Originally Posted by James81
And I don't think Steve looks at pricing in terms of costs anyway. I think he looks more in terms of value. What value is offered by this product? At least that's how I imagine he looks at it based on his blog posts.
And when I look at it like that, and look at he cost of the seminar itself (Which was like $500, right?), I ask myself...is the value of the DVD really considered to be half (or over half) of the value of actually attending the seminar?
I don't approach this from a cost-plus model because it doesn't make sense to do so in this case. Value is a big part of it, but it's not the only consideration. In terms of value, my main goal there is to underprice what I offer, so there's way more value for most people than what it costs. Then that excess value overflows into goodwill, which in turn helps generate more referrals.
I designed this workshop with a particular type of person in mind. It was never intended for someone who can't afford or wouldn't feel good about spend a few hundred for it. If I try to sell this to people for whom it's not a good match, it will only create customer service nightmares because those people will be disappointed.
People who are broke or close to it generally use a different approach to trying to solve problems than people who can easily afford such a product. Those differences (and the ultimate causes behind them) will make it hard for them to relate to the content. They will most likely either be lost or frustrated by it.
When I create something intended for people that are broke, I release it for free and charge nothing for it, using a media like blogging or podcasting.