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Jas P

How to Handle Price Objections - 0 views

  • Create case studies If you really want to show the value in what you offer, you have to create case studies. The simple ones won’t cut it, you have to give detailed ones… ideally with the exact things you provided and the results. To legitimize the case studies, make sure you put in testimonials from customers. This can be done in the form of video or text and if you happen to go the text route, make sure you include: Their full name Company name Their picture Title at the company If you want to see an example of a good case study, check this one out from Conversion Rate Experts.
  • Offer a free trial One of the easiest ways to handle price objections is to offer a free trial. Remember, just because you are offering a free trial doesn’t mean you can’t take a credit card up front. With Crazy Egg, one of our biggest objections from people is that our prices are too high. We created a “free trial” offering in which people had to put in their credit card up front. That offer converted at 59% higher than our 30 day money back guarantee offer. Keep in mind that you will get a lot of people who will cancel your service before their free trial is up, so when you a/b test this you have to also include cancelations into your calculations.
  • Explain the value The easiest way to demand a high price point is to explain how much money you are going to either make a company, or how much money you will save them. If you can explain this in an easy to understand fashion and provide case studies to back it up, it shouldn’t be hard to demand a premium price. A great way to do this is through sales copy. And don’t worry, your copy doesn’t have to be sleazy. I do this with Crazy Egg, NeilPatel.com and I also used to do it for my Quick Sprout Traffic System. You could even spice up your sales copy by including a video incase people don’t want to read your copy.
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  • Offer payment plans When I used to sell the Quick Sprout Traffic System, some people felt it was a bit too expensive. They didn’t like the fact that I was charging $197 for an eBook, and video/audio training. Instead of reducing the price I tested out a few payment plan options: 3 payments of $97. 4 payments of $67. Although both pricing plans in total were more expensive than the original price of $197, the 3 payments plan option converted at 34% more than the original offering and the 4 payment plan option converted at 52% better than the original. With the 3 payment plan option I still got complaints about my prices being too high, but with the 4 payment plan option, I got almost no complaints. Plus I was able to charge more than the original price of $197.
  • Explain what you don’t charge for Just like any good business, you want to go above and beyond for your customers. Which is why you probably provide a few little extra things for your customers at no charge. When people start to complain about your price points, you should explain how you go the extra mile for your customers and all of the little things you do for free. You can even express this on your website by bundling all of that extra stuff you provide into a “free bonus” for anyone that purchases your product or service.
  • Explain why your price points are high If people understand why your prices are what they are, they’ll be more likely to pay them. Tell them your fix costs, explain what their money is being spent on, and even tell them your profit margins. People know you are in business to make money, but no one wants to feel like they are being screwed over. If your margins are reasonable and you explain your costs to potential customers, they shouldn’t have an issue. For example, Single Grain had an issue in which potential customers felt their prices were too expensive. Instead of reducing their prices they explained to the companies why they charge so much, then they broke down their costs and even shared their margins. By doing this they were able to sign on 33% more new customers.
  • Offer lower price points for less and then upsell Now this won’t work for all businesses, but you could lower your price by offering a limited version of your product or service. Plus if people are happy and looking for more, it creates upsell opportunities. I actually had this happen to me when I tried hiring a copywriter by the name of Michael Williams. I didn’t want to pay his fee of $12,000 so he sold me on a smaller package that only cost me $3000. Funny enough, after 2 months, I went back to him and paid an additional $9000 to receive the rest of his services as I had a huge ROI on my initial investment. At KISSmetrics, upsells make up almost 10% of our new monthly revenue. We’ve found that a lot of companies at first don’t want to pay for our higher plans, but within 3 months of using our product, they’ll upgrade to a higher end plan after seeing a positive ROI.
  • Focus on how you are better than the competition If people didn’t see the value in cars like BMW or Mercedes Benz, they would just buy something affordable like a KIA. The fact is a car like a BMW or Mercedes Benz not only has more features than a KIA, but also is better built. Consider creating a comparison chart that shows how you differ from the competition. This is done on the homepage of Crazy Egg. It provided a single digit increase in conversions, so not a huge boost but better than nothing at all. It also reduced support questions by almost half in regards to our prices versus our competitors’ prices.
  • Stress the drawbacks of a lower price point In many cases, lower prices will come with a drawback. If you can explain the drawbacks of the lower price you can persuade people to pay your premium prices. A good example of this is RackSpace. They are one of the largest hosting companies and possibly one of the most expensive. They charge a lot, but their uptime rate is phenomenal. If you ever speak with one of their sales representatives they’ll quickly explain they are expensive, but they rarely if ever go down. They’ll also explain that their competitors may be cheaper but tend to go down more often. Then finally they’ll close hard at the end by asking what it would cost you every minute your website is down. For this reason they have done extremely well with their high price points. The company is worth almost 9 billion dollars as of today.
  • Leverage perceptual price points There are a lot of little tricks you can do to make your price points seem like they are lower than they actually are. Walmart has actually mastered this. Instead of charging you $50 for something, they’ll charge you $49.97. That way you emotionally feel like you are getting a good deal. If you want to learn more about physiological pricing, you should check out this blog post on KISSmetrics. It has some great tactics with examples you can use and learn from. Even the smallest thing can have a huge impact on your sales. Such as removing the “$” sign from your price points, which can cause a boost in sales and reduce price objections.
Jas P

