Most service businesses set their prices using a mixture of guesswork, what they charged last year and what they think clients will tolerate. That’s usually how people end up doing very good work for far too little money.

In this video, I explain a fairly crude but useful way of working out what you should actually be charging.

We start with the number most people ignore: what it genuinely costs you to take the work on once you include your salary, tax, insurance, software, travel and all the other small expenses that quietly add up over a year.

Then we look at the upper end of your market, why your competitors’ prices are useful when you’re establishing yourself but eventually become irrelevant, and how to test a new price properly rather than asking people what they’d theoretically be willing to pay.

I also cover why winning every piece of work can be a warning that you’re too cheap, what a rejection actually tells you, how anchoring keeps businesses stuck at old prices, and how to move existing clients onto higher fees without turning the whole thing into a negotiation.

I’ve also created a calculator to help you work out your own minimum viable fee. You can find it here:

https://www.luxuryacademy.co.uk/cost-calculator/

If you sell consulting, training, advisory work or another professional service, this should at least give you a much better idea of the figure you should never be going below.

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𝗠𝗮𝗶𝗻 𝗬𝗼𝘂𝗧𝘂𝗯𝗲 𝗖𝗵𝗮𝗻𝗻𝗲𝗹: https://www.youtube.com/@luxuryacademy
𝗟𝗲𝗮𝗿𝗻 𝗺𝗼𝗿𝗲 𝗮𝗯𝗼𝘂𝘁 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆: https://www.luxuryacademy.co.uk/
𝗦𝗶𝗴𝗻 𝘂𝗽 𝘁𝗼 𝘁𝗵𝗲 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆 𝗡𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://www.luxuryacademynewsletter.com

Is your online presence doing your actual business justice? In this interview, Sandra Baas of Baas Studio reveals why most websites and LinkedIn profiles fail the "3-second test" and how founders can fix it.

Learn why you must narrow your focus, how to use AI to find your unique tone of voice, and a step-by-step priority list to upgrade your digital footprint this weekend even if you have zero budget.

Connect with Sandra here:
Website: https://www.sandrabaas.com/
LinkedIn: https://www.linkedin.com/in/sandrabaas/



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𝗠𝗮𝗶𝗻 𝗬𝗼𝘂𝗧𝘂𝗯𝗲 𝗖𝗵𝗮𝗻𝗻𝗲𝗹: https://www.youtube.com/@luxuryacademy
𝗟𝗲𝗮𝗿𝗻 𝗺𝗼𝗿𝗲 𝗮𝗯𝗼𝘂𝘁 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆: https://www.luxuryacademy.co.uk/
𝗦𝗶𝗴𝗻 𝘂𝗽 𝘁𝗼 𝘁𝗵𝗲 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆 𝗡𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://www.luxuryacademynewsletter.com

Premium and luxury aren't the same thing, and most of the businesses calling themselves luxury are running a premium model. Which is fine, and a good business, right up until you start pricing and talking like the other one.

In this video I go through what premium actually commits you to, why high end is a fairly stupid thing to say about your own business, and what's become of bespoke, curated, artisanal and the rest of the words the sector has worn out.

There's a real difference between bespoke, made to measure, customised and personalised, and it's worth knowing because they don't cost the same. There's also the 2008 Advertising Standards Authority ruling that lost Savile Row the word bespoke, which most people in the trade have never heard of.

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𝗠𝗮𝗶𝗻 𝗬𝗼𝘂𝗧𝘂𝗯𝗲 𝗖𝗵𝗮𝗻𝗻𝗲𝗹: https://www.youtube.com/@luxuryacademy
𝗟𝗲𝗮𝗿𝗻 𝗺𝗼𝗿𝗲 𝗮𝗯𝗼𝘂𝘁 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆: https://www.luxuryacademy.co.uk/
𝗦𝗶𝗴𝗻 𝘂𝗽 𝘁𝗼 𝘁𝗵𝗲 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆 𝗡𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://www.luxuryacademynewsletter.com

A marketing chap looked at my business a few years ago and told me, with enormous sympathy, that my problem was I had no visual assets.

