Mike Michalowicz uses a provocative metaphor to argue that customers judge quality by price. A $1,000 prostitute and a $10 one might offer the same service, but people assume the expensive one is better. Entrepreneurs should stop competing on price and charge premium rates to attract customers who perceive real value.
Welcome to Honor Roll. And now, here's your host, Mike Michalowicz. Welcome back. I love to see you over and over again because you're beautiful. Today we're going to talk about your favorite subject. Prostitution. That's right. What can you learn from prostitution? Now, talking about prostitution, let's talk about my corporate sponsors, because I prostitute myself out to them. I have the lovely Skype. I have the beautiful Dex Digital. I have the wonderful American Express. I have Preventus Group. Grasshopper, who am I forgetting here? Nextiva. See, us prostitutes, we sleep around so much, we can't remember all the people that we're with. Okay, so what can you learn about prostitution for your business? Well, here's a quick question. Who's the better prostitute? The one that charges $10 for a trick? Illusion, Michael. Trick is something a whore does for money. Or the one that charges a full thousand bills. Now, I'm assuming you haven't spent much time with a prostitute. Or have you? But either way, I bet you can instantly determine who the better one is. Hey, Mike, you owe me about $10. That's the one I used to date, you know what I'm saying? Gotta get rid of her. Okay, the $10 one clearly is the cheapo one, the one you wanna avoid. It's like disease fest. $1,000 one probably is disease Fest. But there's a better quality. We as consumers instantly determine the value, the intrinsic value of something on the external extrinsic value. So if someone charges more, we automatically default to we perceive more value. May not be true. I mean, a prostitute is a prostitute, but we determine it's worth more. And we're going to experience something better for a higher price. So in your business, stop being a cheap prostitute. Start being a fancy prostitute, an expensive one. People will perceive you as more valuable. You know, between me and you, I am a $10 prostitute. And knit flips are free. Pretty woman.
