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Networking Tips from Dan Lok
- Don’t try and sell people on your business right away.
- Learn about their needs, goals and problems.
- Deliver value first. See if you can help them in some way.
- Plant seeds and nurture relationship.
- Develop friendships with people you meet at the networking events.
How to Sell High-Ticket Products & Services By Dan “The Man” Lok
Want to Add An Extra Million Dollars To Your Bottom line This Year? It’s Easy!
If you want to pile up an extra million dollars this year in your business — there’s a couple ways of doing it.
Frankly, most people are banging their heads against the wall trying to sell $7, $25, $50 or even $100 products.
You’ll notice it takes tens of thousands of customers to hit the 7-figure mark.
And notice I said customers — that doesn’t even begin to count the number of visitors you’ll need to generate in order to gain those customers. Even if you had a very high 5% conversion rate you’d still be looking at having to drive in 800,000 visitors! (Most sites convert at 1% — 3% so the number of visitors you need is significantly higher than what I just told you.)
But when you understand how to sell high-priced products and services you only need 100 good customers to pocket a cool mil.
Now you’re probably thinking, “Easy for you to say! But there’s no way my customers would buy anything priced like that!”
I’m glad that’s on your mind because that’s exactly what your competitors are saying too – while you can be chalking up huge 6 and 7-figure paydays….if you get it!
Listen, it truly takes about the same effort (with a few tweaks) to sell a high-priced product as it does to sell a low-priced (low margin) product.
In most cases the difference is simply having the confidence to present an attractive offer with exceptional value to your customers at a premium price.
7 Reasons to Sell High-Priced Products & Services
Reason #1: More Profits – Less Hassle
- Bigger Profit Margins
- Very few companies have been able to profitably sustain a “lowest price” positioning (Sears, Kmart, Wal-mart?)
- Price is not a sustainable competitive advantage
- Someone will always find a way to undercut you
- Many businesses acquire customers at a loss to grab market share
- Most people don’t know how to sell high ticket products and services.
“Business is game of margins, not volume.”
Meat Business from TV show “The Profit”
- $50 Million Dollar in Sales
- $400,000 in losses
- $4 million dollars in Debt
- ($30K CASH in bank account)
To Make $1,000,000:
- $25 product x 40,000 customers = $1,000,000
- $50 product x 20,000 customers = $1,000,000
- $100 product x 10,000 customers = $1,000,000
- $1,000 product x 1,000 customers = $1,000,000
- $10,000 product x 100 customers = $1,000,000
Reason #2: Better Customers
Less Customer Support
- $10 buyers = Many customers
- $1,000 buyers = Less customers
- Dan Lok’s preference is to keep his businesses lean mean and simple
- It cost money to get 10,000 customers
- Work on getting less customers at higher profits margins
- Cheap customer bitch more
Value Your Own Expertise
- The difference between $100 seminars and $ 10,000 seminars
Reason #3: Psychology of Price
If you paid $10,000 for this information would you pay more attention. Would you make sure you applied everything you could?
“You get what you pay for”
- Cost more must be good better
- An Audi R8 is not $25,000
- Price is a shortcut to buying decisions…
- Early 2012, researchers at Stanford University and the California Institute of Technology took a bunch of volunteers and ask them to take part in a wine tasting.
- Five wine to sample, all labeled with the price of the bottle they were taken from: $5, $10, $35, $45, and $90
What’s the catch? There were 3 wines so there was some crossover.
- The volunteers preferred the $90 wine and describe the “oaky richness with undertones of burnt chocolate” of the $90 wine. (Actually it’s the 10 wine)
- Interestingly, when a second set of volunteers were given the same wines with no prices, they preferred the $5 wine.
- Here’s where things get scary – the volunteers in the first experiment (the ones who were shown prices) had their brains scanned with a MRI scanner while they tried the wines.
- The part of the brain associated with pleasure was actually more active, the more expensive they thought the wine was.
- The price label didn’t just fool them on a conscious, logical level (it’s more expensive so it must be better”), it fooled their brain at an unconscious chemical level. They actually did enjoy the wine more when they thought it was more expensive and less when they thought it was cheaper.”
- Price fooled the brain on a subconscious level. The higher the price the more they enjoy it.
“People enjoy paying for the things they value. And it seems the more they pay, the more they enjoy it.”
So why would you want to rob your clients of the simple pleasure of paying a premium rate for your products or services?
Reason #4: You can Deliver More Value
If you offered your service at a higher price.
- How would this affect how you ran your business?
- Imagine not having to work with cheap customers?
