In this episode we’re talking about when and why to make something free versus low price.
This actually came up in a coaching call with one of our Membership Launch Academy members. What she wanted was to do 30 days of videos for $30, and at the end sell those people into a 6-month coaching program for $1800.
I’m using her question as an example in this episode, to show you that sometimes you can’t just slap a price tag on something. There needs to be more thought and a clear purpose for the things you are creating!
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You’re listening to marketing chaos episode 118.
All right. So before I get into this, uh, today’s episode, I wanna know all of you parents out there. <laugh> am I the only one who has to basically like buy their kids crap that they want all of the time that they only play with once and then they, and then they just don’t even use it or look at it again, but they like have to have that thing. Oh my goodness. I think it comes from watching too much YouTube. Uh, I would like to know how do you get out of that? I mean, obviously you can out buying it for them, but I have also had, <laugh> have been allowing my kids to make a little bit of money. I give my daughter like a dollar, which she makes our bed like my bed, you know, um, things like that. This is where I get my parenting advice.
So you parents tell me, um, what do you do? Cause I’m trying to, like also where I was getting to with that is like, sometimes they just are like, they have the money and I’m like, well, do I just not let them waste their money? Cuz I know that they’re not gonna, like, they’re gonna play with it once. And then it just sits there. And then they have this whole closet full of like stuffed animals and, and crap and toys. Like my son has so many race cars and like little drones and things and I’m like, oh my gosh. And he doesn’t ever play with him. Like he plays with him one time. Anyway, I feel like it’s just such a consumer thing. And I’m trying to like show them that they could save their money, but that like saving their money is not that fun.
My son is all about buying, you know, gold and silver, which I think is awesome. My dad is not, she is like, give me the unicorn egg, plastic piece of crap toy that you know is worth nothing as soon as you buy it. Ugh, drives me crazy. Anyway, we’re talking today about when and why to make something free versus low price. And when is it better to make it free or low price? This actually came up in a coaching call with one of our membership launch academy members. And what she wanted to do is basically sell a coach six month, the coaching program by. And so we talk about like, okay, the offer and then the sales mechanism. So whether that be a webinar or like a challenge or a video series or something. So what she wanted to do was have this like six month coaching program as remain offer.
I think it was like 2, 2 50 or three 50 a month or something like that. Uh, for six month kind of a mid range offer. And uh, and she wanted to sell it. But the sales mechanism, she had done these like short videos for like 30 of them. And she wanted to do one a day for 30 days and she then want like, she wanted to sell the 30 days for $30. And then at the end of the 30 days, she was going to, um, invite them to her, uh, coaching program. And I was like, I don’t love it. And I think the reason why I didn’t love it for her is because she wasn’t clear what the purpose was of both things. Meaning the 30 day video thing and the six month coaching program thing. And it’s not that, that, that thing that she wanted to do couldn’t work.
It was that she was looking at at <laugh>. She was looking at it wrong. So let me explain now, if you know, why you’re charging for something or what the purpose is, I should say, what’s, what’s the purpose of the thing you’re creating. Like what’s its job, what’s its role in your business. Now things can have roles. Some things can be just to get, uh, information and value, provide value to your audience. Uh, it can be to warm them up to nurture them. So they get to know you, they get to like you, they get to trust you all of these things. So, uh, like this podcast, right? I give a lot of value. I do a lot of episodes. I don’t charge for it’s a free piece of content, but it delivers a lot of value to my audience. And it allows you listeners to get to know me.
Um, I talk about weird things like what to bribe my kids with or buy them <laugh> and my, you know, chocolate cravings and whatever. But anyway, so you kind of get to know me a little bit, get to know about my life. Um, and I get to, you know, provide some tips and strategies that we’re using inside of our programs. Maybe that’s all, you know, that’s as far as we ever go. Um, but maybe it’s going to warm you up to where you want to come into our, uh, academy or you wanna work with us in a, in another capacity, at a deeper level sometime in the future. So it serves that purpose in my business. And I’m really clear about the purpose that it serves, why I’m doing the episodes, what the target is for both, for me, for my business, for you, like what I want, um, to get out of it.
Like, I, what want you to get out of it? Like all of that, I’m really clear about like how I’m using this podcast and what the purpose of it is, um, in my business. Right. And, and that’s great. So if you’re clear when you’re creating something, what the purpose of it is for both you and your customer, then you’re, you’re on the right track. Now, if you’re not clear about that, don’t just stick a price tag on it. Don’t just go. Like, I worked really hard on this, so I’m gonna charge for it. You know, uh, if the purpose is to grow your audience and nurture them and warm them up to buy a offer from you, don’t just stick a low ticket price on it, to kind of like make a little bit of money off of it, to kind of make you feel better for spending time and energy on it because what’s gonna happen.