He wasn’t wrong, I don’t make anything. I can’t photograph a client, most of them would prefer I didn’t confirm they’ve heard of me, and there’s a limit to how many times you can post a photograph of himself standing next to a lectern.

His suggestion was case studies. I said I’m contractually not allowed to write those. He said ah. Then we both studied the table for a while. Me thinking “I’m paying you a fortune for nothing”, I’ve no idea what he was thinking, that I was being difficult probably.

The trouble is he’d misread what my idea client was doing. Nobody who hires me is looking for a list of logos of companies I’ve worked with, besides they couldn’t verify it even if they tried.

What I sell is a credence good. You can’t judge the quality of it before you buy, and if we’re honest you can’t fully judge it immediately afterwards either, which is equally true of surgeons, solicitors, and a host of other service providers.

When somebody can’t assess the output, they assess the reasoning. It’s the only thing actually available to them.

So they listen to you think about a problem that isn’t theirs, and then decide from that whether you’d be of any use helping them on one that is.

Which is why the confidentiality is never the obstacle. I can’t tell you who I was with last week but I can tell you what I reckon happens in the two seconds after a salesperson hears an objection and starts talking too quickly, and you’ll have formed a fairly firm view of me by the end of that sentence.

Same for the private office, the close protection outfit, the divorce solicitor, and anyone else whose entire working life is unphotographable.

Confidentiality doesn’t stop you posting. It just stops you posting about the client.

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𝗠𝗮𝗶𝗻 𝗬𝗼𝘂𝗧𝘂𝗯𝗲 𝗖𝗵𝗮𝗻𝗻𝗲𝗹: https://www.youtube.com/@luxuryacademy
𝗟𝗲𝗮𝗿𝗻 𝗺𝗼𝗿𝗲 𝗮𝗯𝗼𝘂𝘁 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆: https://www.luxuryacademy.co.uk/
𝗦𝗶𝗴𝗻 𝘂𝗽 𝘁𝗼 𝘁𝗵𝗲 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆 𝗡𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://www.luxuryacademynewsletter.com

A boutique architecture practice wrote in with a problem. They can’t look at a new enquiry for a month, and they’re worried that telling someone who’s just spent $7m on a house will lose them the job.

A month’s wait won’t lose you the client but a month of silence most certainly will.

An enquiry is really three separate jobs, acknowledging it, then the first conversation, and finally the full review itself. Only the last one needs an appointment in your diary, and let’s be honest, the first two take no more than about half an hour between them.

In this video I discuss what to say on that call, and what a buyer is actually feeling in the fortnight after they’ve committed a fortune to something they can’t judge yet.

There’s also some homework you should be setting them while they wait, which makes sure they don’t get antsy waiting, idle hands and all that!

Although there are also two situations where none of this applies where you’re better off handing them to somebody else.

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𝗠𝗮𝗶𝗻 𝗬𝗼𝘂𝗧𝘂𝗯𝗲 𝗖𝗵𝗮𝗻𝗻𝗲𝗹: https://www.youtube.com/@luxuryacademy
𝗟𝗲𝗮𝗿𝗻 𝗺𝗼𝗿𝗲 𝗮𝗯𝗼𝘂𝘁 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆: https://www.luxuryacademy.co.uk/
𝗦𝗶𝗴𝗻 𝘂𝗽 𝘁𝗼 𝘁𝗵𝗲 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆 𝗡𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://www.luxuryacademynewsletter.com

You’ll happily pay £95 for afternoon tea at The Ritz, which is sandwiches, scones and a bit of cake. You would not pay £95 for the same sandwiches, scones and cake on the counter in Pret. You’d think somebody had lost their mind.

The food isn’t the difference. What’s changed is what you’re comparing it to. Before anybody looks at your price, they’ve already decided what sort of business you are, and they’re checking whether your number is normal for that sort of business. Not whether it’s fair, or whether the work is good. Just whether it’s normal.

That’s the problem most small businesses have. The work is excellent, the price is reasonable for the work, and it still reads as a cheek because everything else about them looks like something much cheaper.

In this video I explain how that judgement gets made, the two things that decide which group you get put in, and what to say when somebody tells you you’re too expensive.

