How Money Makes Us Stupid

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When an experience itself is joyful, like a massage or reading a great book, we want the greatest “volume” of it for our money. More time on the table, more pages in the book.

When we’re looking for answers, solutions to problems and big ideas that will help us get where we want to go, though, we want the bee line approach. Strip it down. Give it to me fast and direct so I can do something with it.

But there’s a problem. when we have to pay real money for the latter, all hell breaks lose in the value-volume calculation in our heads.

Surveys show we now consider time our most precious resource, even over money. Yet all too often, we look for the biggest, baddest, most voluminous, time-consuming solution we can find for the money, assuming that the option with the greatest volume will provide the greatest value.

Manufacturers and marketers know this is how our brain’s work. And to take advantage of this irrational quirk, they create products, solutions and, gulp, books, that seem to present with the greatest “heft” for the money, even when they could have solved the problem or delivered the message in a substantially more streamlined format. One Legendary marketer calls this the “thud” factor, or the sound you want your package to make when it’s delivered and hits the table.

A thud, our brains tell us, is worth more than a whisper.

Volume and value.

Seemingly directly related, but in truth, often inversely related…when the currency is time and we’re in pain.

When we take money out of the equation, we all look for the greatest value in the shortest possible time when looking for solutions. Makes sense, we don’t want to waste a second more than we need to.

But when we introduce money into the equation, we turn rationality on it’s head. Now we search for ways to give up the greatest amount of time—a far more precious, non-replenishable asset—in the name of “getting our money’s worth.”

Thus the “Value-Volume Paradox.”

Perfect example, a story I’ve heard many variations of over the years…

A man walks into a dentist’s office, gets a checkup and learns he needs a tooth pulled. The dentist says it’ll take about 10 minutes and cost $1,000. The man says that’s a hell of a lot of money for 10 minutes work, to which the dentist replies, “I can make it take an hour if you like.”

So what’s the solution?

Abandon the quest for heft, embrace the quest for time-efficient value.

The greatest value is often capable of being delivered in tiny packages…if both provider and receiver are open to a relationship defined not by maximum volume/dollar, but maximum impact/dollar.

Or, as Good Ink, Inc. founder, Taylor Lindstrom, says in her twitter profile

“I don’t charge for copy by the hour. I charge by the awesome. Which makes me expensive, but also – and this is critical – awesome.”

Thoughts?

 

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48 responses

48 responses to “How Money Makes Us Stupid”

  1. There’s an old story (and countless variants) of a Homeowner who needed a squeaky stair fixed. He called a carpenter who came in and checked it out. Without hesitating the carpenter simply hammered in one nail and was done. Fixed.

    When the homeowner got the bill he was astounded and promptly called the carpenter to explain. “It only took you a minute!” he fumed. “No,” the carpenter replied, “it took me my whole life.”

    Everything you’ve said here also explains why digital information products (the most “thudless” of all) can cost so much (hint: it’s not because scummy internet marketers are ripping you off). Every time I’ve spent the kind of money that would make most people spit coffee on their screens, it’s always paid me back and more.

    Seth Godin doesn’t write big books. Would they be more valuable if they were bigger? Seth and long-winded just don’t go together.

    • Jonathan Fields says:

      Digital product marketers also know they need thud, so as a “thud proxy,” we create a voluminous product shot, complete with fake boxes, dvds, cases, binders and books that show what the product would amount to were it a hard product. And, people like Kern have even experimented with delivering “the big black block” with real, live hard product, as a vehicle to increase perceived value of digital products. I’d love to say this stuff doesn’t matter, but as long as we’re human… lol

  2. Neill says:

    As a consumer I appreciate value-density. Some of the best books I’ve read took me less than 45 minutes to get through…

    …but as a marketer it seems that volume still gets better results, on the whole.

    I think I have some remarkable / unique products to offer but unless I pile on the ‘value’ I don’t get as many sales.

    How to fix this?

  3. This topic is one I’ve been considering a fair amount lately. On the one side, there are those who offer a $297 product with $1500 worth of bonuses, or offering a $500 product discounted down to $50, both of which seem out of balance to me.

