Living The Red Life - Advanced Buying & Marketing Psychology Secrets

Episode Date: May 9, 2024

In this podcast episode, I delve into the psychology of buying and selling, unraveling the mysteries behind pricing strategies and consumer behavior. To help you understand, I draw from parallels between the automotive industry and product pricing, emphasizing the critical role branding and perceived value play in driving consumer decisions. The importance of aligning pricing with the buyer's journey and psychological triggers, which will hopefully shift your perspective and force you to tailor their marketing strategies accordingly.Another key concept I cover is the stages of buyer awareness, from the unaware masses to the committed customers, advocating for a nuanced approach in messaging and content creation. By understanding where potential customers fall within this spectrum, businesses can craft targeted campaigns and offers that resonate with their specific needs and preferences. CHAPTERS1:08 - Understanding Pricing Psychology2:07 - Analogies from Everyday Shopping3:50 - Matching Sales Processes to Products7:05 - Simplifying the Sales Process8:13 - Tailoring Touch Points to Product Value9:50 - Webinars and High-Ticket Sales11:08 - Drop-off Rates and Sales Funnels12:09 - Matching Price to Purchase Process15:08 - Perceived Value and Branding16:30 - Elevating Product Perks and Brand Strength18:36 - Brand Effect on Price19:50 - Adding Value: Ideas and Implementation22:02 - Navigating Buyer's Awareness Stages24:20 - Tailoring Sales Approach to Buyer JourneyConnect with Rudy Mawer:LinkedInInstagramFacebookTwitter

Why does anyone own a car? Think about it right now. The main reason everyone owns a car is to do one purpose. Go from A to B. So how is it that you can get a used car for a few thousand dollars, but then a top-of-the-line Bugatti or, you know, some super unique one-of-one car can cost you three million, two million, four million, five million? How can one of those products cost five thousand dollars and one cost five million. How can one of those products cost $5,000 and one cost $5 million? This is the secret that most of you are missing when it comes to your products and your branding.

Okay. The only difference, the only difference between those two products is... My name's Rudy Moore, host of Living the Red Life podcast. And I'm here to change the way you see your life in your earpiece every single week. If you're ready to start living the red life, ditch the blue pill, take the red pill, join me in Wonderland and change your life. Hey guys, welcome back to another episode of Living the Red Life. Today, we're going to talk about the psychology of buying and selling and how consumers act, how consumers think, how you should price your products, and what it really takes to build irresistible products based on psychology. So I did a training to my members where part of my

training, I talked to them about how to price their products. A lot of people always ask me, Rudy, how do I price my product? Rudy, what's the best funnel? How do I create the best sales process? And obviously we have best practices and we've created thousands of sales processes for thousands of companies. So I kind of know what works and doesn't work. But what I'm going to do today is actually teach you the psychology behind it, because it's kind of then once you understand it, you'll know for the rest of your life and it will change the way you build all your marketing systems. It will change the way you build your sales processes and it will give you a big advantage because you'll actually understand it at a core, you know, psychological level. So when it comes to building out the best sort of sales process or the best sort of funnel, as we would say in the internet marketing, digital marketing world,

the thing to understand that I taught my members yesterday is how do we interact and buy as humans? Okay. And I'm going to give you a couple of analogies that are going to help really understand this. So when you're going into a grocery store, say in America, we have CVS or Walgreens. In England, you have like Tesco and Sainsbury's and that sort of thing, Co-op. You know, these sort of grocery stores or like, you know, smaller grocery stores where you go in and out on the go and you go and buy some sweets, right? Some candy, as we would say in America or sweets in the UK. You walk in and most of the time they have their own little aisle. And most of the time as you're checking out, there's a bit of a line, a zigzaggy kind of

line, like an amusement arcade or amusement park. And in that line, they have some toiletries, some magazines, some maybe nuts and chips and waters and candy. So they have all these items on the go that you can grab. It says $2 or 50 cents or $4, and you go and check it out, right? Why is it positioned like that? Well, because they know from research and marketing studies, right? And their data, these are the most commonly bought items that people may not have intentionally came in to buy, but always want, right? Because they're not going to put something like milk there. Because if someone came in for milk, they've already gone back to the

back of the store to get milk. So they're not going to line up and wait to pay and then go, oh, I think I want some milk, right? It's more of an intentional item. But most of the time, people want a snack, right? Or they want hydration. Now, the thing with these items is they're structured at a couple of dollars. Why? Because they need to be something that can be a spontaneous purchase that doesn't require a deep level of thinking, a deep level of kind of Q&A process in your own brain to say, is this a good purchase? Is it a good product? Will I get a result from this product? Is it worth the money? Could I get it cheaper online? What are the reviews, right? So it can be a quick, easy, spontaneous purchase.

