The Perils of Low-Priced Product Sales
Too many people try to build their businesses solely on selling low-priced products. That might work for huge corporations like McDonald’s, but for small businesses, it can be devastating.
Simple math shows that you have to sell a lot more copies of a low-priced product to make a given amount of revenue. For example, 370 copies of a $27 product brings in about the same as just 20 sales of a $497 product.
Typically, almost all of those sales will be to new customers, which is where the cost of acquiring a customer comes into play. If you only sell low-priced products, you can’t afford to spend much to get a new customer, at least not without losing money. That makes it hard to scale your business.
That’s bad enough, but it gets worse. Many of these businesses have few or no other products available, so once they go to the trouble and expense to get a new customer, they have nothing else to sell to that person.
The solution to this problem is to develop a range of products and services in a variety of price ranges, what is commonly called a marketing funnel.
We’ll get into more about how to do that later in this report. The key thing to remember right now is that you can do this, too. You don’t have to create the entire funnel at once. You don’t even have to know everything that will be in your funnel to get started creating it.
If you’ve only sold lower-priced products so far, you might be surprised to hear that creating high-ticket products and services is easier than you probably think it is. A lot of the difference is how you format and present your content and knowledge.
For example, the same content could be sold as a $25 book, made into a video training course priced at $197-$997, or taught at a $3000 live event.
In the upper range of the price scale, items in a funnel tend to be services rather than products. In many cases, the service consists mostly of helping people through the material and answering their questions. This type of service is fairly easy to create, as opposed to coming up with something completely different.
If you can write that $25 book, you’re probably qualified to coach people on the same topic and could charge 10-20 times the price of the book for an hour of your time.
The main challenge for most people in this situation won’t be doing the actual coaching. It will be convincing yourself that your service is worth the premium price and that you are “good enough” to coach people or perform other high-ticket services for them. (Hint: If you’re knowledgable enough to write a book and you truly care about the client, you are good enough to coach them!)
Important Note: We are not telling you to avoid selling low-priced products. Those products have their place. Our point is to stress the importance of adding higher-priced offers to your funnel.
Two Ways to Sell High-Ticket Offers
If you haven’t sold high-ticket offers before, you may be nervous about how to go about doing so. There are two main methods people use to do this.
The first strategy is to start by selling someone a low-priced product, then offering them the next highest-priced item in your funnel, and so on, working your way up the price scale. Some of this is done via upsells right after someone makes a purchase, and the rest is done by followup marketing to existing customers.
That is probably the most often-used strategy, since it seems logical that new customers would be more likely to buy the lower-priced items first. That is certainly the case with some customers, but not all of them.
The real danger of this sales strategy is that most of your customers never get exposed to your highest-priced products, because they haven’t yet bought the products in the middle of your funnel.
Leading with Higher-Ticket Offers
We like the second strategy better. It’s almost the direct opposite of the first one. You present your higher-priced offers first, then if the customer declines them, you offer them the lower-priced items. This gets your high-end offers in front of more people, faster.
Believe it or not, some people are more ready to buy your higher-priced stuff than your entry level items. Maybe they’ve already gone through your competitors’ low priced products and are now looking for coaching, a more advanced (and higher priced) program, or someone to do the work for them. If all you’re advertising to new people is your entry-level ebook, they will have no idea you even offer those other products and services, so they will look elsewhere for what they really want.
When it comes to selling those high-ticket items, especially to first-time customers, you do need to take a different approach to it. If you’re used to using methods like Facebook or Google ads to send people directly to low-priced offers, you’ll find that having ads like that go to high-ticket items doesn’t work so well.
The Best Way to Make High-Ticket Sales
Here’s what we’ve found works really well: strategy sessions. A strategy session is a short, free, one-on-one call between you and the prospect. An average call lasts 15-30 minutes. It’s not a sales call, although sometimes it will result in a sale. The main purpose is to see if the prospect and your product or service are a good fit for each other.
