Extract More Money From Your Small Business – Part 2

Remember, I don’t know exactly what you’re doing and what you’re offering OR how good you are.

If you feel like you’re not good enough to charge some of these prices… lower them. Then… improve your skills.

That being said…

Here’s a good rule of thumb to follow.

If you’re offering one on one consulting time or group coaching (and you’re not a TOTAL narcissist…

Take the highest price you’re comfortable with charging and then ADD 10% to that price.

Once you start getting sales at your price, incrementally increase your price by 5-10% for every new customer you take on until you stop getting conversions.

DON’T BE THE ONE TO TELL YOURSELF NO!

Let your customers tell you what they will pay.

*note – correct pricing and packaging for value isn’t going to be enough if you don’t know how to pitch your offer.  If pitching is hard for you, study the book called”Pitch Anything” and work on that skill.  It will serve you well in many areas of life to improve this one skill.

Let’s talk about the different types of products and services you might offer.  This is going to relate to digital products and virtual services.  Any physical products could be added in as well… just remember to calculate your profit margins accordingly.

First of all, I’m a big believer in leading with value.   

You’re reading my “lead by example” version of that right now.

I want you to get some value from me and KNOW I’m worth investing in before I ever ask you to invest.   If I can’t do that, I’ll probably not convince you I’m worth your time anyway and that’s just not a foundation

I can build on.

So find a way to create something of value for your market that you can give away.  Create something that complements OR supplements what you already do.

I grow businesses in many different ways.  One of them is helping entrepreneurs craft solid offers and clear their head trash so they can actually pitch them and make money.

I found that is SUCH a common problem that I decided I would give as much help with that as possible, free of charge.  Obviously, it would work better one on one… but this is a way I can serve my market and find potential leads.

DO THE SAME THING FOR YOUR MARKET.

The next thing you will create to ascend them up your value ladder is a low level offer, sometimes referred to as a trip wire.

You can have many different entry points into your marketing “eco system” … it does not have to be simply linear… but for the sake of simplicity and what I like to focus on, “Fastest Path to Cash” lets consider a linear value ladder starting with free, to low cost and upwards.

Your low cost product should be something that can solve ONE specific problem for them.  It should be easily digestible within one to two hours and should allow them the ability to implement within a day.

The price here is between $6-$20.  There’s so many ways you can validate that your product (ebook or video training work really well) is worth more than dinner for two.

It may take you a while to think about why… but think it out…. Write up those bullet points and look at it.  When you look at that and say “That’s a no brainer” … You’ve got a winner.  

DON’T OVER CREATE!

• REMEMBER to make it easily and quickly digestible and actionable!

The problem you will want to solve is not so much how to give value, not if you know your stuff.

It’s going to be more about demonstrating the value in a product they haven’t seen yet well enough to get them to part with their money.  So focus on this part!  

Pretend it’s your best friend and you want them to understand why they HAVE to have this.  You would tell them:

• Benefit!
• Benefit!
• Benefit
• Benefit!
• Benefit!

What are the benefits of your product?  Get CLEAR on that and making the pitch will be a lot easier, as will choosing the price.

The next offer is going to be your CORE offer.

This is the one that should bring you the majority of your income.  All of your marketing and products will be leading up to THIS product or service that allows you to give max benefit to max audience size.

My preference is that this is scaleable, so it’s a digital product or training that modulated and self-paced (online membership course etc) with possible weekly trainings, live videos, q and a etc inside of a group.

This lets you leverage your time while being able to serve more people at a solid price point.

Finally, you have your upsell offers.

Upsells are not created to be just one more possible way to squeeze money out of a prospect.

It has to be purposeful and make sense for your market.

Keep this in mind… people that pay the least expect the most.

It’s harder to sell people on free and $5 than it is to sell the RIGHT person on $200 or more.

The person who’s focused on VALUE rather than dollars (no, they are not the same) is going to be willing to spend more.

Once you’ve shown them value at each level, they are much more likely to want more from you and be willing to pay higher prices if you continue to offer them what they want.

Upsells are going to solve a problem that not everyone in your market need solved, but the ones who do need it solved understand the value of it.

I’ll use one of my own value ladders as an example:

Free Optin/Lead Magnet – 10 Ways to $10k

TripWire offer – Projects in a Box –

Pre-mapped out project templates for multiple business scenarios to help the “organizationally challenged” get organized fast. $17 per template

Core Offer – My Freedom Systems – $97

Four modules in a membership site teaching people Email management (email overwhelm KILLS productivity) Time management, Project Management (next level on what to do with the templates you bought) and Outsourcing (so you can hire the people to actually do the work ☺ )

Upsell 1 – Group Coaching $199/month or $999 for 6  months (one month free)

I offer 15 minute one on one calls twice a month and a weekly q and a call that’s recorded for all members of the group.  

Upsell 2 – Business Consultation Call $299

90-120  Minute call with me to create a clear plan for what’s next in the business to increase cash and freedom.

