Dec 31, 2009

Move Your Money For A Better Economy

For businesses in America who are frustrated with the economy, I have a simple question:

Are you banking with one of the fourteen banks who were "too big too fail"?

You know which banks I'm talking about... they were responsible for the last great depression and once again, they were responsible for the recent collapse in 2008/2009, too.

Banks who are backed by the families named Morgan, Chase, Goldman-Sachs, etc., along with banks like Bank of America, Citibank, and, Wells Fargo, etc..

Are you going to continue to support the banking policies of these banks? If so, you might as well start wearing an "I love Potter" shirt every New Year to show off your allegiance.

If you're saying, "I love George Bailey" well then do yourself and your community a favor and move your money from the "big fourteen" to a regional, community bank. You money is insured by the FDIC, and you'll probably get better service, as well.

This concept is inspired by a post I read at the Huffington Post:

"The idea is simple: If enough people who have money in one of the big four banks move it into smaller, more local, more traditional community banks, then collectively we, the people, will have taken a big step toward re-rigging the financial system so it becomes again the productive, stable engine for growth it's meant to be. It's neither Left nor Right -- it's populism at its best. Consider it a withdrawal tax on the big banks for the negative service they provide by consistently ignoring the public interest. It's time for Americans to move their money out of these reckless behemoths. And you don't have to worry, there is zero risk: deposit insurance is just as good at small banks -- and unlike the big banks they don't provide the toxic dividend of derivatives trading in a heads-they-win, tails-we-lose fashion."
Can you agree to this principle?

Watch the video and then decide for yourself if this is a good New Year's Resolution regarding your money:

Per Huffington, please "watch Eugene's amazing video, then go to to learn more about how easy it is to move your money. And pass the idea on to your friends (help make this video -- and this idea -- go viral!)."

Moving your money from a "big fourteen" bank to a smaller, regional bank can be one way you can contribute to the growth of your local business community and help rebuild our economy the good, old-fashioned, American way.

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Dec 17, 2009

Predictably Irrational Offers Rational Pricing Ideas

Would you like choice A or B?

Human beings, when given a choice between: A or B
will choose the better of the two... or will they?

According to the research by Dan Ariely, author of  "Predictably Irrational", and an academic, people will actually not always make the right choice if influenced by a number of conditions.

For example, when presented with a slightly flawed "decoy" choice, which Ariely calls -A, the person will choose the choice that does not have the precondition flaw:

So A or B when presented with a slightly flawed "decoy" choice, such as A- or B-  when stacked together as A, A-, or B, the person chooses B, because A was presented with a flaw.

Or, when presented with the choice of subscribing to a journal and offered:

Choice #1:
A. Hardcopy subscription $29
B. Online Subscription $59

In choice #1, people typically choose "A" but when presented with:

Choice #2
A. Hardcopy Subscription $29
B. Online Subscription $59
C. Online Subscription + Hardcopy Subscription $59

In the second choice, people choose C considerably more than in the first example. In this case, choice "B" in the second option is obviously flawed, but people will choose C more often because they get something for nothing, in their mind (the hardcopy, in this case).

This is the argument and fascinating case study work shared in the book Predicably Irrational, by Dan Ariely.

The use of a "decoy" in pricing is critical if you wish to drive success of a higher-priced item.

This is also true if you set a precondition of a certain number in the suspect's mind prior to offering a series of numbers, they are more likely to think that number is "acceptable" as a price.

In addition, the use of zero cost items is essential in promoting a lessor quality item. Offer two of them with one free, and you drive sales.

So, in your pricing, are you offer just ONE price? Or, are you offering comparisons. Because, you see, people will buy based upon the COMPARISON guidelines YOU set. In addition, if you state a RANGE of VALUE prior to offering your price, the person buying will be associating value in that value range, and thus be more apt to offer or buy the pricing within a discount from that value.

For example, if you said "an offer like this, at our normal rates, would cost between $10,000 and $12,000" ut for this day only, you can buy at these special rates:

A. Offer A for $5,000
B. Better Offer B for $8,995
C. Both A and B for $9,995

In this instance, we're using three of the theories put forth in Predictably Irrational TOGETHER and thus, driving up both the likelihood that you'll sell the higher priced options B or C and also driving up the likelihood of prospects choosing option C - your highest profit offering. This is using the THEORY of FRAMING EXPECTATIONS with the THEORY of RELATIVE PRICING with the THEORY of DECOY PRICING. Another theory (not mentioned in Predicably Irrational but still a good pricing theory) is the THEORY of LIMITED AVAILABILITY. If people know they can only buy something TODAY, they rush to get it. It is like when K-Mart would run "Blue Light Specials" where the blue lights go on, everyone rushes to buy that item. It creates an "in-store" sensation that increases the odds people visit that store to get good deals. In this instance, it increases the odds they'll buy TODAY.

While some of these pricing strategies are already part of Cold to GoldTM, I'll be adding additional examples of ways to price products in the bonus "Marketing Maven Mashup" guide as we get closer to the online launch of Cold to Gold. Stay tuned...!

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