In my “Sales Hourglass” post, I described how many critical lessons the sales hourglass illustrates related to successfully making a living online.
You saw how important it is to have products and/or services that are geared to converting leads into first-time sales. But it’s equally important to offer products and/or services designed to keep and grow those customers and maximize your average lifetime customer value through repeat sales.
This post will show you the savvy way to construct that overall product/service mix based on tons of online digital information business success stories.
There is a bit of both art and science to creating a flow with the right appeals and price points as customers engage with you over time. But the general scheme goes like this:
First step: You start by providing your prospects lots of valuable content (relevant to what you sell) for free to illustrate your value/smarts/style/helpfulness. That is often presented as a free “gift” that prospects download, etc. That free content begins the trust-building process (especially critical with any intangible offering as opposed to physical products, because people can’t see, touch and smell what they re going to get before they buy it. They have to buy YOU before they will even consider buying your products and/or services.
Second step: you either offer prospects more free content of even higher perceived value (again, related to what you sell, of course), or you offer them a low-priced, entry-level product or service, one designed to maximize first-time sales. It must have low-risk pricing – something like $27 – $47 (there are experienced onliners who claim – after a lot of testing – that prices under $500 convert better if they end in “7’s”, not “9’s’. I know! We humans, right???)
Now you’re really on trial at this point: did you deliver what you promised – or, if you’re really savvy, if you delivered even more than you promised – when you said you would, how you said you would?
If yes, you have likely built more trust and layed the groundwork for the next sale.
If not, the prospect is likely gone forever. You had your chance, and you didn’t deliver.
Third step: now your are moving into “If you’ve liked me so far, wait to you see what I have for you next” territory. Here is where too many people make the mistake of being too conservative. When you sell information, the variation in price should change by a factor of 10 or 100 or 1000, depending on how much of you the customer gets. The higher the price, the longer and more direct access that customers get to you.
Now let’s take a step back and look at the funnel structure described so far, and where it might go from here…in the case of a life coach:
Take particular notice of three principles at work here (I’m being somewhat redundant, I know, but it’s to stress some really important strategies):
- That the coach commands higher prices as s/he builds credibility and trust with the customer.
- That the price points from step-to-step go up quite aggressively.
- That the higher the price, the longer and more direct the customer’s interaction with the coach is.
Don’t worry so much about these particular package descriptions or price point. Yours will be different. Focus on the principles involved, and fit those principles to your unique situation.