How To Build Your Business Offer And Increase Your Price Point
ABOUT THIS LESSON
Welcome to our “How To Build Your Business Offer And Increase Your Price Point” video – An insight into a live masterclass with our clients where I breakdown the importance of building a better offer for your business.
In this video I dive in depth and cover 2/4 variables that need to be increased for a better offer.
-Variable #1 Outcome
-Variable #2 Liklihood
Please note this was a snippet from a live masterclass with our clients and that they interact with the video on occasions.
Hope you’ve found some value in this video. If you have questions, please drop them below and we will do our best to answer them.
FULL VIDEO TRANSCRIPT
In this video, I’ll be sharing a clip from one of our live mastermind events that we did with our clients, where we spoke about how to build out and improve your offer. In business, your offer is responsible for nearly every step of your acquisition process. From the cost it takes to acquire a customer, to how much you can charge per customer, your lifetime value. Your offer affects your click-through rate and your cost-per-click when you’re advertising online. It will affect your conversion rates when you speak to clients and nearly every aspect of your acquisition is going to be impacted by your offering. So if you can improve your offer, you can charge more, you can get better client results and ultimately better client results means you’ll get better clients, better prospects and it’s a cycle that will allow you to continue to charge more, get more clients, and ultimately, grow a greater and healthier business. So, check out this video, if you want to learn how to improve your offer, take some of the tips and let me know in the comments below what your takeaways are.
Now that we know that’s what we want to do, how do we do it? Well, there’s four things that we can play around with, four variables. And two, we want to increase, and two, we want to decrease. So, two we want to increase is the outcome. So, you’ll be able to charge more if you can provide a bigger outcome, a better outcome, something that people want, or have a stronger desire to achieve. This is linked to the likelihood and this is the perceived likelihood.
Let’s say, you help someone lose weight, you might know that… It’s probably not the best example, but every single person you work with will lose weight. You might believe that, but what is the prospect’s belief? And so, it’s not just the outcome, it’s a perceived likelihood of the outcome. So, I could say, “Click this button and you’ll make a billion dollars.” That’s a very big outcome, but your belief, the perceived likelihood of that actually happening, is probably going to be like next to zero. So, it’s a balancing act. So we want to increase this, we want to increase this and then what we want to do decrease is the time it takes to achieve the outcome and the effort it takes to achieve the outcome.
Amazon’s a good example. The effort to get something from Amazon, it’s basically you click one button and then the time is next day. So that’s really good, versus going to the shops to buy something you need, you got to get in the car, drive there, find a park, get out, go through the aisles, find what you’re looking for, go to the checkout, pay, get back to the car, load up the car, drive home, unpack it. That’s a lot of effort and time. And so that’s why Amazon is more valuable than going to the shops for example. And then, their likelihood is almost guaranteed. So, understanding these things is how we can improve the offer so that we can decrease the CPA, cost to acquire a customer, and increase the lifetime value.
So, we’re going to go through those four areas and we can go through questions as we go. So, the first step is increase the outcome. So, this is something that we spoke about a bit at the last event. There’s three things when it comes to this, it’s the who, the what, and how. So, what you should do is think about your prospects and ask yourself what is the dream outcome that they are looking to achieve? If there was one thing you could help them achieve, that would be the best thing they could do, what is that? Because that’s the outcome. But to make that more specific, again, if I just said, “Click here and make a billion dollars.” It’s not very useful, because it’s not believable and it’s not specific. Another example would be, again, weight loss, if you just help everyone with weight loss, it’s not a very clear outcome.
So we want to, first of all, get really clear on what are we actually trying to help people achieve? And the things we can ask is who, what and how? And so, for the who, the more specific the who, the better. An example would be going back to weight loss, if you just help everyone lose weight, that’s not very good, because it’s just so broad. So if you could get more specific on that who we’re trying to help, maybe it could be people before their wedding, so now you help people lose weight for their wedding. So by doing that, the desired outcome is going to be stronger, because it’s not just I help everyone with weight loss, it’s I help people get ready for their wedding and be fit and healthy for their wedding, so that’s an example of the who.