- Some customers will leave
- But you will attract more higher quality customers instead
Adding Value Mindset:
- With a bigger margin you can deliver more value
- Add 10 – 20x more in value
- Create extraordinary experiences for buyers
EXAMPLE: Tony Robbins life and wealth mastery program
- Resort Experience
Reason #5: Some Buyers Only Buy Premium Products
There is a section of the market place the only buys premium products and services.
Nordstrom Buyers vs. Walmart Buyers
- Some people want to immediately jump to the top of the heap and unless you have something for them – they won’t buy!
Reason #6: Create BIG Pay Days
Nearly every “big product launches” you might have heard about was from selling a high-priced product to a few people (250, 500 or 1000 units)
“Customer-Funded Business Model”.
- Get customers to prepay
- Collect money upfront and then make product
Reason#7: You OWN the Marketplace
Affiliate payout – It’s a Competitive marketplace for top affiliate’s attention. Who’s going to get it? You can pay promoters more money to get the best.
Advertising/Marketing spending – Whoever can spend the most to acquire a customer wins. Period. For every $1 you spend you get 1.20 back
If you can do this you can always outspend your competition
- For every $1 you spend you get 1.20+ back
- Make the math work so you can outspend your competition
Hire the best people
- Pay better so you get more productive, loyal employees.
- To get the best people pay more than the minimum
Price Related to Self Image
- People are too slow to raise price.
- It’s more about confidence and self-image than the actual value delivered
- Competition does NOT set your price – you give yourself permission.
How much would you pay for a small bottle of mineral water?
What is your high-priced example? And why does it work?
4 Types of Customers
Are there customers in your business that you rather not work with?
- How would you feel if you got rid of them?
- You can do more for your business if you just let them go.
- Sell to right side and avoid the left
We sell to who we are comfortable with
- High net worth individuals are very guarded
- Very few know how to get through the gatekeepers
- Most people don’t know how to communicate with rich customers because they project what they value on them and fail to listen to their needs
- They have a scarcity mindset
Your competition doesn’t set your price you do.
- Do something unique that adds value instead of lowering your price.
- How you do your marketing/sales and communicate your value
- Being afraid to raise your price is a marketing issue. If your pipeline is full you don’t care if you scare away a few customers.
Watch this TV Show “The Profit”
Marcus Lemonis’s Top 10 Rules For Success
1. Make a business plan
2. Have enough working capital
3. Create a to-do list for tomorrow
4. Take care of your employees
5. Have the knowledge
6. Constantly reinvent yourself
7. Always stay one step ahead
8. Stick to the grind
9. Push through the fear of failure
10. Stand out
The 5 Biggest Mistakes Entrepreneurs Make When they try to Sell High-Ticket Products & Services
Mistake #1 – Selling a premium offer at a low price.
- People are skeptical: “It sounds too good to be true.”
Mistake #2 – Selling a low-value offer to a premium crowd
Mistake #3 – Making a premium offer in a low-value setting
- The environment isn’t right
- Don’t make a $10,000 deal at Starbucks
- Go to a golf or private club
- There is a reason why I have my meetup at the Vancouver club
- Perception intentionally created
- Dress for success business
- Think about what kind of environment you need to create
Mistake #4 – Making a premium offer to a low-value crowd
- There is no $1000 items in the dollar store
- This is a low-value crowd
- These customers don’t have any money. You are selling to wrong people.
Mistake $5 – Making a premium offer with a low-value mindset
- Don’t project your values on them with a scarcity mindset
How do you change that mindset?
- Immerse yourself in luxury environments
- Hang around people that are way more successful than you
- Sit in Pan Pacific Hotel
- Go to fancy stores
- Practice quoting a high price. Practice asking for a lot of money.
- Expand your comfort zone
- If you are not confident your body language will give it away
Read the Rock Report Magazine
- Look where they Sell High-Ticket Products & Services, there will be NO buy one get one free. Notice the language they use.
Ultimately, the secret to making a great income from your business is simple: Stop Selling to Poor People!
If you are not getting a little resistance you charge too little.
“Do I have to lower my price to stay competitive?”
- Price-cutting is a self-inflicted wound. Your competitors do not lower your prices, your clients do not lower them. You DO!
“We can make it up in volume.”
- Volume doesn’t matter as much as net profit.
LOKISM “All price resistance is in the mind of the business owner, not the client.”
Reflect back on a time when you cut your prices to be competitive.
- “What happened? What was the experience like? Did the client appreciate the discount, or did they feel they “got what they paid for.” Did you enjoy the work?
Now think of a time when you may have charged a higher premium than you were used to.