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𝗠𝗮𝗶𝗻 𝗬𝗼𝘂𝗧𝘂𝗯𝗲 𝗖𝗵𝗮𝗻𝗻𝗲𝗹: https://www.youtube.com/@luxuryacademy
𝗟𝗲𝗮𝗿𝗻 𝗺𝗼𝗿𝗲 𝗮𝗯𝗼𝘂𝘁 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆: https://www.luxuryacademy.co.uk/
𝗦𝗶𝗴𝗻 𝘂𝗽 𝘁𝗼 𝘁𝗵𝗲 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆 𝗡𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://www.luxuryacademynewsletter.com

My mother can judge a bolt of cloth by rubbing the corner of it between her finger and thumb, and the maddening thing is that she can genuinely do it.

There's a fabric merchant, who must be knocking 300 by now, in Mumbai my family used for years, a man of quite heroic patience, and the ritual never varied. She'd take the corner, rub, hold it up to the light, hand it back, and deliver the verdict. He gave up disagreeing with her fairly early on.

So naturally I copied her. By about eleven I had the whole performance, the rub, the light, the considered pause, and not the faintest idea what I was feeling. The merchant would nod along gravely and then look at my mother.

Which is roughly where I stayed. Twenty odd years later I dismissed a bolt as far too coarse for a shirt, then admired the same bolt rather warmly some weeks after he happened to mention it had newly come in from Coimbatore.

I bought six yards of it. My mother, who missed nothing, said nothing at all, which was worse.

It's called need for touch, and it splits in two. There's instrumental touch, which is handling something to find out a fact you actually need, how solid the clasp is, how the weight sits in the hand.

And there's autotelic touch, which is handling something because handling it is lovely, and which carries no information whatsoever.

Her hands were gathering evidence, mine were simply enjoying themselves.

Most of what goes on in a shop is my version masquerading as hers, and the actual deciding was being done somewhere else entirely, by a man telling me where the cotton had come from and that it would make lovely shirts, just to trust him.

He was correct by the way.

So when someone tells me they can't sell online because the client can't feel or touch the product, I think they've misread what's gone missing. It isn't the cloth.

It's the merchant and that's a role that can be filled by lots of other things.

This week's newsletter episode is on exactly this, selling seriously expensive things to people who'll never set foot in a shop. Link in the comments.
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𝗠𝗮𝗶𝗻 𝗬𝗼𝘂𝗧𝘂𝗯𝗲 𝗖𝗵𝗮𝗻𝗻𝗲𝗹: https://www.youtube.com/@luxuryacademy
𝗟𝗲𝗮𝗿𝗻 𝗺𝗼𝗿𝗲 𝗮𝗯𝗼𝘂𝘁 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆: https://www.luxuryacademy.co.uk/
𝗦𝗶𝗴𝗻 𝘂𝗽 𝘁𝗼 𝘁𝗵𝗲 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆 𝗡𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://www.luxuryacademynewsletter.com

I get asked quite often how to look more expensive or luxurious.

And the question always expects me to name a brand as the answer. Which label, which logo will create the most impact. I understand the logic, if I wear Loro Piana I’m instantly buying credibility right? Not really.

Unless you’re wearing a huge glaring logo, nobody can see what you paid.

Price is invisible on the body. The people looking at you have no receipt to consult, so they do what brains always do with missing information, they infer it.

It’s called thin-slicing, we form judgements about status, wealth and competence within seconds of seeing someone, from whatever cues happen to be available.

And the cues that read as expensive are mostly free. Whether things go together, whether the clothes fit the body actually in them, whether the wearer looks at ease or slightly at war with what they’ve got on. You can get all of that right on a high street budget, and spectacularly wrong at Bond Street prices.

Which is where the logo comes in. A large visible logo feels like the safest route because it removes the inference altogether, it simply announces the number.

But announcements carry information of their own. The further up the wealth ladder you go, the softer the signalling tends to become, in most cases but not all. People at the top are usually only signalling to each other, and they can read the small cues perfectly well. Shout the price with a glaring logo and yes you’ve told everyone what you’ve paid but you’ve also signalled which audience you’re performing for.

