great example of how this can lower the perceived value of your offer rather than increasing it. I’m re-packaging and positioning my services so I will definitely have to remember to focus on the best of what I have to offer! Thanks :)

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Wasim

This is exactly what my old University teach told me once when I was preparing my digital design portfolio. he said, “Don’t put EVERY SINGLE little thing in your portfolio, just pick out ALL your absolute best work and make a few strong points to talk about each one”

Hey Derek, the advice in this video means so much more than about prices, it’s about overall value that can be taken on board with almost anything we want to master.

Cheers.

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Nicolas

Interesting and funny video!
I’ll tell my girlfriend to update her resume accordingly… And i guess that’s something i was already trying to do, but not because of the perceived value. Im doing this to reduce the amount of “unnecessary” information – never thought it could actually have an impact on the sales.
Nicolas.

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Michael

Great video. I love how you take the time to apply the knowledge shared to a real world business context instead of just leaving it with us.

As for the argument in the comments that it’s really leading with higher quality then less value – I agree that this is what’s happening, but also agree with Tim that Derek deliberately worded it as less value to get you to watch the video. It sounds more contrarian and sucks us in to watch it and realize that we do actually agree with what he’s saying anyway.

Great stuff Derek – I’m sharing this video with my boss!

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Tonya A Sage

I love this concept! It just gave me a great idea for my next display ad. My local competitors list crazy amounts of info in their ads and this technique could really set my house cleaning company apart from the rest. I also have an idea that I can apply to my website.

Thank You Derek!

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Michael R. Murphy

D’oh! I wish Derek’s email about this video had come a few hours earlier. Just this morning I sent a proposal to a client pitching one of my services which is more expensive than competitors but offers more (and better) features. I thought I should break down those features and describe why they’re better to justify the higher price. It looks like I might have been wrong. Luckily they accepted. But now I know for next time.

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KEVIN

Admittedly the conclusions being drawn are a reach at best…the test as presented is note the purest of test results. ie. what happens to response rates if both the hotel and the pool have equal stars?…what if you reverse the ratings? Entertaining as usual though. :)

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Steven Davis

This is great for a single product, but what if I’m making multiple offers (or different levels of products)?

I would assume that for each product, I’d highlight its best feature?

What about cumulative products (where each product includes the previous tiers)?

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Dan

Every time I watch one of your videos or read something you put out I slap my forehead & grunt as I think about how I did that thing you said not to do.

Multiple times.

This week.

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Randy Marcoz

Derek,

This is excellent information and very entertaining. It appears that this could be an effect of the contrast principle. This principle states that if the second item (the 3 star restaurant) is fairly different from the first (the 5 star pool) the perceived difference will be more that it actually is. Thus, the perceived low quality restaurant drives down the overall value of the hotel. This is a powerful concept with many uses.

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Mike Williams

awww Derek nice video brother, besides the dope information the Zoolander part was hilarious and so unexpected. I would have to agree the important stuff will always stick out.

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Mark C.

Here I am about to launch a new KILLER service in my local area (building a business website within 20 minutes right in front of the customer out of thin air) and I was wondering if I needed to include the additional services in the marketing. Now I know not to do it, but focus on the top selling feature – a new website the same day you order it!

Thanks, Derek. Timing is everything. Yours is awesome.

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Natalie Guzman

Great video and thanks for making it obvious to us that we shouldn’t spend so much time “convincing” people of ALL of the things we are capable of doing but encourage us to only show off what we do REALLY well!

My favorite part of the video was when I laughed at the video and immediately after I saw the prompt “if that made you laugh, click like”. I DID.

I also went right out and shared that tip with my client so she could add it to her existing videos. I’m proof that if you ask for a response you will get one!

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Venisha

This is such a great video.

It’s true about focusing on the most valuable information you have.

Same thing goes for menus at restaurants.

I hate when there are a million things on the menu and you’re starving and have no idea what to choose. So you waste even more time staring at it. Adding to the hunger.

I’d rather go somewhere with a small menu, because it makes me feel like they specialize in their food and prepare the food from scratch so that it’s the perfect meal. In that senario, I will pay the price.

Same thing goes for whatever product or information you specialize in.

If you focus on just that thing, people are more convinced that it’s worth whatever amount you’re selling it for.

I love it D. Good research.

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JoAnn Chateau

You are a fascinating man. I am such a critical thinker, but by golly,your stuff is good.

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Seth

Awesome video Derek – this is great info to have. Thanks for droppin’ some knowledge on me.

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Piers | Kickstarters'HQ

In a funny kind of way, this is almost a subset of the paradox of choice. Provide too much info and people don’t know what to focus on. They think “too much effort” and move on.

