The $400 Ham Sandwich: Why Your Brain Can't Handle Pricing

Ever stood in line at a fancy coffee shop, looked at the $7 price tag on a latte, and thought "Well, at least it's not as expensive as that $9 one with the gold flakes"? Congratulations, you've just been anchored harder than a cruise ship in a hurricane.

Here's the thing about your brain: it's basically a cave-dwelling ancestor wearing a business suit, desperately trying to make sense of numbers it was never evolved to handle. Our hunter-gatherer ancestors never had to decide if a $400 coaching session was worth it – they were too busy figuring out if that berry was the kind that made you see spirits or the kind that made you violently ill.

The Anthropology of "Expensive"

Let me tell you a story about my friend Sarah (not her real name, but she'd kill me if I used her real one). She runs a consulting business and was charging $120/hour because... well, that's what everyone else charged. One day, she's at this fancy steakhouse in Manhattan, and the waiter casually mentions their wagyu sandwich special: $400.

Sarah choked on her $25 glass of wine.

Two days later, she's setting her new consulting rates, and suddenly $250/hour doesn't seem so crazy anymore. That $400 sandwich rewired her entire perception of value.

Your Price Is Someone Else's Anchor

The wild part about anchoring that most people miss: it's not just about YOUR prices – it's about your entire market's psychological ecosystem. Think about it:

• If you're selling business coaching, you're not just competing with other coaches

• You're competing with every price signal your client has ever received

• From their $6 morning latte to their $2000 Peloton

• From their kid's $40,000/year college tuition to their neighbor's $100,000 Tesla

The Scale Problem No One Talks About

"But wait," you might be thinking, "I'm trying to scale my business. Won't higher prices mean fewer clients?"

Here's what I've learned studying how humans actually make decisions (as opposed to how economists think we make decisions): We don't value things based on some rational calculation – we value them based on stories, context, and most importantly, the pain they solve.

Let's break this down:

Low Price, High Volume Is a Trap

• When you charge less, you need more clients

• More clients mean more complexity

• More systems mean more costs

• More costs mean... you need even more clients

It's like trying to fill a leaky bucket by adding more water instead of fixing the holes.

(P.S. "Low price" is relative to your industry. What's considered low for management consulting would be astronomical for dog walking. We're talking about positioning within your specific market, not absolute numbers.)

Let me share a real story about this. When I was running MotivBase, something fascinating happened: every time we increased our prices, we sold more. Yes, you read that right. MORE. It made us uncomfortable at first (okay, every time), but anchoring became our secret weapon.

While some clients did purchase our most expensive tier, the majority landed exactly where we wanted them – in the middle tier. This wasn't just good for our revenue; it transformed our entire business model. For every million dollars in revenue, we needed to sell dramatically fewer units, and our cost of acquisition dropped exponentially. That's the magic of smart anchoring.

The Real Anchor Should Be Impact, Not Industry

Your pricing anchor shouldn't come from:

• What others in your industry charge

• What you think people can afford

• What feels "reasonable"

It should come from:

• The transformation you provide

• The pain you eliminate

• The future you enable

The $1M Ham Sandwich Principle

My radical proposition: Your prices should make you slightly uncomfortable. If they don't, they're probably too low.

Why? Because pricing isn't just about exchange – it's about identity. Every price you set tells a story about:

• Who you think you are

• Who you think your clients are

• What kind of future you're creating

What Now?

Take a hard look at your pricing. Are you anchoring it to:

• Your competitors? (Stop that)

• Your past prices? (Also stop that)

• Your comfort zone? (Definitely stop that)

Instead, anchor it to:

• The transformation you provide

• The elite level of service you deliver

• The future your clients want to create

Ready to Reset Your Money Mindset?

P.S. Speaking of anchoring – the most expensive sandwich ever sold was at an auction for $28,000. Suddenly, that $400 wagyu sandwich seems like a bargain, doesn't it? 😉

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