Read time: 3 minutes 5 seconds

We’re implementing a slight tweak today.

If you’re a regular reader, you may have noticed something missing → we previously started each edition celebrating our total number of subscribers.

Although well-intentioned when first established, we’re removing it for this reason:

Subscriber count is arguably a ‘vanity metric’ that sends the wrong impression about what we value.

Our North Star metric for now is how often you reply to our emails (which we always reply back to!)

That being said, we’ll still celebrate the odd growth milestone - just not in every single email.

Now, a quick thanks to our sponsors who keep this newsletter free.

Today’s Strategy Breakdown is brought to you by… Sidebar

Accelerate your career with Sidebar

Sidebar is a leadership program for those who want to do more, do it better and do it faster.

Their approach to helping members level-up their careers is focused around small peer groups, a tech-enabled platform, and an expert-led curriculum. Members say it’s like having their own Personal Board of Directors.

Imagine being able to tap into a small group of supportive peers (think Fortune 500 execs and innovative start-up CEOs) who have best-in-class experience in their industry for advice, new perspectives, and raw feedback to catalyze your professional growth. That’s Sidebar.

Nothing will get you further in your career than learning from your peers — it’s a true competitive advantage.

See what they mean at sidebar.com, and request an invite to join before December 31st to become a founding member.

How Apple makes you spend more

Chess Move

The what: A TLDR explanation of the strategy

You open the Apple website, looking to buy an iPad.

You’re presented with 5x options:

1. $329 (iPad 9th Gen): The most affordable iPad.

2. $449 (iPad 10th Gen): The newer iPad with a better display, chip, camera, and USB-C.

3. $499 (iPad Mini): The compact iPad that fits in one hand.

4. $599 (iPad Air): The thinner and lighter iPad with a laptop-grade chip.

5. $799 (iPad Pro): The best iPad money can buy.

Like most prospective customers, your needs would be met with the cheapest iPad on offer…

but you end up spending an additional 82% (+$270) on the iPad Air.

Why is that?

The answer begins with the “Center-Stage Effect”:

When customers are presented with a range of choices, they perceive the middle options to be the best value-for-money.

Most buyers don’t consider themselves a power-user needing a ‘Pro’ device.

But there’s also natural aversion to buying a ‘previous-gen’ device.

Breakdown

The how: The strategic playbook boiled down to 3x key takeaways

1: Incremental upgrades

Due to the “Center-Stage Effect”, you’re likely to initiate your purchase flow with the 10th Gen iPad.

After choosing a colour, you’re asked to “Choose how much space you’ll need”: 64GB or 256GB.

For 4x the storage, it’s just an extra $150.

One scroll later, you must “Choose how you’ll stay connected”: Wi-Fi only, or Wi-Fi + Cellular.

Again, another $150.

Each upsell is introduced one-by-one, taking up the entire viewport, rather than all at once to gauge them holistically.

As you assess each incremental upsell, "Consistency Bias" stops you from reverting decisions you previously committed to.

Whether you picked extra storage or cellular connectivity, it won’t take long to realise that the extra $150 could instead cover upgrading to the iPad Air.

When evaluated against the equally-priced storage or cellular add-ons, getting the Air feels like a no-brainer.

2: Win the persuadable cohort

There are 3 cohorts of iPad buyers:

1. People who want the cheapest iPad.

2. People who want the best iPad on the market.

3. People who want the iPad with the best value-for-money.

For cohort 1 buyers, no amount of extra functionality will justify spending any more than necessary for core features like checking emails and watching Netflix.

Category 2 buyers go straight for the iPad Pro, along with all the bells and whistles, knowing they’re getting the best tablet money can buy.

Category 3 buyers are the “swing voters” - they may have an initial preference for cheaper cost or higher performance, but ultimately they make decisions based on a value assessment of options presented to them.

Apple’s pricing strategies are designed to maximise the Average Cart Value (”ACV”) of cohort 3.

3: Drive value across the ecosystem

60% of Apple customers own 3 or all 4 of the main Apple devices (iPhone, iPad, Apple Watch, and Mac.)

Apple uses variations of the same strategies to incentivise upgrades across each device range:

• Prior Gen → Current Gen

• Faster performance

• Additional storage

• More connectivity

• “Mini” / “Max”

• “Air” / “Pro”

And then there’s peripherals.

Plan to draw, write, create? Get the Apple Pencil.

Spend a lot of time typing? Get the Magic Keyboard Folio.

Tie it all together with some AirPods that seamlessly work across all devices…

or maybe AirPod Pros…

or even AirPods Max!

Rabbit Hole

The where: 3x high-signal resources to learn more

Recommendations, friends, and sponsors

[Selling to Corporate] → Business owners and industry leaders are seeing career-changing outcomes by listening to this fast-growing podcast: “It’s literally like having your own personal sales coach and mentor.” Subscribe Now. 

[Winning a backwards market] → A fascinating thread this week about how Brother is winning the consumer printer market, not by offering the best printer, but by being the only market player that hasn’t become considerably worse for customers over time. Read it here.

[Meco] → A distraction-free space for reading and discovering newsletters. The app is completely free and packed with features designed to supercharge your learnings from your favourite writers. Liberate your inbox today.