RARE UPSELL – (I offer this to less than 1% of my audience)

Retainer client agreement. Price varies  They get weekly calls with me and I speak to them and their team to keep projects on schedule and optimize profits and time.  I’ll spend 1-5 hours a week with clients from $2500-$10,000 a month.  It’s not for everyone.  The ones who want it are the ones who make enough that my optimization skills validate the investment.
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Applying This To Your Offers

The strategy is to segment what you offer into a value ladder that you can ascend your customers up through.

Use benefit bullet points to help you figure out what a price is for these offers.

Think about how much time and stress your product or service will save them.  

Use reference points like minimum wage hours worked vs. expert hours.  If you gave them, effectively, an hour worth of your time, is that not worth twice minimum wage?  

Is it worth dinner for two?

Is it worth … Well… What is it worth?

Think hard and DON’T undervalue yourself.

Okay… Here’s the worksheet to help you with some numbers and seeing HOW fast things can add up to $10k a month for you.

Did I just hear you say “Finally!!!!”???

I better not have!

I had to warm you up to know what to plug in there, Speedy Gonzales.

Without context, the numbers don’t mean anything.

If you got to this point and skipped the rest above… Slap yourself on the wrist!

Then go back up and read it.
…

…

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All done?  Good ☺ Let’s move on.

Scenario One –Lowballed

When you’re too afraid to charge much… do you see how many sales you have to make in order to hit $10,000 a month?

Ask yourself… is it harder to charge more and get fewer people to say yes or to charge less and get more people to say yes?

Scenario Two:

Here, doubled the TripWire cost, but it’s still only $10.  We bumped the Core Offer price $7 and left the upsell the same.

Here’s the thing.  With this offer, you need 315 LESS “yes’s” to get to $10k a month.

When you think about what’s harder… getting a yes or a yes at a few buck higher… usually it’s just the “yes” that’s scariest.

I told you… MATH IS YOUR FRIEND!

SCENARIO THREE:

Again… just a few tweaks to the price and now we need even less sales to hit that number.

Something to think about is the percentage of conversions that take the offer.

The higher you can increase your conversion rate from TripWire to Core Offer to Upsell, the more sales you get, the higher value each of your new customer becomes.

As that happens, you can afford to invest more to acquire each new lead.

SCENARIO FOUR:

VIP Prices

This is a powerful example of what happens when you have higher ticket offers available.

With only TWO sales, you just added nearly $2k to your monthly revenue total.

See how fast that can add up?

Only two sales out of your 450 customers.  Improve your conversion rate and that generates a lot more money very quickly.

EXCITING, ISN’T IT?  

Bet you wanna call up your old math teacher and thank them!  

Too much?

Yeah… okay.  ☺

SCENARIO FIVE:

Here we upped the Core offer $20 and doubled the upsell price.  

Remember, these are mock scenarios just to give you an visual idea of what happens when just a few numbers change.

SCENARIO SIX:

Upped that TripWire and BOOM.  More $$

SCENARIO SEVEN:

Some different price points. Lower Upsell prices need a few more front end offers, but not much.

SCENARIO EIGHT:

Lowered the Core Offer price… still making $10k.

SCENARIO NINE: – MORE PLEASE!

Want to earn more than $10k a month?  Getting those $20 sales on automation isn’t that hard with a good content or ad strategy.

Even with a ten percent conversion rate on upsells, the profits look pretty nice.

SCENARIO TEN: – HIGH ROLLER

A few years back, Digital Marketer did a study that found that they could charge THREE Times the price if they divided that price into three payments and it converted almost as well, only a 2% difference.

Instead of charging $97, they charged three payments of $97 and only lost two percent of sales.

Payment Plans are DEFINITELY something you want to consider adding to your model.

Something else you want to consider is making sure that your tripwire cost balances out your ad budget.

Work on your conversion rate and prices so that you break even on any ad costs with trip wire sales.

In other words… If it costs you $2 for a new lead and your tripwire is $20, you need to convert every tenth lead into a customer to break even.

Or… lower your lead cost.

Or… raise your tripwire cost … but that could hurt you if you go above $20 depending on your market.  

If you’ve served them well with your free offer, you may be able to get more.

BOTTOM LINE:

MATH IS YOUR FRIEND!

Play around with your numbers to find out how to make YOUR  personal targets happen.

I’ve included a link to a SUPER SIMPLE calculator that you can download to try different number scenarios.

Grab it Here:

Just adjust the price column and the number of sales column, don’t touch the totals, as that’s a formula that will automatically change as you change the price and total number of sales.

THAT’s IT!

Changing the way you think about numbers is a POWERFUL way to change the kinds of numbers you have in your bank account each month.

Interested in getting one on one help?

Click Here to Book a Two Hour call with me to get some rocket fuel for your business.

Because, after all, there are way more than just 10 Ways to $10k. ☺

– Tina Marie