I started my entrepreneurial journey by selling stuff on eBay while still in college.
Years later, I graduated to creating and selling my own products, on my own website. My first offerings were $5 basketball programs. I was ten-toes deep in the basketball world at that time, and people ate those up.
Selling products at that price invited a high volume of activity.
You might think that’s a great thing. I will say that it’s better than no activity. But when you’re selling $5 products, you know who comes around in droves?
People who have $5 to invest in themselves, but they have to think about it first.
The low-level people who’d file false disputes with their credit card companies in attempts to steal product from me.
It’s not their fault though. People are who they are.
I’d offered a cheap product, and in turn attracted cheap people. I should not and did not expect anything different. Overall, I was happy to know that I could create something from scratch and sell it.
Fast forward to now, when I look at every customer or client I’ve ever had, and I skim off the top of that list — let’s say the top 10% of money-invested in product and services — here’s what’s true: I’ve never had a customer service issue / complaint from anyone in that top 10%.
Why is that? I’ll give you three reasons.
1) People who invest more aren’t looking for a cheap thrill. They understand the value exchange they’re making, and they’re happy to make it.
The security guard at the local bodega watches out for someone stealing a $1.50 Hawaiian Punch soda.
The security at the Louis Vuitton store is there more for decoration than for chasing petty thieves around the block.
The more money invested, generally, the less customer service headaches you inherit.
2) People who spend more money are more invested, mentally and emotionally, in their buying decisions. Which means they’re choosy about where and from whom they buy. When they buy, they know they’re making the right decisions.
They do what they need to do — use the product or service, read the book cover to cover, show up to the training — after the purchase to ensure that their purchase was a smart one.
They’ve had a problem that needed solving for longer. They’ve been thinking about harder and for longer. They’ve looked around more for what they want. When they see it, they know.
Higher-investment customers are more committed, less fickle, and will help you help them get the most out of what they buy. They want to make themselves look smart.
3) People who have more money, are more willing and able to invest more money (and vice-versa).
Which means, they have much less fear and scarcity in their minds around the subject of money. Which means fewer people trying to nickel-and-dime you, the seller, over trivialities. In other words, fewer customer service headaches.
What you should know from all of this: Price is a filter.
When you’re selling anything, you of course consider who you WANT buying your stuff. You also should consider who you DON’T want buying from you, and set your prices at such a level that will filter those unwanted clients out of the conversation.
There are some people who would never pay $1,000 for anything learning-based — a conference ticket, online course, personal coaching — and there are people who don’t even look at such an item unless the price is AT LEAST $1,000.
Which group do you want to serve?
Wal-Mart is a billion dollar company, how? From selling the cheapest products to people who are looking for the cheapest products. Some people I know would never set foot in a Wal-Mart.
On the other hand, there’s a shopping mall in Miami called Bal Harbour Shops. It’ll cost you $5 just to drive to Bal Harbour, because the parking lot isn’t even free.
Knowing this one piece of information, there are some people who’d never shop at Bal Harbour. Which is exactly how they want it.
There’s a market for both. I could sell my courses on a site like Udemy for $10 each and gain more “exposure” for my brand. I don’t judge you if you go that route, but it’s not for me.
I’d rather sell a $1,000 product to one person — who will use every aspect of the product, follow all the steps, and want to make themselves look like a smart buyer — than sell a $10 product to one hundred people, of which I know I’m asking for ten problem people.
To make that $1,000 sale though, you might need to start at $10 or even $0 (like this article) so people can try you out. Just don’t stay there.
These are things you should consider when pricing your offerings and when attracting your buyers.
You learned about this mindset in episodes —
#1212: Price Is A Story
#1181: “What If My Price Is Too High?”
#1101: Raising Your Prices: The Logical And Emotional Understanding Of Why
#835: Your Price Is Too Low
#785: Freelancers & Solopreneurs: How & When To Raise Your Prices
#735: Hot Seat: I Keep Lowering My Prices To Get Clients! [Jasmine from Brooklyn, New York]
#436: Name Your Price: Find Out How Far You Can Go
#272: Why You Need To Raise Your Prices
#225: Price Vs. Cost: The REAL Problems People Have With Money
These alone, with nothing else, is a $1,000 Master course on pricing and getting maximum value out of your work.
You can get all of these, and 1,300 more, for FREE by starting your Game Group Membership here: http://WorkOnMyGame.com/GameGroup