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Matt

Derek, you were right about the funnies in the video. My 1.5 year old son and I watched it together while we ate and I was laughing out loud. He was totally enthralled!

I’ve seen this in action in my workplace over and over and I’m trying to amputate the lengthy, wordy, cumbersome explanations all over. Why do some of us (or is it just me?) just desperately need to give TMI? It’s a place where “thorough” is not always a great quality.

Good stuff dude. Thanks for your help!

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Rohit Gupta

You’re right in the hypothesis of diluting the less-quality content with the ‘awesome’, it hurts!
If we serve the right demographic the best way through quality, that connection is more than enough to make them return.
Awesome expressions in the video. :)

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Steve VanHove

Great video, Derek. You are so right about hitting the prospect with *everything* and over-explaining! Btw I caught the reference to Mr T. Where are your chains?

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Alan | Life's Too Good

Hey Derek,

You’re so right, people should put their focus and marketing efforts on promoting their best qualities/products/services.

Focus on what really sells and puts you in the best light.

But this is not offering less value (i.e. because the hotel is not changing their message to say they don’t have a restaurant). Just like they don’t talk about rooms, parking… all that they’ve done in this example is focused on marketing their best stuff – it’s more an example of selective advertising.

The customers probably assumed that a hotel with a 5* pool probably also has a restaurant, they may also assume that it is a 4 or 5* restaurant given the rating of the pool.

It’s a good point and worth knowing (& I think relates to how we do cognitive processing like we would read an upside down V as an A, adding in the bar sub-consciously) – promote your best stuff and the customer will fill-in-the-blanks for the rest.

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Steven

I’m skeptical of this study applying to general marketing. Hotel guests will favor places with peak experiences, such as five star pools, in part because they presumably can find another restaurant in the area thats better. They can take an a la carte approach.

In contrast, when purchasers of cars may simply buy the most horsepower they can afford, but because of the investment size and difficulty of switching to another car for their trunk storage needs, they will more likely choose the vehicle matching the mix of features they require with as much of the features they want.

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Gail Doby

Dead on, Derek! Less is more.

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Natalie Currie

I absolutely agree. Giving customers/clients more leaves them in a confused state. Let’s face it we are already bombarded with information 24/7. So it makes sense that they would value a product/service less if the are being hit with multiple features. Less is absolutely more. I use this principle in my blogs, workshops and keynotes: give people three things to think about.

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Jessica Suranyi-Hammond

Hey Derek,

As usual- great video. I noticed a few-more than usual- casual references :-)

-Zoolander bit
-”boom!”
-”I pity the fool”

The main message is a great one- I know in emails I often explain too much, so will work on that and take your advice.

Thanks!

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Christian

I’ve been a proponent of this concept, not watering down your awesomeness, for a long time. Especially after reading Oren Klaff’s excellent Pitch Anything, where he gives a good explanation: The brain doesn’t just stack benefits on top of each other, cumulatively, but rather takes something of an average. Anything less than the best, just pulls down the average. It poses some interesting challenges for copywriters.

In Norwegian, I’ve been using a word for it, that I though was quite common: “argumentfortynning” (approx: “thinning of reasons”, “watering down statements”). I’ve been throwing it around, expecting anyone with a high school diploma to understand it. But when I just now looked it up on Google, to find a good English translation, I got just one single hit – A guide to better banner advertising I wrote a couple of years ago. That’s the first time this millennium I’ve gotten just a single hit for a search in Google. Huh …

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Diana Ramirez

Hey Dereck! Thank you for this awesome video! I just realize that my clients in the NGO world have some problems when they want to comunicate their brands, fundraising events, anything. It seems to be more difficult to focus on 1 or 2 BIG ideas about what we do than try to sell that we will change the world :)

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Michael

If I bought a stay at a hotel advertising with a 5 * pool I would naturally assume that everything else was 5 *. Once I then stayed at the hotel and experienced that the restaurant was only 3 *, the rooms were crammed and basically the product was overrated, I would never ever go back and stay at that hotel again.

Furthermore, I would tell all my friends, business contacts etc. not to go stay at that hotel as it is overrated and not worth the money. Seems like a risky business for hotels as customer perception is extremely important.

I do agree that you shouldn’t have to pin out every single thing that you can do (and can’t do) but you should definitely be careful about what information you leave out.

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Camilo Oliveira

I will reduce the amount of text in my portfolio and leave just the good things I did and what I want to do now. I’m sure the people would be more keen to read that.

I was redesigning some pages few days ago and started thinking about it. I guess I was right about it :)

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Liv Campbell

My thoughts on this principle are that throwing a bunch of ‘Wait, there’s more!’ things at the customer makes them wonder why the seller is trying so hard to push their not so impressive add-ons.