A logo can’t rescue an outfit that’s fighting itself. In this weeks episode I speak to Savile Row tailor Nathalie May of Fielding & Nicholson about tailoring, fit and fabric.

𝗡𝗮𝘁𝗵𝗮𝗹𝗶𝗲’𝘀 𝗖𝗼𝗻𝘁𝗮𝗰𝘁 𝗗𝗲𝘁𝗮𝗶𝗹𝘀:
𝗟𝗶𝗻𝗸𝗲𝗱𝗜𝗻: https://www.linkedin.com/in/nathalie-may-3b6a0455/
𝗪𝗲𝗯𝘀𝗶𝘁𝗲: https://fieldingandnicholson.com/



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𝗠𝗮𝗶𝗻 𝗬𝗼𝘂𝗧𝘂𝗯𝗲 𝗖𝗵𝗮𝗻𝗻𝗲𝗹: https://www.youtube.com/@luxuryacademy
𝗟𝗲𝗮𝗿𝗻 𝗺𝗼𝗿𝗲 𝗮𝗯𝗼𝘂𝘁 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆: https://www.luxuryacademy.co.uk/
𝗦𝗶𝗴𝗻 𝘂𝗽 𝘁𝗼 𝘁𝗵𝗲 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆 𝗡𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://www.luxuryacademynewsletter.com

The question I get asked more than any other by founders of new luxury brands is some version of "we have no heritage, so how can we sell luxury?" And buried in that question is an assumption, that heritage is the active ingredient and everyone without it is selling a substitute.

Hermès was founded in 1837 and I'd be surprised if one buyer in a hundred could tell you that. Nobody in the queue is there for a history lesson. What heritage actually does is settle a very specific fear. At £200 the question is whether the thing works, and at £4,000 the question is whether you've been a fool. A century of other people making the same choice without regret calms that fear nicely. But it's one way of calming it, and far from the only one.

Jo Malone was blending scent in her own kitchen in 1994 and sold to Estée Lauder five years later. Louboutin opened his first shop in 1991. Strathberry is barely a decade old. None of them had a founding story to stand on, and all of them sit comfortably alongside the old houses now.

And some of the heritage we do revere is invented anyway. Creed tells the world it was founded in 1760 and scented the crowned heads of Europe. The paper trail begins around 1970. Sales haven't suffered in the slightest, which rather gives the game away. If a marketing department can write the story, the story was never what held the price up.

In this week's newsletter I go through what a new brand can actually use instead, borrowed provenance, costly signals, manufactured recognition, and the one thing you must never do, which is dress up as your own grandmother.

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𝗠𝗮𝗶𝗻 𝗬𝗼𝘂𝗧𝘂𝗯𝗲 𝗖𝗵𝗮𝗻𝗻𝗲𝗹: https://www.youtube.com/@luxuryacademy
𝗟𝗲𝗮𝗿𝗻 𝗺𝗼𝗿𝗲 𝗮𝗯𝗼𝘂𝘁 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆: https://www.luxuryacademy.co.uk/
𝗦𝗶𝗴𝗻 𝘂𝗽 𝘁𝗼 𝘁𝗵𝗲 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆 𝗡𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://www.luxuryacademynewsletter.com

Two questions came in on the channel this week that turned out to be the same question. “Can you charge luxury prices as a service provider without a physical product?”.

The answer is yes, though probably not in the way you might expect.

If somebody buys a handbag, they can pick it up, look at the stitching, feel the weight of it, and walk away believing they've judged something.

Nobody can do that with advice, and they can't do it afterwards either. Six months on, the deal has closed and the strategy worked, and the client still has no way of knowing whether that was you being exceptional or whether anyone competent would have got them there.

Economists call this a credence good. Law, consulting, coaching, therapy, wealth management, all of it.

Clients don't do well with uncertainty. They resolve it by finding something they can observe and letting that stand in for the thing they can't judge.

And of course, the loudest thing on offer is nearly always the price. Which means your fee isn't simply what you charge. For a client with no other way of evaluating you, it may be the strongest evidence about you they'll ever see.

Which changes the problem entirely. You don't need to justify the number because the number is already doing a lot of the work for you.

