Download: MP3 (65.4 MB)
A recent conversation in the Community chat inspired today’s episode. Someone mentioned that there were a lot of people who couldn’t afford a certain product in their market and they saw that as an opportunity for them to enter the market with something cheap to sell at scale.
But when you sell a cheap product, your margins aren’t going to be very good. That means for it to be sustainable, you have to mass produce. To mass produce, you need a ton of up-front capital!
So first, you need a lot of resources to sell cheap in a sustainable way, but second, you’re limiting your potential. Selling cheap affects your brand. When you have a cheap brand, you can’t very easily sell higher-ticket products. When you start with premium or high quality, you always have the option of coming down, but when you start cheap, it’s an uphill battle to do anything else.
How do you resist the temptation to price match with others in your market? How do you find the confidence to charge more? Primarily, it’s positioning and selectivity. If you want to charge more, you can’t target everyone. You must narrow your focus and come up with a different value proposition. That’s what we get into with today’s episode.
Oh, and we talk about the even higher end market you’re missing out on by making assumptions.
Highlights, Takeaways, Quick Wins
- You need a lot of capital to sell things for cheap sustainably and make a profit.
- When you focus on the higher-end market range, you filter everyone else out and reach the serious people.
- There may be a higher end potential of your market you haven’t tapped into.
- Have a different value proposition—you have to offer something different than everyone else.
- Don’t sell the product—sell people a better version of themselves.
- If people perceive you as a commodity brand, it’s difficult to sell high ticket items.
- Nice-to-have products are a luxury for your customers and luxury for you to sell. Earn the right by making money elsewhere first.
- Position yourself as a premium brand to set yourself up to succeed in the long run.
- If you want to make money, sell something that makes money to people who have money.
- Forget industry standards—if they don’t fit your goals, they don’t matter.
- 01:56 Sean: You think, “I can’t price things in a high end market. I’m not confident enough. People probably won’t buy it. If they don’t buy it, I won’t make money, so I can’t afford to do it.” I think you can’t afford to sell things for cheap, and that’s what I want to talk about today. Ben, you said that you were going to play devil’s advocate.
- 02:20 Ben: Sean kind of just said it. A lot of people think, “I can’t afford to sell things for expensive, at a high price, because then people wouldn’t buy it. I’ve got to lower my price so I can increase my volume and get enough customers.” If people aren’t thinking that way, at the very least, they’re thinking, “I’ve got to find some sweet spot.” Especially in the beginning, when you’re not fully confident in the quality of your product and you’re not sure people are interested, you try and find a sweet spot where you can make enough volume and get enough sales so you can push that up.
The Low End Market
- 03:10 Sean: This topic came from a conversation in the Community. That’s what inspired this episode. Someone was saying, “There’s so much room in the lower end market!” In their industry, they were seeing this gap. They could sell things cheaper and sell a lot of them. No one else is doing that. I thought, “I want to do an episode on this,” because there’s a lot to this. There may be an even higher end market that you’re missing.
There may be a reason that people aren’t in the lower end market of your industry.
- 03:49 If you don’t see someone else doing it, that’s a warning sign. It’s not to say that you can’t ever find something that no one else is doing, but pause for a moment and ask yourself, “Is there a reason that no one else is doing it?” Sometimes it’s just because people are scared, they don’t want to push the status quo, and that’s where you can innovate. Other times, it’s because they’ve tried it before and it’s not going to work out for some reason you don’t know.
- 04:19 Ben: This gets me thinking about something that Sean and Matt are working on. In that space, where lower priced items don’t exist in that industry, maybe you’re thinking about it the wrong way. “This thing that’s normally priced high, I’m going to price it low, so I can sneak into that space and capitalize on all this room that’s there,” but it might be better to think, “In this industry, what is some accessory, some add-on that works as a lower end item, that I can still sell for a premium price in that space?”
- 05:02 A premium price for an ampersand keychain, for example, is a low priced item. It definitely fits into the lower tier when it comes to Sean’s apparel line. He definitely has higher end items, but it’s also premium priced for what it is.
- 05:49 Sean: In our conversation, this person was saying that there are people who want this thing, whatever it is, that don’t have money. That person’s immediate solution was, “I’ll give them a version of this thing that’s cheap, that they can afford.” I’m not saying that you can’t do that, but you need to think about the order of things here. In order to produce something for cheap and make a profit, you’re going to have very low margins, which means that you’re going to need to sell a ton. The production costs of that are going to be pretty high.
