Summary of What Makes People Buy? Price & Value Masterclass w/ Ron Baker

00:00:00 - 00:55:00

In the video, Ron Baker discusses the importance of value in customer service and subscription-based businesses. He explains that customers are willing to pay more for a product or service that they perceive to be of higher value, and that businesses must constantly strive to improve their offerings in order to keep up with customer expectations.

• 00:00:00 The speaker discusses the importance of value to customers, and how companies that focus on value to their customers (such as Disney and Sea World) are able to charge higher prices than their competitors. He goes on to talk about his own experience as a cpa, and how he realized that billing by the hour was a poor customer experience. He then started his own accounting practice and became a certified public accountant (CPA). He discusses how his background as a cpa and his experience in taxes helped him develop his ideas about value pricing. He talks about how people can learn about value pricing by reading his book, Implementing Value Pricing. He concludes the talk by discussing how value pricing can help creative professionals in the industry, and how listeners can apply what they've learned by watching and listening to the talk.
• 00:05:00 In this video, Ron Baker discusses the theory of market value, which holds that commodities (like a diamond or a rock) have no intrinsic value and that what makes something valuable is what a person perceives it to be. He also explains the theory of cost-plus pricing, which states that price justifies the cost of a business. This theory helps businesses stay afloat when consumers' values change.
• 00:10:00 In this video, Ron Baker discusses the concept of "cost plus pricing," which is when a company charges more for a product because of the cost of producing it as well as the cost of labor. He believes that this mindset is an entitlement and that it is selfish for buyers to engage in this type of pricing. He goes on to say that when a product is priced according to cost plus profit, it is easier for businesses to go bankrupt because it costs more to produce something and more labor is involved. He finishes the video by discussing the importance of brands and how consumers are drawn to them because of the promise that they represent.
• 00:15:00 Price is one of the factors that determines whether a purchase is made. When buyers and sellers are able to agree to a price, it is called a "just price." Prices send signals to buyers about how to allocate their resources, and anti-trust laws should not be used to determine if a price is fair. A market with a wide array of prices is healthy and allows for specialization. When a market is healthy, businesses can rely on customers to tell them what they think is worth it.
• 00:20:00 Ron Baker discusses the concept of "value" and how it applies to pricing. He explains that, in order to price based on value, customers must be able to have a conversation about what they are willing to pay. He provides an example of a situation where a customer is frustrated with a contractor, and how a value-based pricing system would help to resolve the issue. He also discusses the benefits of price discrimination, and how it can help to improve an economy.
• 00:25:00 Ron Baker discusses what makes people buy, how prices and value vary depending on the situation, and how a good value conversation can help identify the best option for the customer.
• 00:30:00 Ron Baker discusses the importance of framing and articulating one's value to command premium prices. He explains that the possibility pursuer is a concept that is also applicable to professional services, such as marketing and pricing. He cautions businesses against relying on hourly pricing, as this can lead to customer confusion and potential problems down the road.
• 00:35:00 In this video, Ron Baker discusses how to attract and retain customers. He explains that, if you specialize in a certain field, it will be slower growth, but more profitable. He also discusses how self-esteem and reputation are key factors in pricing.
• 00:40:00 Ron Baker discusses the concept of "value pricing" or pricing that creates value for customers over time. He argues that a professional firm is defined by its customers, not by its services. He also discusses the trend of professional firms moving to a subscription-based model.
• 00:45:00 The video discusses how subscription-based businesses, such as porsha drive, are different than traditional businesses. It cites an example of a cpa who converted to subscription-based work and saw his revenue increase by 600%. Ron Baker also discusses how subscription-based businesses can be valuable to customers and how they must constantly up their game in order to keep customers.
• 00:50:00 Ron Baker discusses the importance of price and value in the customer service industry, explaining that customers will pay for peace of mind. He also provides a list of recommended books on the subject.
• 00:55:00 Ron Baker discusses the importance of pricing and value in the subscription space, and how his upcoming book, Value Pricing 2.0, will help businesses succeed in this new era.