A $300 one-on-one program isn’t affordable for many people, but why would you, a wellness coach, still want to opt for it instead of giving out a low-ticket digital course? Kendra Perry assures us that the latter business model is destined to fail. In fact, there is no way for it to work. She argues that if you couldn’t sell a one-on-one program at $300, it would be harder to sell a digital course at $100. Does that sound counterintuitive to you? After all, isn’t it easier to sell cheaper things? Well, that’s not quite true. Tune in as Kendra tells us why and what you should do instead.
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A Low-Ticket Course Is BAD For Your Business
In this episode, I have a good enlightening, possibly depressing episode for you. I want to talk about a conversation that I often have more than I would like to on Instagram. Specifically, I’m thinking about a direct message conversation that I had with a coach weeks ago. I do my best to start conversations with pretty much everyone who follows me as much as I possibly can. Usually, I reach out and introduce myself then I’ll, at some point, ask what the biggest challenge that person is having in their business is. It’s a great way for me to learn, “Can I help this person?” It’s also a great technique for market research and learning more about my ideal client.
This particular follower said something along the lines of this. I’m paraphrasing, “I’m getting burned out from discovery calls. No one is saying yes. My program is $300, so I think it’s not affordable for people. My plan is to create a digital course.” This hurts my heart but I wanted to know more so I asked her why she was planning to create a digital course. She said, “So more people can buy at a cheaper price of maybe $100.” I asked her what her income goal was and she told me $5,000 per month.
This conversation is pretty common. I have this often and it completely breaks my heart and my soul because the business model that this person is talking about doing is destined to fail. It’s entirely impossible for them to make it work but I understand why they think this way and where this line of thinking comes from. The first question is, “If you’ve been unable to sell a one-on-one program at $300, why do you think you could sell a digital course at $100?”
It may sound counterintuitive but lower-ticket products are way harder to sell than higher-ticket. Again, I know that seems counterintuitive and you’re like, “Isn’t it easier to sell cheaper things?” It’s not even a little bit. What it comes down to is traffic, the number of people who land on a sales page or follow you on social media or come in through ads. The cheaper that you sell something, the higher volume of traffic you need coming into your business.
If you want to make $5,000 a month and you’re selling something at $100, you’re going to need a way higher volume of people coming into your business than if you were to sell something at $1,000. To make this clear, we’re going to crunch some numbers. When you sell a $100 course, it doesn’t make sense to sell off a discovery call. You’re going to be relying on selling directly from a sales page. What is a good sales page conversion?
When I say sales page conversion, I mean the number of people or the percentage of people who will buy based on the number of people who land on that page. A good sales page conversion or let’s say an average sales page conversion can be anywhere from 1% to 5%. I’ll be totally transparent. I’ve had sales page conversions as high as 12% but that is after years of learning how to write sales page copy and even hiring copywriters and designers to do those things for me and also after years of testing as to what works with my audience.
The truth is conversion copywriting, writing a sales page that has the intention to convert people, is an incredibly hard skill. It is the hardest skill that you will learn in your business for most people. It takes years to master. More than likely, as someone who isn’t a copywriter, you will probably have closer to a 1% conversion. As I said, this is typical for newbies, and again, only if the page is written effectively.
You could have a 0% conversion because maybe the copy doesn’t resonate with your audience. If you have a 1%-sales page conversion and you want to make $5,000 per month from a $100 course, that means you need to sell 50 courses per month. Maybe you’re like, “That’s not that bad. Fifty courses don’t seem like a lot. That’s something I could do.”
Let’s keep crunching some numbers. In order to make 50 sales per month, how many people need to land on that sales page if you have a 1% conversion? It’s a simple mathematical equation. We’re going to divide 50 by 0.01. What that equals to is 5,000 people. If you were to times 5,000 people by 0.01 or 1%, that would be 50 sales per month. Five thousand people are going to need to land on your sales page in order for you to sell 50 courses and make $5,000 a month. Where, my friend, are those 5,000 people coming from?
The person in question I was speaking to had about 300 Instagram followers. Based on the Instagram algorithm, typically only about 1% to 2% of people see your content. If 1% of people of your 300 followers are seeing your content, that means 30 people. Maybe as many as 60 people are seeing your content. Seriously, where are these 5,000 people coming from?