You need a lot of capital in order to be able to sell things for cheap sustainably and make a profit.
- 06:32 In most cases where you take something that people want, you look at the part of the market that can’t afford it, and you create a version of that for them, it usually isn’t good. There are a lot of people who want gold watches, but they can’t afford gold, so I’ll make a spray-painted plastic gold watch. I don’t know that you’ll make enough money to stay in business that way, unless you sell thousands of $2 watches at a 5 cent margin.
- 07:07 Ben: Maybe you could make enough business that way, but those customers are never going to become the people who buy the actual gold watch. They’re looking for the cheaper version.
You May Be Ignoring an Even Higher End Market
- 07:24 Sean: I think this person felt like they found a hole in the market, and they thought, “I can fill that.” This is the one that almost no one ever sees. They look at the market and they see, “Here’s the low end. Here’s the medium, and here’s the high end. This must be the whole. The cheapest thing is the low end of the market and the most expensive thing is the high end of the market, and that’s as high as it goes.” They don’t really realize that, in a lot of cases, there’s an even higher end market. Case in point, Learn Lettering.
- 08:04 Most courses on lettering were selling, and still sell, for around $29. Some of them are $19. I came in and I sold a multi-hundred dollar course. It was 10 to 20 times the average or even the highest price point. Why am I able to do that? If you looked at the market, you would say, “Well, there’s free stuff on YouTube. There’s this $9 guide, some $19 courses and some $29 courses. I guess that’s the range for this market.” People do this with many markets, and they don’t see the potential in the very high end of the market.
- 08:56 Maybe people haven’t even pushed into that end of the market yet. There are probably reasons why they haven’t pushed into it, but don’t assume that they’re legitimate reasons. They could just be assumptions, like, “No one would ever buy this,” or, “Everyone I ever talked to said that they only had this much money.” What about the people you haven’t talked to? What about the people who didn’t want to talk to you because they assumed that you didn’t even have what they wanted because you were selling something so cheap?
You don’t know the high end potential of your market because you haven’t tapped into it.
- 09:28 What about the people who want something more? In my case, I came in and I disrupted that, because I offered something different. I know people hear my Learn Lettering story a lot, but in the chat Jameson just said that he just finished an old episode where I talked about how people in the future would listen to this show (Related: e093 Lessons Learned From Running Businesses in 3 Different Industries). He said, “It’s a year and a half later,” so there are always new people coming in. The unique value proposition for Learn Lettering wasn’t just that I was teaching you lettering techniques, which is most courses out there: “How to draw letters. The end.”
- 10:07 I said, “How to make a living as a handlettering artist.” I teach people the business stuff, because my background is in business. I had worked with clients, I had done licensing, and all of that stuff is baked into the course. People can take this and make a living as a handlettering artist. I’m offering something different here.
- 10:30 Ben: Sean, knowing that was your unique value proposition, I’m assuming that at the time when you were considering putting this course together, you had already had some interaction with your audience. You had already been discovering some of their needs. Because there didn’t already exist something similar that covered the same kinds of things, how did you know? I want to reverse-engineer this a little bit. Lettering was the main focus, and that was the entry point for most people. What drove you to test the market for that specific need, when it came to making a living as a handlettering artist and offering the business side of it as well?
- 11:16 How did you know to validate that market? How did you do that? I’m asking this question for somebody in that position, where everything around them points to this idea that they’ve either reached a cap or there’s some level they can’t go beyond. They’re not sure whether or not that’s arbitrary, they’re not sure what to look for, as far as their unique value is concerned, and if they find it, they’re not sure how to validate that market before they put something out there.
- 11:49 Sean: With Learn Lettering, I wasn’t particularly trying to come in and say, “I want to charge more. Can I? Can I test it? How do I figure out what I can charge?” Rather, I had a message. I had a solution to my own problem that I figured maybe other people had. What I brought to the table was valuable, and it would be absurd to sell it for $29. I thought, “What am I offering here? I’m offering something different from what everyone else is offereng. It doesn’t make sense to charge the same amount.” I’m offering the knowledge and the ability to make a living at something. It’s all-inclusive. Who wouldn’t spend a few hundred dollars learning how to make a living at something? I thought, “It makes sense to price it on the value people are receiving.”
