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The Power Of Positioning And Pricing

sales Oct 19, 2020
 

Introduction 

Pricing and positioning is beautiful.

I think of it like art.

I mean think about it:  Why are so many things priced at 99 cents or 98 cents?  Or why do you see items priced at $97 rather than $100.  I mean, that's only a three dollar difference so does it really matter?

>> Click here to get a FREE instant download of the PDF version of this post... I'll throw in my audio narration as a free bonus.

It turns out it does.

One quick thing that's bothering me...

Before we jump in today, I need to ask you a question:

Are you here to make an income or an impact?  Are you here to make a dollar or a difference?

I need to bring this up because the stuff you've been learning so far, and specifically what you will learn in this lesson, can put you in a place where you can make a massive impact in the world.  

By pricing and positioning your products using the techniques I'll share below you'll be able to get more of your product to more people which means you'll be in a place to make a real difference.  You'll be in a position to really change people's lives for the better.

This is a good thing!  And I just wanted to take a moment to commend you for wanting to do that.  I know you're not the kind of person just looking to make a buck.  If you're looking to get rich quick you should honestly leave my website immediately because you're not the kind of person I want to work with.

I'm here for the people who really want to introduce value in the world so they can change as many lives as possible... for the better.  If that's you - keep on reading!

NoteDownload the FREE PDF Version of this article so you can read offline, anytime and print it for easier viewing.  As free a bonus, it includes the audio narration as an MP3 file so you can listen on the go.  Just enter your email address to get the entire thing.  It's free, instant and available now.

Pricing And Positioning

So now that we have our Beta Program finalized, we can think about pricing an positioning.

So what is pricing?  It's exactly what it sounds like!  The pricing is all about the cost of the product.  How do you know how much you should charge?  What price is fair and reasonable?  Will people actually buy at the price point you set?  Is there a scientific approach to determining this number?   

Positioning is more of an art than a science as you are trying to figure out the perfect way to turn your prospects desires from wants into must have needs. 

Price Strategy 

So how much should you charge for your flagship course?

Here’s a key point: don’t innovate on price.  You don’t want to come up with creative prices like $63.31 for your video course!   

We’re going to be working on your first online course, which will be a short video course which addresses a specific problem your audience has so if you have less than 6 hours of content you can charge between $49 and $499. 

Now I know some people like to end their prices in “7”’s because from a psychological perspective, they believe more people buy when they see the number 7 since it implies good luck.

That sounds nice and all but I don’t buy it!  Pun intended. 

I'm just kidding, all joking aside if you wanted to use the 7’s you could price your course between $47 and $497. 

If you have a longer multi-part course with video content more than 6 hours you can start thinking about pricing your product between $500 and $2997 (depending on the specific result you’re promising your audience) 

Alternatively, if you tack on a high ticket back-end product as a strategic upsell you can usually price even higher.  For example if you create an upsell that complements your flagship course by helping your customers get even quicker results then you should expect to price it between $3000 and $5000. 

I know it feels insane to price something that high but remember: the difference between a $5,000 course and a $500 course isn't 10 times the work.  The difference is that the former can produce a result quicker than the latter.  So if the $500 course has 10 videos on how to lose 100lbs in 6 months then the $5,000 course could be a live workshop where people fly to your home and you work with them individually.

But here's my suggestion: for your first course I just want you to price it at $97. Remember our goal is modest: we simply want to earn our first $500 and then once we have that under our belt we can scale up from there. 

Let's start with small wins and victories.

Positioning Strategies   

Let's shift gears a little bit and talk about positioning. 

Your positioning is basically the thing that makes your product unique.  In other words, when your customers, fans or co-workers talk about your business, your unique positioning should make them say something like this:

“Oh yeah, [your business name] is sort of like [something everyone knows or understands] but it’s different because [the thing that sets you apart]” 

Tiered Pricing And Packaging 

When it comes to selling your stuff online you should always offer tiered pricing so when your prospect is deciding  whether they want to buy from you, they can choose between you and YOU... not you and your competitor. 

Here are two amazing, and somewhat advanced packaging secrets you can use that will almost certainly boost your sales:

On-going Vs One Time

This is actually one of my favorites.  Using this strategy, you only have two pricing tiers which is awesome because the simplicity of this technique is part of the reason it is so effective. 

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You offer one pricing tier that includes your flagship product for three monthly installments at some affordable monthly price point.

And you pit this against a one time payment that costs 20% less than the monthly installments. 

So the comparison sets off a decision in your prospects mind: they can get in on your product right now for an initial payment of $37 (and then just $37 per month for two months afterwards).  But if they do this, they’ll pay 20% more for the total cost of the product... that’s the cost of convenience.   