The next one is the what. And so, changing what you do. I mean, not necessarily changing what you do, but changing how you explain what you’re doing. So, to help people lose weight for their wedding, you might write diet plans. And so, the what is a diet plan, but again, are people really going to pay that much for a diet plan? Maybe not. So the what might be six pack abs, right? And so, the way you do it is, it’s still doing this, but you’re changing what you’re focusing on. We’re not just making a diet plan, what we’re doing is getting you six pack abs. Or it could be like fit in that wedding dress or something similar to that. And so, they’re kind of the differences between what. Most people focus on the what, but they don’t really look at what is underneath that. So yes, it’s diet plans, but why? And you can go deeper and for all those things you can ask why a few times. Why does someone want to lose weight? For their wedding. Why does someone want diet plan? To get six pack abs.
And then the final one is the how, so this is how you do it. And a good example is, let’s say you sold healthy food, and so you just sell vegetables. That’s the how, this is how I’m doing this, I’m selling vegetables. But if you look at the company like HelloFresh, they’re selling vegetables, but they package them all together and they deliver it to your door, so it’s a different how. And then you could look at a company like Youfoodz, which is a meal delivery company, which HelloFresh just acquired and they don’t just send you the ingredients, they actually send you the pre-packaged meals. And so, these are different levels of food, healthy food. One is the raw materials of the food, one is the raw materials collected with some instructions on how to assemble them and then Youfoodz is preassembled and delivered to your door. So, by changing these different variables, we can improve the outcome. Yeah, does that make sense?
So with this, we basically want to look at, with your prospects, what is their dream outcome? What do they want to achieve? And it’s not like a diet plan, in this example, it’s having six pack abs for their wedding. And then we could look at how we help them achieve that and it could be meal delivery. This is just an example, obviously you’d tailor it to you, but going deeper where it’s just like, “I help everyone with weight loss,” versus “I help men get six pack abs for their wedding, by delivering their meals, so that they don’t need to worry about that.” What you could charge for those two things are going to be vastly different, because we’re getting clear on the outcome. Make sense?
So, Connor, can you hear me?
Yes, sure can.
Hi, could I float you what I’ve got and see how I can improve that, because I don’t know if I’ve completed all the ones, but I’ve got, I help self-motivated time for moms, create healthy and sustainable habits so that they can feel sexy, healthy and vibrant without compromising their milk supply or giving up their comfort foods. Is that too much? That’s a lot of words.
It’s a bit wordy, but it’s very, very specific, so it’s a very clear outcome and you’ve got the who, you’ve got the what and you’ve got the how, so it’s quite good. Yeah, the only thing is the amount of words, but in your mind, the idea is really clear, so that’s the perfect example. It’s not just, “I help people with weight loss.” It’s a very specific thing, so that’s a very good example.
Yeah, you might just want to reword it in a few less words, but overall, what you’re doing, that’s really good.
Okay, thank you.
You’re welcome. Cool, so that’s the outcome. Is everyone clear on that? Cool, so the next thing is the likelihood, right? So you can say that the outcome’s really good, but does the prospect believe it? So, with the likelihood side of things, there’s four variables that we can play around with. Your price, what you charge, the specificity, which kind of ties into the outcome, but there’s a few other things that we’ll cover, bonuses and guarantees. So, the first one here is the price. And so, this is a famous study where basically it was like a blind taste testing for wine, and they had one bottle of wine, they pulled the label off, but they said this one was a low price, let’s say $10, this bottle of wine was a medium price, let’s say $50, and this one was $100.
And it was a blind taste test. They asked people to taste and rate the wines, but the people tasting them knew the price, right? So one was, I don’t know the exact numbers, but let’s say it was $10, $50 and $100. The feedback was that the low priced one was bad, the medium priced one was okay and the high priced one was good. And so, that kind of makes sense, because if you charge more for something it should be best, but the catch was, these were all the same bottles of wine, identical. And so, just because the person drinking it perceived it to be more valuable, in their mind it was. And so they actually thought it was better, because it was more expensive, even though it was exactly the same.
And so, understanding that and how pricing works, people perceive value based on price. And so, you can have a great offer like this, but if you’re not charging something that gives people confidence that it is good, they’re not going to think it’s good. And so, there’s a lot of different studies that are similar to this, but basically the more you charge, the higher the quality of the prospect and also the higher the quality of the product, even if the product doesn’t actually change, because people see it in a different way. And so, there’s kind of this feedback loop, and this is how your pricing works.