    In the first case, it’s kinda like buying a shirt and getting two suits free, in teh second, getting a $500 suit for $50 on sale. Offline, what would at least some of us think of the value/construction of those suits?

    Then there’s also the situation that by adding all the bonuses, or length to a book many, if not most, people will never get through the info. It’s too much. As you mentioned, we don’t have time for that even if we think we want it.

    So is the answer to find a happy medium between what is needed to solve the issue and overwhelm, or to show more people/customers the value of “non-bulk” like Seth and a few others have managed to do?

    Very timely discussion I think, thanks for starting the conversation.

  4. Ooh yes! In the book “The Millionaire Next Door” the author commented that a lot of the millionaires they interviewed were gathered one day… and when they walked out to the parking lot they realized that these millionaires weren’t buying cars for the economy of it. They were buying cars by the pound, so that they’d have more car for the dollar.

    So in essence they were getting a bargain by buying a whole lotta car.

    Totally blows my mind how our logical minds can come up with these things. 😉

  5. This so needed to be said. As someone who has spent far too long in a bureacracy (federal government), I can tell you that volume and heft will just slow you down when you’re trying to get something done.

    I think the question is: how can we, as e-product creators, help people see the real value without the thud hype? Or maybe it just comes down to finding the right kind of customers–the ones who appreciate impact over volume.

    I’d love to hear your thoughts on that.

  6. Jonathan,
    I’ve always had trouble with people jacking up prices for the purpose of increasing their product’s perceived value. On the one hand I do understand that you get what you pay for, but I don’t agree with blatant overcharging either. I usually run from online products that have a bazillion bonuses. To me it’s a huge turn-off. I usually think that the book, or product must not be very good if you need that many freebies to sell it. Plus, as you point out who has time to read all this stuff! I like to get away from my computer once in a while.

  7. Hey Jonathan,

    Seth Godin, who I know from following you for a few years you know and admire (who doesn’t), taught me that books don’t have to be long to be valuable. At least one of his business books I’ve read is less that 100 pages (I’m sure many are).

    At first I thought I was being robbed. Then I realised his books were highly valuable, but also concise and therefore treated my own time (to read and glean the value) as just as valuable. Now I get extremely frustrated and annoyed when I read a great business, leadership, or other non-fiction book and its filled with repeated content in different formats, regular recaps of earlier content, and other ‘thud’ factor. Even in novels I am becoming intolerant of unnecessary content that does not add to the story or enjoyment factor.

    So my view now has changed to, “If you want to sell me a valuable message, please do it quickly and concisely. The cost of your book is insignificant when compared to my time to read it, and I’d prefer not to waste that time on unnecessary ‘thud'”.

    Lets face it. Most books cost in the region of $10 (give or take a few bucks). How much of my time am I willing to provide for that some $10? Very little.

    Nice “chatting” again.

    Regards

    Richard Howes
    from a game farm in Zululand, South Africa

    • I agree 100% about the length of a book having nothing to do with how good or valuable it is. I’ve read 300 pages of fluff and 100 pages where you could not take out another word, but would’t want to lengthen it for the sake of pages.

      Size isn’t quality. Taking more time does not always mean better. The best out there can charge the most because you get more done in less time, AND have more time to yourself. If only people thought of things that way.

  8. Lynn Hess says:

    Isn’t it amazing that no matter how “smart” we get, there are still so many things that our psychology has yet to catch up with?

    I wonder if this tendency for valuing heft might be starting to evolve a little — at least when it comes to digital information. Personally, I have passed up digital information products that I might otherwise have purchased because they came with TOO MANY bonuses. Not only because that business model has been done to death and now seems kind of smarmy/scammy to me, but also because I know that I am already totally overwhelmed with information and would be highly unlikely to utilize all (or ANY, probably) of the bonuses. Then it feels like I’ve “wasted” something and have this sense of vague guilt, which is a feeling I hate. So I just don’t buy the product in the first place.

    To me, something small, clean, quick, and precise that would get my problem solved would be worth paying more for. I would be paying for getting to KEEP my time.

