Price Psychology: The Psychology Behind Setting Legal Fees with Kai-Markus Mueller

Kai-Markus Mueller

Professor of Consumer Behaviour

Kai-Markus Mueller is a Professor of Consumer Behaviour at HFU Business School of Furtwangen University in Schwenningen, Germany, and Director of Pricing Research at Neurensics, Amsterdam. He previously founded and ran a start-up where he developed NeuroPricing™, a suite of neurotechnology-based methods to measure and model the optimal price – meanwhile acquired by Neurensics. Before, Kai gained experience both as a neurophysiologist at the US government and as a strategy consultant with an international management consultancy. He holds a PhD in neuroscience. 

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When pricing your services, it's very important to sell value. You don't sell an hourly rate. You sell value.

Dr. Kai-Markus Müller

Episode 103

Show Notes

Brief summary of show:

In this episode, Dr. Kai-Markus Müller joins me to discuss and understand the psychology behind pricing models and pricing structure, and how to better frame legal fees.

 

Kai-Markus Mueller is a Professor of Consumer Behaviour at HFU Business School of Furtwangen University in Schwenningen, Germany, and Director of Pricing Research at Neurensics, Amsterdam. He previously founded and ran a start-up where he developed NeuroPricing™, a suite of neurotechnology-based methods to measure and model the optimal price – meanwhile acquired by Neurensics. Before, Kai gained experience both as a neurophysiologist at the US government and as a strategy consultant with an international management consultancy. He holds a PhD in neuroscience. 

 

His work has been featured by the BBC, Forbes, Businessweek, ZDF, Der Spiegel and many more. His latest milestone is a book co-authored by top sales expert Gaby Rehbock titled “The Invisible Game – The Secrets and the Science of Winning Minds and Winning Deals”.

Kai gives listeners actionable tips on:

[4:00] The main mistakes lawyers make on discovery calls

• [7:15] Does a ‘payment threshold’ exist?

• [13:40] How to apply Kai-Markus’ research to attorney pricing strategies 

• [14:50] The price quality heuristic 

• [16:55] How to create perceived value without going too far

• [21:15] Tips build reassurance and trust

• [24:45] Changing value by how we frame things and understanding decoy pricing

• [32:40] Kai-Markus’ book review

• [36:00] One big takeaway from this episode

Kai-Markus Mueller's Book

From the publisher:

Imagine that two doctors in the same city give different diagnoses to identical patients—or that two judges in the same courthouse give markedly different sentences to people who have committed the same crime. Suppose that different interviewers at the same firm make different decisions about indistinguishable job applicants—or that when a company is handling customer complaints, the resolution depends on who happens to answer the phone. Now imagine that the same doctor, the same judge, the same interviewer, or the same customer service agent makes different decisions depending on whether it is morning or afternoon, or Monday rather than Wednesday. These are examples of noise: variability in judgments that should be identical.
 
In Noise, Daniel Kahneman, Olivier Sibony, and Cass R. Sunstein show the detrimental effects of noise in many fields, including medicine, law, economic forecasting, forensic science, bail, child protection, strategy, performance reviews, and personnel selection. Wherever there is judgment, there is noise. Yet, most of the time, individuals and organizations alike are unaware of it. They neglect noise. With a few simple remedies, people can reduce both noise and bias, and so make far better decisions.
 
Packed with original ideas, and offering the same kinds of research-based insights that made Thinking, Fast and Slow and Nudge groundbreaking New York Times bestsellers, Noise explains how and why humans are so susceptible to noise in judgment—and what we can do about it.

Noise by Daniel Kahneman