Why You Should Replace Your Sales Reps with Ambassadors - 0 views

  • With the rise of the glorious interwebs, customer behavior has changed radically. Historically, gathering information about anything required an enormous amount of time and resources. Talking to sales reps was the ideal way to learn about product features and benefits, learn about the market, and see how everything worked.
  • As we all know, that’s no longer the case. With Google, Twitter, Facebook, and every other platform we use to connect, we have an unlimited access to just about any topic. This means we’re more informed as consumers than we’ve ever been.
Jas P

Reaching the Startup Holy Grail: Product-Market Fit | Michael Karnjanaprakorn - 0 views

  • Product/market fit means being in a good market with a product that can satisfy that market. You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of “blah”, the sales cycle takes too long, and lots of deals never close. And you can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account.
Jas P

Ramit Sethi and Patrick McKenzie on Getting Your First Consulting Client | Kalzumeus So... - 0 views

  • Ramit:  I want to emphasize a couple of things you mentioned. One, if you’re charging 5, 10, 20 bucks an hour, it’s very, very difficult to go from that to charging 200, 300 an hour or 10,000 a week.  It’s very difficult to make that transition. If you do it when you come in, that can happen. But going from one level to another is extremely difficult.
  • Thumbnail sketch: You can get from $20 to $100 by getting serious as a professional, and you get from $100 to $200 by getting really good as a professional (or working in a high-demand speciality), and then somewhere between say $150 and a weekly rate in the tens of thousands you probably repositioned your offering such that it is no longer directly comparable to what you were doing before.
  • Can you sell Rails at $50k a week?  I'm going to go with "almost certainly yes."  I think there are probably people who do that, and if you listened to them pitch clients, they would speak a language that holds very little in common with what you hear from a $100 an hour Rails developer.  Want to speak that language?  Keep reading for some thoughts.  (It will also help to get pretty darn good at Rails... though I think most people in my audience probably overestimate how skilled you have to be to move up that ladder.)]
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  • Ramit: The other thing you mentioned is how many people go in saying, “I’ll just do this first, and I need to make my bones.” And you know what? There is a time and a place to do free work. I do believe in free work occasionally. But I always tell people if you’re going to do free work, make sure you are clear about your messaging.
  • Now, I’m generally not a fan of free work, but I can be strategically. This is what I would say to the client. I would say look, my normal consulting rate is $85 an hour, or whatever format of pricing you’re using.
  • However, I really like what you’re doing, and frankly, I want to build up my portfolio. I would be willing to do this for three weeks for free if, in exchange, you agree that if I do an extraordinary job, then we can discuss working at my normal rate. Well, who’s going to say no to that? If you do an extraordinary job, everyone’s going to want to pay you.
  • But in this case, yes, you are working for free. But you are explaining why. That is so important. It separates you from, frankly, the people who are new. They’re new, and you can tell that they’re asking to be taken advantage, because they’re like OK, I’ll work for free. It’ll be fine. Somehow, I’ll go from free to $500 an hour. Doesn’t work. Explain your messaging. Explain your positioning, and people will respect you way more for it.
  • You will then aggressively leverage this portfolio when attempting to get work at your current billing rates.  I have projects which I did at $X per week which I will use to justify new $5X per week projects at new clients.  If clients ever picked up on the discrepancy – which would require me being stupid like mentioning that somewhere publicly… wait… d’oh – I would say something like “My previous client took a chance on me earlier in my career, when I didn’t have a track record of delivering results to people just like them. 
  • Ramit:  That’s right. I want to talk about one of the secret sauces of my business, and it’s something that actually nobody really cares about. People think they care about it, but they don’t care about it. It is the research that I do going into building a product or getting a client. And I know you’ve done this as well. It’s funny. The other day, I was asking people, “Hey, if I speak at South by Southwest, what would be a good talk?” Somebody wrote back on Twitter saying, “You should talk about your research methodology.” I said that would be great… for the three people who would attend.
  • Research is what allows me to charge 100 times what my competition charges… but nobody cares. Nobody wants to see [the hard work which goes into] how the sausage is made.  They just want to see the shiny tactic – the A/B test where you tested the color of this button.
  • I have a course called Earn 1K, and it’s about how to take your skills and turn them into freelancing income by getting multiple clients and earning 1K. Many of my successful students earn 5K or 10K in a month on the side. So, very relevant to the people listening here. When I started off doing this research, I actually didn’t even think of doing an “earn money” product
  • You can negotiate your salary. You can get passive income, which for most people, never works. You can get freelance income. You can blah, blah, blah, blah, blah.  [Patrick notes: Ramit would probably round out this list with 1) buy real estate and rent it to people, 2) invest in the public capital markets, and 3) start an honest-to-goodness business.]
  • Now, you can get good survey data with as few as 20 responses.  For all the engineers listening, listen closely: Statistical significance is irrelevant when you’re doing customer research. I don’t give a damn about P values and anything like that. It’s almost all qualitative.
  • Now, you don’t have to do 50,000.  Honestly, 100 gets you farther than most people do. [Patrick notes: I think talking to ten individual people who could actually buy your product prior to writing a line of code puts you ahead of the curve, judging from my inbox.  You’ll learn a million times more from 10 people than you’ll learn from your IDE when coding a product built for nobody.]
  • No SEO wakes up in the morning and thinks, “Damn, I have a WordPress problem.” They wake up in the morning and say, “Damn, I have a business problem.”
  • I pay them pretty well. I have passed on hiring engineers who may be more technically proficient, but they didn’t understand what I wanted. Honestly, guys, as a business owner, do you think I care if you’re using this technology or that? I just don’t give a damn [about technology]. I really don’t.
  • What I care about is, is my business going to generate revenue? Am I serving my customers? Is my website going to go down, and I have to be the one who tells you? Or can I go out on a Friday night and not worry about my business?
  • The guy was doing very well. I believe he was making either 40k or 400k a month. He was doing very well. This guy got pretty interested, and he said, “Hey, I’ve got to take a look at this market.” He spent about four or five months really doing deep research. Lots of stuff, including ad words, including customer research, including buying all the other products.
  • Once we got those right, sales skyrocketed.  [Patrick notes: cough read writeup in Fortune Magazine cough] I’ll just say that it’s very, very important to understand the words that your client or your customer is using and be able to explain how and why you can help them.
  • I think we don’t pay nearly enough attention to the exact words people use. Maybe we would if we came from a communications background. Nothing motivates people like having their own words repeated right back to them, which is something that you should try to do more often. It’s just an easy conversational hack to sound more persuasive.
  • But you have to make your prospective clients feel like you understand where they’re coming from. And that starts with both understanding where they’re coming from, and then communicating like you understand where they’re coming from. Even if you’re building a website for someone, it’s not just a website, right?
Jas P

