Episode #034: Can Low Ticket Be Profitable?
Can Low Ticket Be Profitable?
If you've ever found yourself asking the question, "can a low ticket product suite be profitable?" - you're not alone!
Most of the products we sell are UNDER $50 or under $50/month and we run a successful business?
Wanna know how? Then tune, in and listen up!
Links Mentioned on the Show From Zach:
Full Transcript:
This is Not Your Average Online Marketing Podcast, episode number 34, and in this episode, we're talking about the low-ticket business model, the ever so elusive, selling the one product to many people at a low price while staying profitable. Can it be done? Let's get into it.
Hey, hey, hey, not so average marketer. Welcome to another episode of the podcast. Now, I am really excited because I am actually traveling right now. I'm in Las Vegas for a mastermind, a business mastermind that I'm in with other online entrepreneurs, course creators, coaches, consultants, digital product makers, and I was actually at lunch today with a couple of people from the group, and I was talking with one of them because they have no product in their business that cost over $300, and that one that is close to $300 is for a full year in their membership, and they're running this wildly profitable and successful business, and I kind of started wondering like, "How is that possible?" Right? I think a lot of us wonder that, and I started kind of stepping back and saying, "I think that this is something I should bring to my audience because we don't run a 100% low-ticket product business, but we've been able to really create a low-ticket business model for course creators and membership owners that has felt really good for us." When I met this person and we were having lunch and kind of chatting, what dawned on me is that you can do whatever you want in business.
You can sell low-ticket products to millions, you can sell high-ticket products to dozens. It doesn't matter. What matters to me, in my opinion, is that you're creating quality content, serving your audience and delivering value. What I want to do on this episode is I'm not going to break down what that person does because that's their business, and maybe I'll bring them on the show in the future to talk about it, but I want to talk to you about how we at Heart, Soul & Hustle and inside our Not Your Average membership have been able to create a low-ticket business where we are serving as many people as we can possibly in our audience while still staying profitable, because if you kind of thought about it, you might be thinking, "Zach, this is great. I like the idea of selling low-ticket products," and I'm going to talk about what I think some of the benefits of those are in a second, but you might be thinking, "I want some low-ticket products."
"I want to kind of get into the game and start testing out some low-ticket stuff, but I don't know if it can work," so I want to start by talking about our model. Our model is kind of this three-phase model that we use to create a low-ticket product suite that stays profitable. The first thing is variety. We create a variety of low-ticket products. Now, I am of the belief that if you want to have a profitable, low-ticket product business, you need to have multiple products, so we've had multiple products and multiple iterations of products over the last couple years in our business.
We've had a Facebook ads mini course. We've actually had a Facebook ads workshop. We've had Facebook ads bootcamps, all of those different offerings around Facebook ads. We've had live workshops. We have an upcoming live membership workshop.
We have a low-ticket membership. We have a low-ticket Challenge Launch Toolkit, and that's just to name a few of the things that you can access us for under $50, okay? First things first, we want variety. If you want to sell and be profitable, you want to have one customer buying multiple products, so you're still generating higher ticket revenue on a single customer, but you're doing it through variety. Number two, we focus on accessibility.
For me, when I created Not Your Average membership and my low-ticket products, I kind of found myself saying, "There's this segment of my audience that really wants to learn this stuff." They want to advance their business. They want to learn more about marketing, but they're kind of up against this wall because they're saying, "I can't afford $1,000 course yet," or, "If I spend $1,000 on a course, then I don't have money for Facebook ads," or, "If I invest in a multi-$1,000 group coaching program, then I don't have the resources to build the business I'm learning about," and I said, "I want to create accessible resources." Okay? Hear me out, I am not saying that high-ticket products are inaccessible.
