Apple just released its latest product, the Apple Vision Pro, and from the outside looking in, the launch was a success. Which is strange considering that, according to Facebook CEO Mark Zuckerberg, the Apple Vision Pro is an inferior product to their Meta Quest 2 VR system...and 7x the cost!
So today I want to break down the launch, what Apple did, and why it worked.
But to understand Apple's positioning, it helps to take a look at Tesla.
Tesla launched their first vehicle -- the Tesla Roadster -- in 2008. The base price? $98,950.
Comparatively, the average price of a car at that time was only $23,429.
This made the Tesla product $75,521 more expensive than the average car at the time.
Percentage-wise, that's 322% more expensive, or 4x the average price of a car in 2008.
Let me highlight the important thing here:
The Tesla Roadster was 4x more expensive than the average competitor (make a note of this for later please).
Now, let's look at the launch of the Apple Vision Pro.
I see some similarities…
Like the Tesla Roadster, it's not the first virtual reality headset.
("there are many like it, but this one is mine")
Like the Tesla Roadster, it's unabashedly class-ist and does NOT care about the majority of the market.
And like the Tesla Roadster, the pricing is integral to the product.
Case in point:
Take a look at the Meta Quest 2 (originally titled the Oculus Quest 2, but later rebranded), which was released in 2020 for $499.
Fast forward to 2023, Facebook (Meta!) releases the Meta Quest 3 for $499.
Then in comes Sony. To compete in the VR market, Sony releases the Sony PSVR 2 with a price tag of $549.99.
There are other VR products, and they all fall around the same price point.
Then in walks Apple, hours late to the party and probably a little drunk, and says hold my beer.
The Apple Vision Pro releases for a whopping $3,499.
That's $3,000 more expensive than the Meta Quest 3. Percentage-wise, it's a 601.2% increase in price…
And by multiple, the Apple Vision Pro is 7x the price of the average consumer VR product in this category.
Take that in for a second:
7x more expensive than the competition.
What's the point?
Entrepreneurs, creators, and companies often look at pricing in terms of 'mass adoption.'
What's the sweet spot to get the most number of people to buy the most number of products to make the most amount of money?
They compete on the feature set.
It works. That's why they do it.
But when a market is saturated, this pricing strategy ends up being a race to the bottom.
Good for the budget buyer...but for the brand trying to stand out, it becomes increasingly difficult to communicate a message around why your product is 5% to 15% more expensive compared to the competition.
For the customer, that requires brainpower, time, and effort. I have to look at the specs, I have to read reviews, and I have to convince myself the "premium brand" is worth paying more when the "dup" is just as good for half the price.
But Tesla and Apple -- they take the ULTRA PREMIUM pricing approach.
In other words: they're playing the 'status' game.
There's no comparing the Tesla Roadster or the Apple Vision Pro to anything else, because you literally can't compare them to anything -- and that has nothing to do with the feature set. It has everything to do with price.
When playing the game of status, the price IS the product.
The product features, the packaging, the polish…all of that reinforces the story that the price is already telling you before you learn anything more about the product.
Here's what Musk said about the original Tesla Roadster:
To break the mold, to establish a beachhead in the market, Tesla HAD to play the 'status' game instead of the 'price to value' game. They started at the top of the market, intentionally excluding 99% of the population.
Yes, this gave them margin, but more importantly, it let people know: this is only for the cool kids.
And you see where they are now.
As for Apple? Well, it seems to be paying off...
In the game of STATUS, the price IS the product.
So when you're thinking about pricing, maybe consider an APPLE or Tesla approach.
Instead of competing on an extra feature, why not go 7x higher than your average competitor and see what happens?
Yes, it raises the stakes. And, yes, you'll have to level up your messaging, packaging, and the product itself (although apparently not according to Zuck)...
…but at a 7x multiple, maybe there's margin (and meaning) in doing the extra work to be in a category of one.
Michael Zipursky is the CEO of Consulting Success, and is a coach, consultant and author. Michael's list of clients include organizations like Panasonic, Dow Jones, Financial Times, Royal Bank and many others. He has written 5 books including “Profitable Relations: How to Dramatically Increase Your Profits By Giving Customers What They Really Want,” and “The Consulting Success System: How to Become a Successful Consultant.”
In today’s conversation, we talk about how to grow a successful coaching or consulting business. Michael imparts the four pillars of consulting success that are proven to add value for a client and create a sustainable consulting business that does not rely on its network. He also shares how to convert client consultations into long-term (and high-paying) clients, and how to handle initial intake / consultation calls, to get someone to make a decision on whether to hire you now, rather than waiting in limbo for a reply.
If you are a coach or consultant, this is going to be one of those interviews you’ll want to come back to again and again. Enjoy!
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Regina Anaejionu is the creator of ByRegina.com. She has been writing, growing online communities, and selling products and services online since 2008. She's done everything from full time writing, to design work, to WordPress website creation, to publishing her own courses and ebooks.
In today's conversation, we talk about 'sensative sales.' In a nutshell, it's a way to market and sell your products and services by being fully transparent. Instead of hiding your offer behind a webinar, you share the offer right away, and give the potential customer everything he or she needs to make a purchase. That way they have the time to think it over and won't be blindsided by the offer when you share it on a webinar (or however else you might share it).
We talk about this and much more on today's broadcast.
And much more.
Subscribe to In The Trenches on iTunes
Did you enjoy today's broadcast of In The Trenches? Please click here to leave an honest rating and review on iTunes. Your review helps me spread the word of this podcast, which allows me to line up amazing guests and continue to produce this podcast ad-free. Thanks so much in advance for your support.
I started consulting 10 months ago.
The first time I offered my services I felt like a phony.
While I felt comfortable and confident with the topics I teach (publishing, product launches, online biz, etc.), I wasn't sure people would see the value...
And I figured even fewer would take me up on it.
In spite of the voices in my head telling me to stop (The Enemy), I decided to test it out anyway...
Before I was ready.
Before I felt confident.
Fast forward a month, and the results were in: people did want my services and were willing to pay a generous amount (click here to read about how I made more than the average US doctor on an hourly basis).
Not only that, but offering my services helped me build confidence in myself and my knowledge.
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