How about your email list? How many people would you need to have on your email list in order to get 5,000 people to a sales page? Maybe you’re like, “I have 2,000 people on my email list.” Great, but did you know that a good click-through rate is 2%? When I say click-through rate, I mean the number of people who see an email and click on the link in the email.
Let’s assume that all 5,000 people are going to open the email, which is not going to happen by the way. A good email open rate is 20% to 30% but let’s say everyone is going to see the email and the clickthrough rate is 2%. That means you need 250,000 people to open an email and click in order to get 5,000 views on your sales page. Do you have 250,000 people on your email list? No. I don’t have 250,000 people on my email list. I’m not even close.
How are you going to get those people? Let’s say you’re going to run ads for a freebie to build your list. The average cost per email subscriber with Facebook ads in the health and wellness space is about $5 per lead. You can get it cheaper than that. You could maybe get it at $2.50 a lead but let’s be generous and let’s pretend that you are going to get a $2 subscriber cost. This is again being generous. We need 250,000 people on our email list, $2 cost per lead. We need to pay $500,000 in order to get those 250 people on our email list.
Your course is selling for $100 and you want to get 50 people to purchase so you can make $5,000 a month. It’s going to cost you $500,000 to make $5,000 per month. How does that make sense? The problem is that it doesn’t make sense. This will never work either organically or with paid traffic. It doesn’t make sense and it will not work.
The only way for you to make money with a small audience or a lower ad budget is with a high-ticket program. It is the only way. The problem isn’t that this person’s program is too expensive at $300. That’s so incredibly underpriced that I don’t even have words for it. $300 is way too low for any coaching program. The problem is that this person likely lacks a profitable niche, an effective message, and sales skills.
Any time you hear the money objection, it’s not about the money. It’s never about the money. Money objections are the most common objection, regardless of what you are charging. She could drop her price to $50 and some people would still say, “It’s too expensive.” It’s never about the money. It’s always about the perceived value. Back when I was in my mid-twenties, I had a roommate total my car essentially and drive the car while it was overheating for 100 kilometers until the engine seized and broke. I got the truck towed. The mechanic called me and said it was going to cost $2,500 for me to replace my engine.
Now, this was when I was in my early twenties. I was on unemployment insurance because I was working in forestry. I had to get laid off in the winter and so I would make $1,600 a month on unemployment. My mechanic wanted $2,500 from me, which I did not have. Did I let my car go? Did I write it off and decide not to have a vehicle? No, I got innovative. I got resourceful. I figured out how to get that $2,500. How did I do that? Why did I do that?
It’s because the perceived value of the vehicle was way more than $2,500. I lived in a small town and I needed a car. I wanted to go to the ski hill. I wanted to go on adventures. I wanted to have freedom. That freedom and convenience were worth way more than $2,500 and so I made it work. The people to whom you are speaking and who are interested in working with you have access to money. I understand that there are people in this world that do not have access to money but these are not the people to whom you are talking to. They do have access to money.
If they see value in what you are offering, they’re going to pay the money. They’re going to figure out how to make it work. They’re going to take out a line of credit, ask for help from their partner or from their parent, ask for a raise or ask for a paycheck advance. There are so many different ways that people can get resourceful and get the money to pay for your program.
When you are hearing the money objection, know it’s not about the money. It’s typically about two things. The first one we talked about is perceived value. They don’t understand how the value of your program is more than the price you are asking. That is the first reason and that always comes down to your sales skills.
If you learn how to better sell your program, how to talk about it in a way that dials in the value because what you’re offering is transformation. If people come through your program, they can change their entire life. They can live longer, be happier, feel better, improve their relationships, have more energy, sleep better, and have a much higher quality of life. I’m sorry but that is worth way more than $300. That is worth way more than $3,000. That is even worth more than $10,000. That’s invaluable.
The second reason is fear. There is a good chance that this person has worked with another coach before or they’ve tried something before, whether it’s working with a coach or it’s investing maybe in a course or some eBook and they failed or didn’t follow through. They’re afraid that they’re going to fail or they’re afraid that they’re not going to be able to make the required change to see the result. There’s so much fear that comes with taking the step into transformation.
