Episode 87:Please Don’t Buy a Prada Shirt
Summary
Nick and Kai work through price anchoring using luxury retail as the model. Nick shows how publicized low-priced goods, a $300 Prada t-shirt or a $10 Apple cable, make premium offerings feel proportionate, then maps that logic onto his consulting product ladder. Kai adds a practical warning: underprice your entry product and clients will use it as the anchor for everything else you sell.
Highlights
- A $300 Prada t-shirt makes a $4,000 handbag look cheap by comparison. Nick says that’s the point, and the same mechanic runs through his own product lineup.
- Nick’s published pricing goes from Cadence and Slang at $50 to teardown access at $125 to Revise Express at $3,000. Draft Revise prices stay unpublicized, the same way couture pricing is never on a tag.
- Kai warns against cheap entry offers: a $100 one-hour call anchors the whole ladder to hourly rates, and clients will question why a project costs $3,000 when they can get an hour for $100. Kai also says not to charge hourly at all.
- Nick ties his ability to price at the luxury end to a specific track record: 11 years in the field, roughly $5.5 million generated for clients, four books, and 25-plus conference talks.
- Kai’s market framing: more buyers have less money than buyers have more money. A tiered product ladder serves both groups, but each tier should sit at the top of its price range rather than the middle.
- Nick notes that reputation shortens the pricing conversation. Once clients trust you, closing the deal gets easier.
Read the transcript
So Nick, tell me a bit about your thoughts on price anchoring for consultants.
I’m going to start by talking a little bit about price angering in the luxury industry, which I love turning to all the time, as you may well know. In a previous episode, we talked a little bit about this. How many like super fancy stores have you ever been in in your life, Kai?
Under a dozen super fancy. Legitimate fancy.
Like legitimate fancy, yeah. We um okay, so and that’s a very like broad stroke statement for me. I bet I like a lot. Like I kind of fascinated by it. And also, like, I kind of say no to the vast majority of objects that I have in my life, so there’s that. Have you ever been in, like, one of the more like Simultaneous luxury, yet extremely well-known stores out there like Prada, Gucci, Ferragamo. Mew Mew, etc. , etc. , etc. You’ve noticed that they, you know, if you go and you’re getting like a Louis Vuitton or Gucci, like you’re usually getting like a bag. Or, if you’re a lady, you’re like a dress or like a suit, you get like something that’s a higher-end good, right? You get something that takes a lot of time and effort. If you go to like Hermes, you’re getting a Birkenbag, right? But that’s not the only thing that they sell, right? They sell all sorts of stuff because they’re a giant conglomerate, right? So you go and and Prada, Prada has T-shirts, right? Prada has t-shirts. And one thing I strongly recommend everybody do: go to like the fanciest store in your town or wherever, you know, like go to go to like an upscale mall in your central business district. and go into one of these stores, clean up a little bit so they don’t look down on you, and that’s it. Just go in and take a look at what their t-shirts cost. You’re going to be horrified at how much their t-shirts cost because, like, a Prada t-shirt is like $300. What does this mean for price anchoring? Well, you look at that and you think, fuck, that’s more than any human being should be spending for a t-shirt. Agreed, strong agree, but it makes the $4,000 handbag look way cheaper. Right. And it shows that you’re on a certain level that the desirable goods that they have look way cheaper. I’m currently on an Apple computer and I have all Apple stuff and I pay $10 for cables, right? And it’s the exact same situation. They’re charging $10 for cables because they’ve spent so much time industrial engineering, everything else, that they make that into a cash cow. If you can afford an Apple laptop, you can afford a $10 cable. Who doesn’t buy the $10 cable? Okay, well, go to Anker or go to some other tiny provider. But the fact that it’s an Apple cable, it’s got the white and the cache to it, they know that it matters. So, what does this mean for price anchoring in a consultancy? It’s the exact same business principle. It matters so, so much. If you charge more for your lower value goods that you’re publicizing, imagine how much your higher value goods end up costing. How many of them are you going to be selling? Well, if you’re draft revised, it’s probably three or four a year, right? So, okay, well, I don’t publicize draft revised prices, but I do publicize cadence and slangs prices. All of the things on my ladder nudge the high end of acceptability for a given price range. We’ve talked in the past about how much should you make your initial product, and I think the highest end we said was fifty dollars. Cadence and slang is $50. And then after that, how much are you going