Offer Something Different
- 12:50 Joe Allen asked, “How do I avoid the temptation to match the price or try to be cheaper than much of the marketing I’m entering into? Are there any tips to help me feel more confident selling my things at a higher price?” Joe just launched an app. This app works on IOS devices, and it’s called Soundboard Studio. He launched it as of today’s recording, and it’s expensive. This app is $30. It’s an app. People are always complaining about apps. “Oh, it’s a $2 app, why isn’t it $0.99?”
- 13:37 You don’t deal with any of those people. You’ll get some stragglers who say, “This is crazy expensive,” but move on. Who cares? Once you’re selling an app for $15, $30, or $99, when you get up into that higher market range, you filter everyone else out and you’re reaching the serious people. Who is this for? Everyone else says, “Here, use this soundboard. It includes audio of flatulence so you can trick your friends.” That’s great. I don’t really want that. I’m not going to buy that for my professional studio, for my show. You target professionals and you say, “I’ve thought of everything for you and of the podcaster specifically.”
- 14:22 He has a soundboard that works with whatever you want to do. It works in a lot of cases, but the more specific you get, the better you can serve that person and the more they feel like you’re reading their mind. “Hey, podcaster, I thought about you with this situation with another guest and wanting to play music for your intro, but also using a soundbite of your voiceover that goes over the music before you start talking.” With all these other podcast soundboard apps, when you press a soundbite, it will stop when you press the second soundbite.
- 15:11 He includes this feature called Playover. It will say, “This soundbite plays over other soundbites,” so when you tap it to play your music, you can then tap your other soundbites and they will play over the music. You can control each of these individually. You can control the volume individually. You can tap and drag with two fingers and change the volume. You can set them to be linked, where it will just play to the next one. I haven’t set it up yet, but I got his app and I’m super excited about it. In the pre-show and the after-after show, we play music under us talking. Whenever a track ends, I have to go over and tap on the next track.
- 15:52 This one just lets you play it right through with custom volume. I’m always adjusting the volume, because different tracks are slightly different. It’s all done for you. He thought of everything. I asked him to make this app and I asked for specific features, so for me, it’s very tailored. Basically, anything I asked and said, “I need it to do this thing or that thing,” he said, “Done. It’s included. I’ll do an update with it. It’s coming in a few days.” That’s amazing. I have a relationship with Joe because he’s in the Community and we talk, but because he made that based on feedback from someone who’s actually going to use it, everyone else like me—a podcaster who runs a show who needs a soundboard app that doesn’t suck—is willing to spend money on this.
- 16:46 What is the price of having a soundbite stop your track and make you look unprofessional while you’re live on the air? What is the price of having to worry about playing the next track and thinking about how it’s going to stop and you’ll have to start it? Someone who’s serious about their trade is willing to spend $30, while everyone else isn’t even going consider it. They’ll say, “$30 app? Of course not. I’m looking for the free stuff.” He’s in a totally different place. He’s asking, “How do I avoid the temptation to match the price? Are there tips to help me feel confident selling my things at a higher price?”
The key to charging more is to have a different value proposition—you have to offer something different than everyone else.
- 17:38 Even if you think it looks the same, you need to figure out a way to differentiate yourself. Everyone else is competing on features, so you need to think about benefits. People don’t buy features. They don’t buy products. They buy a better version of themselves. That’s what you need to be selling. Don’t sell features, sell benefits—sell the version of someone that they want to be. I want to be a podcaster who doesn’t worry about his soundboard, where all of the music is perfectly lined up. It’s tailored, it has the right track volume, it continues automatically when I play something else, it doesn’t stop. All of these worries and concerns are lifted from me.
- 18:22 I’m willing to pay to make that go away, because I want to be that person. Previously, Joe has sold plenty of apps for $4 or $5, so this is a lot for him. This is pretty high end, but he’s already got a dozen sales just from the Community. Everyone here is serious about what they do, so it’s a no-brainer. Zero buyer’s remorse. This thing works, and it’s polished. You have to know the value of what you’re putting out there. Don’t compare the features, because you’ll always find someone else who’s doing something similarly. Who are you targeting? I could have come out with Professionalism for Creative People, and maybe that would have done well, maybe not. For my first course, I think it was smart for me to niche down and serve a particular audience.
