Topics: 

1. It might take more time, but you will build a better business when you build a lot more trust in the people who are following the advice and information that you have.
2. Starting small in this way; what it does is it builds the know, like, and trust factor.
3. It might take more time, but you will build a better business when you build a lot more trust in the people who are following the advice that you have and information that you have.

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Build a Badass Business: Episode 39: Should you sell something high or low priced first? 

Coming to you from the city by the bay, this is Build a Badass Business with Diane Sanfilippo. Diane is a New York Times bestselling author and serial entrepreneur. She’s here to teach you how to grow and develop a successful business you love, and how to create raving fans along the way. Here she is, your host: Diane Sanfilippo.

Diane Sanfilippo: Alright, welcome back to the show. Today what I want to talk about is, should you sell something high or low priced first? I get a lot of questions about whether selling something for a dollar, or under $5, or under $10 is something that people should start with; or, you know, you’ve got big ideas and big projects and big products that you want to sell and maybe they’re more than $50; maybe they’re a couple hundred dollars. Should you start with those?

I’m going to give you my take on that, and give you a few tips to kind of figure out what’s going to work best for you, as well as what might work best for your market, and to figure out what works for you kind of as a person and as an entrepreneur. Because I think that not every entrepreneur has the same feeling or same sort of theory around what will make them feel happy and successful with the product that they’re selling.

So first and foremost; if you have a product, and this is something that I learned from Amy Porterfield; or, I guess I would say I heard her talking about it and I jived with it. I was like yeah, this makes sense, and I like this concept and I think you guys will like it too. The broader the appeal of your product, generally the lower you might want to price it. So for example; I sell a 21-Day Sugar Detox program, and originally the program was pretty small. It was a PDF eBook, and then it may be expanded to two other eBooks, and I sold that whole thing for $21.

Now, in today’s market, even in the market when I was first selling it back in 2010, that was actually a pretty low price for the product, and people told me I should be charging more, or could be charging more. But I didn’t want to; I just had it in my head that I wanted to charge $21 for a 21-Day Sugar Detox. And for as long as I did that, I stood by it. I loved that price. I still love that price.

The product is no longer that price because it’s a much more expanded product, even more than what it was 5 years ago; but, at that time, and even still to this day, my personal take on a product that has a very broad audience; the more people who you can get it in their hands, the more people you can have consuming the information that you have to put out; the product, the service, etc. The more people you can get your product or service into their hands or into their lives, the more people that will then continue to bring to you.

So, any limitations or barriers that you can take down, the better. I really like having something that’s priced in a way that’s inclusive as much as you possibly can. Now, that doesn’t mean that everybody has to sell things for super cheap, and it doesn’t mean that everything you have, you have to give away for free. Because at some point, you have to make a judgment call; what’s free, and what’s going to have a price on it.

So, here are some more examples. Maybe you have a blog; maybe you’ve been writing blog posts for a long time, and that’s free content. It’s free content that you give away to anybody who wants to come across your website and read it. Maybe you post pictures to Instagram; that’s actually free content that people are giving you. If you follow people on Instagram and they’re showing you recipes or meal ideas, that’s free content that they’re giving you. So at some point in time, if you have a collection of recipes, maybe you’ve curated, maybe it’s the best of the best. Maybe it’s new recipes, new information and you want to sell that, now you have an opportunity to think; do I want to sell this, or should I maybe even give it away.

This is a question that I get a lot; should I sell something that’s a lower priced item, or should I give it away as an opt in offer, or a lead magnet. Those two terms are kind of interchangeable, and actually a good way to think about this is; you are asking people to give you something in exchange for that lead magnet, or that opt in offer. So let’s just say you have an eBook that’s like 30 pages; instead of charging $3, or $4, or $5 for your 30-page eBook, maybe the cost to your customer is their email address .Right? There’s a very high value on their email address to you to be able to stay in touch with them in the future.

And as we all know; as you guys know from listening to this podcast for, hopefully, months on end now. You’ve hopefully listened to back episodes. You know that your social media following is not quite meaningless, but it’s not everything and those are not your people. Until you have those people on an emailing list, and you’ve collected their contact information, you’ve collected their email address, you don’t have those “customers”. You don’t have those contacts, you don’t have those leads until you have their email address. So it’s really critical that you find a way to consider what you might be able to give them before you ask them for anything. Before you ask them for money.

So perhaps if this is your first item that you have that you’ve created, that you have put a little more time and energy and focus into. So let’s just say it’s that 30-page eBook, maybe it’s 20 recipes, and you were thinking this whole time; I’m finally going to sell this eBook! I finally have something I can sell! But then you kind of step back and you realize; you know what? I really don’t have anyone on an emailing list. And what about when I have something else to sell? What about when I have 100 recipes altogether, or what about when I have a book about all breakfast on the go, or something specific that you will want to sell down the road to keep your business going. Because maybe your business is still pretty new.