Or they can just buy the whole thing out right now for $97 and be done with it. 

Platinum, Best Value and Most Popular 

This is a classic tiered strategy that also works well. 

The idea here is you want to offer three pricing offers, or packages with increasing value add so that your prospects can choose between the offerings you offer (and not your competitor’s) 

The way you set this up is your Platinum or Premium offering has EVERYTHING your prospect could ever need to get the desired results in the shortest possible time. 

For example, you might provide lifetime access to your online course plus a training vault that includes additional how-to guides, checklists and workbooks.  You might also include one-on-one calls and an invitation to have people fly out to your home (or hotel) to do a special one-time-online mastermind session with you where you basically teach them one of the lessons in the course live.   

Of course, at the end of your live mastermind “trial” you could include your upsell into your fully paid program which you would charge $5,000. 

Now, if all of this sounds crazy I want to say that it sounded crazy to me the first time I heard of it as well.  But the truth is there will be a small, select group of people who will become your rabid fans.  You might only have 5 or 10 of these people from a list of thousands of subscribers but that’s all you need. 

Think about it ten $5,000 purchases could be life changing right? 

So that’s the idea behind the Platinum package.  Let’s say you charge $997 for the Platinum package. 

Then you would juxtapose this Platinum\Premium\Ultimate package thing against a Best Value offering.  The best value is where you want to capture the majority of your market because it includes everything in the Platinum except one thing (for example the live mastermind session) and the price is comparable.  In this example the Best Value might be $497. 

And then finally your “Most Popular” package would include everything in the “Best Value” package except one item.  For example maybe the one-on-one calls is missing.  But the secret to making this work is to make the price only slightly less than the “Best Value”.  So you would make this $447 or something like that.   

So look at what you have:

  • Platinum: $997
  • Best Value: $497
  • Most Popular: $447

So when people are making a decision they can see the “Most Popular” option is the cheapest but for just $50 bucks more they can go with the “Best Value” and get more for less. 

Are you starting to see how this works?  Which one would you choose if you were someone in your target market?

The Carwash Trick 

The Carwash Trick is awesome.  It’s based off the Mr. Carwash carwash chain.  I first heard it in on Pat Flynn’s podcast which was brought up by his guest, Derek Halpern.   

Halpern tells the story of two car wash shops next to each.  One of them was struggling with sales but the other was growing like crazy. 

Halpern, being the curious sales guy that he is, asked the growing car wash employee what they were doing to get so many new customers and what he found out was amazing. 

This car wash implemented a subscription model with a clever comparison between price points.  Customers had two choices: 

  • Buy a single, one time car wash for $10 bucks and be done with it 
  • Pay $12 per month for unlimited car washes. 

Guess what happened? Almost everyone went for the unlimited car washes! 

And think about it: it looks like a deal when you look at how the prices are juxtaposed to one another right? 

So with your online course you could do something similar. 

You could create two pricing packages. 

  • Most Popular: One time payment of $47 for 4 modules, cheatsheets, checklists and a one-on-one setup call  
  • Best Value: Monthly payment of $49 which includes everything in the one time payment plus long term access to an exclusive community in the membership site that can support the customer and help them with implementation.  

Trials 

I feel like this section wouldn't be complete if I didn't mention trials. 

Think about this scenario: you can package your product as a membership site (see our lecture on Membership Sites for more details) that bills the client every month at $37 but pushes the first payment back by 14 days or 7 days or whatever.  

So they can cancel before the bill period right?

>> Click here to get a FREE instant download of the PDF version of this post... I'll throw in my audio narration as a free bonus.

But one of the ways you can sell this is by saying something like this in your sales copy:

“Don’t decide today.  Instead just signup for the 7 day trial today then if over the next week you decide that the product isn’t working for you, feel free to cancel anytime.”  You are basically asking them to delay the decision today (accept your trial) and then decide after they've already consumed your product.  So the idea is if your product is getting them results (and it should be if you did the beta test) you will have less cancellations before they start getting charged. 

Quick Action Result 

The quick action result today is to pick your pricing structure.  

  • Decide which pricing and positioning strategy makes the most sense for your business. 
  • Write down the strategy you will use and start thinking about how you will implement it. 
  • Jump into your New Kajabi FREE trial and start looking at the different ways you can create offers.  Offers are pricing packages that you can use to bundle products.  Using offers is how we will create these pricing packages in Kajabi.
  • If you want hands-on help creating trials and pricing strategies in Kajabi, join my email list so we can start working together on making this happen!

In the next lesson we’re going to dig into upsells and downsells!  This is where the fun happens guys.  Most people have heard of upsells... but downsells!? Yes, that’s a thing and it has the potential to skyrocket your sales.  I’ll explain why next week. 

Talk soon!

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