Premium-priced products are everywhere – in digital marketing, in the service industry, even in the cigar business.
You can look at almost any company in any industry and see examples of how they use high-value products to bring in revenue.
Why should you use premium-priced products in your business?
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Video Transcript
[The following is the full transcript of this episode of The Legendary Marketer Show. Please note that in this episode, like all LM Show episodes, David’s words are unscripted and unedited.]
Hey, what's going on guys? This is Dave Sharpe. I am coming to you live here from Vegas.
Wonderful night. It's my birthday week. My wife and I are having a fantastic time. And I wanted to make a video for you because I'm actually sitting here enjoying a Behike.
Now, if any of you guys know anything about Cohibas… let me come in here.
There it goes! The Cohiba Behike. Now, the reason why I'm telling you about this cigar will be the same reason why I tell you about any cigar. That is because it's a unique cigar and sort of like many things in marketing, the marketing of this cigar has been absolutely brilliant, in my opinion.
The reason why I say that is because over the years, Cohiba, which originally was Fidel Castro's favorite cigar brand, has become almost a Loch Ness monster in the sense that – I guess that would probably not be the right analogy. Because you do obviously see them. But it's a mysterious one.
One reason, in particular, is because of the story of how it actually originated. Many people who are cigar fanatics know that the story of the Cohiba dates back to the 1960s, I believe. There was a guy who rolled them, and Fidel loved them. So this particular guy became Fidel's personal cigar roller. Then there was a little bit of drama, or beef, or misunderstanding, or something, and the guy no longer wanted to be the roller. So it was sort of unknown who took over the company and what blend of tobacco they were using.
Were they still using the original blend that Fidel loved, or did they introduce a new blend?
Anyway, lo and behold, over 60 years later, the cigar is still around, and is probably right there rivaling with the Monte Cristo out of Cuba, the most popular and sought-after cigar in the entire world. There's a reason why. The cigars are fantastic. As you guys know, I love to smoke cigars. Cigars are absolutely fantastic.
One of the things that I think Marketers can learn from this cigar, from the story, is that – one lesson is premium pricing works. This is a premium priced cigar. This particular Behike, which is actually only about 4.5 inches, is priced at a modest – wait for it – $100.
This is a $100 cigar that I am holding in my hands right now. This is the Behike 52. There's a Behike 54 that's a little bit bigger than this. And then a Behike 56 that's even bigger than this. Those are priced, respectively, $100, $120 I believe, and then $140.
So premium pricing works, right?
One of the things that premium pricing does in your marketing is it creates a perceived value of whatever product or service that you're selling, that there's more quality or value in the product.
Now, obviously, one of the things that you want to make sure that you do is actually fulfill on the value. If you're charging a lot of money, you want to make sure that you fulfill on that value.
But they do. The cigar is fantastic. They really fulfill on the value. Smoking it is a creamy, smooth smoke. Although it's a medium to full body cigar, it's a cigar that's going to give you a lot of creamy, nutty, coffee notes, and things of that nature. It's definitely going to fulfill on the medium to full promise of its strength, but it's also going to be one of the smoothest cigars that you ever smoke in your entire life.
That's important because, mainly, and universally cigars are pretty well known to be harsh on the throat and not enjoyable, but smoking a Cohiba, particularly a Cohiba Behike, is pretty enjoyable. Even to the person who might think most cigars are pretty harsh to the taste/
So premium pricing works. If you don't have a premium priced product in your value ladder, then you should probably get one. You should probably try to introduce one, whether it's some sort of a product or service that you introduce to your own product line. For example, if you're not selling something that's premium priced, Cohiba sells a lot of cigars that are around the $30-$40 range. Those are probably going to be the cigars that most people around the world buy the most of. But they're also going to be selling these premium-priced cigars.
Now, Cohiba also has one line in particular that I'm thinking of, is called the 1966. This particular cigar is priced at $750. That makes this modestly priced $100 cigar actually seem relatively cheap, right?
So why is there a huge marketing lesson there? There's always going to be somebody in your customer or leads prospect list who is going to be willing to pay more for a more valuable product or service. Or a more luxurious or intimate experience with you, or some sort of a higher level, done-for-you, whatever your product or service is – you get the point.
There's always going to be somebody. It's going to be a lower percentage of people who are going to be willing to pay a higher price for a more valuable product. So for me, over the years, I really subscribed to the idea that Jay Abraham – that I heard him come up with for the very first time. I'm not going to try to reinvent the wheel or say it any differently or more smartly than he did.
There are only three ways to make money from a customer: number one, go get more customers. Number two, do business with that customer consecutive times. So over and over. Subscription services, things of that nature. And the third way, simply, is to charge more money. To sell a higher priced, more valuable product. If you remember those three rules, then you can simplify your business, right?
A lot of people I see, either their business dies of over-complication, or they're just looking for some magical, secret fix, when really it just boils down to – are you going to get more customers, are you going to try to do business with those customers more times, and are you going to charge those customers more money?
For me, I obviously like to do all three. But I'm not going to try to over-complicate it and go outside of that philosophy. That's a very specific structure. It's an equation that works if you work it. Cohiba definitely worked it.