- 19:20 Ben: Alternatively, you could have done a course on lettering—how to draw letters, and left it at that. You could have not focused on the people who were serious about it and wanted to make a career out of it.
- 19:37 Sean: Joe just said that he sold over 100 units today.
Reverse-Engineer Higher Prices
- 19:50 Ben: Sean didn’t get to the point where he was going to sell Learn Lettering and then ask, “Okay, how can I break into a higher price point?” There’s an acknowledgement of the unique value he already provides, with a focus on the benefits. He’s no longer comparing his lettering course to someone else’s. Do they cover the same modules, etc? You might need some creativity, though. Even if I focus on the benefits instead of the features, I can’t always differentiate this from what someone else is offering.
- 20:39 Sean: Why not?
- 20:42 Ben: The only difference is that this is you and that’s them, so this is a unique thing. Let’s say Sean didn’t offer the business side of it, for example. Part of it is the quality he’s providing. If I’m going to do this, I’m going to produce better quality content than what everyone else is doing. That’s a purposeful decision to add value to something in order to get yourself into a different price point. For people in that situation, I want you to ask yourself, “What unique value can I add to this, not to justify being in a higher price point, but to add enough value that having it at a higher price point would be a no-brainer for someone because of the value they would receive from it?”
- 21:42 Sean: It’s kind of like setting a goal for yourself that’s a little bit farther than what you think you may be able to reach, but as a result, you’re able to do it. You’re able to do more, essentially. Rather than just say, “What’s the value of what I’m offering? What’s the most I could do?” Start with a higher price point. Take your highest price and triple that number. What would you need to do to create that much value for someone? Set a mile marker further than you’ve ever run before. Make a challenge for yourself, where you now have to reverse-engineer that.
- 22:42 Ben: At this moment in time, you may not be able to afford the time it’s going to take to learn the things that are necessary to get to that place or the extra time you would have to invest. The value increases exponentially as you continue to invest in it.
Extra investment goes into extra value, but the amount of investment decreases as it gets higher.
- 23:24 Sean: On both ends of the market, you have to invest. If you want to be sustained selling $2 spray-painted plastic gold watches, you’re going to need tens if not hundreds of thousands of them. Or, millions! If you really want to make money on a $2 product, you need to invest millions to get to where you can make 1 to 1. It’s a scale thing. You’re going to need a huge amount of investment, and it’s not just your time and effort. It’s literally money that you probably don’t have. If you go to the higher end, you’re more selective, and you need to sell fewer.
- 24:10 If Joe sold the soundboard app for $3.99, he would have to sell a ton of them. I like to pose this question to people: if you doubled your price, would you lose half of your customers? If you invest in a higher end thing, yes, fewer people will buy, but will enough people buy to where it’s worth it? I recommend starting there for so many reasons. If you want to get into a more commoditized market, you’re going to need capital, and it’s way easier to get capital if you’re selling higher end things.
- 24:55 Ben: If the answer to that question is yes, you could lose more than half of your customers, in some cases, when you’re playing the long game, that’s still the right move. You’re filtering out the kind of customer that you have. Right now, that may cost you a little bit, but in the long run, the quality of customer you attract to your brand will increase the overall value.
- 25:20 Sean: Brand perception is huge. That’s probably the most costly part of it all, and people don’t think about it. If you’re selling cheap things, you’re a cheap brand. If you’re in the low end market, let’s say you make it work and you do make some money. Now, it’s literally an uphill battle, in all senses of the expression. It’s going to be very difficult for you to push into higher ticket items if people still perceive you as a commodity brand. They think of your brand as cheap. Imagine if Walmart tried to start selling $10,000 things. It’s going to be hard, because they have that brand perception. I don’t know that I want to spend $10,000 on a Walmart product.
- 26:17 Ben: What, are they selling cars? That’s where my mind goes immediately. If a brand I perceive as cheap has an item, of whatever ticket price, I immediately imagine the cheapest version of whatever could be in that price category.
- 26:36 Sean: Whereas, if you start at quality, at premium, where your stuff is priced higher than everyone else but it’s quality, then you can go down and people will actually think the best. If Apple makes a car, you’re going to assume that every piece of that is polished, that every corner is rounded. Everything you touch is how it should feel.
- 27:05 Ben: They’re probably going to sell it for at last $65,000. That sounds right to me, in my head. That’s a lot for a car, where you can get one for $20,000.