Now, what I said to my members when they talked to me about how to price and build the sales process and, you know, should they use webinars or landing pages or what? I said, well, to answer that question, you've got to understand all of the steps that go on in your head, okay, as a consumer. So if I had at the little kiosk, or the line where the line is, if I had a speedboat there, right? Say I had a nice speedboat or a nice mini yacht, right? You'd find in Miami and say it was $100,000, which isn't much for a boat in Miami. I don't think anyone would buy the $100,000 boat, right? And it's not even the boat, right? If you're in a line to pay, imagine a picture of the boat and it just has the price tag, right? Like you see for the candy, it says $100,000 and you just take the picture up and that's how they scan it to buy your $100,000 boat, right?

Most people are probably not going to buy that. Maybe one person ever in history might buy it. I doubt anyone will ever buy it. Why? Because it's not the right place and the right time. To buy that $100,000 boat, it's not spontaneous. It's high price point, takes a lot of decision making. Most of the time, you're going to want to see it and actually test drive it. You're probably going to be with another family member, a friend or a spouse to buy it. You're going to look at reviews. You're going to Google it, right? There's a lot of touch points and a lot of steps that go on in your brain. Now let's imagine that was reversed, right? Imagine you went into CVS, Walgreens or a grocery store to buy some Haribo or some candy, right? You know, call it a Hershey's bar or Cadbury's bar if

you're in the UK. Now, if you wanted to buy that candy bar or whatever, right, for $2, and they made you go through the process like buying a boat, you had to come in and schedule an appointment, you had to show that you had proof of funds or financing and credit in place to actually afford it. You had to be over the age or have a boat license, maybe. You had to schedule a time to see the boat, right? Then you had to sit in a sales rep's office and go through all the specs and what it's got, tour the boat, then maybe arrange a time to take the boat out on a lake or to the ocean to actually test drive the boat. And then maybe set up a meeting with a bank, right? Or go through their in-house financing. And then you may be looking at reviews online and then you come into maybe a purchase decision, right? That's 12 things or so I just listed. But imagine you went

through that process to buy a $2 bag of Haribo, right? Or Hershey's bar or Twix or whatever it might be. You're not going to do that to buy your candy, right? You're not going to set all those schedules and appointments and reviews. So that's obviously an over-exaggeration of how the user psychology is when it comes to buying products, when it comes to pricing your products, and when it comes to the sales process. And I know that last five minutes might sound very stupid and obvious to all of you. And you say, really, what am I learning here? But what most of you don't understand is you complicate this and don't use that basic logic when it actually comes to your own products online.

I see many, many, many products at $1,000, $500, $2,000, $4,000, where it's a simple landing page and the price tag. That's like putting your $20,000 car on a shelf at CVS and then saying, why is no one buying my car? I explained what it is. I had a picture of the car. I said the price clearly. No one's going to buy it when they can just see a photo of it and a bit of text and a couple of images and blurbs and maybe a few reviews, right? Because it's the wrong sales process. And it's the same is true when I see people jump through 20 different hoops to buy a $40 product. That's like sending someone in to buy a candy bar, a Hershey's bar for $2 and making them set an appointment, come back later,

doing a follow-up email, rescheduling them, doing a test drive. That is an insane sales process to sell something that's simple. So it's so, so important that your price matches the logical steps needed and the amount of time and touch points needed for the purchase. So if you're selling something generally cheaper, $100, right, or less, if it's $100 or less, then you should have a great sales process in place where it's easy, it's frictionless, it's pretty instant, and they can obtain it right away. Just like going into CVS, Walgreens, or a grocery store and buying a bottle of water or a candy bar. Now, the opposite is true when it comes to buying something expensive. If you're selling a $3,000, $5,000, $10,000 product, there probably needs to be a lot of touch points. There probably needs to be a