When a hotel is proud of their 5-star whatever and that’s ALL they highlight? I know they are proud for a reason.

Besides, customers who visit and enjoy the 3-star restaurant may leave reviews on relevant travel sites. So the other features will get mentioned by actual customers, giving them more value than if the hotel had just put every single feature in their advertising.

I’m going to guess that some of this depends on price positioning. It’s definitely a great high end strategy.

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Amandah

I guess it goes back to the “less is more” adage. To bad I didn’t watch this video a few days a go. I sent out a couple of LOIs and stuck to my regular format. The next time I send a LOI I’ll hi-light the best and will report my findings. Stay tuned!

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Luke DePron

Derek,

Fairly new to socialtriggers but have been enjoying your newsletter and have had some major takeaways, thanks!

What are you thoughts on the sales pages that break down products into segmants assigning a value and than ending with the slashing down from 297 to 47. I seem to see that everywhere. Do you think it woud be better to not mention all those segmants or pieces of a product?

To me I don’t like those sales pages but it seems to be what everyone does. Would leaving out those less valued “add ons”, “freebies” or “bonuses” be best?

thanks,

Luke

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Christian Nordtomme

Hi, Luke,

I can’t answer for Derek, but I’ve got some thoughts on that.

Those sales pages are anchoring your expectations high, so when you see the actual price, you’re more likely to find it reasonable or even low. It’s a tried and true technique to increase conversion rates, but it doesn’t really work if your prices are high.

This less-is-more-technique, on the other hand, is a way to increase prices, but might not do much for total number of sales.

On one hand, it’s a question of positioning/branding (are you selling more-for-more, more-for-less, same-for-less…?) and knowing your market, as well as doing the math and finding a sweet spot (which may not be anywhere near the middle).

On the other hand, you need to consider what the limiting factor in your business is. Is it the number of customers that’s dictating your growth? If you’re selling info products online, your costs stay pretty much the same whether you sell 10 or 10.000, but your profits go up, so you’ll want as many sales as you can have. Increase conversions.

Or are the limitations on your side, e.g. a limited resources? Typical for a hotel, where the only way to grow revenue past a certain point without making massive investments/expansions, is to charge more. Well, then (and you won’t find this in your Philip Kotler text book – only on Social Triggers :-) ), you may want to aim for less-for-more.

Too long answer, I know. But I hope you got something from it.

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Luke

Christian,

I really appreciate the time you took to reply. And I did get something out of it.

Finding a price for an info product I’m creating is tricky. I see what everyone else charges (although I think I provide more value than what I see out there….don’t we all). ..I’m having difficulty determining what that “sweet spot” is.

Your mentioning of the limiting factor resognated well and I see the idea of a lower price point being the way to go.

Thanks again

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Charlene

Derek, you are a hilarious and insightful spokesperson for Lacoste clothing. Have they figured this out yet? If not, they should totally sponsor Social Triggers TV and they will probably start making “I’m Sexy and I Know It” T-Shirts too.

I like the “omit the average, focus on the best” and “less ideas, focus on high quality” concepts.

Thanks for all your great videos and posts!

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Felicia

This was a great video!!

I’m not re-thinking how to structure my packages. So that I point out the best features and not list the “average” stuff.

Thanks,
Felicia

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Brian Watkins

So it seems the extension of only mentioning a five star pool is that the customer assumes that if there is a restaurant it must also be five stars. It’s only when the ad mentions it’s in fact three stars that this illusion is broken and, like you said, diminishes how much someone is willing to pay.

Love it, and thanks for sharing this video!

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Christian Nordtomme

I don’t think that’s really what happens – making assumptions and projecting expectations. (If it is, it’s on a very deep, subconscious level.) I believe it’s more about our brains being “cognitive misers” (to borrow an expression), that just see 3 stars and 5 stars and split the difference, instead of analyzing what an offer is actually worth to us. If we didn’t already have lots of anchors and reference point, most of us would probably not know how to put a price on a five-star pool anyway (or even understand how a pool can rack up five stars). So we look for other clues and cues.

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Ryan Hache

It think both of your are right..

Assuming the pool looks great, our deep subconscious will agree with the 5 star rating and make the other assumptions that the rating system legit and the rest of the hotel must also be.

However if the pool doesn’t look 5 star it almost has a double negative effect. Now I no longer beleive the message, the rating system or advertiser and im going to be weiry about the rest of the hotel..

I’m going to think.. if they think this pool is 5 star and this is their best shot at getting me excited, the rest of the hotel must be a joke.

but brian makes a good point.. if you show a nice shot of the restaurant but omit that is 3 star I would be interested to see what results come from that. (would peole assume its also 5 star?)