What you need instead is for everything around it to support it rather than undermine it. Most proposals I see tend to do the opposite.

That’s what I discuss in this week’s newsletter.


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𝗠𝗮𝗶𝗻 𝗬𝗼𝘂𝗧𝘂𝗯𝗲 𝗖𝗵𝗮𝗻𝗻𝗲𝗹: https://www.youtube.com/@luxuryacademy
𝗟𝗲𝗮𝗿𝗻 𝗺𝗼𝗿𝗲 𝗮𝗯𝗼𝘂𝘁 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆: https://www.luxuryacademy.co.uk/
𝗦𝗶𝗴𝗻 𝘂𝗽 𝘁𝗼 𝘁𝗵𝗲 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆 𝗡𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://www.luxuryacademy.co.uk/luxury-academy-newsletter/

Pour someone a glass of wine, tell them it’s the expensive one, then pour them the exact same wine and tell them it’s the cheap one.

They’ll enjoy the first glass more. Not pretend to, actually enjoy it more.

There’s a rather well-known bit of research where they ran this in a brain scanner, identical wine, different price tags, and the reward parts of the brain lit up, there was more activity for the expensive one. The wine hadn’t changed, only the number had.

Which is the whole game with pricing, and most people have it backwards.

They treat the price as a description of the thing, an honest little summary of what went into it. The client doesn’t read it that way at all. The client reads the price as evidence of what the thing actually is.

It’s called the price-quality heuristic, and it does the most work exactly where you’d least want it to. When quality is hard to judge, and in luxury it almost always is, you can’t assess the stitching or the provenance or the forty hours of someone’s life from across a counter, so the brain takes the shortcut and lets the price stand in for all of it. The expensive thing must be the better thing.

So your price isn’t just sitting there on a label. It’s positioning you whether you meant it to or not, and it’s doing it before the client has touched a thing.

Set it too low and you haven’t been generous, you’ve told the client that the product isn’t as amazing as you’re suggesting. You’ve filled your client base with people who’ll haggle, quibble and treat the whole thing as a transaction.

The dangerous bit isn’t pricing too high though, it’s pricing into the gap. Too expensive to be a casual treat and too cheap to be a statement, so the number contradicts everything else you’re saying and the client can’t put you in a neat box, and clients love a box.

Your price chooses your customer long before your product gets a look in.

Watch the full video on the Luxury Academy Newsletter YouTube channel.

See you in the next one

Paul

Visit the Luxury Academy website at https://www.luxuryacademy.co.uk/

I get asked this constantly, in person, on the channel, in DMs, occasionally by people the slightly cornered look of someone who's been arguing with their sales director.

Should you follow up with a client or not.

The question itself suggests something isn't quite right, because nobody who's confident about what they're doing tends to ask it. They just do the thing. The question is a tell, it means someone has been burned, probably more than once, and they've started wondering whether the whole thing might be doing more harm than good.

Which, the way most people do it, it absolutely is.

The two camps tend to be these. The first lot follow up religiously, they've got a CRM with reminders, they send the polite check-in email at 48 hours, the second one a week later, the third one with a small bit of news attached, and they wonder why the conversion resembles a trappist noble silence.

The second lot have been so badly bruised by the first approach not working that they've swung the other way entirely and just don't bother, on the theory that if the client wants the thing they'll come back for it. They won't, by the way. Mostly they'll forget, or buy something else, or be reminded of you only by an algorithm three months later when it's far too late.

Neither camp is right, but they're both responding to something real, which is that the polite follow-up email is one of the most effective ways ever invented to talk a client out of a purchase they'd already decided to make.

I've watched it happen to me, a buying intent completely murdered by a perfectly pleasant little email saying "just checking in."

And I do this for a living, I should have seen it coming. I didn't and most clients don't either. They tell themselves they went off it, that it wasn't really right, that they'll come back later, and they almost never trace it back to the message that did the damage.

So yes, you should follow up.

Of course you should, the relationship doesn't sustain itself, and the alternative is just hoping, which isn't a strategy, and hope certainly doesn't pay bills.