    And I adore Seth Godin’s stuff for this very reason. I have so many blogs e-mailed to me that I never get to, because I click on the e-mail and see this huge wall of text and think “Oh, I’ll read that later” (but, of course, rarely do). But I almost always read Seth’s — and find tremendous value in it. Brooke Castillo is another blogger who manages to convey huge ideas in an amazingly tiny, super-efficient package. I think that’s an amazing skill.

    I wonder if, as we all become more and more overwhelmed by content, it is this talent for efficiency that will become most valuable. I hope so!

  9. Andrew Morgan says:

    An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked.

    Inside the small boat were several large yellow fin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

    The Mexican replied, “Only a little while.”

    The American then asked, “Why didn’t you stay out longer and catch more fish?”

    The Mexican said, “With this I have more than enough to support my family’s needs.”

    The American then asked, “But what do you do with the rest of your time?”

    The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life.”

    The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing; and with the proceeds, buy a bigger boat: With the proceeds from the bigger boat you could buy several boats. Eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor; eventually opening your own cannery. You would control the product, processing and distribution. You would leave this small coastal fishing village and move to Mexico City, then Los Angeles and eventually New York where you will run your ever-expanding enterprise.”

    The Mexican fisherman asked, “But, how long will this all take?”

    To which the American replied, “15 to 20 years.”

    “But what then?” asked the Mexican.

    The American laughed and said that’s the best part. “When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions.”

    “Millions?…Then what?”

    The American said, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”

  10. I think if we are ready to make a purchase that we feel is valuable- say a great offer from a great teacher or expert, that MORE from them in the forms of bonuses etc is more value.

    I mean if they have great advice in one book, yet they give us three books of great advice isn’t that better? (assuming all of the advice is great!) It brings the cost down of each and therefore easier to justify in our head.

    What we don’t account for is opportunity cost- if we could solve our problem in 10 minutes, but spend 3 days reading all of that info that COULD help us in the future, is that the best value?

    But alas, we might never know so we might as well go for the extra bonuses. 🙂

    • Lynn Hess says:

      Jaime, that is such a great point. There’s a huge difference between extra bonuses that are actually from people we already like and are purchasing from, and the kind I was thinking of — the “$1997 worth of valuable phone recordings and e-books!” from other people (many of whom I have never even heard of) that tend to be designed to get us to buy even more stuff.

      And the time thing is huge. Though if I’m really crazy about someone’s content, the time is usually worth it. Maybe the lesson is to only buy things from people we’re crazy about!

  11. Chantalynn says:

    I am all about quality, and time is a very precious commodity for me. I consciously spend my time whether it is to complete a task or to meditate or to breathe. I do have a money/value story to share:
    I took my 5 yr old son to see his dentist for a couple of fillings. We have no insurance and when the dentist came out, she told me that one of my son’s filling was too big and she had to do a “mini” root canal. The bill was $620. I was flabbergasted. My son was totally fine and is not traumatized at all by the experience. I struggle to pay the bill but I do appreciate so much how his positive experience will help him for the rest of his life. This is value I guess but wow was it ever expensive!!!

  12. Another great post Jonathan! Heft has definitely ruled my money decisions in the past. Lately though I’m really seeing how just one clear insight can create a huge shift in the results I get in life and business. Whereas tons of information just dulls my mind and puts me in a state of inaction. With the unbelievable wealth of information available online these days, it really pays to be discerning what we buy or even download for free. I like to ask a question like “Is this really going to contribute to my life or business in a big way?” If it feels expansive, I go for it. If it feels heavy and contractive I move on.

  13. Jude Smiley says:

    Great post Jonathan! Reminded me of the story of picasso when he charged $5000 for a portrait that took him 30 minutes. the buyer complained about the price and Picasso’s reply was
    “my dear sir, this portrait did not take me 30 minutes….indeed it took me my entire life!”

    J

  14. Reminds me a little of Gary V’s book “Crush It!” It’s shorter than a Sumo wrestling match but it delivers BIG value, since there isn’t a single centimeter of the book that does not contain solid, implementable nuts-and-bolts concepts.

