The Economics Behind What You Offer

Here are the important lessons from Brian Tracy’s principles of economics for entrepreneurs.

I. People prefer more to less. If you were offered $10 thousand or $100 thousand dollars to the same job (all things being equal), which would you choose? People aren’t greedy, they just prefer more to less.

II. People prefer sooner to later. If you could receive this money on the 1st of January or the 31st of December, when would you choose receive it? Few people choose the annuity payout lottery winnings. People aren’t impatient. They just prefer to receive a benefit sooner rather than later.

III. People prefer easier to harder. If you could earn the money doing an easy job or a harder job, which would you choose? People aren’t lazy. They just want things to be easier.

IV. People prefer certainty to uncertainty. If you could be absolutely certain you were receiving this money or you could choose a degree of uncertainty, which would you choose? People aren’t afraid, they just prefer certainty over uncertainty.

Don’t Lower Your Price, Raise Your Value
Your goal is to sell free products to purchasers. That means the benefit the customer receives is perceived to be greater than the price they pay. All customers want to know “What’s in it for me?” Sometimes your customers leave for a competitor charging a lower price. Are they leaving because of price? No, they are leaving because the cost/benefit ratio is better somewhere else. They are saying that the price difference between your product and your competitors does not outweigh the benefit value you offer. What can you do about it?

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