And this was what I saw happening with her is it’s, she’s gonna shoot herself in the foot, both for not getting a lot of leads in if she had done those 30 days for free, but she’s also going to shoot herself in the foot on the back end offer of this coaching program because not gonna have the volume of people. And she’s also gonna shoot herself in the foot with the $30 sales, because that’s not gonna actually bring in the amount of money and revenue that this let’s say, let me do the math here. If I can’t remember of her was two 50 or three 50. So let’s three say it was 300 times six is 1800 for six months. So this is let’s call it a $1,800 offer versus a $30 offer. How many people is she gonna have to get into that $30 video series thing to equal one person money, money wise in the coaching program, 60, 60 people buying a $30, you know, video thing, six zero have to buy that versus one sale of the coaching program.
So I wanna, and I don’t think like the problem was she hadn’t thought about any of this. So she’s going, this is how her, her mind was working. I, you know, I spent a lot of time filming these videos. I did 30 of them. They’re like three to five minutes each. It’s not, you know, something that I can charge hundreds of dollars for, but I wanna like kind of be, I wanna make my effort worthwhile. So I wanna charge $30 and it’s worth something, you know, it’s, it’s 30 days of valuable videos for people. And I’m like, yeah, that’s not the point. Like, yes, I’m sure that these 30 days of videos is worth $30 or more like, I’m sure that what, however you determine what something’s value is, which is very subjective, but it’s like, that’s not that’s beside the point. My point is you are not doing yourself any favors.
Now, now it’s not to say that this can’t work. If you are actually clear why you’re doing it and, and charging for it, and is one reason why you might wanna do the exact same thing that she was planning on doing, but with a totally different reason. And let me explain, this is a different way. Now, the, the mindset is basically different. The mindset is not. I spend a lot of time on this. I’m giving people so much, I wanna make a little bit of money back. The mindset is okay. I want to make sure that the people who I’m going to be, uh, inviting to this $1,800 coaching program are high quality requalified enough that they haven’t just signed up for this 30 day thing, cuz it was free. And they’re like, it popped up on their screen and they’re like, ah, whatever. And they just didn’t even think about it and put their email address in.
They actually took the time to put down $30. They went and got their wallet out of their purse and they walked all the way back and they put in the credit card and they paid money. That is a bigger step than just putting an email address in. Can we agree on that? It’s not a, not a lot of money, but it’s something and it is a barrier that people have to go over. And that is one reason. It’s not the only reason, but that is one reason. And why people tack on those low ticket, uh, prices on things like those, um, intro offers or challenges or things rather than doing it for free. It just gets a little tricky if you’re not clear and confident. And I actually willing for it not to work and try something different. Like so, and she wasn’t thinking about any of that.
Um, she was trying to make a little bit of money off of that front end thing. I’m like, look, that’s not the, the, the purpose of this thing is to get people into the coaching program. Like that is why you created it. Right. And she’s like, yeah, okay, well, are we charging for it? You’re this is a sales mechanism. Why are we charging them to present them your sale? Well, I hadn’t thought about it like that. Okay. But what if we did think about it like that you’re earning the privilege and this is why you have you’re providing value for 30 days. That’s how you earn the right to then make a pitch to them. Now, could you just make a pitch to them from, from nothing? Yes. But you haven’t really done anything to gain their trust. You haven’t really done. I mean, unless they already know you, which is, you know, what a lot of people bank on is like, well, these are my returning customers.
Okay, great. Then go straight to them with your offer. Like if they’re that warmed up already, you don’t need 30 days of anything. So it’s like kind of like mix and matching like four different strategies into one. And so none of them is going to work because you’re not actually clear why you’re doing anything. So the moral of the story is really like, be clear on why you’re creating the thing. What is the purpose of it? And then, and then use it like that, use it to serve the purpose. Don’t just stick a price tag on it because it’s worth that. Like, I’m sure it is worth that, but that’s not going to actually be where the money comes in. You’re not making money off of $30 offers like $30 offers 27, 17, 7, 19. Like all that stuff is only two reasons. One is to pay for your lead, your customer acquisition costs.
So it, if you’re running, uh, paid traffic, the idea is to offset that with a small price tag that’s number one. Uh, not that that is working anymore, by the way, uh, with the cost of as, but anyway, number two, um, it is sometimes, but a lot of cases, it has working with iOS changes and costs of ads have gone up, which is a whole nother topic. But, um, it’s a lot harder to make money off of a, a, a low ticket thingy that way. Um, but number two is to get a higher, um, a higher level of commitment from your customer, which makes them a more qualified lead. So once they, again, they have to go get their credit card, you know, enter it and they’re spending money. They’re trusting you enough to give, like, to give you their credit card, essentially. Like some, I mean, it’s online.