Sean Ellis on creating a sustainable growth program via Sandi MacPherson - QUIBB - 0 views

  • Behind the term 'growth hacking'The concept for growth hacking grew out of the fact that most startups fail, and needing to not fail. When you think about games, the market is filled with large companies with lots of money to throw into marketing. Sean summed this need up well, with: When you're competing against Sony, you can't go dollar for dollar
  • 2. A Must-Have Experience Sean focused on the importance of a Must-Have Experience (MHX) - you must have a hook that clearly identifies what this is.
  • 3. Uncovering your MHXTo get a clear understanding of what your MHX is, Sean suggested reaching out to your Must Have Users (MHUs)… but what is a MHU?
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  • Sean likes using a pop-up or other survey tool to ask people 'How disappointed would you be if [your product] wasn't available anymore?' on a scale ranging from 'not at all disappointed' to 'extremely disappointed' to identify your MHUs (they'll answer very or extremely disappointed).
  • You can ask these identified MHUs 'What is the primary benefit you receive from [your product]' (as an open-ended question to start, then after getting ~30 responses, you should be able to narrow it down to 3 multiple choice answers).
  • 4. Getting people to your MHXOnce you understand your MHX, you can then maximize the percentage of people that reach this point. This means identifying points of friction and reducing that friction (Sean suggested watching people use your product, and then A/B testing based on insights gained), focus on what a real conversion looks like, building channels to increase user habits/increase revenues/drive sales/etc., and understand intent by A/B testing your messaging and hooks. You need to obsessively optimize everything that is part of this newly formed growth engine.
  • You need to engage with your users, and take those insights to come up with new, breakthrough ideas.
Jas P

You're a Growth Rookie, not a Growth Hacker. | Vlaskovits - 0 views

  • 1) A Growth Hacker, like a “visionary”, is only anointed with the sacred oil of growth hacking ex post facto. Once, you have delivered huge and exponential growth in users/leads/sales, you are a Growth Hacker.  Before that, you are a Growth Rookie. <— ain’t nuthin’ wrong with being a Growth Rookie.
  • Growth hacking comes after the early stage chaos and post-product-market-fit.
  • This bears belaboring: growth-hacking comes after most, if not, all elements of your business model have already been figured out and shown to work — especially, the paramount elements of your market segment (who), your value prop (what) and marketing channels (how).
Rafal Dyrda

StartupDigest | Derek Sivers & 8 ways to achieve profit - 1 views

  • Derek Sivers founded CD Baby which became the largest seller of independent music online, with $100M in sales for 150,000 musicians. Here’s his talk on business models and 8 ways to achieve profitability.
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