I was out on a date the other night with my wife, and after a few particularly spicy servings of curry she left craving Juicy Fruit — you know, the bubble gum that I could had sworn was a victim of the new millennium. Weird, but whatever.
Well, we managed to find a pack at a nearby grocer and the craving was subdued (and a lot of failed attempts at blowing bubbles were made by me). But this article isn’t about bubble gum. Instead, it’s about the psychology that went into craving gum and then ultimately swiping a debit card.
That pack of gum was what’s called an impulse buy. It didn’t affect my wife’s and my finances in any meaningful way, and we’re not going to miss the few bucks we spent picking it up. No mental overhead went toward debating the pros and cons of buying that pack of gum.
Now, had we left the Indian restaurant and she turned to me saying, “Brennan, I really, really want a new MacBook Air,” the night would have gone a bit differently. Where spending a dollar on gum has no bearing in my budgeting, spending a thousand or two on a laptop does.
And let’s pretend I had no knowledge of Apple as a brand. Would this laptop work the way we needed it to? What was the likelihood that it would break the next day? How right is this laptop for me and my family?
It’s all about risk
With any transaction, there are two types of risk. First, there’s the money risk — Am I going to get more value out of this than the money I put into it? And second, there’s the product risk — Is what I’m being sold really what I’m getting? Am I being duped?
As the sticker price of the product moves north, the more these risks become a factor in the buying cycle. But you knew that. We all know that.
However, I see a lot of people who try to sell stuff online put together an ebook, a course, or a membership site and after driving traffic to it (and often times at a cost), they’re left wondering why sales were so poor or non-existent.
Sometimes, it might be the product. But more often than not, it’s the way they go about selling the product. They’re asking strangers to go home with them on the first date, which statistically tends to have a high risk of failure.
My premium product is something I call the Consultancy Masterclass. It’s $1,799, and sells out almost every time I host the class.
I like to say that the fact that it sells out has little to do with the copy or design on the sales page. I could drive all the paid traffic in the world to the sales site for the class, and I’d likely make zero return.
And I’m by no means an expert copywriter, nor have I discovered some secret sauce that allows me to sell thousand dollar products where others struggle to sell stuff for $10. What I have done, though, is court my customers.
The lifecycle of a Masterclass customer is generally something like this:
- Reads an article of mine and takes my five day free course. They’re also now on my newsletter, and getting free educational content each week in their inbox.
- A little later, picks up my introductory book (generally through a little autoresponder nudging on my part), “Double Your Freelancing Rate” for $49, which for a B2B transaction is practically like buying a pack of Juicy Fruit.
- They manage to raise their rates and end up netting thousands of dollars in new revenue, and internalize that by spending money on Brennan, they netted a huge return.
- Later on, they’ll pick up my second book (again, after being gently nudged through some autoresponders — more on this in a second), which helps consultants become better at sales and marketing. This book can cost a little more: the packages range from $49 to $249. And then, once again, they derive an ROI (e.g. they get a new client or two through some of the tactics I outline.)
- Next, they discover I teach a two day intensive course which involves a lot of individual coaching from me. It’s almost $2,000, but so far they’ve made thousands of dollars from our relationship.
- It’s a no-brainer. Remember: spend money, make money. I’ve been courting them for months, and we have a very healthy, and very mutually beneficial relationship.
The idea is that I’m aiming to offer my best products to those who have had the best results. You can get an email with brand new content from me each week for free, and this is where all of my customers start and stay. But a segment will self-select to dive deeper into one of the topics I cover, like value-based pricing. They’ll pay $49, and walk away with more value than they put into it. And then an even smaller percentage will opt to dive even deeper into pricing and the mechanics of running a consultancy, and they’ll pay close to $2,000 for group access to me. Finally, my customers who have had the best results self-select to pay $24,000 a year for 1-on-1 access and accountability each week.
Free -> $49 -> They learn and net an ROI -> $249 -> They net an even greater ROI -> $1,799 -> etc.
Ramit Sethi, the NYT best selling author of “I Will Teach You To Be Rich”, takes a similar portfolio approach to his products. The majority of his audience finds him either through his $4.95 book or blog, but through — as one commenter pointed out — a “Choose Your Own Adventure” style of interconnected autoresponders, he’s able to channel his audience into the funnel that makes the most sense for them and their goals.
His products range from a few hundred dollars to his $12,000, in-person workshop, which he only offers to his most valuable and most successful customers.
The importance of the followup
There’s a clearly defined funnel in my product business. Entering the funnel involves joining a free email course of mine or a newsletter, which is something that everyone is talking about nowadays.
But what isn’t always discussed, which is instrumental in the success of my business, is what happens after someone buys from me.
Where the typical progression might be: Public blog post -> Email course opt-in -> Hard sell -> Product sale, I’ve tacked on autoresponders that fire after a sale which are meant to telegraph customers from one stepping stone to the next.
Let’s say you’re on my list, and my initial set of autoresponders drive you toward checking out my first book. After you buy that first book on pricing, I’m not done. I’ve established cashflow — you’re not a newsletter subscriber any longer, you’re now a customer. And my primary goal is to make sure that the customer experiences and, more importantly, realizes that they’ve made an investment and not an expense.
So right after you buy that first book, I’m going to send out timed emails that offer additional perspectives on what the customer is likely digesting at the moment in my book, and establish a standing offer to help however I can. The emails make it clear that I’m not looking to have a one-night stand with my customers: “Have you done X yet? OK, what’s stopping you? If you’re stuck, here are some resources. Still stuck? Reply.”
The results of these followup autoresponders have been outstanding, for both the success of my customers and the balance of my checking account. I’ve been able to effectively glue my products together, with next to no continued input on my end.
Automate all the things
The single best way to move people toward paying for your monthly membership site or buying your premium course is to deliver a lot of free value (through blog posts, newsletters, email courses, and downloadables) that steers people toward your products and asks for the sale only when it’s time.
And don’t leave your customers out in the cold — followup up with them and help them make the most of your products, and they’ll come back for more.
Once you have the right processes in place, you can spend more time doing what you do best — talking to your customers about their particular situation. Much of my time is spent each week in my inbox, responding to emails that came about from machine-generated emails to my customers, but in the last year alone resulted in $324,073 in product sales — with almost half of that revenue coming from my most premium products that only 2% of my customer base bought.
Brennan Dunn has helped over 10,000 freelancers learn how to avoid the mistakes he made while growing his freelancing business to an agency. Over the next few months, he’ll be sharing more of the tactics he uses to automate the sales of his products and services with his newsletter.
The Top 10 Mistakes in Online Business
Every week we talk with entrepreneurs. We talk about what’s working and what isn’t. We talk about successes and failures. We spend time with complete newbies, seasoned veterans, and everything in between.
One topic that comes up over and over again with both groups is mistakes made in starting businesses. Newbies love to learn about mistakes so they can avoid them. Veterans love to talk about what they wish they had known when starting out.
These conversations have been fascinating, so we compiled a list of the 10 mistakes we hear most often into a nifty lil' guide. Get the 10 Most Common Mistakes in Starting an Online Business here »