I'm saying that the segment of my audience that I'm serving with my low-ticket products wouldn't be able to otherwise access my genius, because accessibility is subjective in terms of pricing. There's no perfect price that makes you perfect for everyone, and so I'm always asking, "How can I serve a broader audience?," so accessibility also ties into a broader audience, okay? Then, the third phase of this is what I call recurring revenue, and that is our membership. We have a variety of low-ticket products that you can buy, and that compounds the average value of a customer to our business, right? If we sell one $37 product, it's worth $37, but if we sell three of them, suddenly it's worth over $100, right?
Accessibility, we're creating products that serve the broad part of our market, the part of our market that's not ready to spend $2,000 on coaching or $3,000 to hire our agency or multiple thousands of dollars to hire me for a long-term coaching contract, right? Then three, we're creating a recurring revenue model within this business where we have people that are buying our low-ticket products, getting access to our information, and then saying, "Wow, this information is so good, I'm actually going to take the time to join Zach's membership because I know the information in there is going to be just as good, if not, better, and now I'm creating recurring revenue." Sometimes a customer comes to us and they buy, for example, our Challenge Launch Toolkit for 37 bucks. Well, we also have upsells, we have order bumps, and the average person actually spends $55 on that, so we make $55 on average per a customer. Well, if that customer then comes to our membership, where we average four to six months stay at $50 a month, it's actually 49, but we're going to say 50 to keep the math clean, $50 a month for four months, that $55 customer is now worth $255 to $355, so I didn't have to sell a $297 course to get the value of a $297 sale.
Now, this is where I want to take a beat because you might be saying, "Zach, why not just sell the $300 course?" Well, I'm going to tell you what I think the big benefits of low-ticket offers are. Number one, you don't necessarily have to provide high touch support. When you do a course, a group coaching program, a mastermind, people expect an additional level of support, whether that be a Facebook group, live coaching calls, access to you, access to a Slack channel, they want access, and I find that at a lower-ticket offer, I'm making information accessible, not access to me accessible, right? It's a subtle nuance that makes a huge difference in the way that we operate.
Number two, I find that it's so easy to overdeliver, okay? Now, let's be clear. I think a lot of us suffer with imposter syndrome. We think, "I'm not good enough," or, "I don't know if my course is going to be good enough," or, "I don't know if my content's going to be good enough," and what ends up happening is we second-guess ourselves to the point where we don't create the thing and charge three, four, 500, $1,000 for it because we don't know if it's going to be good enough. Well, if you can charge somebody $37, I think it's much easier to overcome that imposter syndrome and say, "I can feel really good about myself and 100% stand behind my product with no doubts, fears or insecurities because it's 37 bucks," which brings me to the next piece of this, which is that I think that with a low-ticket product, you can provide so much value that people want to become repeat customers, but you don't have to create the big honkin' course.
Okay, let's be real. How many of you listening to this have said, "Oh my gosh, I would love to launch $1,000 course," and you start mapping it out and you go, "Oh my gosh, this course is going to have 25 workbooks and 50 videos, and it's going to be 10 modules long, which is 10 weeks and 10 weeks of coaching, plus a Facebook group, plus this, and I'm going to have to launch it like that, I'm going to have to do a big launch like this," and suddenly before you know it, you're overwhelmed at the concept of even creating something? Low-ticket products by definition are information based and easier to create. I find that it's much easier to create these products, and that means I can create more of them with less stress rather than trying to create one big mack daddy product. I create consistent products that are accessible, variety, and then ultimately recurring, right?
The last thing that I want to say about the big thing that I see as a benefit of low-ticket offers perceived as incredibly high value even though they're not high-ticket. Why is that? It's because when you put your unique content, your unique ideas, your unique process to paper, to video, to checklist, to workbook, people are like, "Wow, I have paid 10 times more for less information." Okay? I'm not saying that you should put $1,000 course in a $37 product.