But the question people are actually asking when they ask whether they should follow up isn't really should they, it's how to do it, because everything they've tried so far has either chased the client away or felt like doing nothing at all.

Those aren't the only two options. There's a third, and it's the difference between continuing a conversation and pursuing an answer.

That's what this week's video is about.

Chat to you next week.

Paul

𝗠𝗮𝗶𝗻 𝗬𝗼𝘂𝗧𝘂𝗯𝗲 𝗖𝗵𝗮𝗻𝗻𝗲𝗹: https://www.youtube.com/@luxuryacademy
𝗟𝗲𝗮𝗿𝗻 𝗺𝗼𝗿𝗲 𝗮𝗯𝗼𝘂𝘁 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆: https://www.luxuryacademy.co.uk/

I tried to book a business class seat to Zurich a couple of weeks ago and BA wanted forty-five pounds to let me choose where I sat. Each way.

Ninety quid on top of a five hundred pound fare, served up at the very last screen, with the confidence of a brand that has clearly stopped thinking very hard about who it's selling to.

I shut the tab and booked Swiss.

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𝗠𝗮𝗶𝗻 𝗬𝗼𝘂𝗧𝘂𝗯𝗲 𝗖𝗵𝗮𝗻𝗻𝗲𝗹: https://www.youtube.com/@luxuryacademy
𝗟𝗲𝗮𝗿𝗻 𝗺𝗼𝗿𝗲 𝗮𝗯𝗼𝘂𝘁 𝗟𝘂𝘅𝘂𝗿𝘆 𝗔𝗰𝗮𝗱𝗲𝗺𝘆: https://www.luxuryacademy.co.uk/

A director at a training session I ran last month asked if we could build their entire sales approach around Myers-Briggs types. She wanted every salesperson to know instantly whether they were dealing with an INTJ or an ENFP and adjust accordingly.

I felt rather like a vet being asked to examine a unicorn. You don’t want to be cruel, but at some point you do have to mention that the animal isn’t real.

The Myers-Briggs Type Indicator was developed by a mother and daughter, neither of whom were psychologists, based on their reading of Jung, who himself would probably have found the whole thing rather reductive.

The fundamental problem isn’t that it’s badly designed, though it is, it’s that it doesn’t measure stable traits. Take it twice, a few weeks apart, and somewhere between 39% and 76% of people get a different type.

In psychology, if your measuring instrument gives you a different answer every time you use it, that’s no different to a mood ring.

But the reason MBTI feels so uncannily accurate is itself quite beautiful psychology. It’s called the Barnum effect, and it describes our tendency to accept vague, flattering personality descriptions as deeply personal when we believe they’ve been tailored to us.

So your profile tells you that you value deep thinking but also enjoy meaningful connections, and you think good lord, that’s exactly me, when in fact it’s exactly everyone. It’s the same mechanism that makes horoscopes work, and I realise that comparison will irritate the devotees, but the architecture is identical.

When have you ever had an MBTI test come back and say actually you’re a bit of an asshole? Never I would wager.

This woman had reorganised her team’s seating plan based on MBTI compatibility. She’d moved people’s desks. When I undiplomatically pointed out that the evidence base was thin, she looked at me the way my mother looks at me when she thinks I’m trying to be amusing. Pity and exasperation in case you’re wondering.

Once you’ve adopted a type as part of who you are, evidence against it feels like a personal attack.

It’s not that people can’t process the data, it’s that processing it would mean dismantling something they’ve built their identity around, and that’s a much bigger ask.

The whole appeal of MBTI in the corporate world is the shortcut, a way of sorting clients into boxes so you don’t have to do the harder work of actually paying attention.

but in luxury, paying attention is rather the entire point. 🤷‍♂️

See you next week

Paul

Luxury Training

Online Luxury Courses

A friend of mine who sells rather beautiful handbags redesigned her Knightsbridge store last year, she changed nothing about the staff or the stock, but instead simply rearranged the order clients encountered pieces when they walked in.

Higher-margin sales went up about twenty percent.

She told me about it over lunch as though she'd personally invented retail. "Paul, I literally just moved things around." Yes darling, that's decision architecture, Thaler and Sunstein built an entire field around the observation that the way options are arranged changes what people choose, while the person choosing almost never notices it's happening.