We can resolve this issue by, 1) Learning how to sell and 2) Learning how to coach people who are dealing with fear. When it comes to high-ticket, the conversion rates don’t change much when you raise your prices. It’s counterintuitive but that’s why it’s easier to sell high tickets versus lower tickets because the conversion is the same. Instead of having to find thousands of people to buy something at a lower price point when you have a small audience, you only need to convert a smaller amount of people. If you have a small audience and by a small audience, I mean like under 50,000 followers and under 10,000 people on your email list, as an example.
The only way to be successful and make $10,000 a month and beyond is with high-ticket. Let’s crunch some numbers again. For example, let’s say you have a $3,000 program and you have 1,000 people on your email list. That means based on our 2% click-through rate, that 20 people are going to book calls from that 1,000 people on your email list when you send an email. A good close rate on a sales call is about 30%. You can get it much higher but we’ll go with like industry average, which is 30%.
That means 6 of those 20 people who book calls are going to say yes and buy your program. Your program is $3,000. That is $18,000. Even if you paid for every one of those email subscribers with something like Facebook or Instagram ads, with that average cost of lead, let’s, again be generous, $2 per lead, it’s $2,000. Even if you paid $2,000 to acquire those subscribers, you’re still making $16,000.
This is why in Health Coach Accelerator, I help students build a high ticket offer because it doesn’t make sense to sell low tickets when you don’t have an audience. Almost every single person who is coming to me only has a few hundred email subscribers or a few hundred Instagram followers. Very few people are coming to me with bigger followings and even then, even the people who come to me with 10,000, 30,000, and 40,000 followers still need to sell high tickets. It is your ticket to freedom. A high-ticket program is your ticket to freedom.
When I say high ticket, I’m talking about at least $1,000. I know people get freaked out when I say high ticket. They think I’m talking about $5,000 or $10,000 and that would be great. That is something to aim for but I want people to start at about $1,000 and go from there. I don’t want you to start charging a price that you feel completely uncomfortable selling and that you can’t even say without your voice cracking. We want you to start somewhere that you can say the price comfortably and go up from there.
I always want my students to aim for at least $3,000 and ideally $5,000. Again, they don’t need to get there right away. Sometimes it takes 1 year or 2 to feel comfortable raising your prices to that amount. The take-home message here is that the only way for you to make money with a small audience and a small list is with high tickets. It’s the only way. If you want to make an income that doesn’t keep you below the poverty line, then you have to sell high tickets. You cannot sell low tickets.
When you’re in your first couple years in business, it’s guaranteed that you have a small audience and it doesn’t make sense to sell something low ticket. I don’t think it makes any sense to sell anything under $1,000. A thousand dollars is still too low but that’s what I like people to start with then we move up from there. If you are a practitioner who is utilizing labs, a functional health practitioner, that $1,000 is your take-home cost. It does not include labs. Let’s say you’re paying $500 for labs then your program is going to want to start at $1,500 because that $500 isn’t yours and it goes to pay for the labs.
I hope what you’ve gotten from this episode is that a low ticket doesn’t make sense. It will never make sense. Something I should have talked about earlier but I forgot to is that typically when you’re selling a course for $100, you will end up with a lot of refund requests. With health and wellness, people need support. They need to be able to ask questions. They need to be able to get coaching because health is so unique. Even if you are somehow able to make $5,000 a month with your $100 course, you might have a refund rate of 20% to 30%.
Most people I know who have low-ticket product businesses, where they’re selling low-ticket courses have incredibly high refund requests. It doesn’t make sense. High ticket is the only way for you to make a good living, for you to have extra money to do the things that you want to do, have regular vacations, save for retirement, and for you to have the freedom, not to be working 50, 60, 70 hours a week in your business to try to make almost no money. Are we on the same page? I hope so.
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Important Links
- Health Coach Accelerator
- https://Training.KendraPerry.Net/s/lDo3UK
- https://Go.KendraPerry.Net/p4p
- iTunes – The Wealthy Coach