- 27:18 Sean: That’s the nice thing. The automobile industry is all over the place. It’s commoditized, but there are also luxury vehicles. If you enter it for the first time, like Apple, people will still buy Apple cars because it’s Apple, even though they don’t have a track record. That’s a little bit scary. Hopefully they’re good and they know what they’re doing, but people will do it. If you’re starting low and you try to go up, you’re going to have a hard time.
Selling Through Different Platforms & Venues
- 27:59 Dominic says, “What is ‘cheap’? This is something I struggle with. I do caricatures at events for $25 each but if they order a custom one (that’s usually digitized and has other flourishes and nice-to-haves) I raise the price significantly. Is that selling it cheap or having a different price-point for certain venues? When I say ‘they order,’ I mean from my personal platform or another place where a client will contact me that’s not a live venue.”
- 28:32 Ben: I always go back to Value-Based Pricing. If it’s something pre-existing, based on licensing and so on, you have to take that case by case based on the value it’s going to provide the person who’s asking for the product or service. In that case, it’s not about the time you spend on it. It’s not about the features, like Sean said, but it’s about the benefits. What is having these extra flourishes going to do for this customer?
- 29:11 Sean: I’m less interested in answering the direct question and thinking more about the whole situation. If you can make more with custom commissions that people order from your platform, what if you spent all the time you spent doing commoditized work at the venues on these higher-end commissions?
- 29:47 Ben: Depending on the industry, you could sell something in one venue to a certain type of customer, and they’re going to expect it to be cheap. If you take that same thing and you sell it on your website, the exact same product is perceived as more valuable and people are willing to pay more because of how it’s being sold. That’s an important consideration. People do their own courses or sell digital goods through an online vendor, and it doesn’t matter how objectively valuable your thing is outside of that platform.
If your product is being sold through a platform, people will associate the brand value of that platform with your product.
- 31:04 Sean: I have a story about Learn Lettering, but it’s some insights about the sales since the Learn Lettering 2.0 launch in 2015 that I was sharing just with the Community members last week. I did something different with Learn Lettering 2.0 this time. Everything was reproduced and repackaged from version 1.0 to version 2.0, but I took the same amount of materials that I previously sold for $99 and I added so much more that the starter class had as much material as what I previously sold for $99. This time, I decided to give it away for free.
- 31:50 Instead of charging for it, I gave it away. First of all, I wanted to experiment. Second of all, I wanted to create a story. I could have sold this for $99 and I did last time, but this time I’m giving it away for free. That’s why it really spread. A lot of people were sharing it, because who doesn’t want that? The other angle to it was that I am in the highest part of this market. The master class is $699. I also wanted to demolish the lower end. Why would you pay $29 for someone else’s lettering course when you can get $99 worth of a course for free from me? It makes it a no-brainer, and that’s why 40,000 people have decided to sign up for Learn Lettering.
- 32:46 My video hosting bill, for instance, is hundreds, and sometimes in the four figures, per month, to give away all of this stuff. I’ll share real numbers. 450 people have bought the master class, and there are tens of thousands of people on the list. That’s a lot of people who haven’t bought the master class. I put an auto-responder in, so when people sign up for the starter class, they get their course and they can go through the lessons, but they also get these emails for 30 days. Even more value! There is 45,000 words worth of stuff that I could have sold. It’s educational value, and I’m giving it away over email.
- 33:36 Towards the end, I talk about the benefits of the master class and why you might want to upgrade. When I put that in, we did get a few sales. Here and there, we got a Master Class sale, but it was still really slow. It wasn’t as much as I wanted. I thought, “What am I doing wrong? I’ve given them so much!” Part of me thinks, “Maybe I gave them too much.” I gave them so much and they got so much value out of it that they could free load and their life was a whole lot better, and they didn’t have to compensate me at all.
- 34:17 Tens of thousands of people did that. They don’t need to pay me, because I gave it all away to them. Even though there’s so much more, there’s 20 times more value in the Master Class and they don’t even know what they’re missing on the business stuff, they don’t know because what they got was so good. Part of me feels like, if I were to do it again, maybe I should have sold it. I wouldn’t have gotten tens of thousands, but I probably would have gotten thousands at the basic $29 price, $79, or whatever.