She'd put the expensive bags where clients saw them first, which meant everything afterwards got evaluated relative to those. It's called anchoring, and it works whether you're standing in Knightsbridge or browsing on your phone at midnight in your PJ's.

Most luxury brands understand this instinctively in a physical space. A good showroom puts the hero piece where you can't miss it, controls the sequence, lets the environment do half the selling before the salesperson has even opened their mouth.

But online they abandon every single one of those principles and instead present forty-seven variations of the same bag in a configurator that lets you customise the leather, the hardware, the lining, and the monogramming, as though giving someone more decisions is the same thing as giving them a better experience.

It isn't BTW. To me that has always felt like just too much hard work.

The entire promise of luxury is that someone has already done the thinking for you, that's rather the point of paying what you're paying.

The brands that understand this online do something quite simple, they pre-select. They show you a considered starting point, the version they'd recommend, and let you adjust from there.

It's called the default effect, and the research on it is genuinely robust. A thoughtfully chosen default says "we know what we're doing and we think this is the one."

Forty-seven options in a dropdown says "we haven't the faintest idea, you sort it out."

One of those is a showroom. The other is nothing more than a stockroom.

Chat to you next week

Paul

Luxury Training:

https://www.luxuryacademy.co.uk/

Online Courses: https://www.luxuryacademy.co.uk/online-luxury-training/

“Scammers always end their prices in a 7.”

And the thing is, they’re not entirely wrong. Not about the number itself, obviously, the number 7 hasn’t committed any crimes. But the feeling we have about the number is very real. The involuntary little wince when you see £997 on a landing page next to a photo of someone leaning against a lambo they almost certainly don’t own.

The wince here is quite interesting.

Because the 7 ending didn’t start as a scam. It started as a split test in the late seventies, run by a direct response copywriter called Ted Nicholas who tested everything, envelope colours, headlines, price points, the lot. He found, or at least told people at his seminars, that he found that prices ending in 7 converted better than 5 or 9. Gary Halbert and Dan Kennedy, two direct mail supremos both ran with it, and within a decade the entire direct response world was pricing in 7 like it was one of the ten commandments of sales.

The convention migrated into the online course world, where it was adopted with wild abandon by people selling courses, usually on how to sell courses, which I’m pretty sure if you looked closely enough you’ll find these course sellers mentioned in Dante. And once the lowest-quality, highest-pressure end of the market makes something their own, something is rotten in the state of Denmark to borrow from Shakespeare.

It’s called evaluative conditioning. You pair a stimulus with a context enough times and the emotional response transfers to the stimulus itself. The number didn’t change but what we associated it with absolutely did.

What makes it genuinely problematic is that you can’t reason someone out of it. You can explain that the number is arbitrary, that it has nothing to do with fraud, and they’ll nod and still feel the distrust. The aversion was never rational, so rational argument doesn’t touch it.

There’s a second layer too. The moment someone recognises that a pricing technique is being used on them, they stop evaluating the offer and start evaluating you. Instead of “is this worth it” they’re thinking “why has this person priced it at £997 instead of a thousand, and what does that tell me about them.” The price becomes evidence about the seller rather than the product.

Which is precisely why luxury has always used round numbers. Round numbers, or prestige pricing as it’s called, are cognitively fluent, your brain processes them without friction. A .97 ending creates a tiny moment of disfluency, which triggers analytical thinking. In mass-market contexts that can actually help you, because the price may hold up under scrutiny. In luxury, scrutiny is the last thing you want. The moment a client starts dissecting your pricing structure, you’ve pulled them out of the emotional frame the entire purchase depends on.

You’d never see Claridge’s list a suite at £897 a night. The disfluency alone would undo everything else they’ve built.

Any persuasion technique, no matter how clever it once was, eventually becomes a signal of the type of person who uses it. The tactic becomes the tell and once your audience can read the tell, you’re not influencing anyone.

There’s a word luxury brands have been using for so long it’s become essentially invisible. Aspiration.

The whole industry runs on it, or thinks it does. Buy this and you’ll be seen as the kind of person who owns expensive things.

