I see it happening all the time. The new business owner gets excited about their online prospects. They read a few ebooks, pick up a couple of courses, and get started with their first product.
For their first product, they create a $7 ebook. . . or maybe they go way out on a limb with a $10 product. Their concept is that with such a low price, it should be easy to sell.
Sure, you may sell more at this low of a price, but what's your overall strategy? How do you upsell them to a higher ticket item? What are the other products you make available to them?
Here's a rule you must always remember. . . Good marketing will not overcome bad math!
You have to sell 100 copies of that $7 product to just make $700. If you want to earn at least $5,000 this month, you have to sell 715 copies. . . and that's counting you as having zero advertising expenses. That's a tough road to follow. Averaging 24 sales a day without advertising just to earn an OK income is not an easy to plan. And it's never one I'd want to follow.
Do the math! Let's say you want to earn a million dollars. Sell 100,000 items at $10. . . or 1,000 items at $1,000.
Please note that high ticket could also mean $5,000, $10,000, $20,000 or more. These higher ticket items greatly reduce the number of customers you need to reach your goal.
What if you sell 10 of your $10 product this week, you make $100. On that $1,000 product, you made $10,000. Can you live on $100? Not likely. Can you live on $10,000 a week? I surely hope so, or we need to take a serious look at your lifestyle!
How about taking care of the customers? A surprising fact I've found is often the higher ticket customers are less demanding. With a higher ticket item, you obviously need a lot less customers. . . which means less customer service on it's own. . . and less staff. So less expenses in selling those higher ticket items.
You do the same marketing work for more profits. You have to create a sales letter, autoresponder messages, JV letters, etc. for either product. The sales letter for the higher ticket item might be a little more detailed, but those same details can find their way into your email messages, videos, teleconferences, etc. You make more money from the same work when you sell higher ticket products.
So what's the purpose of a low cost product? It's a lead generator for your high ticket items. Build a stronger relationship with your customers. If you're selling another product first, you can also move into additional marketing such as direct mail or phone to sell the higher ticket item.
So the only question left is how do you develop higher ticket products? One key of course is by adding additional value. Always increase your value until you're giving way more value than what you're asking for in price.
Another key is to change who you're marketing to. Pick markets where your customer have money. . . seek to sell to the affluent instead of those barely getting by. A great way to start this is through picking up a couple of magazines such as the Robb report.
For me, this was difficult at first since I came from the place of being poor and in debt. So it was hard to wrap my mind around the fact that there were a lot of niches where people had money. . . where they bought $5,000 golf clubs and attended $25,000 marketing conferences.
Yet, that's one of the biggest changes you can make. . . a change in your mindset. In most businesses, people are willing to spend money to get what they want. And these are some of the best customers you can ever have. . . if you focus on them and deliver exactly what they're looking for.
Terry Dean helps business owners Earn More, Work Less, and Enjoy Life. Receive his Special report, “10 Key Strategies for Any Business Owner to Earn More, Work Less, and Enjoy Life" along with three other special reports worth $109.80 for free at http://www.theterrydean.com