The Importance of Price Anchoring With Coaching
Rather Than Selling Info Products As the Initial Client Purchase
Price anchoring is the psychological process by which individuals assign a "price" or "value" to you and your coaching based on the first price they are exposed to from you.
For example, if someone's initial exposure to you is a $10 ebook, their initial price anchor for your work is... $10. All future increases in their belief in your value must be built incrementally on top of this initial $10 valuation.
Contrast this with exposing someone to your HIGHEST ticket product or access to you (coaching) at the very beginning. For example, let's assume that the first exposure to a price from you is the price of your year-long coaching program which has a price tag of, perhaps, $10,000. In this case, this becomes the price anchor for you and your services, and anything that is priced below that has the potential of being perceived as a bargain. Contrast this to having to prove that your next offering has some additional value over and above the value of ... your lowest ticket, item, for example.
When you initially anchor with a higher price rather than a lower price, the emotional and psychological price anchor they create for the value of your expertise is the price of your highest product.
When you initially anchoring your prospects with a higher price, it allows you to sell with much more ease, at any price point up to and including, the initial price anchor.
Let's take a real world example.
Let's imagine that you have 3 products - a $97 intro product, a $1000 mid-level product, and a $5000 coaching program.
When you introduce your $97 product to the prospect - whether they buy or not - they create a price anchor for your expertise at $97.
So what happens when you attempt to sell them your $1000 product?
They have to increase their price valuation of you by...10 times!
Perhaps you might be thinking, but what if you are offering something that has 100 times more value than the initial offer...isn't it still a good deal if the price is only 10 times more than the initial price?
The answer is yes, it is a good deal... and they might even know it is a good deal logically and intellectually... but they must be convinced emotionally and psychologically that it is a good deal in order for them to make the actual purchase. If they are fighting their internal anchor for the value of your expertise, the internal anchor will win almost every time. It is much difficult to increase the anchor (it can be done...but it is hard...and takes time) or to sell above the price of the initial anchor, than it is to sell below the price of the initial anchor.
Contrast that with this scenario:
You have 3 products: a $5000 coaching program, a $1000 mid-level product, and a $97 product.
You expose your prospect to your $5000 coaching program first. The price anchor for your expertise now becomes $5000. Although they might not buy this coaching product right away, the price anchor is set at $5000. They believe you are worth $5000. Once you build the trust necessary, they will be emotionally and psychologically free to invest up to $5000 with you.
Imagine that once this price anchor is set and it's solid...you promote to this same prospect your $1000 package.
Now this $1000 package appears to be a real bargain compared to your $5000 value.
Does this make sense?
Contrast how much easier it will be to make this sale to someone who has a price anchor of $5000 for you, as opposed to a price anchor of $97.
There is one more element that you might be thinking makes this more difficult. Perhaps you are thinking that many people might not be able to afford the $1000 product, so why not just sell a $97 product, and let the ones who can afford move up the chain and buy the $1000 product?
Well of course the first issue is the price anchor you have set by making a $97 sale (or even exposing them to the opportunity to seriously consider making the $97 purchase).
But the second issue is that if someone can't afford the $1000 product, so you are selling them the $97 product, that simply goes against what you are trying to accomplish in the first place, because the purpose of selling the $97 product in the first place is to create prospects for the $1000 product.
But if someone can't afford the $1000 product, then why even introduce them to the funnel to purchase the initial product, if they don't have the resources to move through the funnel?
Of course, there is the argument that those $97 sales are additional revenue, and they are, but I believe the lost sales due to the lowered price anchor that is set in the financially qualified prospects is greater than the additional revenue created by the $97 sales, therefore I conclude that you should start with the higher price and work down from there, rather than working with the traditional "funnel" or "ascension" model.
So now let's talk about the pricing psychology and the order in which you reveal your prices (and the value associated with purchasing at each of these prices):
Before your prospects have an opportunity to purchase anything at any price, they should be exposed to your highest priced package. I believe this highest priced package should not only be high priced, but should be the very highest price you could possibly charge for a package of your services, and should also contain components that make it worth the high price you are putting on the package.
I believe your package should also be something you are willing and able to deliver at that price, if someone should choose to purchase it.
Here is an example of the type of highest ticket package I help my clients create:
Let's assume that the highest level assistance someone could get from you would be to come work with you personally for one week. What would be the price you could realistically charge for having someone spend one full week with you? $5000? $10,000? $25,000?
Wait, you say. I don't really want to hang out with someone for a whole week. That's ok. Price your week high enough that if someone sent you a check for that amount to spend one week with you, that you would rather just spend the time with them than send the check back. What is that number for you? $10k? $25k? More?
So for this example, let's assume that number is $15k to spend one week with you, and you would simply teach them for that week, while also allowing them to shadow the normal work that you do (that will be part of the learning experience for them).
Let's assume that you want to allow that person to have access to call you anytime for one year with any questions about anything you teach. What would that be worth to you, to allow someone that kind of access? Let's assume that's also $15k.
Now we are up to $30,000 in total value.
Let's assume that you also have a teaching core that is worth $5000 (if you don't, you will have one when you finish doing the steps I teach in this book). So you add that to the package.
Let's assume you also have manuals or processes which are unique to you in your business or teaching area - and let's imagine these are also worth $5000.
Now you have a real-world value of $40,000.
So you create a complete package that includes everything I've just mentioned...for $40,000.
It is real, right?
And if someone paid you $40k, you would be willing to deliver it, right? (If not, raise the price)
If just one person buys this package each year...you earn an additional $40k, over and above any other coaching and teaching you do.
And...if no one buys it...that's ok too.
Because as long as it's a real package that you would deliver if someone paid you...then you can legitimately expose new prospects to this package before they see any of your other offers, right?
And if you did that, what kind of value would your new prospects place on your time and your coaching?
How would that value compare to showing them your lowest ticket package first?
So there you have it. I have given you the psychology for creating high ticket coaching packages, and selling your high ticket coaching packages.
If you find this content helpful, you can find lots more like it, that you are free to use for your own purposes, at my main site: http://www.PLRContentSource.com