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Economy 101 + Psychology 101 = What?

posted Sep 3, 2011, 5:00 PM by Eric Banks

The little money I have - that is my wealth, but the things I have for which I would not take money, that is my treasure.

-Robert Brault

 

Hey you, let’s go shoppin’ for, say, a new, ultra-thin, high definition flat-screen television.  Yep, let’s go.  So we hop in the car, and before you know it, there we are standing shoulder-to-shoulder, gazing up in jaw-dropping awe at the extremely crisp and overly vivid real-life picture screens, each one overflowing with touchable colors and flooding the air with enrapturing sounds, surrounding us in deep, bone rattling bass-toned pulse beats, immersing us in the lively scenes, making us feel as if we are living our existence inside the TVs.  We stare and we salivate as we compare the boob-tubes to determine which one is the best, which one sports all the bells, banners, trinkets and whistles, and we listen for the one that speaks to us, the one that seems to call our names…  Oh, and by the way, money is no object; you can simply pick, point and take the one you want.  Which one would you choose?  The biggest, loudest, most flashy box?  Of course you do.  And that would be cool. 

 

Now say, you could only spend $5,000 on this high-tech wonder…how much would you spend then?  Huh?  You say, $4999.01?  Nice.  What if we gave you a choice of just three TVs and while they were all pretty evenly matched, nearly identical, two were priced at around $3,000 and the third one came in at $4999.98…which one would you buy then?  Nope, wrong; you’d still buy the most expensive one.  Yep, that’s right, even if all three were virtually identical, duplicates in just about every way, studies have shown that most people will buy the one that’s listed as most expensive, simply because cost conveys a perceived value into the mind of the buyer.  Strange as it may seem, and I’m sure all marketers know this and use it to their advantage, a good number of people will go for the most expensive option, even if a cheaper one is equal to or even better than the pricy one.  This is the “you get what you pay for” mentality.

 

Well, if this is true, I’m in trouble, ‘cause as dojo tuition fees go, we don’t match up with the average going rates for martial arts classes in our area.  In fact, we are way, way underpriced.  Should I jack up the prices then, in hopes that higher rates will attract more students, pulling them in by means of an inescapable gravitational force that rivals the very tug of the sun?!?  Well, that would be really cool to see, but I don’t think so.  While I am considering increasing the monthly tuition fee by $5.00 (that’s just 42¢ per session), I want to keep it reasonable for all.  My thing is, if you want to train, come train; money should never be the factor that keeps you from doing so.

 

I’m fairly certain that the low, reasonable fees I charge have actually turned some away.  Yeah, that’s weird.  But again, this is the “you get what you pay for” mindset.  So what do I do about the perception that our low tuition equates to an inferior product?  Well, I know the truth, and while I’m not tootin’ my own horn by any means, I’m pretty confident that the “product” presented at this dojo is among the best in the area, and if prospective students, those serious about learning a worthwhile art, come in and give it a real, effortful try, they will see it and experience this truth too. 

 

Yep.

 

Thus ends the Econ 101 lesson.  Please, when you do go out to buy that fancy new TV, invite me to come along, and I’ll make sure you get a great deal for your dough, despite the psychological manipulations of The Man!

 

Keep training.

EDB

02.23.11