If you’re still within the first few months to a year, your business is still pretty new. So a better bet might be to take that 30-page eBook and give it away; give it away in exchange for someone’s email address. Maybe you also have a couple of those recipes for free on your website that people can either download as a PDF, just two or three recipes in a specific PDF, or maybe you load a few of them to the website so that people can see them any time. It is still important to have content that is accessible without having someone exchange their email address.

But starting small in this way, what it does is it builds the know, like, and trust factor. That’s probably the most important thing that comes into play later when you have something more expensive to sell, and something bigger to sell.

So the reason why this is a topic that I wanted to talk about today, specifically, is that I literally just today; if you’re listening to this when this episode goes live it will have been just yesterday, Tuesday October 6th, just launched the most expensive program I’ve ever launched, even though I consider the fact that I’m launching it still kind of at a discount. So last December, I launched the beta version, the test version of the 21-Day Sugar Detox coaches program. I think we had it priced at $297; and at $297 we almost didn’t even tell people what they were getting, at all, because we had one instructor’s manual and one other guide perhaps, a little bit of content, one really big guide. I mean, there was a ton of information in there and support from myself and my team, and a handful of other things. I think some coupons and some little things.

And essentially what happened over the last, I would say 4-plus years, is that I’ve been giving away content for so long, and selling things at a much lower price, doing things like live Periscope videos, answering people’s questions, posting to Instagram, posting to Facebook, responding to people, interacting, building up the fact that people, like you guys. You’re listening to this episode; you know me. You guys have been with me for years. You know so much about me, and obviously if you’re listening, you like me. There’s something about me that jives with you that you feel that we speak the same language, and you trust me.

It was really funny, last December I was like; I don’t know what’s going to happen when we launch this, and people were like; I would give you this money for whatever it is that you have to sell. Like, I don’t even know what’s going to happen, but I know that I trust you, and I know that this is going to be awesome; and the same thing is happening right now.

So we launched this program; like I said the price tag on it is $697, so it’s still under $700. And when myself and my team look at what’s in the program; we’re like, this should be 4 times the price. But I still, I don’t have this huge motivation of, I want to charge some crazy amount. Not even a crazy amount; I just, I don’t need to do that right now. I feel that there’s so much value to be gained from building that business, building up learning from the people who are in my program, building even more trust in the people who have enrolled in my program and spent their hard earned money to then see what we have to offer, and to further be able to spread the word to people down the road to say; this is worth so much more than I paid for it.

And when the price does go up, people know that it’s still worth whatever it is going to cost, because my team, we’ve literally been working on this, I wouldn’t say all of our time and energy since last December, but a good portion of it on and off; more on than off, since last December when we initially launched the beta program.

I’m just using this as an example, because I think a lot of times; I’m in a position now where I could probably be consistently releasing products and services that always have a price tag on them, because people know that what I’m going to deliver to them will be of great value. I’ve given away so much free stuff over the years, and the few things that I do have for sale, the price of them is pretty low, considering what you’re getting.

And that’s something that; instead of looking at what someone is selling, look at the time they spend not selling anything. Look at the time that a business spends; like my friend Tony Kasandrinos; right, he sells extra virgin olive oil. We all know that; you guys know I talk about him and his product all the time. I had him here on the podcast for an interview, and he spends so much time sharing pictures on Instagram, regramming a picture, sharing other people’s stuff so they can get more views; just some goodwill, sharing things on Facebook, finding a way to answer people’s questions, hopping on Periscope when I told him that it was a great platform.

He’s interacting with you guys, and you know, at the end of the day, the thing that he has to sell is a bottle of olive oil. It’s not like a $10,000 product. You know; I don’t know it’s like a $25, $30, $35 bottle, depending on whatever you get.

I think it’s important to know that the price tag that you have on the item shouldn’t also dictate how much time and energy you put into supporting or answering questions from anyone person. I have no idea when someone asks me questions whether or not they’re at all interested in buying anything from me, and I really don’t care. I just want to answer the questions, and if down the road at some point that person feels like something I have to offer will be of value to them, and will solve a problem for them; as some people who are watching this episode as I’m recording this podcast. I’m doing it live on Periscope, so some people are watching saying, hey I just enrolled in your program. So I think that’s really cool and I’m real excited about that.