- What was the experience like?
How to Set Prices?
- Value (People pay for their value, not yours)
- The greater amount of pain the customer has the more money you can charge
- Is it a nice to have or a must have
- ROI (Money at a discount)
- Contrast Pricing
LOKISM: If you’re charging market rates, you’re letting your competitors set your rates for you.
Other Factors that Affect Pricing
- Payment terms
- Guarantee vs No guarantee
- No questions asked vs conditional
- * Pay after “x” result
LOKISM “People afford what they want to afford. Stop discounting prices and start adding value.”
People want the fish cooked and delivered on silver platter
- Didn’t need to lift a finger $$$
- Do it with them $$
- Do it yourself $
People afford what they want to afford
- Stop discounting just add value to your offer instead
- But sometimes discounting can be ok if it’s strategic
- Think about what you can do to absolutely amaze your customers
- “How can I provide 5x – 10x in value for any customer of my high priced product or service?”
- “What can I do that will absolutely amaze them?”
- How can I give them the end-result they want on a silver platter?
- How can I do it for them?
- How can you do everything for them? People are lazy.
Dan Lok’s Mentor Dan Pena
Dan Pena’s Top 10 Rules For Success
- Practice success before you are successful
- Follow what you’re passionate about
- Surround yourself with great people
- Perfection equals paralysis
- Focus on the few, not the many
- Believe passionately
- What gets measured gets accomplished
- Just fucking do it
- Be extremely positive
- Love yourself
7 Psychological Triggers to Sell High-Priced Products and Services
Psychological Trigger #1 – Scarcity
- We are motivated more by fear of loss than of prospect of gain
- Watch “The Diamond Empire”
- Diamonds are not rare but we believe them to be
- They turned it into a symbol for love and infused that into our culture
- Then restrict supply
- Created social pressure
- Lots of advertising
- A Diamond without this is worth $4
- Huge margin. Evil but brilliant.
- They turned something nobody wants into something you have to have.
How can you create scarcity in your business?
- If you have a service business you can only work on so many clients
- Restrict supply and pump up demand
- New Prospect “Can’t do it this week because we’re fully booked”
- Let’s schedule next week.
Psychological Trigger #2 – Rarity / Collection item
- Exotic Cars
Psychological Trigger #3 – Exclusivity
- Patek Philippe ($20,000 – $2 million)
Psychological Trigger #4 – Ego Appeal
- Black Card
- By application only
- The more expensive make them wait
- Privilege – Not for everyone
Psychological Trigger #5 – Part of Group
- People want to belong to something.
- Appealing only to NICHE
Psychological Trigger #6 – Experience
- “Once in a lifetime experience”
- People will pay to be entertained.
- People will pay for an exclusive experience.
- People will pay for a premium experience.
LOKISM “Don’t sell services, sell experience.”
Brainstorm some ways you can “wow” your clients.
- What are some things you can do so that your client feels that he or she got more than what was expected.
- How can I increase the level of perception?
- How can I increase the level of service?
- How can I increase the level of experience?
- Appeal to all senses. Be creative.
- If you’re going to Sell High-Ticket Products & Services you have to wow your customers.
Psychological Trigger #7 – Takeaway Selling
- “People don’t want something until they know they can’t have it or other people want it as well.”
- Qualification process
- Put them on a waiting list
- How can you add ONE or more high-price psychological triggers to your offer or business?
Use this knowledge to Influence with integrity, DO NOT use this to manipulate. It will backfire on you.
Tier Pricing Strategy
Regardless of your industry, service, or product, you can probably think of a way to give your customers options. Make the middle package the most optimal and appealing. The large one is a decoy.
Three tiers work best since the structure fits a familiar framework:
- Basic, deluxe, and complete.
- bronze, silver, gold
- Small, medium, large
- Good, better, best
LOKISM “The quality of your business is directly related to the quality of your clients.Low prices attract disloyal, unfaithful clients, clients you can’t build a business on.”
- Don’t sell to poor people
- Get comfortable raising prices
- Sell High-Ticket Products & Services
- Don’t discount but add more value instead
- “wow” your clients and customers
- Deliver more than what was expected
- Provide an extraordinary experience
- Scarcity Mindset VS Abundance Mindset
- The more expensive the more they wait
- Serve don’t sell. Influence with integrity
- Create scarcity in your business
- Psychology of Price: The more they pay the more they enjoy
- Some buyers only buy premium products and services
- Don’t make a premium offer to a low-value crowd
- Your competition doesn’t set your price you do.
- 4 Types of Customers: Cheap, difficult, affluent and sophisticated