to be paying for a teardown? Well, Revise Express is $3,000. How much do you want for access to teardowns? That’s $125. That’s a lot of money for these sorts of things, right? And it’s because I’ve built a name for myself and I’m establishing drafts products as luxury goods. I am pulling from the exact same playbook as Gucci or Aesop or any of the rest of them. And that’s tremendously powerful. It’s something that you can leverage significantly in your business in order to increase your top line revenue across The board for all of your product offerings. So that’s basically what price anchoring is. You have a lower value thing that it might operate in slightly higher volume in case of Cadence and Slanger, it might not. But it’s something that’s publicized, right? You can look at a Gucci or a Prada T-shirt and you know how much it costs. Whereas, if you’re getting their couture stuff, who knows, right? Those are the things that they’re known for, that you see in like runway shots in Vogue or wherever have you. But it’s also kind of like you have to know them. You have to get it customized for yourself. Think about anybody on the red carpet at the Oscars, something like that. You don’t know how much their stuff costs, right? It’s because it’s custom.
No, I love this, and I think this is perfect. And I love, honestly, the philosophy of treating your business, treating your service offerings, be it products or consulting services, as a luxury good, something that people would save up for. I think it’s it runs contrary to something I’ve been seeing in the market and wanting to experiment with more in the market, the notion that there’s More buyers with less money than there are less buyers with more money. But I think it actually slots in nicely because if we have a range of service offerings and products, you have Cadence and Slang starting at $50. You graduate to teardowns at one hundred and twenty five dollars. You graduate to services in the thousands of dollars. Well, you are providing offerings for each aspect of the market, be it people who have the larger portion with less money or the smaller portion with more money. you’re covering both sides of it. And so you’re able to capture more of the market more efficiently. But in each case, you’re pricing yourself as that luxury good. So you’re capturing the top end of that portion. I really like this philosophically.
Right. And it’s something that you should do as you built up a name for yourself, right? Like I have 11 years of experience in the field and four years of doing A-B testing, and I’ve generated probably around $5. 5 million for my clients in aggregate. These are numbers that are indisputable because they’re numbers and they’re facts and they’re things that happened. And I’ve written four books. There’s another number that’s indisputable. I’ve spoken at like 25 major conferences and another one last week and all of these things, right? They all contribute to your reputation. And I’m very grateful to have that reputation. But it’s also one of those things that, like, this is not a 101 move, but it is a way to puff yourself up a little bit. And it’s something that I recommend people do as they build up a name for themselves.
And I think even in the 101 aspect, being aware of how the prices for your services relate to each other and what they imply. is a very, very important thing to consider. So let’s say you sell a one-hour call for $100. Well, A, please don’t charge hourly. B, Now, customers and clients are going to use that as an anchor that they compare all your other service offerings to. Oh, they’ll get on the phone for an hour for $100. Why is this half-day project $3,000? Sort of shoot yourself in the foot and move yourself away from pricing on the potential value of the project for the client or anchoring on the value of the project when you have a lower priced offering. Everything gets anchored to that instead. So I could see a mistake that a lot of consultants could make being Underpricing one of their initial service offerings in the hope of getting volume. But then you have such a large jump, such a large spread from that initial service offering to the next service offering you’d sell to the client. who would make that jump? How many people would realistically do it? Suddenly, you have a lot of bad fits for the projects you are actually trying to sell. So it’s better to price higher earlier to attract the right people with an investment mindset or who could understand the value of the project.
Yeah. So there’s, you know, there’s a lot to be said as far as framing the project, too, right? Like it is easier to close the deal when people trust you and respect you, right? And so once you’ve built up that reputation, you can charge more. That’s why we’re here on this exact episode and why we’re talking about it in this specific way. Factor of pricing it out. But it’s also a factor of being able to close the deal more effectively. And you’re able to control the conversation a little bit better. So, yeah.