But you know what? I probably could have sold an expensive program years ago. But I just have this feeling that I would rather spend more time giving as much as possible before I have something that I feel I want to charge more for. That’s just my take. I think that building demand and building people up and building so much trust in people that you get to a point where they’re almost literally ready to pay you for whatever you have to sell; possibly, I think Gary Vaynerchuk says this, and I don’t think he’s joking. Almost even out of guilt, some people. Obviously, not a very expensive program that people are going to enroll in and be highly engaged in, but maybe somebody has a $20 product, maybe you have an eBook you want to sell, and you’ve had readers…

This is what happened to me, I had readers for so long before I ever launched the 21-Day Sugar Detox, and when it came out at $21, people were like, I’m just buying it because I just want to say thank you. They didn’t even do the program {laughs}, they were like; this is the first time you’ve ever told me a way to send you any money, {laughs} so I’m going to send you the money.

So I think that people get themselves in a tough situation. If you quit your job, and you didn’t have money saved, if you quit your job too early, if you weren’t prepared to work as hard as you were going to need to work in the beginning of your business, to be at the place where you could work without much income in the very beginning. Now, I’m not saying for a year, but for a while, if you put yourself in that situation then you’re going to feel like you need money really badly.

So if you start out your business feeling like you’re doing it because you need to earn money really badly, then you’re basically going into it scared. I’ve heard Chalene Johnson and her husband joking, scared money don’t make money. I think it’s really important to take that stuff to heart. Because when you’re going into business, you’re like; oh my gosh, I have to make money, I have to sell this thing; I think part of that is fine. Part of that, there’s motivation, there’s passion, there’s the drive to get yourself out of a bad place. That’s ok. But if you’re feeling like you just need to push your product on people because you need the money so badly, people will smell that miles away. And I never did that kind of thing.

I think any time I promote any product, it’s because it’s something that I love and I use, and it might take more time, but you will build a better business when you build a lot more trust in the people who are following the advice that you have and information that you have. So people need to get to know you, they need to like you, they need to trust you.

I say if you’re torn on whether to release something that’s inexpensive or more expensive; I think release something that’s not that expensive first. That’s just my; I feel like it’s less stressful, I feel like you open the door and you open the gate for more people to come into your house when you have the price lower.

Again, if you’re selling a program that’s going to teach attorney’s how to build a business, you might not be pricing that too low. {laughs} If you’re writing a program that’s going to tell accountants how to speak to artists better to make sure that they sign up for the accounting services; probably a niche market, and I think accountants are doing pretty well for themselves. {laughs} I think those of us who have a business accountant are looking at the bills like; oh, that’s a pretty good business to be in. But I can’t imagine doing that job, because I don’t think it’s too fun.

So I think if you have a product like that, it’s really different. But when you have a product that’s a lot more broad-based audience, appeals to a lot of people, or could appeal to a lot of people, especially recipes and things like that, keeping the price down is ok. And you’ll invite more people into your house, you’ll show them all the amazing things that you have to offer them, and then eventually when you have a bigger, more badass, more expensive product to sell, they already know, like, and trust you and they’re ready to be on that ride, be on that journey with you, and they’re not scared when they click that button.

If you enrolled in my coaches program, if you wanted to be a 21-Day Sugar Detox coach; I don’t want you to push the enroll now button and put your credit card in, and then be nervous about what’s going to happen. Even if I didn’t explain something perfectly on the sales page or whatever you want to call it; even if I didn’t explain something perfectly, and you’re a little unsure of something, I don’t want you to be nervous and have this bad feeling in your gut that myself and my team and my product and my services aren’t going to deliver. At the end of the day, that’s the thing that I want everybody who comes into my programs and my products to feel like they’re going to get their money’s worth and 10 times more. That’s how I want people to feel.

So if you’re selling something, it better be worth 10 times what you’re selling it for. Especially if it’s a digital product, and we have to put a price tag on that stuff; make sure it’s super, super valuable.

Hey guys, I’m so glad you’re loving the show. Let me ask you to do me a favor; come follow me on Periscope. You can find me; I believe you can search Diane Sanfilippo, or you can search @BalancedBites, which is my Twitter handle, which is the account name over on Periscope. I am going to start doing live sessions, really quick thoughts for the day. I’m not sure if it I will be every day, but it will be pretty often, and some Q&A on business topics and motivation, inspiration, etc. So make sure you’re following me over on Periscope. Download the app in the app store, and I will see you there.

That’s all I’ve got for you guys today. Don’t forget to subscribe in iTunes so you don’t miss an episode. And drop me a review to let me know what’s speaking to you from the show. If you want to get in on the conversation and you haven’t yet joined the group already on Facebook, head on over there and join the Build a Badass Business group. I share insights and tips regularly, as well as answer your questions right there on the page. Do work that you love, and hustle to make your business grow like your life depends on it, because it does. Thanks for listening, and I’ll catch you on the next episode.