You’ve got the perceived value and then that perceived value is going to affect the emotional investment, excuse my handwriting, which is going to affect the prospect quality, which is then going to impact the results. So, if you charge not much, the perceived value is going to be low, so negative. And then the emotional investment is going to be low, so negative. And then the prospect quality is going to be low, because you’re not charging much, so it’s negative. And then the results that they experience because of that is also going to be negative. And then that’s going to lower the perceived value it’s going to lower your perceived value yourself because you’re not attracting good people, they’re not like enjoying it, they’re not getting good results and it’s this negative flywheel and it gets worse and worse and worse.
On the other hand, if you increase your price, then the perceived value of what you offer is higher, just like the wine, the emotional investment in your prospects is higher, so they value it more and you’ll attract a higher quality prospect and then the results that those people get are better. And so, everything gets better. And so, your price affects a lot of things and it is this feedback loop and it can be positive or negative. So, understanding that if you’re offering something, if you have a great outcome, but the price isn’t congruent with that outcome, then people aren’t going to believe it, so the belief is low, the likelihood of achieving that outcome is low, the people you attract is going to be low and therefore, because they’re low quality people, there’s even less likelihood that they achieve the outcome and their results are going to be less and it just gets worse and worse. So, if you can improve the price point, then everything gets better.
And so, if there was one thing you could do to get high quality prospects, get better results for your prospects or clients or customers, and make more money, if there was one thing that could do that, you would probably do it. And you can just by increasing the price. So, it sounds very simple, but this one thing is really powerful to understand. And understand that if you’re charging less than what you think it’s worth, it’s not doing anyone any favors. Your prospects won’t take it as seriously, so you’re doing them a disservice. You’re going to get low quality prospects, so people that you actually could help who are high quality, will not be interested. And the results that everyone experiences will be less, worse, the perceived value of what you offer is worse. You think that what you do is worse, because it’s not working, because of all these factors. So, pricing is really powerful. Any questions on that?
Cool. So yeah, the quote that I’ll repeat is that increasing the quality of the prospect increases the quality of the product. And you can do that by doing a price, so it’s important to increase the quality of your products, but if you can increase the quality of your prospect, that will also increase the quality of your product by default. And that comes from having a good price point. So, the first way to achieve the likelihood of success is your price.
The second way is specificity. So, an example would be, if I said to you, I help you with weight loss and you’ll lose weight one day versus you’ll lose 13 kilos in the next six and a half weeks, what one are you more likely to believe? The second one, because it’s specific, right? And so, I think specificity into your offer will increase the prospects, believed likelihood that they’d achieve it or that you will deliver on what you’re saying. So that can be time, so how long it’s going to take? Being specific on that. Or also a specific outcome. And that goes back to the offer as well. Not just lose weight, but six pack abs. So if you could help someone get six pack abs in eight weeks, for example, now it’s more specific and they believe it more. And so, that’s going to increase their likelihood of believing that it’s possible. Makes sense?
Cool. The fourth one, so we’ve done price, we’ve done specificity, the next is bonuses. And so, the way bonuses work is, let’s say you’ve got an offer and let’s say you offer one thing, right? This is your offer. You probably do a lot of things in that offer that’s not just one thing. And so, if you can break it up into these different chunks, it’s still the same thing, but you break it up, then you can position your offer in a way that is more valuable. So let’s say an example, I’ll just stick with weight loss, because it’s simple to understand. Let’s say you offered weight loss and it was $1000 and that’s how you position it. Well, if you could break that up into, “I’m going to offer you like complete food and diet for $1000. I’m also going to give you as a bonus, all your workouts. I’m also going to give you support and coaching as a bonus and I’m also going to give you…” What else would you do? Maybe supplements.
You can break up your offer into these different things and you add these bonuses so that it is a perceived higher value. And by doing that, again, the believed likelihood of achieving the outcome is better, because they’re like, “I’m going to help you lose weight by helping you diet.” When you offer something to someone, they’re to have doubts. They’re to be like, “Well, what about this? What about this? What about that?” And so, if you can deconstruct your offer so that you have these bonuses that resolve those what abouts, then it’s going to build trust and confidence.