As much as you might want everyone to buy, eventually you’ll realize that’s not ideal. Some of the people you talk with won’t be a good fit. Your offer might be too advanced or too basic for where they are right now. They might have goals that don’t align with what you offer. Or in the case of something like coaching, there might be a personality conflict.
Trust me, sometimes politely telling the prospect you’re not the right person to help them is the best thing for both of you. Otherwise there is a risk of selling to someone with unrealistic expectations or who won’t take any action or won’t get along with you, and none of those are good things.
The phrase strategy session comes from the world of coaching, though the concept works well with almost any high-ticket offer, especially services.
The Key to Setting Up Strategy Sessions
So how do you get people to sign up for strategy sessions? First, realize that you can only fit so many of these calls into your schedule, so you should be selective about who gets one. The best way to do this is to make people fill out an application, an online form with some questions they have to answer before they can get on a call with you.
Having an application accomplishes several things. It helps you gather some information before the call about what the prospect is looking for. In some cases this will be enough for you to realize you can’t help them, so you can politely cancel the call and save yourself both the time. It shows the prospect you’re serious by asking for the information upfront. It helps you prepare for the call by having some idea of what questions or problems the person has. It also weeds out people who aren’t serious enough to spend a few minutes filling out the application.
Scheduling Strategy Sessions
Setting up this process online used to require you to set up two pieces of software. You needed one to create the application form and another to let people see your available times and schedule your call. There are a number of software products that can create online forms and a bunch of others for scheduling.
We’ve tried cobbling together various combinations of these products, looking for the best solution. We quickly found that if we have people book a time first, many of them don’t bother to fill out the application, either because they’re confused or think it’s OK to skip that step.
If we have them fill out the application first, many of them who do so don’t book a time, for whatever reason.
We found ourselves having to do a lot of manual followup to get everyone signed up properly, and the whole point of this was to have an automated system that prospects could easily use to apply for and schedule a call.
A Software Solution
Unfortunately, there wasn’t one software package that did both parts of this process, so we decided to create our own. We now make it available to our clients. It’s called TimeSlots, and if you’d like to know more about it, you can watch this video.
Once we had the software issue solved, we set out to find the best way to let the most-qualified prospects know about our strategy sessions and encourage them to sign up for one.
Promoting Strategy Sessions
We’ve had some success sending traffic to strategy session signup pages from online ads, and of course, traffic from your own email list can work very well.
What has worked really well for us is webinars. Webinars are proven to be great for making sales, so we thought why not offer a free strategy session instead of selling something directly on the webinar?
It worked even better than expected. Maybe this is because people are so used to hearing sales pitches on webinars that they are pleasantly surprised when you offer them a free call instead.
Use the presentation part of the webinar to show your expertise and teach your audience something, then use the pitch part to offer the free strategy session. People who will sit through the webinar long enough to get to the offer are usually more serious and better qualified candidates for your high-ticket offers, which makes them ideal for strategy sessions.
There are other uses for strategy sessions besides qualifying prospects. A good one is market research. If you are putting together a high-ticket course, do some strategy sessions to find out what problems and questions people in your target market have. This is a great way to make sure your course covers everything it should. It will also give you some good ideas to use when it’s time to write the sales material for the product.
The Benefits of Premium Pricing
Making more revenue per sale is just one benefit of adding higher-ticket offers to your marketing funnel.
Here are a few more:
You can help people much more by selling them a higher-ticket service that allows you to spend time with them than you ever can from putting all your knowledge into a product like a book.
High-ticket offers tend to attract higher-quality customers and clients. Many business owners have noticed that their higher-paying clients are usually easier to work with and generate fewer support issues than people who buy low-priced products.
Those clients are also much more likely to take action because of the investment they have made with you. That makes them likelier to get the results they seek, which means happy clients.