But something’s shifted with younger affluent clients, particularly the Gen-Z lot spending serious money. The social engine has gone rather quiet. They’re not buying things to be seen. They’re barely even mentioning other people when they describe why they bought something.

What you hear instead is language that’s entirely internal. “I just needed something beautiful.” “It made me feel calm.” “I wanted something that felt mine.”

It’s called hedonic self-regulation, using consumption to modulate your own emotional state rather than to communicate anything to anyone else. The audience for the purchase has moved from external to entirely internal.

If your buyer isn’t trying to signal anything to anyone, then all the language of exclusivity and “joining an elite world” is rather missing the point.

See you next week

Paul

Luxury Academy Website

Luxury Academy Online Courses

Every few weeks another brand announces a “limited edition” with the breathless excitement of someone who’s just discovered fire.

Three hundred pieces. Exclusively numbered. Available to a select few, by which they mean anyone with a functioning credit card.

A friend who runs a rather good watch brand tried exactly this last month. Same playbook that had worked splendidly three years earlier. The response from his best clients was a collective shrug so violent I’m surprised it didn’t register on seismographs.

He couldn’t work out why. His clients could. They’d seen the identical trick from six other brands that quarter.

The thing most companies get wrong about scarcity is assuming the mechanism is universal. For a mass market buyer it works through urgency, a genuine fear of missing out, and that’s a perfectly sound tactic.

But someone who’s been buying expensive things for decades isn’t remotely worried about missing out. Something else will come along, or they’ll find it through someone they know, or they’ll just buy something different and never think about it again.

What affluent buyers respond to is scarcity that confirms something about them. A two-year wait because a workshop in the Jura mountains makes forty pieces a year tells you something utterly different from a two-year wait because someone in marketing thought it would build anticipation.

It’s called identity-congruent desire, a fundamentally different animal from loss aversion. You’re not afraid of losing the opportunity. You’re drawn to what owning it says about your taste.

The fly in the custard is that brands keep manufacturing the second kind using the tools of the first. Countdown timers on products sitting in warehouses. Engineered waiting lists for things nobody needed to wait for.

And affluent consumers spot this instantly, because decades of sophisticated selling gives you rather a refined nose for the mechanics of persuasion.

Friestad and Wright called it persuasion knowledge, and when that nose twitches you don’t get indifference, you get reactance, the pushback that happens when someone feels their autonomy is being toyed with.

In luxury that’s devastating. The whole promise is you’re being treated as a discerning individual. Manufactured scarcity says the opposite: we think this will work on you.

The brands that talk most about exclusivity almost always have the least genuine constraint on supply.

The ones that never mention it are the ones where scarcity actually works.

See you in the next one

Paul

Online Luxury Training

Luxury Academy

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Which is strange, because unlike furniture or inventory, clients aren’t inert. They don’t just sit there being profitable. They influence tone and they shape pace. They also have a habit of messing with your internal language in ways you don’t notice at first, until you catch yourself saying things like “let’s just be careful” about what should have been a perfectly routine email.

And of course, by that point, nobody’s talking about the actual client anymore. They’re talking about the ‘weather’ around the client. So staff hesitate more, decisions take longer to make and confidence drains like the heat through a window in a stately. And the odd thing is, you’ll still find someone, maybe even yourself, insisting, “Yes, but they spend a lot and they pay on time.”

As though this compensates for emotional extortion, which make no mistake, this is what it is.

Now, demanding clients are fine. Expected, even. Especially in luxury. But there’s a difference between being pushed and being undermined. One improves the work and the other erodes it.

But this is where it tends to get interesting: the client will usually be perfectly polite to the owner or the manager or whomever is in charge. Because they know exactly where the power sits, but they save the petty tyranny for your assistant, your coordinator, the junior who’s just joined.

And if you allow it, what you’re really saying, no matter how many times you mention “our people are our greatest asset” at a town hall or in your LinkedIn posts, is that being a bit of a dick is perfectly acceptable, provided you give us money.

That’s the message you’re sending, and I’d imagine it’s not the one you want.

See you in the next one

Paul

Luxury Online Courses