Now that you know how to choose a good product, how do you price it? Well, hey I'll tell you; you price your product as high as you can. Low price tickets do not equal less work. So, if I have a high price ticket, And I'm like “Jesus high price tickets are going to be so much work. I don’t want to do all that work. It’s going to be too time-consuming. What I'm going to do is a low-price ticket and do less work.” Well, let me tell you, it does not work like that! Your low-price ticket item probably takes an equal amount of time of your high-priced ticket. What we're trying to do is we want to get a ticket that really is as high as we can get for the market. One of the reasons that we want to do that, other than it's the same amount of work, is our marketing and advertising is going to be very niche driven since we're not going to drive towards every market.
Let’s use real estate as an example. We're selling real estate course and there are two different groups. We have the very engaged group, and these are brokers that are maybe pushing a million dollars a year. Then the second group we have is “everybody else”. This is where the pricing mistakes happen because what most people try and do is to create a price point for the engaged market. But then they market that package to the “everybody else” group. Let’s say the package for the engaged group is $4,999 and the package for everyone else is $299. Sure, the everybody else market is massive, It's a huge market and if I take that $4,099 package and try to sell it to the everybody else market nobody is going to buy it because it's too expensive. It’s too expensive because these are not the engaged people. These are not the people looking for a $4,999 package. They're not looking to make a move to the next level. The same happens with the engaged group. If you try to sell the $299 package to the highly engaged group two things will happen. The first thing that happens is that they don't want that product because they're not beginners, there's nothing for them to learn from there. They're looking for a package that is going to take them to the next level. The second thing that's going to happen, if you sell the $299 package to the engaged market, even if they did want it, you're not going to be able to sell enough of them because it's too small of a market and you won't make any money because you’re going to tap out eventually. So, we must bring $4999 price point to the engaged market. They want a course that’s going to show them how to move to the next level. They want a course that has nothing to do with beginners, a course that will give him the competitive edge within their market with the other big players. And the $299 package is of course appropriate for the mass-market. It's appropriate to the people who are thinking of dabbling in real estate or thinking about learning a little bit about how to market real estate. But they're not fully committed, nor are they fully engaged. This is such a common mistake that internet marketers make. I think what happens is you start going crazy on your numbers and you think “if I could sell my $4,999 package to even just 50% of this everybody else market, then I would just make millions.” It just doesn't work that way; you have to be in front of the right market. When we talked about pricing a product as high as we can you must understand that the masses’ price point is always around $1,000 to $2,000. When talking about the high-ticket product that price point is the $5,000 range. So, the mass is the one just below the high ticket. Then we have the super generic markets. This market has price points between $299 to $499. An example of this market would be the weight loss market. I don’t recommend that you touch that. We don't want to talk about that all because it's so low UNLESS you have an upsell. Remember no matter whether you are selling high-ticket or selling to the masses, we can always start low and work your way up. Remember this, if you can't sell low, you sure as heck aren’t going to be able to sell high.
So, I had a student that sold marketing to surgeons, heart surgeons specifically. His course is designed to specifically teach heart surgeons how to market their services to get as many clients as they can. Obviously, that’s a hot market because how many people is he is competing against? Not many. And what does he charge for his course? $25,000 for that course and it’s a good course. The student here who sells $25,000 course, Jacob, there's not a chance that he could have started at $25,000 because he was still testing the market and the product wasn't quite developed. Because of that, he started at the $5,000 mark. Which was a great value and he had no problem selling it. He then jumped up to $8,000 then $10,000. He then said let’s just do $20,000 and then he capped out at $25,000. But remember while you might think that such a massive price, how many heart surgeons are there in the US? There's not a ton of heart surgeons so he must have a ticket price that high. If he sells the $25,000 to the everybody else's there is no everybody else’s. Everybody else is not a heart surgeon. Again, if you don't have a very big market, but you're very, very, very targeted, hot specific niche then you got to charge big dollars for it. If there is a problem, and in this case there is a problem, people will pay big dollars for it. The problem is surgeons don’t know how to market and they know that they don’t know how to market. And when you come up with a solution, it's very, very desirable.
So again, nothing wrong with starting low, but remember, if you don't have mass, you can't go too low. You can’t take a $5,000 product and sell for $299. You can start your $5,000 product at $3,000 and see how that works. So, you must pick the right price point for the right market.
Now that we have covered how you should price your product, I want you to identify what your product goals are. It's so important because once you start marketing, where you want to be cannot change and it can't change because you're already locked in. Can you start low and then go high? Yes. But you can't have a $5,000 product even if you started at $3,000 for testing then start marketing it to the everybody else's or even to the masses. If you're looking for mass you are going to generate a lot of leads and therefore you want to have a very, very strong back end and you want to be able to upsell as well as sell other products. Let's just say you want to go into the $297 or even the $499, which isn’t really mass. When we're talking about mass, we are talking about the $2,000 price point. But when using the $297 - $499 the point it to then bump them up to the $2,000 price.
For example, let’s take a weight loss program for $297, you can then bump them up to another program designed for retention. You can do a $99/month program once they finish the program and they see results because the program is amazing, you can then bump them up to $499 product. Or you can start off with the $499 product and then bump them up to a $999 product which would, of course, include a whole lot more services. You might even want to bump up to the exclusive one-on-one package, which is $1,999.
Now if you’re looking only for cash flow, as in you just want to make a lot of money quickly, then you should definitely go for the high-ticket products. I would generally start that at the $3,000 mark and then work your way up to about $10,000. When you start getting to $25,000 you really got to have some experience and you can do that. But you should start with the $3,000 price point first.
Let’s look at the difference between the low-ticket and high-ticket items. If you want to make a $150,000 a month for the low-ticket item and you’re selling for $297, you got to sell to 500 people. Now 500 people is a lot even if it doesn’t sound like it, it is a lot. It's not necessarily a lot to sell to, but it's a lot of people to service and deal with. It's a lot of issues and a lot of people to push through the upsell. It's a lot billing problems such as cancellations and refunds. Even if you only have a 1% problem, you're still having to deal with 1% and obviously a 1% on a 100,000 people is much more than 1% of 10 people. So everything becomes much bigger, it's not a problem, but I want you to keep that in mind. Now if you want to make $150,000 on a high-ticket product, that’s only 30 people ($5000 * 30). You see what a huge difference it is? You're talking about 500 people versus 30 people.
My $5,000 course could not be sold in any sort of mass because we have one-on-one interactions. I talk to my students all the time as they are going through the modules. I monitor their ads, their landing pages, their webinars, their products, and overall progress. You could not possibly deal with 500 people if you’re doing all that, then you'd have to have a huge support staff. You would have to hire 20-30 people working for you. And eventually what happens is that $150,000 starts losing a lot of profit because you're paying big staff, big overheads. This isn’t a huge problem either because with the high-ticket products this is always the case. It is very hard to scale up above a certain level. How can I sign up 1,000 people? I can't look at 1000 websites. I can talk to one thousand people a day, clearly. So, then I'm starting to hire staff as well. Both tickets have their pluses and minuses. If you want to deal with something that's got more volume and you have a nice upsell idea in mind, then the way to go would be low-ticket items. If you want to deal with something on a very personal service, you want to provide a lot of one-on-one service, and you want to deal with smaller volume then you should go with high-ticket. It doesn't matter which way you want to go you just have to decide. I want you understand that increasing the price doesn't make it harder to sell, you just have to be more targeted in your ads.
So, it really doesn’t matter which one you choose, it just matters that you are aware of the pros and cons for each. Once you make that decision though you can’t just change it once you start, you are locked in because again different markets have different price points and have different expectations in terms of the product.