When you sell higher-priced services and deliver quality, you can expect referrals. Many service providers get so much business from referrals that they no longer need to advertise their services since they are fully booked.
You’re more likely to get testimonials from clients or students you have worked with personally (i.e. higher-paying clients) than from low-ticket buyers.
You’ll get known as an expert in your niche as a result of offering higher-ticket services and products. Some of that is a result of the increased testimonials and referrals, but some is just a result of having higher-ticket offers. Many people who see those offers, even if they don’t purchase them, will think of you as an expert.
Being recognized as an expert leads to being invited to guest on webinars and podcasts, to speak at events, to do media interviews, and other opportunities that will make you more famous.
If your funnel has higher-ticket offerings in it, it’s much easier to attract quality affiliates. They will seek you out rather than you having to chase them.
If you give good service and build your funnel intelligently, some of your clients will continue to work with you for long periods of time. It’s much easier to continue working with a happy client than to recruit a new one.
You’ll find that you’re happier with your business and your life as a result of all these things.
Models for High-Ticket Offers
The high-ticket offers you can put together are limited only by your imagination and talent. Here are five types of packages to get you started.
One-on-One: These are offers that require your personal time, such as one-on-one coaching, tutoring, mentoring, etc.. That time is the primary reason for the higher price, since you have an absolute limit on how many hours you can give to your clients.
Assisted One-on-One: This is an offer which includes some high-value elements in addition to one-on-one time. The idea is to design them to reduce the amount of one-on-one time required, while still maintaining the value of the package.
One common element is prerecorded training. For example, if you already sell a video course, you could include that with your coaching package. That will save you from having to teach the entire course individually to each student. It will also increase the value of the package, since clients will have the course to refer back to after the coaching has ended.
If you don’t already have a course, you can record training videos or create other material for your students to go through to supplement the coaching. That way the students can learn much of what they need from the prerecorded training, and your one-on-one sessions can focus on questions and advanced topics.
Hint: Notes from a coaching program are a great foundation for creating a related course, if you don’t already have one. Include case studies and testimonials from your successful students, with their permission, of course.
Assisted Group: Many coaches offer group coaching as a lower-priced option in their funnel. Since they can have several students in the same session, they can charge less per student.
With some thought put into designing these packages, you can position an Assisted Group package to be as valuable as a one-on-one offer.
One key to doing this is to keep the group small. (Putting 50 people on a webinar is not group coaching!) In a small group setting, students can learn from the questions asked by other students. Being in a group also takes the pressure off a student to feel like they have to maintain half the conversation, like they might feel in a one-on-one situation.
Another key, if you have enough students, is to divide them into groups by skill level, interest, or some other major factor, so that the discussion is more targeted and relevant to them. For example, if your general niche is parenting, you might find out that several students have babies and toddlers, while others have just school-age kids. It would make sense to separate the students by the age group of their kids, so you can make the discussions more suitable for everyone.
High-End Products: Although many high-ticket offers are services, let’s not forget about products. Common examples of high-ticket products are courses, seminars, workshops, bootcamps, and other types of training, as well as software. These can be delivered in many different formats: physical or online products, live in-person events, live online events such as webinars, or various combinations of these.
If you’re selling high-ticket services, there are almost certainly some products you could create which would be a logical fit for your business.
Masterminds: Some of the highest-ticket offers of all are masterminds. A mastermind is a group of people who get together to discuss and work on a common interest, such as a specific type of business. For our purposes, the ideal candidates for a mastermind would be people who have taken our course on a particular subject and/or are in our coaching program.
In a properly-designed mastermind, students learn from each other as well as from the group leader. People join masterminds to get access to the other students as much as to learn from the leader. Many business deals and partnerships have started between people who met in masterminds.
There are many ways to structure a mastermind. Some of them are one-time events, like a weekend retreat. Others are ongoing; students meet online or offline on a regular basis such as weekly or monthly. For ongoing masterminds, students typically commit to participating for a long period of time, such as a year, to keep consistency in a group.