So if I’m like, “I’ll help you lose weight with your diet.” You’ll be like, “Well, what about my workouts?” If I’m like, “Well, I’m also going to give you a bonus. I’m going to give you your workouts.” And you’d be like, “Well, what if I get stuck?” “Well, I’m also going to give you a bonus of support.” And you might be, “Okay, cool. Do I need supplements? What about that?” And then that’s a bonus too. So, you overcome the prospect’s concerns by simply breaking up your offer from this one thing to multiple things. And by doing that, you’re adding trust and credibility.
And the real key to making this work really well, is if you can make these bonuses perceived as value or more valuable than the main thing. So, in this example here, you’re saying, “You’re going to get everything for $1000.” If I say, “I’m going to help you with your diet, and that’s $1000, and I’m going to give you 12 months of tailored, customized workouts as a bonus for free.” And in your mind, you think that that’s also worth $1000. And then I say, “I’m going to give you 12 months of one-on-one coaching and support.” In your mind, if you also think that that’s worth a $1000, it really adds the value to what you’re doing, because the bonuses alone are equal to the whole. And if you can get someone to think that one thing alone would be worth it, they can justify the price. So again, if you’re offering nutrition coaching, and you say, “I’m going to give you these workouts.” If that prospect in their mind thinks that well, just the workouts alone would be worth $1000, then all these things together is like a no-brainer. Yeah, so that is bonuses.
And then the final one is guarantees. So, I think a guarantee can be very useful, but you want to be careful of how you structure it. And so, the best way to structure guarantees is by reverse engineering. So let’s say, let me just write this down. So, I’ll use Apex as an example. So in Apex, someone enrolls, then they do their onboarding. Then they do their foundations, which is training. And then they have their action plan call. So we know if someone does these things, they’re very likely to stay and get results. And so, in your product or service, reverse engineer the steps that are required for someone to get results. And what you can do is look at all your customers or clients and see what were the things that people did that got them results. And then if you create a guarantee that is in relation to this, so if Apex says, “If you do this within 30 days and you don’t like it, you just get a refund.”
But by knowing the process and by knowing that if they do this, if they do this, if they do this and they do it properly, they will get results, then you can create guarantees that are very appealing to your prospects. And it increases that likelihood of achieving, because in their minds, it’s like, “Well, if it doesn’t work, I get a refund.” But if you work in these steps that if they do this, they will get results and to qualify for the refund, they need to do these things, therefore they will get results, then they won’t want the refund. It works very well for everyone, because the prospect feels confident and you’re confident that if they do it, they’ll achieve what they’re looking to achieve.
So, when it comes to guarantees, you want to look at your customer journey, your onboarding, the steps that they need to take to achieve success in whatever it is you offer, and then deconstruct that, so that it’s worked into your guarantee. And yeah, this is really good to think about, because like for Evolution, it’s probably like join the Facebook group, like jumping through [inaudible 00:22:03], there are different things that we know of people do, they’re more likely to achieve success, so you can work that into what it is you’re offering and make that part of your guarantee. And so, they’re the four things, price, higher price point increases confidence. Specificity, the more specific it is, increases confidence. Bonuses, break up your offer into different things, so that people think, “What about this?” And you can offer it. And if that bonus, they think, “Well, that thing alone is worth the entire price.” Then that’s really good. And then guarantees, work them in so that it basically forces people to do the steps that you know are required to get results and therefore they get results, but they also feel more confident from the outset.
Sorry, Connor, you just got a question in the chat. Someone couldn’t talk it through to you.
Thanks for letting me know. I started with my prices lower, but now I’m struggling to get customers to purchase my services at my new price, how do I make it more attractive to my clients?
So, you’ve got current clients at one price and you’re trying to get them to charge more, or is this with new people? Let me know. We can come back to that. So, we’ve spoken about the outcome, we’ve spoken about the likelihood, the next two are time and effort. Do we have any questions on these things, other than that one, before we move into this bottom section?
Hopefully you enjoyed this video. If you did, be sure to subscribe. If you’d like to learn more, click the link in the description and if you have questions, drop them in the comments below and we’ll do our best to answer them. Thanks for watching. I’ll see you next time.