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Sandy

you’re adorable!

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The Get In Shape Girl

What do you think of the idea of saying less to entice, then having a place where people can learn more? I offer multiple services with virtual training – different price ranges for the more services the person chooses. Sure, I don’t need to bore people with things like:
-access to FAQ videos or
-daily motivation emails

But I think it’s incredibly important for people to see some of the really important things I do, and I cannot list less than 5 or 8 things

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Angela

Wow. So this is rather different from what Etsy (for example) recommends about selling products online, where the story is important, and you need to describe how it feels, how it makes you feel, how sturdy it is. I’m going to try it after the holidays, though, and see if I’m pummeling people with text when I should be… working on my photography or something.
Derek, love what you’re doing!
x
old lady archivist fan

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Nick Eubanks

Same principle has worked for growing search traffic (pumpkin hacking principle) focus on what works, stop wasting time with the rest.

Thanks Derek.

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Michele

Thanks, Derek, this is awesome! People are so crazy busy and distracted, and it’s hard enough to attract a reader’s eye and attention without making it worse by overloading your ad with information that make people’s eyes glaze over.

Offering instead a single, meaningful, memorable idea that makes your target audience’s heart skip a beat – like the thought of lolling about in a blissful, refreshing 5* pool – makes much more sense.

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Harrison

More is better only when I eat my grape tomatoes.

Haha, in all serious-ness, great advice Derek. I’ve been cutting back on words and putting out what people can chew. I used to be way wordy all the time, but learned to edit back.

Cheers!

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Mary Bartnikowski

This is inspiring me to take action in this way. I have a new online magazine, Vagabond Travel Photography Mag on the iTunes store. I’m doing the 2nd issue right this minute here on the coast of Cambodia and I’m going to fine tune it with only my most golden content – I thought I was doing this all ready but this video gives me another kick in the pants about how to stay lean and keep it simple with the finest and best content. Mediocre sinks to the bottom where it belongs. Thanks for the enthusiasm Derek I also liked your how to deal with haters video – a subject that isn’t often discussed.

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Liz

now I’m just wondering what the point of the zoolander spoof was?!

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Aaron Helman

Derek-

Thanks for sharing this. I released an eBook and emphasized the main points of all seven chapters. Buy rate was LOW. But 90% of those who read and reviewed it all said that chapter two was their favorite.

New sales page emphasizes ONLY the stuff in chapter two and is already converting better after just a few days.

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Laura Ecker

I am trying to start my own business as a professional organizer. I have recently put a lot of my plans on hold while taking care of a disabled family member. Any time outside my home is limited, but what I can do is study and research internet marketing tools and trends. I have been subscribing to a lot of blogs similar to yours. I am unsubscribing from all except one other blog today because they are wasting my time. Thanks, Derek, for not wasting what precious little time I have.

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Adam Moyse

Derek

Struggling to put the concept into my business plan. My photo booth conmpany offer extras such as more hours, extra prints etc which we charge for and inclusive products in the hire such as a prob box and free web downloads. Are you saying we should keep the same price but charge for these current inclusive products.
Business is tight at the moment and charging for what everyone else gives within their main price looks like a crazy move.

Adam
Plymouth,UK

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Briana

Boom!
I love your videos. They make me happy as well as informed!

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Val Nelson

I agree that people tend to overexplain in order to justify their value. A losing position. Good call.

However, I’m concerned that this advice could so easily lead to people listing unusually great outcomes as selling points, when in fact most of their clients get very minimal or poor results. It’s as if the advice is to list the outlier results, not the norm.
What would you say to that?
Thank you.

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Kim

Always developing my business, and this post grabbed me. I’ve just decided this morning that my new business strategy is GET SMALL! No, I’m not downsizing or going into semi-retirement. I am however going to take a fine tooth comb to my products and services and choose what is 5*, and anything I’d like to develop to 5* in the future and focus on making those even better than they are now. The rest can go. I’m polishing them up, making sure my presentation and marketing really reflect the value that’s in those products. Because right now, I think people are sitting in my 3* restaurant, peering out the window and saying … is that a 5* pool out there? I didn’t even know this hotel had a pool!!

Thanks Derek, for another cool and powerful nudge in the right direction.

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Joanna

Excellent insights Derek, very interesting research results.

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Ana

Very interesting to go from a tweet, to the blog, to the video– getting many new dimensions of you. I enjoyed the video snapshot, and would like a link to the original article if possible. Thanks!

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Karan Labra

You just never disappoint me Derek.

Your videos just force us to think beyond our comfort zone. Love your blog. :D

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