1. What Is a Funnel

1. What Is a Funnel

What the Heck is a Funnel, Anyway?

For an online business owner, a sales funnel is probably the most important marketing tool you have. And yet many entrepreneurs – both new and established – have no clear understanding of what a funnel is or how it works.

As you can imagine, failing to fully understand this critical part of your business means fewer sales, lower profits, and ultimately, an unstable business.

A Simple Sales Funnel

At its most basic, a sales funnel consists of free content, which typically requires nothing of your readers. Many sales funnels begin with blog posts, YouTube videos, Facebook content, and other information readers can access at no cost. This is the “top” of your funnel.

Next, you’ll have an attractive offer that requires a very small “payment” of sorts – typically an email address. You’ve seen this type of offer on websites all over the internet, and probably even signed up for some. This is the free ebook or guide, video series, checklist, workbook, or other valuable content that is available in exchange for “opting in” to an email list.

Once on your mailing list, you’ll then present your readers with a series of low-cost offers. Perhaps you have a low-priced ebook or a trial membership.

Customers who purchase your low-priced product move further down the funnel, and are presented with more, higher priced products. As they continue to buy, they move closer and closer to your top-end offers, which make up the bottom of your funnel.

How Your Funnel Works

If you imagine your funnel as looking like, well, a funnel, it’s easy to see that your free content—at the top—is consumed by the largest number of readers. Below that, your extreme low-cost item (available only for the cost of an email address) attracts a smaller subset of the true freebie seekers. Next, your low-priced products bring in yet a smaller group.

Finally, as you near the tip of the funnel, only the loyalest of fans and customers will purchase your highest priced offers.

Your job, as the business owner, is to ensure that your funnel leads buyers naturally from the top, free offers all the way to the bottom. The more buyers you can keep in your funnel, the more money you will make.

Most new—and even established—business owners can easily envision the top of the funnel, but if you truly want your business to grow, you must master the entire process, and that starts with understanding what a funnel really is and how it works.

 

1. Pricing Strategies

1. Pricing Strategies

Easy Pricing Strategies to Determine Your Rates

It might just be the most stressful decision you ever have to make: what to charge?

You’ve got the competition to consider, your own skill set, what you perceive to be your skills (yes, this is different from the former for most of us), what your market will pay, your location, and a host of other variables. Working it out can feel like a hurdle you can’t quite get past.

Of course, there are some strategies you can employ. One popular method is to use a calculator such as the one found on Melissa Ingold’s Time Freedom Business. These will quite quickly tell you what you need to be charging to reach your income goals, and they’re a great place to start.

But what about all those other questions? Creating a solid pricing structure requires you to do a little more digging. So with your starting number in line, take a look at:

Your Competition: This might take a little detective work, since a lot of coaches and service providers don’t publish rates. But if you pay attention to their websites and social media, ask a few discreet questions, and get on their mailing list, you can figure it out.

Be realistic about who, exactly, your competition is, though. Don’t undervalue or over-sell yourself. In other words, make sure you’re comparing yourself to another provider who shares the same skills, market, and track record, rather than simply looking at who you strive to become.

Your Skills: In some fields, this is easy. There are certifications and educational programs that allow you—by virtue of having achieved them—to charge a certain rate. If you’ve followed this path, then pricing will be easy for you. If not, take a solid look at what you can legitimately claim as a skill.

Look, too, at your track record. Have you proven yourself by helping former clients (and do you have the testimonials and case studies to show for it)? Have your former clients moved on to bigger and better coaches after working with you? (That’s a good thing!) These are all reasons to maybe consider a higher price range than you might have first thought.

Your Market: In the game of setting rates, it’s your market that has the final say. As any first year economy student can tell you, the price of anything lies where what the buyer is willing to pay meets what the seller is willing to accept.

If your goal is to give newbies a helping hand and lead them down the path to success, that unfortunately means you can look forward to low paying gigs. That’s not a bad thing—everyone has to begin somewhere—but it does need to be acknowledged. If, on the other hand, you’re target market is more established and economically stable, then a higher fee isn’t just warranted—it’s a must. They will expect a higher price, and will not find value in the lowest-cost provider of anything, whether it’s coffee beans or business coaching.

Finally, don’t forget that pricing is never set in stone. It’s flexible. If you find you’re attracting the wrong market (or no market at all) you can always change your rates. Working too hard for not enough return? Raise your rates.

It’s your business. You get to call the shots.

2. No More ROI

2. No More ROI

No More ROI: The Real Way to Sell High-Priced Packages

Want to know what keeps a lot of coaches and service providers from charging what they’re really worth? It’s that all-too-common belief that “I am not a sales person.” Combine that with a healthy dose of “It’s rude to discuss money,” and you can see why it’s just easier to keep your rates low.

It’s time to think of your services from a different angle. Not only will you see things in a clearer light, but selling suddenly won’t feel so…salesy.

Here’s how traditional pricing discussions go:

You talk to a potential client, and you explain what you can offer, how your coaching or service works, what he or she can expect (how many calls/emails, phases of work, length of contract), etc. And then you say, “My rate is $XXX.00.” Your client either says yes, no or (the kiss of death) maybe.

