STOP selling yourself short
All to often I see the majority pricing their products as if they truly don't believe in it. I mean after all, 9 times out of 10 price reflects quality. The average consumer is aware of this. Are you?
Throughout my career in sales I've seen about every type of customer that walks the face of the earth. Those that say gimme the cheapest thing ya got to those that say I want quality and "price is not an issue". So two very different types of customers. I am sure we can agree in any business we would rather deal with more of the ones that want the quality. That is the issue though, you are selling a 37 or a 77 dollar product. This is by and large on the low end of the stick in sales. After years of observing my own customers behavior, I soon began to realize a few things.
The customer that wants the cheapest possible item generally will be:
- The customer from hell.
- The customer to give you support issues beyond believe.
- The customer that may end up writing a letter about you if you do not give in to their outrageous demands.
- The customer that will cause a scene online and offline.
- The customer that at will ask for a refund after you jumped through hoops and pulled your hair out over.
Now - not saying that this statement is true 100% of the time, but it is a general rule of thumb I've used with a lot of success. (In my career I was never the one dealing with the customer I described above because I weeded them out before I took it to the next step)
This is the same exact market you target when you sell your services and goods online "The customers from hell"
Why is it that there is such a high refund rate on these types of products? Well generally, it's because that is the market you targeted in the price point you set. Yes, I know, there are those that just want to get over and get something for nothing, but they too fall into this crowd.
One reason why marketers are doing this is because they just don't believe in their product. They don't feel that if they raised the price it is justified. I have worked with many different types of salesman that fell into this very same trap.
For Example:
Salesman A asks to see product X. Product X has price ranges from $499-$999
Salesman A pushes the product priced at $499 because he or she don't feel the customer will spend extra money for something better quality.
Next one of two things will generally happen:
If the salesman persists pushing the product for $499 the customer may get frustrated and just say "ok, thanks" and walk away until a different salesman approaches.
Or they will ask to see something a bit better.
So, they just told you they like quality and they don't mind paying for it. So Salesman A sells the best one at $999.
So while they are writing up the sale, Salesman A decides not to mention the service plan on the product since it costs $399 and the salesman feels that is just to much money for the customer to spend. Salesman A also doesn't sell the customer add-on products, again because they feel it is just to much money. Yet - the customer already told you they like and want quality. So if there is an add-on to further enhance the product they purchased they will generally buy it..DUH!
Moral of that story is just because you would not pay that price or you feel it is not worth it it doesn't mean a customer would feel that same way.
I often see many online marketers cursing it up at some of the bigger fish in the industry for charging $1997 or $2997 for their product. I say to myself, these marketers haven't gotten it yet. The marketers charging 3k have seen the light and "get it".
Let's not forget these are very high quality products. They know their target market, they also know that training or secrets should cost a whole lot more than 67 dollars. That is just selling yourself short.
That isn't even the worst part though. Let's say you want to make 1 million dollars from a launch.
If you sell a product and including upsells the average sale is $105.00 dollars. You need roughly 9500 sales to hit your mark. That is 9500 customers you need to provide support for as well and that too cost money. Now lets say you sell a product for $3000.00 dollars. You need roughly 333 sales.
Yes - BIG difference. Not only that, think of the support. You would also be spending FAR less money on support and generally would be able to give even better support since you have 333 people to handle instead of almost 10k.
Get the point yet?
Now I am not saying your next video series to making big bucks while laying on your couch type of product should cost 3k. BUT, at least make it price point that looks as if you really believe in it. I mean, besides all that, you will make more money, and may even have less support issues since there are less customers, and that is a good thing.
Final thoughts:
Stop selling yourself and your products short. Price it to sell to the correct market and not just the market that doesn't like to spend on quality products otherwise your refund rate will go up, support issues go up and you may in the end make less money than you could have if you priced it properly.
If you're going to cut price and make it up in volume, then you have just decided that you're going to have to sell one heck of a lot more product in the same period of time.