Even though I lost potential money, it’s good that I didn’t charge for the Starter Class.
- 35:06 I could have made tens, if not a hundred, more thousand dollars had I put a price on that lower point, but I think this is better for my brand. Look at what Learn Lettering is. It’s a premium course. It’s $699. I give away a ridiculous amount upfront, but it’s completely free. There’s no price that anchors me down, so it doesn’t commoditize me or my brand. I keep that position by not putting a price point on the lower end, even though I would make money. It’s tough. I wanted to experiment and give away this ridiculous amount of stuff for free, and it has cost me. It costs a lot of money to sustain the bandwidth of thousands of people who aren’t paying, but it’s still yet to play out.
- 36:05 I get emails over and over and over. I see tweets and comments from people saying, “I’m saving up for the Master Class.” How many people are saving up for your product? It’s been seven or eight months since launching 2.0, and that’s a lot of money and not a lot of time for some people. They need that time to save up money. There are a couple of points I want to break down with this. Number one, it’s very possible that there are a lot of people saving money who might buy soon.
- 36:44 Number two, there are a lot of people who have very positive brand associations with seanwes because of Learn Lettering, and I think we have yet to see the benefits of that. This was a long term play, a decision I made a year ago before I realized that I needed to think more short term with seanwes. I’m learning as I go. Who’s to say that someone who got that much value, who doesn’t have enough money for the master class, doesn’t have positive enough associations with the seanwes brand to eventually join the Community or go to seanwes conference? It’s hard to see that.
- 37:30 The other thought was, this is just a reality. Part of my thought was that I would give away a ton upfront, nurture the leads, and up-sell them to the paid class. Not everyone will do it, but some will, and that’s why I decided to go this route. What I didn’t take into consideration was the market. When you go so high end where you’re creating a new tier, where no one else was selling at that range before, you have to expect to only sell a few. That’s the reality. In this hobbiest, generally nice-to-have market, it costs you a couple of bucks to get a pen and a piece of paper to enter this market.
- 38:27 It’s not like video equipment or anything. It’s so easy to come in. You’ve got hobbiests, you’ve got kids—teens or students who literally have no money. People write me from third world countries, and they’re very grateful for what I’ve given them, but they literally have no money. That’s the market I entered into here.
I’m giving great stuff to people who don’t have money, and I need to understand and accept that less than 1% of people will convert to my items in the high end market.
- 39:15 Ben: There are a lot of things that you don’t know how they’re going to play out. Sure, when you give stuff away, you’re going to give some of it to freeloaders who will never turn around and purchase something from you, but you’re also building reciprocity into people who are young. They’re young, they don’t have money yet, and they’re still trying to figure out what they want to do. You mentioned the Community, but think about the people who are interested in lettering now. I think back to when I was 16 or 17. You’ve got people that young getting that free course because they’re interested in lettering, they think Sean has cool stuff, and they want to be like Sean or this other person they follow.
- 40:06 They really like the authentic feel of lettering and they want to give it a try, but in a couple years, they completely change their mind. They’re on a whole other career path. Maybe they’re doing something else creative or maybe they aren’t, but Sean is building the seanwes platform in a way that serves other industries as well. His highest priced items are still ahead of him. He’s continually building the value. He’s giving people plenty of reasons to stick around the platform—all of these podcast channels, for instance. One day, these people may get to a place where they’re ready to spend $5,000, $10,000, or $50,000 on something specifically for them at that point in their lives.
- 41:19 Sean: If you want to sell things for cheap or to give away stuff to people who don’t have money to buy, if you’re targeting people who don’t have money, you’re not going to make a lot of money. That’s just a reality. Jennifer said, “When dealing with nice-to-have products, how do you avoid slipping into a habit of competitively pricing as cheaply as possible? Should you focus on the audience who—due to their personal taste—think of your product as a love-to-have instead, therefore increasing the value of the product?”
Nice-to-have products are a luxury for your customers and for you to sell.
- 42:15 For various reasons, it’s harder to sell things that don’t immediately solve an apparent problem. You can dig down and figure out what kind of problems nice-to-have products solve, but when it’s less apparent, it takes a little more work and a little more creativity to sell. When you solve a clear and apparent problem, people pull out their wallets. It’s just easier to sell. Sell the things that are easier to sell first. Find the obvious problems, where people are already spending money, and apply your skills and expertise to that. Throw your hat into the ring, and put your own product out there where people are already buying products.
