Long-time readers know I am a fan of the podcast What It’s Like To Be. I only know about this podcast because it’s hosted by Dan Heath, author of the book Made to Stick, which I believe is one of the best texts about crafting persuasive messages.
In the What It’s Like To Be podcast, Dan Heath interviews people who make their living doing different jobs.
Sometimes it’s inherently interesting — a speech writer, a baseball player.
This week though, it was… a baker. I had to force myself to listen to it. I’m glad I did.
It turned out that this interview about what it’s like to be a baker is very relevant for folks who have or want to have a small online biz, maybe writing or teaching or coaching or having an audience.
There are lots of parallels and business insights from the baker, someone who works in a surprisingly similar to what I do, but in a different sphere.
I’ll include the link to the whole podcast at the end here if you wanna check it out. For now though, lemme share one specific and interesting thing I heard.
Dan Heath asked the baker, how do you price your bread?
This led the baker into a discussion of what would be reasonable in theory:
Figure out her cost of ingredients… put in margin on top of that to cover fixed expenses like rent and employees… and add an extra margin on top of that for profit.
In reality, the baker said, what she does is she looks at what other bakeries are charging, and charges something similar. When margins get too tight, she raises prices.
And then came the really interesting and insightful part wanted to share with you:
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And and then if like our overall margins are starting to feel too tight, then I try to put more of our price increases on our pastry because I feel like pastry is a luxury good, and bread is like a staple food and should be as affordable as possible.
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Dan Heath asked if this a commie-like desire to make sure everyone can afford the staples of life? Well, yes. But it’s also a capitalist calculation about what people are willing to pay. The baker explained:
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It also lines up with how people spend money. Like, people are going to balk at spending $12 or $15 on a loaf of bread in a way that they won’t at spending, like, $7 on a slice of cake or, like, $3 on a cup of coffee. People’s mental calculation is so different for things that feel like treats, whether it’s like sugar or alcohol or snacks than it is for something that feels like grocery, that feels like a staple good.
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My point today is exactly what the baker says in this second block.
There’s one mental calculus for things that feel like necessities and staples. There’s a different mental calculus for things that feel like treats or splurges.
You can apply this insight the way the baker did, by simply offering two lines of products, one staple-y and one treat-y, and using the treats to be able to charge more, and to support the other parts of your business.
You can also benefit from this insight without launching a new line of products, simply by repackaging your dutiful and reasonable products in a new gift box that suggests indulgence, enjoyment, or fun to your prospects.
I’ll have more to say about that “fun” element tomorrow.
For now, if you wanna hear what other business insights the baker had to share, you can find the link below. Highly recommended, even if you have no interest in baking, and only want to run an online four-hour-workweek-style business:
https://www.whatitsliketobe.com/2246914/episodes/18563714-a-baker