Because if you string out the time period, then you're just making less money in any given time period because you've lowered your margins.
Throughout my career in sales I've seen about every type of customer that walks the face of the earth. Those that say gimme the cheapest thing ya got to those that say I want quality and "price is not an issue". So two very different types of customers. I am sure we can agree in any business we would rather deal with more of the ones that want the quality. That is the issue though, you are selling a 37 or a 77 dollar product. This is by and large on the low end of the stick in sales. After years of observing my own customers behavior, I soon began to realize a few things.
The customer that wants the cheapest possible item generally will be:
- The customer from hell.
- The customer to give you support issues beyond believe.
- The customer that may end up writing a letter about you if you do not give in to their outrageous demands.
- The customer that will cause a scene online and offline.
- The customer that at will ask for a refund after you jumped through hoops and pulled your hair out over.
Now - not saying that this statement is true 100% of the time, but it is a general rule of thumb I've used with a lot of success. (In my career I was never the one dealing with the customer I described above because I weeded them out before I took it to the next step)
This is the same exact market you target when you sell your services and goods online "The customers from hell"
Why is it that there is such a high refund rate on these types of products? Well generally, it's because that is the market you targeted in the price point you set. Yes, I know, there are those that just want to get over and get something for nothing, but they too fall into this crowd.
One reason why marketers are doing this is because they just don't believe in their product. They don't feel that if they raised the price it is justified. I have worked with many different types of salesman that fell into this very same trap.
For Example:
Salesman A asks to see product X. Product X has price ranges from $499-$999
Salesman A pushes the product priced at $499 because he or she don't feel the customer will spend extra money for something better quality.
Next one of two things will generally happen:
If the salesman persists pushing the product for $499 the customer may get frustrated and just say "ok, thanks" and walk away until a different salesman approaches.
Or they will ask to see something a bit better.
So, they just told you they like quality and they don't mind paying for it. So Salesman A sells the best one at $999.
So while they are writing up the sale, Salesman A decides not to mention the service plan on the product since it costs $399 and the salesman feels that is just to much money for the customer to spend. Salesman A also doesn't sell the customer add-on products, again because they feel it is just to much money. Yet - the customer already told you they like and want quality. So if there is an add-on to further enhance the product they purchased they will generally buy it..DUH!
Moral of that story is just because you would not pay that price or you feel it is not worth it it doesn't mean a customer would feel that same way.
I often see many online marketers cursing it up at some of the bigger fish in the industry for charging $1997 or $2997 for their product. I say to myself, these marketers haven't gotten it yet. The marketers charging 3k have seen the light and "get it".
Let's not forget these are very high quality products. They know their target market, they also know that training or secrets should cost a whole lot more than 67 dollars. That is just selling yourself short.
That isn't even the worst part though. Let's say you want to make 1 million dollars from a launch.
If you sell a product and including upsells the average sale is $105.00 dollars. You need roughly 9500 sales to hit your mark. That is 9500 customers you need to provide support for as well and that too cost money. Now lets say you sell a product for $3000.00 dollars. You need roughly 333 sales.
Yes - BIG difference. Not only that, think of the support. You would also be spending FAR less money on support and generally would be able to give even better support since you have 333 people to handle instead of almost 10k.
Get the point yet?
Now I am not saying your next video series to making big bucks while laying on your couch type of product should cost 3k. BUT, at least make it price point that looks as if you really believe in it. I mean, besides all that, you will make more money, and may even have less support issues since there are less customers, and that is a good thing.
Final thoughts:
Stop selling yourself and your products short. Price it to sell to the correct market and not just the market that doesn't like to spend on quality products otherwise your refund rate will go up, support issues go up and you may in the end make less money than you could have if you priced it properly.
If you're going to cut price and make it up in volume, then you have just decided that you're going to have to sell one heck of a lot more product in the same period of time.
Because if you string out the time period, then you're just making less money in any given time period because you've lowered your margins.