- 43:04 Siphon some of that revenue, because you can use that money to fund your nice-to-have products. If I want to have a nice-to-have product, it’s a luxury to me. If I want a wooden, laser-cut, laser-engraved ampersand keychain, that’s a luxury to me. If I want to give away a free Learn Lettering class to thousands of people and pay for the bandwidth every month, that needs to be seen as a luxury to me. If I’m putting all of my stock into that without a foundation, I can’t remain in business.
- 43:40 Ben: It’s very similar to the idea of content marketing that some people take on. They think that it’s just about giving away free value, and they don’t think about the fact that it’s marketing. You’re trying to sell something. This was difficult for me to grasp, because I was all on board with giving away as much value as possible. I love the idea of being generous, but I wasn’t facing the fact that I can’t be generous indefinitely if I can’t pay my bills. I can’t give away a bunch of value indefinitely if I can’t take care of my own needs.
- 44:22 The marketing side of it is actually serving your audience. When you have a nice-to-have, you have to counter-balance that with something really valuable that people would be willing to pay a high ticket price for. That’s what Sean did with Learn Lettering 2.0. Not only did he afford himself the ability to offer something for free, there was some overlap going on. With that free item, he also released something very premium and expensive. He wasn’t just giving something away for free for the great brand perception, because he was also selling something at a premium price, which is huge for brand perception and makes it possible for him to continue giving the free thing away.
The Long Game
- 45:36 Sean: Going back to the long term play, when you position yourself as a premium brand, you’re setting yourself up to succeed in the long run. We give away so much here at seanwes that we’ve almost given ourselves out of business. We’re trying as much as possible to survive, and everything else is aggressively invested into the future. If we sold what we could be selling right now, we would be a seven figure business, if not a multiple seven figure business. I care more about being an eight figure business in five or ten years. Maybe we could be a seven figure business now, for a short amount of time, but it may not last forever.
- 46:32 It certainly wouldn’t last forever, because I would be cashing in now. Instead, I’m investing that in people’s experience. The Learn Lettering experiment there was to see what would happen. I had a few takeaways from that experiment.
If you want to make money, sell something that makes money to people who have money.
- 47:09 It’s very simple, but most of us don’t do that. Most of us start by saying, “I want to make this product.” Sometimes that works, because a lot of people want that product. They’re like you, and there’s nothing wrong with that at all. You absolutely can do that, but the easiest way is to sell something that makes money to people who have money. That’s it. What did I get right with Learn Lettering? I sold something that makes money. The difficult part is that, primarily, it was to people who don’t have money. They’re hobbiests, students, or artists who don’t have expendable income.
- 47:55 You can do those things. I don’t want to discourage you from creating this product or service that’s your passion, but I suggest starting with something a little more obvious, because it can fund your other efforts.
- 48:17 Garrett says, “How do you handle industry standard pricing? For example: in the video game industry, a AAA (triple A means Major Corporation) title will usually go for $60. An indie (independent, small company) title will usually go for $40 or less.” I’ll tell you my approach. Be so good that it doesn’t matter. I don’t ever go by the industry standard pricing. I invest everything into the name and the brand so that I can do whatever I want. How much does the Apple pencil cost? Is it $99? They’re selling something called a pencil for $99. It’s a stylus, but the point is, do what Taylor Swift does!
- 49:11 What is the industry standard? The industry standard is to put all your music on these streaming services. I guess you have to do it! She says, “Nope. I do what I want,” and all her fans said, “I guess that’s where we buy it.”
- 49:25 Ben: But that’s Taylor Swift, Sean.
- 49:29 Sean: So, step one, be Taylor Swift. That’s what everyone does. All people want is excuses. “Well, first you have to be Taylor Swift.” Why don’t you do what you can with what you have to be the best you can be and get as close to that as possible? Why not literally take the first step and do it. Be Taylor Swift. When I say, “Be Taylor Swift,” how many people immediately say, “Nope.” 98% of people are grumbling, but there might be a half of a half of percent of people who hear me say that and say, “Yeah. I’m going to do that,” and they’re going to be that.
