Well, well, well. We have a bunch of farmers’-market geniuses reading IWT, I see.
On Monday, I told you how I tried to bargain over a $10 t-shirt. A bunch of you wrote answers on why the guy didn’t take my lowball offer of $8. And — you nailed it!
The t-shirt guy knew he didn’t have to lower his price. He even knew I’d be back.
In fact, I wanted the shirt so much that after I got rejected, I walked back in the stall later that afternoon and sheepishly asked to buy it. Full price. He just smiled and nodded. Ugh.
That wasn’t just guesswork on his part. This is the way real business works.
You think McDonald’s or Mercedes licks their finger and holds it in the air to decide on pricing? You think they look at their sales reports and say, “Huh, I guess we sold that much last month?”
They know down to the decimal place what their sales will be today, tomorrow, and 3 months from now. Restaurants know exactly how many people will add on fries or a Coke, and car companies know how many will spring for the optional leather-trim package. And the farmers’ market guy knew he didn’t have to lower his price, because his real customers would buy it at $10.
This is where it gets interesting. See, you and I walk into a store thinking we have free will, believing that we make our own decisions of our own accord…
…but a company knows that out of 100 buyers, exactly 18 will opt for the higher tier. Not 17, not 19. Precisely 18.
We know this at IWT, too. So it makes me laugh when I see people complaining about how stupid companies are.
If you’re complaining about how dumb a company is — “ugh, websites that use popups are stupid” or “McDonald’s, if you just made your food taste good, I would eat there” — you have 2 options:
- Automatically assume you are smarter than a multi-million-dollar company.
- Take a different approach and use a framework I call the D-to-C Principle: Disparagement to Curiosity. Instead of saying “LOL SO STUPID,” ask yourself, “Assuming I think this person/company is pretty smart, why would they do that?”
Here, I’m unlocking a video from one of my premium courses to show you how the Disparagement-to-Curiosity Principle works:
Here’s a video on exactly how the D-to-C Principle works. This viewpoint changed my life.
Remember, it’s easy to sit back and criticize. “Why does this company charge so much? They must be trying to rip people off.” “Why does she stay with him? Ugh, it’s so obvious he’s bad for her.” “LOL if they just lowered their price to $10, I’d probably buy.”
(Most of those critics truly believe they will buy…but they never will. It is my great joy in life to catalogue the delusional freeloader comments found all over the internet: Ramit’s freeloader bookmarks.)
Easy to criticize. Much harder to try to understand the underlying reasons why they made that decision.
For example, why can’t you buy any IWT product you want, any time? Are we stupid? We don’t accept anyone in our flagship programs with credit card debt, a decision that personally costs me millions of dollars a year. Am I a moron?
Cue DISPARAGEMENT TO CURIOSITY: Instead of insulting others, start listening and digging around. Use this phrase when you notice yourself calling someone or something stupid: “Shut the hell up and try to figure out what’s going on here.”
For example, I recently spent $10,000 to attend a week-long executive education class at Columbia on accounting. Why? I don’t even run a public company, and I have accountants and bookkeepers that work for me.
- The most successful people invest in themselves with time and money. Interestingly, the more successful you are, the bigger impact even one idea can have on your life. (Imagine if you could show Bloomingdale’s how to improve sales by 1%. That would be worth tens of millions of dollars.)
- This isn’t just about spending lots of money. I still buy $10 books and $200 programs from people who earn a fraction of what I do. Why? Because nobody’s too good to learn. Ironically, it’s usually beginners who are arrogant enough to think they know it all, while successful people realize how little they know.
Can you think of an example where a company did something that a lot of people thought was dumb…but it was good for business? (Bonus points if your example is IWT.)
Leave your comment below.
P.S. Next week: How did IWT go from a blog to a real business? How does a CEO engineer growth? And what was even more important than multiple million-dollar products as I grew IWT?
P.P.S. IWT is hiring! If you’re a top performer, check out our careers page to see what we have available. Competitive pay, most positions are 100% remote, and you’ll work with the best in the world on helping millions to lead a Rich Life.