scheduled event, maybe a one-on-one sales call, like you would meet with a sales rep at the boat place, right? Or the car garage, right? Or the dealership. There then needs to be some way to understand or test drive the product. So if you're selling a coaching program or a course, you might not be able to let them test drive it, but you might be able to, during the sales call, highlight some of their gaps and weaknesses and give them some feedback, like a coaching session. You might be able to show them the members area. You might be able to show them the live calls. You might be able to show them a two-minute video of the live events they get

so they can actually experience all those things, like when someone goes to buy a car, right? They just look at the car, and then they test drive the car, but they're talking about the size of the engine. They're talking about how much mileage they get for a tank of gas. They're talking about the sunroof. They're talking about the leather seats. They're talking about the music system, all those other things. And that process is long. So this is why when it comes to selling higher ticket items, products 500, 1,000, 2,000, 5,000, 10,000, 20,000, you need a lot of touch points.

They say in business and marketing, there's this famous saying that most customers need 7 to 12 touch points. A lot of customers will need a lot more than that to buy higher ticket items. This is why webinars, right? And a webinar is like a live or pre-recorded one or two hour training. This is why webinars, live events, and virtual challenges do very well to sell high ticket because they are allowed to take a user through a journey. There's multiple touch points. But this is also why when you get people to register for a webinar or a live event online, only 20 or 30% of people show up. And then another 50% or so leave before the pitch. And then when the pitch comes on, only 10% are buy. So it's like a percent of a percent actually buy. There's so much drop off. So that will not work if you're trying to sell a bag of

$2 Harry Bowes or candy or a Hershey's bar, because there's way too much drop-off time and money to fill that to sell a $2 product. However, if you sell a $20 product, a $20,000 product on the back end of that, even with, you know, 100 people registering, 30 show up, 10 of them leave during the event, 20 are there at the time of the pitch, and three of them buy, well, that's still great news, because out of 100 people, if two or three buy, that's 40K, right, or 60K, three of them buy, well, that's still great news because out of 100 people, if two or three buy, that's 40K, right? Or 60K, or even one buy, it's 20K. That's still really, really good. That's still really good ROI for getting those 100 people. Say 100 people cost $330 a lead, that's $3,000, right? $3,000 spend, 20K back, that's a super profitable funnel. So you've got to, but if you only sold 10 Hershey's bars and made $20 from free grand in spend, not a profitable

funnel. You see the difference, right? So it's super important that you're picking the right type of sales process, the right type of landing page based on the product, and you're creating enough touch points, you're creating enough of an experience if you're selling higher ticket. Whereas if you're selling the candy bar, the cheap products under $100, you've got this clear and simple process where it clearly demonstrates the product, what they get, why it's unique, how it works, and then they can make an immediate transaction in five to 10 minutes or less because someone buying a candy bar wants to spend less than five minutes in Walgreens or CVS to buy it, okay?

So that's the first part when it comes to buying psychology, okay? The next part that I want you to understand that I worked with a lot of my members on is the perception of value aspect, okay? And I ran this analogy with my members. I said, think of a cheap car, used 10, 15 years old, and then think of an expensive car, right? So both of these cars, why does anyone own a car? Think about it right now. The main reason everyone owns a car is to do one purpose,

go from A to B, the main reason, to go from A to B, right? We all agree. Why would anyone own a bike? To go from A to B, okay? So we have transportation in place to go from A to B, the same with a jet, right? So a car is in place to take someone from A to B. So how is it that you could get a used car, 15, 20 years old, old, you know, beat up car, right? For a few thousand dollars, let's say $5,000 or less, right? In England, you can get a car for $1,000, cheap, super cheap, right? They'll still get you from A to B, okay? But then top of the line Bugatti or, you know, some super unique one-of-one car, right? Lamborghini or something can cost you 3 million, 2 million, 4 million, 5 million, right? I mean, one of the

most expensive cars in the world is $5 million. So how can you take the same product that takes you from A to B, the same product goes from A to B, right? How can one of those products cost $5,000 and one cost $5 million, right? That is a big difference, a big gap. And even if we go in a smaller gap, one product can cost $5,000. I can go outside of my office now on South Beach and see some cars that are $5,000, $6,000, $7,000, $8,000 on the road. And then I can also go outside of my office on South Beach and see many Lamborghinis and Rolls Royces that are free for $500,000 cars. Why? Why is that true? When the product does the exact same thing, it gets you from A to B. This is the secret that most of you are missing when it comes to your products and your branding, okay? The only difference, the only difference between those

