Why do people buy $3000 trainings?

A course with Tony Robbins or Ramit Sethi easily costs upwards of $3000. How are people willing to pay that much for such a course?

Let us assume that this course enables its attendees to do a modest 1% better job the next year. Say a junior engineer who generates about $100,000 in value for his employer takes this course. The value of a 1% improvement on his performance amounts to $1000. Therefore, a training that costs $3000 doesn’t make sense.

Now let us consider a senior executive who generates about $3,000,000 in value for her employer every year. Assuming that the training results in a 1% improvement in her performance, the additional value she generates is worth $30,000 in this case. The $3000 training is a bargain – it yields more a 10x return within one year. The executive’s employer will pay up the required $3000 without a second thought.

The value of any product or service depends on the value that its user is able to derive from it. This value, of course, is different for different users.

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