Again, if you don't have a high price, high-value product that will net you either high commissions as an affiliate, or high revenue as a business owner, then go out and get one, obviously. Create an offer. Think, what do I do that if I did more hands-on or more exclusively, or if I gave people more intimate access to me, could I charge more money for it?
I'm talking about in the five to tens of thousands of dollars for it, right? That's a good, high ticket product. Some people consider high ticket $1000, $2000, $3000, but I really think that you can legitimately go higher because there's always going to be somebody out there who's willing to pay it if you have a transformational product or service.
If you don't have a product or service that you can sell, because you're in maybe affiliate marketing, then go out and find a company that will allow you to be able to market a high-value product or service that they will pay high ticket commissions on, as an affiliate, or really you're just leaving a whole bunch of money on the table.
So those are your two options. Either create your own product if you have a business or be an affiliate of a product. There are ways that you can combine this. I see people doing multiple things. You can have your own lower ticket product on the front end because you don't really want to fulfill, so you don't want to deliver on the higher priced, more valuable products. So maybe you sell your own low-ticket product on the front end, then you actually promote an affiliate offer, or somebody else's product, on the back end as your high ticket product. That's an option.
Or you can find a company that actually will offer low ticket, medium ticket, and high ticket products for you to be able to market. Again, if I had a cigar shop, and it's sort of the same way that cigar shops operate. Cohiba allows them to sell their cigars in their store, and Cohiba essentially lets them get a cut of the business.
So affiliate marketing, those of you who watch my videos, or if you're finding my videos and think that the only way to build a business is to create your own products and services, you are sadly mistaken. One of the smartest ways is to get started in affiliate marketing. I'll drop my recommendations below.
Obviously, I own a company that does that. We do it very successfully. I'll drop my recommendations below for you to be able to take advantage of what I think is going to because companies are often not what they say they are, I know what we do. I'll leave that down below in the description as an option for you to click. You can just click on the little arrow below this video and click that link. Go over and see what we do, because we may be able to give you an option that is almost a done-for-you set up option – similar to you having a cigar shop and just deciding to sell somebody else's cigars.
At the end of the day, sometimes going and rolling your own cigar, coming up with your own blend, that's a difficult thing. Sometimes starting a business can be a difficult thing too, so that's why affiliate marketing is smart.
Whether you decide to do affiliate marketing or have your own business or you have your own business and you don't have a high ticket product yet, you are just drastically missing out on such a huge piece of the puzzle.
I am going to enjoy this cigar. I've already cut it here. I'm actually going to try to light it up here and let you check out the first few puffs of the cigar. It's probably going to be a cigargasm – kind of like an orgasm, but with cigars.
One of the things that you see me doing here and a lot of cigar smokers have a preference of matches over butane lighters. For me, my only real rule is don't use like a Bic lighter, because that is really going to infuse a lot of chemicals that you don't want into your cigar. I use a butane lighter a lot of times. Right now I'm using matches because traveling, you aren't allowed to take those through the airport.
Absolutely one of a kind. Cohiba Behike. There you go.
Picking up just a smooth, creamy, graham cracker-y, cinammon-y, just love. Just absolute love. Unbelievable cigar. Unbelievable time here in Vegas. Unbelievable lesson that Cohiba gives us as entrepreneurs and marketer to learn from.
I don't just like to enjoy a company's products. I like to learn from a company what they are actually trying to tell us. What can we actually pick up to implement in our businesses that have worked so well for a company that's so old, that successfully sells something that you sit and smoke within 45 minutes to an hour – and you're done with it – for $100 to $150 to $750 a stick.
Gosh, are there some amazing gems, some amazing marketing lessons we can take. No matter what you're enjoying, whether it's a fast food burger or whether it's a $100 Behike Cohiba cigar, try to pay attention to the lessons that you can learn to implement into your business because they're everywhere.
Most people don't choose to pay attention, they choose to be consumers instead of creators. When you make that switch from consumer to creator, you really open up a whole new world. It's like seeing the world through a different set of lenses. It's like literally putting on a pair of glasses, and you now see the world in a completely different way. In a way that you can profit from instead of just getting profit from you.
That way, now you're not just becoming part of the economy in a way that you end up broke at the end of the day, but you might actually have a shot at getting rich. If you look at everybody's to-do list, it's pretty high at the top.
You might be wondering what I'm drinking. That's going to be a Perrier in a wine glass with a little lime. That's my go-to. All the time, every single day, lots of Perrier, Pellegrino, Saratoga.
It's going well, it's bringing out the flavors, or at least preserving the flavors, on my palate – this wonderful Cohiba Behike. Medium strength, unbelievable draw right out of the gate. I'm gonna sit back and just enjoy this cigar. The music looks like it's going to crank up. My wife is up in the room. It's been a long day – it's 10:15. A long day of shopping and hanging out here in Vegas.
So I'm going to enjoy this Cohiba.
Make sure you subscribe to this channel. Lots more cool stuff coming if you like videos like this where I review cool stuff, go on marketing rants, and even review other peoples' marketing to tell you what's really going on.
Subscribe, watch your email for new videos, and I'll talk to you later.
Alright, my friend.