two products is the branding and the perks, the add-ons, the extra items, the bits that make it unique. And these two items is what your business is missing right now. You're competing with everyone else trying to sell the $5,000 car when there's a few people in your industry out there selling the $200,000, $300,000, $400,000, or even $5 million car, right? Even though at their core, they do very, very similar things. So think to yourself, how do you create a business and a product where you fill it with perks so you can sell the higher amount? So a good way to think about this is what is it that everyone's looking at when they jump from a $5,000 car to a $100,000 Porsche, right? Or Mercedes. Let's think about it. Well, they're looking at the

exterior, how the car looks. They're looking at the brand. How well is the brand known and what does the brand add to me? What's the perceived value of the brand? And does the brand increase my, you know, my personal image, right? Next, they're looking at reliability. How long will it last, right? What is the reliability and value for how long it will last? What is the safety? What is the interior look like, okay? What is the leather seats like? What is all of the other perks and features? Okay. So all of those things are external to the main product. They're add-ons or additions to the main product that can influence and sway buying behavior and they can influence and sway the price. So what I want you to think about for your own brand right now is how do I create all of those things in the middle that will take my product from a $5,000 car all the way

up to a $50,000 or $100,000 car. Because don't get me wrong, building the one of one $5 million Bugatti is very, very hard to do in any industry, right? And you don't see many of them and they don't sell many. So let's not go there. Let's go to the more higher premium tier where they still sell high volume. OK, because that's a sweet spot for a lot of us. So these are all things that you should be working on and buffering out in your product. OK, extra bonuses, extra features, bells and whistles, and then building the brand name, strength and reputation. So people want to buy in to doing business with you. A good example of this is a lot of people have sales trainings. A lot of people have masterminds. A lot of people have coaching programs and marketing.

But there's a reason that people like myself, Grant Cardone, other famous entrepreneurs in this space with big, big communities are able to charge a lot more and have a lot more people in it. Why? Not necessarily because of all the extra things we offer. Don't get me wrong. I'm sure some of the best programs out there, including mine, we do have lots of perks. Like I have a big coaching team, right? My coaching team is bigger than most of my competitors' entire employee list. I have 12 to 15 staff just in the coaching team. Most of my competitors have

12 to 15 staff total across their entire business with one or two coaches, right? So there are definitely perks within it. I have a much bigger team, right? And community, for example. But outside of that, it's the brand effect, okay? People want to come and hang out with me, come and take photos with me. People want to come and hang out with me, come and take photos with me. People want to come and hang out with Grant Cardone and come to his office and come to his events and take photos with him. So there's that branding effect where two products, even if they did identically match, can cost a lot more. And another good example of this is cars, right? So similar cars will be made by similar manufacturers with similar engines,

but a separate brand with slightly different exterior can be $20,000, $30,000, $40,000 more because of the brand. So that's another massive part of buying psychology is what's included, what are the features, what are the benefits? And that's where it becomes up to you, the CEO or the marketer, to really buffer that out to take your product from the $5,000 product to the $50,000 or the $100,000 product. Okay. And if you're a bit stuck or lost how to do this, I actually did an exercise with my community on a live training where I had them go into ChatGPT and I had them talk about all the perks and benefits and what their product did. And then I had them work with chat GPT to give them five or 10 ideas of add on products or

extra additional items that would drastically increase the perceived value so they could charge 10 times more. So you just go in and ask chat GPT that you have to feed it with all the information about your product and what they get and all the outcomes. And then when you do that, you can actually get a ton of incredible ideas. And all my members loved it. They had a bunch of ideas that they're now going to go and add on into their products or their services to drastically increase the perception of value. This makes it easier to sell at the current price point. And in most cases, it lets you increase the price point and sell just as many because you built out a much better strategy and system to sell that product. You had a much stronger offer, clearer deliverables, clearer benefits, more bells and whistles, a stronger brand that increases the price point. This is all buying psychology. The product,

the core product of what it does driving from A to B still remains the same, right? It's the same in marketing. Our marketing program still helps the clients grow their business. It's the same thing, but how we do it is very, very different, okay? So that's a bit of a one-on-one on understanding buying psychology, okay? Understanding how to create additional offers and promotions within your product, right, or bonuses to increase the perceived value. And the last thing I want to talk about briefly before we wrap today is the stages of awareness. OK, I've talked about this in previous trainings, but the stages of awareness, to summarize, is where the buyer is in their process. OK, so most people are in the unaware phase. They don't even know about

