Cost vs. value: the $71,000 conference that’s a bargain
June 29th, 2011 - 11 Comments
The vast majority of Americans are fixated on cost, not value.
They complain about how much something costs, rather than understanding what value it could provide — whether financially, emotionally, or otherwise.
I’ve written about this before in my post on why I bought a new car, a decision commonly dismissed without any research or perspective. In that post, I argue that value (what you get) is much more important than cost (what you pay.)
Earlier this year, I discovered an extreme example that makes the distinction even clearer. Business Insider wrote about how huge corporations are spending $71,000 per year to attend the World Economic Forum’s annual meeting in Davos, Switzerland (pictured above.)
Predictably, most people reacted to this with shock, horror, and even disgust. “$71K for a conference? That’s crazy!” But like many of the people who criticized me for buying a new car, these folks were focused solely on the COST, while totally ignoring the VALUE.
Everyone, that is, except the people who actually attend the conference. They talked about what they were getting for their money:
“…because Davos is now primarily a huge, high-level business conference, in which senior executives from the world’s largest companies take advantage of their physical proximity to meet in person with partners and clients and would-be clients–meetings that can end up being vastly more valuable than the price of admission.”
You know what? People with millions of dollars are pretty smart. So instead of yelling how stupid wealthy people are to spend money on something, perhaps a better approach is to say, “Hmm….what do they know that I don’t? Why would they be doing that?” And try to understand, rather than demean and degrade.
That’s why everyone who flew to Davos this year will be back next year and for many years to come, no matter how high the price is.
It’s easy to look at a high number like $71,000 (or even $500-$1,000) and proclaim how “outrageous” it is. But it takes a little more insight to think about what that seemingly outrageous amount of money is BUYING.
I see this with my Earn1K course all the time. Each time I open it, a number of readers scoff at the price and invent all sorts of reasons why they would never pay it. (The excuses are so predictable that we actually have a scored taxonomy of excuses, as we’ve seen thousands of them.) Meanwhile, a smaller number of smart readers consider the price in relation to what Earn1K could help them DO.
DUMB PERSON EXAMPLE: “OMG…why would you pay that much to earn $1,000?? I have an idea…give me $1,001 and I’ll give you $1,000…hahaha ahaha aahaha.”
SMART PERSON: “Hmm…if this course teaches me the specific steps to earn $1,000/month on the side, I could earn $1k/mo for the rest of my life. Or maybe more…”
One of my students, Jackie, turned her Earn1K investment into $80,000 in new side income. Others have achieved incredible results. She saw the cost of the course not as money down the drain, but as a shorter learning curve (and faster financial rewards.) A classic example of spending money to make money.
The point isn’t that you MUST spend money to get value, or that spending money GUARANTEES you will get value. Rather, I just want you to be open to the idea that it can and often does make sense to pay for value — and that cost is not the only concern.
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