    But, I definitely agree, we humans are in dire need of shaking off that whole volume = value (false) notion.

    Thanks for the brain slap, Jonathan!

    Peter

  15. I never thought about this before. But now that I think about it, I see it all the time. I think even with some of my own services I try to add the thud factor. And it’s really not necessary.

    Thanks for pointing this out Jonathan.

  16. Whoa, I just thought of another one.

    I lived in Japan for many years. The Shinkansen (“Bullet Train”) takes you from Tokyo to Osaka in 3 hours and it costs a bunch more money than if you took a slower train (obviously). But, for some crazy human reason, I sometimes thought that, if we’re paying more, shouldn’t we get to spend more time “having the experience” of riding in this expensive train?
    That wasn’t the point, though – the point was customers paid more money to save time, which brings us back to the original (probably true) notion that time is our most valuable resource or asset, even if it is not exactly quantifiable.

    May you know peace in your buying decisions 😉

  17. Certainly, it is a mindset – abundance vs. scarcity; love vs. fear; peaceful vs. paranoid. The good news: we can change our thinking and transform our lives.

  18. I really enjoyed this post and everyone’s comments. We face this dilemma frequently in our (personal service) business. Sometimes when a client asks what it would take to hire us at a lower cost, I say, “Well, we could work a lot slower…” They usually laugh and get it.

  19. Jonathan,
    Wonderful post. It immediately made me think of education. I’ve been a teacher and administrator for years and it seems that the education “world” always opts for heft.

    Instead of paying a gazillion dollars for that suite of products, why can’t we use the free web 2.0 products out there?

    I agree that our society is all about heft over content. It’s really a paradigm shift. No doubt, I would love to read a book in one hour and gain more knowledge that slogging through a book over a week.

  20. Jonathan,

    I do appreciate your content, which frequently makes me pause and re-assess my approach to my business (and sometimes other areas of my life). I loved the Twitter profile quote–that summed it up so well!

    But even more, I appreciate the effort you have invested in this community. I learn a lot when I read the blog, and then I get an additional education in the comments. There’s value!

    Warmly,
    Ann

    • Jonathan Fields says:

      Thanks so much for the kind words, Ann. Thought truth told, I often like you guys add so much more value in the comments than I did in the posts. lol

  21. Satu says:

    And the biggest time thieves are video courses! Videos have their place if you have to show how to do something, and perhaps build rapport, but otherwise they just suck time..

  22. sukhi says:

    I believe the key to this is communicating the value. Value is perception and in the absence of value money becomes “the” issue. There’s a program called “lean sensi” and large organizations are on wait lists to get their employees into this program to essentially get leaner.

    It’s the essence of what you’re talking about. Yet it goes against your American (I’m Canadian) big box stores and advertising. Where the message is always bigger, more, is better.

    The green movement is all about getting lean. We’ll see how far it penetrates the masses.

    • Anne Wayman says:

      Yes, this is, I hope where it’s going. Am wondering how to best to state the green and/or lots of value for little time investment… maybe just that way… maybe that’s the subtle msg in Jonathan’s note at the end of posts about how long it will take to read it.

      If (we?) marketers can teach folks to look for heft surely we can teach them not to and to value time.

  23. […] How Money Makes Us Stupid If we’re spending our money, we often look for the 800 pound gorilla solution – the big, hefty, expensive one – rather than the simplest solution to the problem. This often complicates our lives and costs us money, too. I couldn’t help but think of a sixteen piece pot and pan set when I read this. (@ jonathan fields) […]

  24. […] How Money Makes Us Stupid If we’re spending our money, we often look for the 800 pound gorilla solution – the big, hefty, expensive one – rather than the simplest solution to the problem. This often complicates our lives and costs us money, too. I couldn’t help but think of a sixteen piece pot and pan set when I read this. (@ jonathan fields) […]

  25. […] How Money Makes Us Stupid If we’re spending our money, we often look for the 800 pound gorilla solution – the big, hefty, expensive one – rather than the simplest solution to the problem. This often complicates our lives and costs us money, too. I couldn’t help but think of a sixteen piece pot and pan set when I read this. (@ jonathan fields) […]