Let’s turn that around, and rather than focus on what he or she will get from YOU, take a look at what she will achieve when she hires you.

For a business coach, this is easy. Talk money. How much more profit will your client make when she hires you? If your coaching fee is $1,000 per month, but you can show her how to increase her sales by $3,000 per month, then your price is inconsequential. She’ll earn it back three times over, not only while you’re actively coaching her, but for the rest of her business life.

Who wouldn’t jump on that with both feet?
What you’re doing here is not talking about the cost of your coaching, but rather the cost of not hiring you. Because if she doesn’t work with you, she’s losing $3,000 per month. What about other kinds of coaches though? The same applies, you just have to find a way to show your clients the cost of their inaction. If you’re a life coach, inaction (to your potential client) might mean years of feeling unhappy and unfulfilled. Imagine what it might be worth to your client to lift that depressing burden forever?

The same goes for health and wellness coaches. Can you add 10 years to the life of an unhealthy, overweight man? That’s priceless. What about dating coaches? For someone who’s been unlucky in love, in and out of one bad relationship after another, the promise of a man (or woman) who will love and cherish them is worth nearly any price.

You just have to paint the picture.
What will life/business/love look like without your coaching services, and what can it look like with you? Once they see the difference, pricing becomes nearly irrelevant.

3. Art of Discounts

3. Art of Discounts

The Art of the Discount: How to Never Lower Your Rates Again

It’s happened to every coach and service provider at one time or another—probably more than once. You offer a proposal or contract, only to have your potential client respond with, “That sounds great, but I can’t afford it.”

What do you do?

For a lot of coaches, their first response is to lower their rate. After all, they reason, she really does need my help. Plus it’s good karma, and she’ll talk about me with her friends, and refer business to me later.

Maybe, but more likely than not, what you end up with is a client who takes far too much of your time, for less money than you deserve. You wind up resentful, and wondering why you aren’t earning the living you know you’re capable of.

Sound familiar?

I want you to make a promise to yourself right now that you will never again lower your rates to appeal to a client. Doing so devalues your services, makes the client less likely to follow through, and worse, makes you feel terrible later.

Now, I’m not saying you can never offer special deals. But I do want you to change how those offers are made. Here’s how it works.

If your coaching package includes:

  • 1 45-minute call per month
  • 1 email per day
  • 1 in-person meeting per quarter
  • and 1 mastermind retreat per year

and your potential client claims to not be able to afford your asking price of $1,000 per month, rather than offering to reduce the price, you offer to reduce the price and the package.

So the offer you make to her now includes everything BUT the mastermind retreat. Or everything BUT the in-person meeting every quarter. You have not lowered your rates so far that you feel used, but at the same time, you’ve worked with her to create a plan she can afford. It’s a true win-win for both of you.

The same technique can be used for any type of coach or service provider, unless you’re charging strictly by the hour. If that’s the case, take a look at how you can reduce the number of hours you need to invest while still providing value.

For example, rather than offering four one-hour calls, change your plan to just two calls, with email follow-ups. She’ll still get plenty of value, and you’ll free up some time by inviting email questions rather than blocks of time on the phone.

Next time you’re asked to reduce your rates for anything, take a close look at how you can also reduce the work you’ll be doing. That way you’ll never feel as if you’ve been taken advantage of, and your clients will still get great service.

4. Stop! Before You Raise Your Rates

4. Stop! Before You Raise Your Rates

Stop! Before You Raise Your Rates…Do This

In every coach’s life, there comes a time when you simply have to raise your rates. Maybe you’ve been in business for years without a pay increase. Maybe your skills have recently improved through a new training course or certification. Or maybe you just want to attract a higher caliber of client.

Whatever the reason, it pays to have a plan in place before you make your big announcement. Here’s where to start.

First, take a look at your current clients. Will you raise their rates as well? If the answer is no, then you have to consider if keeping them will be worth your time, or if you’ll feel resentful at the amount of (lower paid) time you are spending with them. Resentment can build up, so be wary of this. It’s better to raise their rates than provide substandard services due to hidden anger.

If the answer is yes, then you have to prepare yourself for potential fallout. Simply put, there are some clients (you likely know who they are) who will balk at a price hike. They’ll threaten to leave. They may actually leave. Are you prepared for the hit your wallet will take should that happen?

Next, consider when your rate increase will go into effect. This might be different for each client, depending on when/how they’re paying you. A client who is on an annual coaching plan might not see an increase for 8 months or more, while a monthly client might be shocked to find his or her rate is going up in a week.

If you can, give you clients at least 30 days notice of the increase, so they can not only budget a higher expense, but shop around for a new coach if they choose to.

Finally, if you’re a little flexible and want to gain a few new clients, you might think about creating a last-minute offer. Announce that your rates are going up on [whatever date], then offer to let X number of new clients lock in your current rate, if they sign a contract right now.

Sure, you’ll still be working at your old rate, but with a few new clients on the roster, your cash flow will definitely improve.

The most important thing to remember about rate increases is this: You have to feel good about the prices you charge. If you think your rates are too low, chances are good that they are. Raising them will not only make you feel better, but it might just let your current and prospective clients know the value of your services as well.

Pin It on Pinterest