Like we all know there’s scams out there, all that. So they’re, they’re going over that barrier. But here’s the thing with this person selling to a warm audience. They don’t have that barrier. Like they probably like a lot of them have bought from you already. So they’ve crossed that barrier. A lot of them know you already from other free stuff you’ve done or they’ve met you in person, blah, blah, blah. Like they’re warmed up already. So you don’t need to sell them a low dinky, like $30 thing. You need to just really present your coaching package in a way, like you basically need to make a compelling offer for them if they’re already that warmed up. So that’s like one way of doing it is like, okay, I have a warm audience. Well, great. Why are we doing 30 days of anything with them? Like, that’s beside the point, they don’t need that at, they’re just, they’re gonna spend $30 with you.
Yeah, sure, sure. They’ll pay $30 for 30 videos with you. Um, and that’s fine. But then what, so, so then they are done after 30 days of getting 30 videos and paying $30. Like that’s not what we wanted. We wanted them in the coaching programs for six months. So it can also work against you to give them that much value because they’re like, yeah, I’m good. You know, I got, I got everything I needed 30 days. Thanks, bye. It was 30 bucks. Why would I spend 300 a month? You know, 10 times that time when I just got all of that for, for 30. So it’s kind of a tricky one. And number one, be clear and be congruent with your choice and go all in on that choice. Like this is the play that I’m making and I’m gonna go all in on this.
Like if you did the same thing for free, then the play is new customer acquisitions. So getting cold traffic in, cuz if you’re gonna spend 30 days with them, like you don’t need to do 30 days of videos of every day for people that already know like, and trust you. Right. It’s like overkill. I mean, they’ll enjoy it, but you don’t need to do that. Like, I mean, probably you don’t <laugh> um, so it’s more for cold traffic. So how are you going to reach that, uh, audience that, that doesn’t know you and that work really well, but like, do we really wanna sell them this $30 thing or do we really want them in our world getting nurtured and warmed up for 30 days and then making a compelling offer for them? Like, and then do you see moving them into and both can work.
You can charge, you know, or make it free. You just have to be aware of your audience, be aware of your strategy, be aware, be clear and congruent and be willing for it, not to work and try something different because you really can’t predict this. The thing is it will change. Like it already has changed several times since I’ve looked at, you know, free challenges, pay challenges, it’s gone back and forth like SLO funnels, like all this stuff, low ticket offers, it’s always changing, you know, and you have to kind of be willing for one thing that you know, was working might not work. Now you might wanna just switch it around and really have a look at why is it that you’re creating it? What’s the purpose for both you and for your customer. If you’re not clear on that, don’t just stick a random price tag on it.
You know, if you’re, if your purpose is to really, uh, warm, ’em up a new audience, why not do it for free? You know, those people, they may not buy the first round, but they may be now in your world, warmed up loving you. They may buy in three months, six months, two years. You never know. Uh, and there’s no guarantees right on any of this. You have to be willing to test and, and try and flop and fail and get up again. <laugh> you know, and the good news is you have 30 days of videos that you’ve done. If you’re this person, you know, she had already filmed the 30 days and she wanted to make the most out of it. I’m like, well, let’s make the most out of it. Wouldn’t you say, if we use those 30 days of videos to acquire, hire $1,800 customers into your program, that that would be a better use and a, you know, uh, make more value for you than $30 a, a person.
Well, of course you would. Why not make 1800? Um, if you had a choice between 30 and 1800, so it’s like, sometimes you have to kind of just change the way you’re looking at it. And when I, when I kind of ran this down with her, she’s like, oh, <laugh> I never thought about it that way. I’m like good. Now you have more information now, whether she goes and, and still charges for this thing, that’s a whole nother story, but at least she’s doing it with a clear intention. Um, not to say you can’t create, like, let’s pretend there was no coaching program and you just wanna create a product and charge $30 for it. That’s fine. There’s nothing wrong with that, but you’re still gonna need to drive. I have traffic to buy that product. Like just putting it in your shop. Doesn’t make it sell.
Even the clients that I’ve had. And the people, the brands that I’ve worked with that are, have massive, really engaged, high paying, you know, clients, they don’t just put products in their shop online and they sell, like we have to drive traffic, have sales, like make funnels, like create, like it, it’s still a lot of work. There’s no passive income here in any of this. Like, and if you think that there is, and I’m breaking the news to you, I’m sorry. <laugh> it was gonna happen sooner or later. There’s nothing passive about it. Like you may, okay. You made 30 days of videos. It’s gonna be a product. That’s awesome. That’s great. How are you going to sell that? And do you really wanna put a bunch of resources from your team and your, your time and attention, your money into selling this $30 thing? When you have this $1,800 thing that you could be selling and like you, you might wanna a focus on the thing that’s like where you really want the, uh, the energy and the, and the impact to come from just my 10 cents and probably created more questions than answers for you, but at least it’ll get you thinking, considering asking questions and having more awareness than you did when we started. Thanks guys for listening today until next time. Bye for now.