How I ended up screwing myself over

1 Marketing Example

What’s good young and eager mind.

Yesterday, I told you I got some exciting stuff coming.

Well, I’m launching a new product for the first time in forever.

You see, here’s what happened.

I was working on a new product I felt my students would benefit from when it suddenly hit me… it’s gonna be difficult to get everyone who needs this to buy it.

I shipped a product on building habits a while ago because one of the biggest issues I see each cohort is that my students struggle to implement what I teach consistently.

But that stuff just isn’t as sexy as a product on getting to your first $10,000 month.

So you’re forced to create what people want instead of what people need.

And also, as I’m creating more and more products, the store gets more complicated. I’ve noticed this overwhelm as well when I’m doing my sales interviews with prospects.

Read this if you wanna learn how you do a sales interview:

The choice architecture (to use a fancy term) becomes overly complicated.

So I said, you know what, fuck it.

You know what I would really want…

An MMA gym but instead of teaching people how to fight, they’ll learn how to become a successful solopreneur.

I want them to pay a fixed membership fee and just include everything. My guides, eBooks, group coaching, offline courses, live courses, in-person meetings, and the community.

Everything for a fixed price.

From a selfish POV, this would be the dream because I’d no longer have to weigh the pros and cons when I want to make a product I feel my students need.

And from the student’s POV, it’s better because you don’t have to make a purchase decision every time you want to join a new product.

We’ve already seen this play out in the music and film industry. When people bought a song on iTunes and paid for each movie they wanted to watch, consumer preferences were conservative.

Now that Spotify and Netflix exist, the data shows that people are far more willing to explore things they normally wouldn’t have.

This is a direct result of not having to make a purchase decision every time you wanna check out a song or movie.

Ironically, this is exactly the kind of important stuff that I’d love to create a product on. The basics of choice architecture, and how different pricing models influence your customer’s behavior but I can’t make it currently. The number of “black belts” who’d benefit from this stuff is too small so instead, I’m forced to create more for “white belts.”

As I’m launching the Solopreneur Gym, I’ll be breaking down what I do so you can peek behind the curtains and steal what you like and implement it in your own business.

Super meta lol

Starting with the price.

The common wisdom in solopreneurship circles is that it needs to be as low as possible.

If you sell something at a low price, it becomes an impulse buy for people.

I’ve not found this to be the case at all.

Maybe if you’re selling products near the $50 mark.

But for any form of live course, or smth that involves your time, if you’re gonna sell it at $200, you might as well sell it for $700.

The bad news is that conversion doesn't increase when you price it lower.

The good news is that conversion doesn’t increase when you price it lower.

In order words, your conversion rate stays roughly the same.

The thing that changes is the type of customer you attract. (Almost always you’ll attract a better quality customer.)

That’s cool because when you charge more, you now have more money to spend to make the experience even better. That gets you word of mouth which makes you more money and around the flywheel goes.

Say you do 7 sales interviews per week and you close 1 or 2 of those.

If your avg sales interview is 60-90 and your price is cheap, that’s already not worth it.

And I’m not even mentioning stuff like onboarding, following up when they need to think about it, and delivering the product if it has a live element.

But if your price is higher and your margins are better, you can afford to do a good sales interview. You won’t need to rush the process and take as long as you need to do a good job. So that higher price allows you to do what you’re supposed to do: act according to your fiduciary duty and help the prospect to the best of your abilities.

Put simply, to put their needs first.

Now of course, you can take things too far and make your prices so high that your risk goes up too much.

This was actually an entire session in the old Youngling Research Cohort because if you’re already doing 200K like me, you can afford the risk of not closing a super high deal. If you’re selling something that’s 50-100K and you don’t close 1 for the entire year, you still got food on the table.

But when you’re dependent on that to pay your bills, you’ll get REALLY nervous when it’s November 17th and you still haven’t sold anything. 0 sales multiplied by a high price is still 0. Not to mention that on paper, it doesn’t matter if you sell that 100K product on Feb 2nd or Dec 21st, but IRL it does because you need to be able to afford your burn rate. This is where the difference between profit (revenue - expenses) and cash flow (money that hits your bank - money that leaves your bank) becomes important!

If you expect to close that large deal by December 22nd, your profit might still be amazing. But if you can no longer pay the bills after April 4th, you got a situation on your hands. Never mind the fact that the longer you go without selling that high-ticket item, the more the likelihood goes up that the reason why you’re selling is due to no one wanting it vs. just the law of probability.

This is why I, as a coach, always have to make sure the student’s product portfolio takes into consideration not just their psychological makeup (big five), but also their risk tolerance. (Which can be a function of how far along they already are or how much they’ve got saved up etc.)

Tomorrow, you and I are gonna start discussing something really cool… The sales letter.

As I’m creating mine, I’ll walk you through how you can create yours.

Talk soon,

RJY

Wood. Water.