  26. […] How Money Makes Us Stupid If we’re spending our money, we often look for the 800 pound gorilla solution – the big, hefty, expensive one – rather than the simplest solution to the problem. This often complicates our lives and costs us money, too. I couldn’t help but think of a sixteen piece pot and pan set when I read this. (@ jonathan fields) […]

  27. […] my colleague Jonathan Fields recently wrote about how money makes us stupid. “Surveys show we now consider time our most precious resource, even over money,” […]

  28. […] my colleague Jonathan Fields recently wrote about how money makes us stupid. “Surveys show we now consider time our most precious resource, even over money,” Fields […]

  29. Sharron says:

    Great post, Jonathan! I suppose (unfortunately) the same principle often applies to dining. I dislike going to buffets because it seems a lot of people are intent on “getting their money’s worth” (whatever that really is) and gorging themselves on food that is usually neither appealing or nutritious. The same person would feel paying somewhat more for a meal that is artfully prepared from fresh ingredients to be a poor value–even though that meal provides aesthetic appeal, reasonable portions, in an atmosphere conducive to conversation and relaxation. Often one supports a local business and sustainable agricultural practices, too.

  30. […] my colleague Jonathan Fields recently wrote about how money makes us stupid. “Surveys show we now consider time our most precious resource, even over money,” Fields […]

  31. […] my colleague Jonathan Fields recently wrote about how money makes us stupid. “Surveys show we now consider time our most precious resource, even over money,” Fields […]

  32. […] How Money Makes Us Stupid If we’re spending our money, we often look for the 800 pound gorilla solution – the big, hefty, expensive one – rather than the simplest solution to the problem. This often complicates our lives and costs us money, too. I couldn’t help but think of a sixteen piece pot and pan set when I read this. (@ jonathan fields) […]

  33. […] my colleague Jonathan Fields recently wrote about how money makes us stupid. “Surveys show we now consider time our most precious resource, even over money,” […]

  34. Jane says:

    Very good points. It ties in to something that as a designer I find difficult to convince clients of. (Although they often both don’t want to spend time OR dollars.) But what they overlook is the value part. In a way, it’s about redefining “cost” more as value as it relates to impact. They often want to rush a process in the interest of time, but then risk spending more time down the road undoing, which is maybe another paradox! In other words, it’s not so much amount of time ,but the right amount at the right time in a process.
    Which ultimately costs less.

  35. Zoe says:

    That is the true irony of money, it turns us into irrational, emotional beings. On the face of it, it seems illogical. But I guess no one wants to ‘feel’ ripped off, even if it means taking up more of their time.

    That’s why it makes sense to outsource things that aren’t important but are time consuming to do. I rather pay for that than trade my time to do it – unless it’s something I enjoy.

  36. Mark Freddy Farrell says:

    What does each individual consider as valuable?
    2 cars, one a sports car, one a 4 wheel drive, same price, same re-sale value. One person may want more car (4 wheel drive), the other may go for comfort (sports car)?
    Are there other rational reasons, or underlying issues associated with the purchase? Only as individuals do we see the value with our own stories
    connected to that purchase.

    Cheers,

    Mark Freddy Farrell.

    • Mark Freddy Farrell says:

      Ah, Forgot about the Time thing!

      – Maybe the Sports Car?

      – But then again, More Car for the same Money,
      and maybe I will go Camping? – 4 Wheel Drive.

      Do I really know what I want, probably for now, but that could change?

      Maybe I should ask the Marketing people?

      Cheers

      Mark.

  37. […] my colleague Jonathan Fields recently wrote about how money makes us stupid. “Surveys show we now consider time our most precious resource, even over money,” […]

  38. […] my colleague Jonathan Fields recently wrote about how money makes us stupid. “Surveys show we now consider time our most precious resource, even over money,” […]

  39. This is a very interesting blog. I am in the process of learning about marketing and etc. It makes a lot of sense. Thank you for sharing.