What I'm saying is that your $37 product, it's easy to make it worth 100 bucks and people perceive that value, and therefore, value you and your content more, which ultimately means it's easier to create, repeat, and recurring customers, okay? Just to take a quick step back and kind of cover what we've talked about, the model that we use is a variety of offers that are highly accessible in terms of information to our audience that moves people into a recurring revenue model. Now, the benefits of low=ticket products is that they are easy to create, they help overcome imposter syndrome, they don't have to be this big mack daddy course, and they're high-perceived value. What does this model look like in action? Well, for us, what we do is we sell a lot of low-ticket products and we reinvest them into advertising to sell more low-ticket products.
I know it sounds silly and you might be like, "Zach, so the model is sell, reinvest, sell, reinvest, sell, reinvest, and continue." Yes. Now, on the podcast, I've talked about the three ads you should always be running. We'll link that up in the show notes. I've also talked about Facebook ads for list building, which we'll link up in the show notes as well, but what I want you to understand is what I do is I sell my low-ticket products and my membership, and I take a large portion of that revenue, and I put it back into growing my email list and promoting my low-ticket products through automated email funnels, okay?
Now, a lot of this I've talked about on the show before, okay? Not like this, but in terms of the pieces. I've talked about email sequences. I've talked about Facebook ads for list building. I've talked about engagement ads that we're always running.
What we do is we take a large majority of the revenue that comes in from our membership and our low-ticket products, anywhere from 60 to 70% of it, and we put it right back into advertising every single month. I know that's daunting, I know that's scary. I want to say we didn't start there, so we started advertising 20 bucks a day, then up to $50 a day, then up to $100 a day. Now, we spend between 150 to $250 a day on advertising for our products, okay? Now, just to clarify, I'm not saying that I run ads directly to my low-ticket products, I run ads to my freebies to grow my email list, and then I have an email sequence that promotes my low-ticket products, my podcast, and my blog to grow my listenership, my readership, and my client base or my student base, okay?
If you're doing the math in your head, you might be like, "Okay, Zach, so our membership, just to be really transparent, does around $10,000 a month in recurring revenue, and we sell between 1,000 and $3,000 a month of our other low-ticket products. Monthly, we're putting six to $8,000 back into Facebook ads," so if you're doing the math on that, you're going, "So Zach, you're taking home like four to $6,000 profit?" No, my friends, because this is where it gets really cool. We have additional offers. What we do, there's two options here and I want to share both of them with you, is on a regular basis, we'll release a new low-ticket product, or we'll also offer higher ticket one-on-one services.
I feel it's much easier to charge high-ticket for services, so for us, that looks like our Facebook ads agency, where we manage clients, which often come through one of our low-ticket products. It looks like ongoing coaching or one-off consulting clients. A lot of times, people from our membership or from our low-ticket products will say, "This is so good. Can I hire you to just look at my stuff?," or we'll even do VIP days. I actually just did an episode recently on how we do one-on-one clients without a big launch, how we get one-on-one clients without a big launch, and we sold three to four VIP days.
We have a fourth one that we're in talks over, but we sold three VIP days at $2,500 a piece over a matter of a week. Between the agency and the consulting and the VIP days and the additional low-ticket products, we bring in more revenue into the business. In our business, we leverage not just low-ticket, but also high-ticket one-on-one services. Now, if you're listening to this going, "Oh, Zach, that means the low-ticket model doesn't work," well, we're actually profitable even on just the low-ticket stuff, because what we do is we can, anytime we want, release a low-ticket offer again to the email list that's always growing. For example, we have a live workshop coming up on June 7th, called The Membership Workshop.
It's a $37 training, where we're going to teach you how we took our membership to $10,000 a month recurring revenue, and it's 37 bucks to join. At this point in time, at the time that I'm recording this, we've sold over 100 spots to that training. If you're doing the math on that, and I'll do it for you if you're not, we've done over $3,700 in sales of just tickets, and on that class, we can make an offer, we can pitch for one-on-one, we can do whatever we want, but we've already made all of this money just promoting the workshop. Who did we promote this workshop to? All the people on the list that we've always been growing.