your product or service or that industry or if it exists or not or how it works, okay? They're probably not a good customer. The next phase is people that are aware, but they're not quite ready to buy. They're still figuring out what if it's a good solution and how it works, okay? So they're a pretty big size pool, okay? If you imagine turn a pyramid upside down, the top of the pyramid, if it's turned upside down, is the massive pool of the rest of the world that have no clue what you do, no clue what it is, and no interest. So let's scrap those people for now. The next level down on the pyramid is people that are kind of aware of the problem and they're kind of

aware of what this thing is, but they don't really understand it fully, right? So let me give you an example of that. That's people that know they need to lose some weight, but they don't really know what diet to do. And they're kind of thinking about it and they don't understand like a ketogenic diet, which is what you teach, right? Using this analogy. So they're not a bad group of people because there's millions of them most of the time, but they require a lot of education and nurturing to really understand like, A, they need to lose weight, getting serious about it, understanding how it works, understanding your diet plan is the best diet plan, and then understanding who you are and how the program works. There's a lot more steps, right? So let's go to the, and they can be good as you want to expand, but they're a bit hard to tackle

in your first few million. Let's go to that next phase. This is where it starts to get interesting. This group of people, right, they are looking for a solution. They want to lose weight. They've heard about low-carb diets. They've started to look at that. They're thinking about, is this the right diet for me? They are the perfect person for you because there's a lot of them, okay? And they're in the phase where they're ready to take action, right? So they're going to be who you create most of your advertising and content for. The stage below that, we get into the tip of the pyramid, upside-down tip, right, near the bottom.

There's a lot less of these people, but they already have decided they want to do a low- pyramid, upside down tip, right near the bottom. There's a lot less of these people, but they already have decided they want to do a low carb ketogenic diet. And they've heard of maybe your program, high, high interest level, very easy to sell to compared to some of the previous bigger groups. However, there's not many of them. And they're also looking at your competitors. The next group, people that have already looked at your program and they are on the cusp of buying. They've seen the product. They've seen testimonials.

They just haven't made a decision yet. And then the final group below, right at the tip of the pyramid, if it's upside down, right? The final group are people that have already purchased, okay? And now they're looking at doing more with you, referring their friends. So understanding those levels of the buying process and the buyer journey is very important when it comes to psychology too, because you have to tailor your messaging, your content, how you deliver it, what ads you run to those different people. Now, those people at the top

of the pyramid are the massive groups of millions of people, but you can't run an ad to them and say, join my $5,000 one-on-one ketogenic coaching program, right? Because they don't even know who you are. Most of them aren't even ready to lose weight or don't know what a ketogenic diet is. However, at the tip of the pyramid, upside down, right at the bottom, those people you can, because they already bought your ketogenic diet plan, and now they like you, they know who you are, they got some good results, they're looking for that next step. So it's really important to They already bought your ketogenic diet plan and now they like you. They know who you are. They got some good results. They're looking for that next step. So it's really important to understand where people are in your buying process, right?

And their own process, because that's going to also tailor how you sell to them, how you message to them, what type of content you create. Okay. And we can use that boat analogy too. Someone that's already been looking at different boats. They've come into your your boat shop before. Right. They're a perfect person to text message, to call, to send a printout when you get new seasons of boats in or you have a big discount because they're interested in buying a boat. However, selling to a bunch of people that have never thought about buying a boat. Right. So you go to the middle of the country. there's no lakes, there's no water around, they're in a lower class neighborhood, they're probably

the worst customer to buy a boat from. They don't have water near them, they have zero interest, and they have no money. Terrible group of audience to try and sell your boat to. So knowing where to sell your boat and who to sell it to and how to advertise to those people is also very important. And there you have it, guys. That's the 101 on buying psychology. And there's more. There's a lot more. But those three things are three fundamentals you must understand and master. And I promise when you do, your marketing will become a bit more effortless, right? It's still going to be hard because marketing is hard, but it'll start to click and you'll start to understand who to advertise, how to advertise, what to write to them and where

they are in the process and how to position your products and sales processes based on what your customers need. I hope you enjoyed today's session. That's more of advanced marketing stuff that I try and teach you guys occasionally. And I teach my high level members. I hope you enjoyed it. Drop me an Instagram if you did share it to a friend or some other marketers or brand builders you know, so they can learn this stuff too. And I'll see you in the next episode. Take care.