Examples of High-Ticket Packages You Can Create
There are many types of high-ticket one-on-one offers you can put together. Here are some ideas to get you started.
Monthly: This is a great way to start if you’re new to high-ticket offers and for your new clients, since the time commitment is short. Your monthly package could consist of a one-hour call per week with the client, possibly with some email access to you between the calls. If you both want to continue working together at the end, the client can renew for another month.
You should insist that all the calls are scheduled in advance and that the client shows up on time. The best way to schedule is to stick with the same time and day of the week for each call for a given client.
For best results, structure the calls rather than just getting on the phone and chatting. Here is a typical format for coaching:
- What action did the student take since your last call? Were all goals for the week achieved?
- What questions or problems does the student have?
- Training and discussion of what to do next.
- Set goals for the coming week.
The first and last steps should just take a few minutes, with the middle two taking up the bulk of the time.
This format is a good way to keep students on track and accountable, since they will realize they have to tell you if they took action or not, and why any goals weren’t met.
Quarterly / Semiannual / Annual: These are the same as the Monthly package, except for the duration. Give people a discount for making a longer time commitment and paying in advance. For an annual package you might charge 9-10 times the monthly rate.
If you’re new to this, you might want to start with just monthly and quarterly packages until you get more experience delivering your services.
Live Events: There are many ways to structure live events, from a one-day workshop to a week-long bootcamp. One of the most lucrative is a one-on-one, in-person meeting with the client. You can travel to them, or they can come to you. This type of meeting typically lasts a day.
Premium One-on-One: This package could include elements like more access to you, more one-on-one coaching, extra services, or other perks not included in your basic package.
Done-for-You Services: Another type of high-end services is a whole category known as done-for-you. Instead of teaching your clients how to do something, or coaching them through it, you just do it for them. Many people would rather just pay an expert to do the task for them than go to the trouble of doing it themselves.
Continuity: This is any service or product that is billed on a recurring basis. Some examples of continuity are access to a membership site or software, services like consulting or coaching (when recurring billing is in effect). Although continuity isn’t automatically high-ticket, we mention it here because including it in your business model can really help your bottom line. A continuity program adds a fairly predictable, steady income stream to your bottom line.
Designing Your Funnel
When you start planning your high-ticket services and products, think strategically. Design them so there is a logical flow from one to the next. Figure out good reasons why your clients or customers would go from one package to the next.
For example, at the low end of the funnel, it makes sense why someone would move from a $27 ebook to a $197 video course, even if both contain basically the same information. Videos have higher perceived value than text-based content.
It’s easier to teach some things in a video than in a book, because you can show people visually how to do things. Think of the difference between a recipe in a book and a chef on TV showing how to prepare the same dish.
On the higher end of the funnel, it makes sense that someone would upgrade from a group coaching program to one-on-one coaching or from coaching to a mastermind or a done-for-you service.
Although we often use coaching as an example, please keep in mind that your high-ticket service could be something completely different. Coaching isn’t suitable for every niche, and some people prefer not to do coaching.
That’s fine. Just think about which services and products would make sense for you and your clients or customers.
Don’t forget the power of strategy sessions. They are a great way to bring people into almost any high-ticket service and to research your niche.
Finally, try to think of at least one continuity program you can add to your funnel.
If you’d like some help creating your funnel, schedule a free strategy session with us here.
Watch this video about TimeSlots to discover how easy high-ticket sales can be when you have the right information. That video will also give you some ideas of what questions to ask in your strategy sessions.
Marketing funnels can look pretty complicated when you see them fully diagrammed out. However, you don’t have to create everything at once, and you can always add or tweak things in your funnel later once you’ve had some experience with it.
Always be thinking about what is the next logical step for your clients or customers. What products or services could you add to your funnel to serve people better and increase your revenue? Also look for gaps in your funnel where it might make sense to add an intermediate step.