On this workshop, we're going to talk about our membership. We're going to talk about how we built our membership and we're going to talk about our membership as a whole, which means, guess what? We're going to get new people signing up for the membership, right? We're going to get new people signing up for our affiliate software that we use for the membership, right? We're going to get people interested in learning more about how they can be inside and learn more from us, and so to date, we've had 111 ... I just double-check the stats while I was talking, 111 people join, and we still have a week before the training, so there's still time to sell more tickets.
If you're just kind of doing the math roughly in your head, our membership will bring in $10,000 this month, our workshop, our goal is to get 200 people in. That'll bring in $7,400, and then our low-ticket one-off offers that we just have sitting on the shelf will bring in around 1,500 to $2,000. That's between 19 and $20,000 in low-ticket sales. That means that our business is essentially running at multiple six figures on low-ticket products. We're able to scale beyond that because we compound.
We're always growing the list and promoting the membership. We're always bringing new people into the membership. We're always bringing new people into our offers. We're always making new offers and we repeat, repeat, repeat, repeat, okay? Now, for me, the key of this is that we have that recurring revenue piece.
We have that piece of the puzzle that is a membership, and if you're listening to this episode and you're thinking, "Oh my gosh, Zach, I love this conceptually. I want to bring more low-ticket products into my business. I want to have more low-ticket products actually selling or connecting," then I think it would be beneficial for you to consider having a membership as one of your low-ticket offers, and I want to take a quick second to invite you to join us for that live workshop that we're hosting on June 7th at 3:00 PM Eastern, 12:00 PM Pacific called The Membership Workshop. During the Membership Workshop, we're going to help you create your profitable membership plan. Now, it's really important to me that you understand this is not a free webinar.
It's a $37 class, which means we are doing work in the class. We're going to help you understand how to map out a profitable membership offer. We're going to help you understand how to pre-launch your membership to the audience that you already have even if it's small. We're going to help you understand how to find your first members for your membership. We're also going to teach you how we leverage advertising in this grander scheme to sell more memberships.
We're going to help you understand how we create content for our membership consistently, and even how to get the people who join your membership to tell their friends about it and refer them to your membership so that you can get more people into the membership and continue to grow that recurring revenue. Now, if that sounds like something you'd be interested in, you could head over to heartsoulhustle.com/membership. Again, that's heartsoulhustle.com/membership, and you can check it out. We'll also link that up in the show notes for you. I want to start to wrap up this episode by saying this, to me, I think it's important that we understand that the low-ticket product game is a volume game. We need more people and we need more products, and you want to constantly be growing both of those.
You want to be constantly growing and refining your offer suite and constantly growing and refining your email list and your email list consumption of your content, whether that be blogs, podcasts, or products, and so what that means is that when you make money, you can't just take it all out and go, "Well, that was the easiest $37 product I ever sold." You have to take it, set it aside, and invest it back into selling more. This is a long-term compounding game. It's almost like compounding interest, right? I can make $10,000 a month in my membership, but what if I add more members and kick it up to 11, and then 11.5, and then 12, and then 13, and then 15, and then 20, and I just let it continue to grow by always fueling the machine?
It's not as complicated as it sounds, and I hope that if you've been thinking about the idea of low-ticket, if you've been wondering about how we're doing low-ticket, that you understand it's about the recurring and the variety, and the combination of the two creates a profitable low-ticket business. That's this week's episode. I hope you got lots of massive value from this. I hope it's helping you think about business differently because that's my goal. It's not that you sit here and go, "Oh, I've got the perfect business model, and low-ticket is it."
T's simply that you start to think about business differently. That's all I want for you. I can't wait to hear what you think of this episode. If you enjoyed it, please do me a favor, make sure to leave us a review over on iTunes, and you can also tag me over on Instagram @heartsoulhustle, and tell me what you thought of the episode, or you can even DM me. I love hearing from you guys.
Get out there, think about how this could fit into the grander picture of your business, and until next week. Stay not so average.