- 50:38 Ben: Whether you believe you can be Taylor Swift or not, if you’re thinking in terms of talent, opportunities, hard work, or whatever, the industry and it’s conventions were set up by people. The reasons they are in place vary from legitimate to, “Well, this is just the way we’ve always done it.” There are varying levels of legitimacy to the way people do things in different industries, because it’s built by people and supported by people. There’s a relationship between the industry and the average customer. Well, is your target the average customer? It’s not just, “Be Taylor Swift.”
Be the best possible version of yourself, but also think differently.
- 51:41 Do people have to purchase my music from a streaming service? Is there a way I can make that available to them on my website? Not as many people will buy from me on my website. How can I get people there? What incentive can I offer them so they need to go to my website, so they want to be there? What other things can I do?
- 52:05 Sean: There are two types of people listening to this right now. The first type is calling us dumb, but the other type are getting the point here. Yes, there are good and bad examples of all of these things, so be the good examples. Forget industry standards—if they don’t fit your goals, they don’t matter. I love what Ben said. All of these things exist for a reason. It’s the least common denominator, and they work for the average person. Is the average person your target audience? Think about that. I’m not defining it for you, but I’m asking you. Are they your target audience? If so, do the status quo.
- 52:58 If not, do things differently. Maybe don’t care about the industry standards. Multiple concepts? How about one concept? Net 90? How about Net Now? I don’t even care, because I don’t want the average client. I want the best client. I don’t want the average Community members, which is why I’m not going to run $1 trials, free trials, and discounts on my membership where I open it up every year and it’s too bad if you already paid the full price. I don’t care if the membership is dwindling or it’s not growing as fast as I want, because I want the right people.
If you don’t want the average customer, why are you doing things the average way?
Upping Your Prices
- 53:47 Steve said, “How do you sell things for more once you’ve already been selling them for cheap? What if there’s no value you can add in order to increase the price?” There’s always value. You just have to find it. Accept that there’s always value and you have to find it, so if there isn’t value, you haven’t found it. Think creatively. Talk to the people. On the brand end, if you’ve been selling things for cheap and you want to increase your price, that could be tough. It’s an uphill battle. If you’ve been doing things the cheap way, it’s going to be hard.
- 54:28 Ben: I’m thinking of McDonalds. I remember when they made some branding changes. They started having a more modern look and started focusing on more healthy foods. They started doing iced coffee. I remember when they started doing that, and I looked at that and thought, “Okay, that’s stylish and cool. I see what you’re trying to do, McDonalds, but you still sell Big Macs. You’re the place that sells hamburgers and french fries to me.” Even for people who haven’t had the previous experience of the old McDonalds, they’re going to go in and they’ll see french fries and hamburgers on the menu. They’ll see fast food prices.
- 55:26 Once you establish something, you almost have to destroy what you previously created and start over with something new. If McDonalds wanted to become a health food store, they would have to get rid of all of their hamburgers and french fries. They would have to say, “Okay, we’re done with that,” and it would cost them a lot of money, because they have a lot invested in being the hamburger and french fry place.
- 56:09 Cory: Sean is very right. When you have a problem-solving product or service that you’re selling, it’s much easier to discover the value and price accordingly. When you have something like a nice-to-have, it’s going to be harder. There is always value to discover about it. You’re selling people a better version of themselves, a feeling that they get. People buy based off of emotion, though logic is involved. Does it make sense for me to purchase this?
- 56:58 Sean: We all make purchasing decisions based on emotion, as much as we hate to accept that. We use logic retroactively to justify the emotional decision. We convince ourselves that we make logical buying decisions, but it’s not true.
- 57:21 Ben: That’s the fun challenge of the nice-to-have. It’s more work, creatively, but you have to ask yourself the question, “How can I tap into the power of the emotional purchase here?” Not in a way that exploits people. Maybe somebody believes that buying a t-shirt with a message on it is going to make them a better person. This could even apply to selling the comfort of something. The fabric is really high quality, it’s super comfortable, and you’re going to feel more relaxed throughout your day.
- 58:07 Sean: It’s like my Hustle t-shirt. The fabric is comfortable, it’s tag-less, it’s water-based ink, so even the printed tag you can’t feel. It’s so comfortable that you forget you’re wearing it, which is the point. You shouldn’t be reminded that you’re wearing clothes. It shouldn’t be scratching you.
- 58:44 Ben: When you’re trying to hustle, you don’t want to be thinking about how uncomfortable your shirt is. It takes away from the hustle.