Episode #006: Should You Have a Low Ticket Offer? (The Pros & Cons)
Links Mentioned on the Show From Zach:
Full Transcript:
This is Not Your Average Online Marketing Podcast, episode number six. And in this episode, we're talking about the pros and cons of a low ticket product. They're all over the interwebs, they sound really cool, but are they? Let's talk about it.
Hey, hey, hey, welcome to the Not Your Average Online Marketing Podcast. I'm your host, Zach Spuckler, and I am so excited to be hanging out with you today and talking about low ticket products. Now, for those of you who don't know, we have a few low ticket products that we offer in our business, but we actually have one central offer that you can check out at toolkit.heartsoulhustle.com. You don't need to buy it. This isn't a pitch. I just want you to know you can check it out if you want to learn more about how we position our low ticket product. And it's called The Challenge Launch Toolkit, and the Challenge Launch Toolkit is basically a $37 training that teaches you how to launch with a five day challenge.
We've had a lot of student success from that. We've had people who have their first launch of several thousand dollars. We've had people use that to do $20,000 launches. And, it's par for the course, we have had people take it and never open it, and we can talk about that too, with low ticket products as well. But I share that with you, not so that you go check it out and buy it. In fact, it's not even what we're actively promoting right now. I share that with you because I want you to have a little bit of context for the low ticket process and what it is that we sell. So we launched our low ticket product just over a year ago, about 13, 14 months, and we've had over 1300 people join that low ticket product.
Now, what's been really cool is that we've been able to do a lot of stuff with that low ticket product. We've been able to move people into higher level products, coaching, consulting, ads management, and we've also had some stuff with that that that hasn't worked well, expensive ad costs, low conversion rates. We've had to upgrade our sales pages, pay to have that done. So what I want to do today is just go back and forth between the pros and cons of a low ticket offer and help you figure out if they make sense for your business.
I want to start by sharing something that I saw on Instagram. And I recently saw someone post, well, you should price your products or your services based on not how long you've been in business or been a coach or been an educator, but instead based on the transformation you provide. Now, I don't necessarily disagree with this, but I wanted to point something out, and that is that a lot of us think we should base our products on the transformation. What kind of transformation are they getting? What kind of ROI will they see?
Well, when you're getting started or building your first product or having a hard time getting people to even work with you, you don't have any transformation yet. So one of the benefits of a low ticket offer is that it's more accessible, meaning you can technically get more volume of people in and work with those people as directly or indirectly as you want to start getting those transformations. So if I was to launch a program called The Five Day Challenge Program, which I've done in the past, and no one's ever gone through it, I've never worked with a student before, and I say, yeah, you could make up to $10,000, and I price it at 1000 because it's worth 10 times that, how do I know? How do I know that it's worth that?
No, I'm not saying you can't raise your prices or start at a reasonable rate, I'm not saying that your one-on-one time shouldn't be priced, 100 or several hundred dollars an hour for one-on-one consulting. But when you first start developing courses, you've got to realize that you don't have the transformations yet. You don't have the experience yet. And I know I talked about this in a previous episode, but sometimes we want to charge one, two, $3,000 for a course. The problem is, we don't have the experience to create the experience that's worth that. We don't know the tech. We don't know the customer service. We don't know the backend.
And that's okay. That's not a bad thing. It just means we're growing and evolving. So one of the benefits of low ticket offers is that they lower the risk for your audience and they increase the volume for you. I talked about this as well in a previous episode, but it's very easy to price something at 30 to $50 and get 10 to 15 sales and make your first $500. So again, one of the pros is that it lets you get your feet wet without having this big, overwhelming thing that you have to take on, and it lets you start collecting testimonials, collecting transformations, and really establishing yourself in this space as an authority.
Then let's talk about one of the cons, and the con is that it's not quite as easy as everybody makes it sound. And this is kind of a two parter. Number one, if you don't have an audience already, that's going to be a challenge because you don't have anybody to sell the low ticket offer to. You've got to have some audience to put your offer out there. Little side note, put it in a bubble, I think you should have an audience before you try selling anything. We'll do a whole episode about that in the future, but you've got to have an audience to make your offer to. So that's the first part.
But the second part is that everybody... the big sell of a low ticket offer is, if you do a low ticket offer, you can run ads to it and you'll get purchases at like 10, 15, $20, and then you're making money on everybody who's clicking on your ads. Well, I got news for you, technically it's possible, however, we don't find that it happens as frequently as you might think it's going to happen.
What I mean by that is we have run a ton of ads. We've run a ton of ads for our Challenge Launch Toolkit, and I can tell you that sometimes the ads we get like a 1.47 X return on ad spend, we had like, and I'm actually looking at the ads as I share this with you, we did one ad that had 183 purchases at $30 a purchase. We spent about $5,600 and we made about $8,200. I got news for you, that ad ran for a couple of months and we're not going to retire on $2,000. You really need to have, in the long run, upsells, order bumps, and potentially higher-level offers.
I'm not saying that you have to make everybody who buys your low ticket products buy your next offer, but you do have to have something else to offer unless you got a really big ad spend, a really good ads person, and a longterm strategy.
The other thing that I want to say about this is that that dream gets sold a lot, and you do, in order to sell these products for $37, you don't actually make $37 on the order. So this is one of the things where it gets a little complicated, is that you don't just have a $37 product standalone on the page, nothing else. What you actually have, is you have a product with an order bump and an upsell. And an order bump is basically where somebody adds something to your order on the checkout page. You've seen that, it's a little tick box that says, add this to my order for 10 bucks. And then an upsell is either a video or a sales letter that comes after they check out that makes them an offer to buy something else.
What you have to realize is that on our $37 products, we actually have a $54 order value. And you might be like, well, Zack, that sounds like a pro to me, and it totally is that you can generate more than the front end value. The con is that you now have to create more than just the low ticket product if you want this to be a longterm offer in your business. You have to create something that goes beyond just the simplicity.
The other thing that I'll say that's really great about these, is that we get a much lower refund rate. We have had a really healthy amount of people buy our product in the last nine months, about 1,150. And of that, what we found is that only about 34 people refunded, which means that our refund rate is like two and a half, 3%.
And you might be like, wow, people refund? Yeah, absolutely. The reason is, we have a no questions asked refund policy. We say, hey, if you buy it and in 14 days you don't like it, you just let us know. No questions asked. We'll refund you in full. We have people refund for various reasons. They're like, oh, it's a little too advanced or I'm not ready or I don't have an ads budget. I didn't read the sales page fully. There's all kinds of reasons. Very rarely does somebody say the content is not good. It's usually an internal reason. We've had one or two people say I don't like it, but I can honestly say if 1,120 people like it out of 1,169, then I don't worry about the content.
You might be like, well, Zach, again, this sounds like a con because you're getting refunds. Here's the reality. You're going to get refunds no matter what. I always liken it to, if you ran an in-person store, you're always going to have a bottom line item for theft, refunds, defective product. That's just part of business. But because the cost is so low, we find that the refund rate is also low. So what a lot of people do, and this is something that I don't think it's talked about enough in the industry, is you have $1000 product and you quickly find that two people refund. Well, that's $2,000 from your bottom line missing. If you launch your course to the tune of $1000 and you get, say, five people to buy, but one of them refunds, that's 20% of your revenue when you're getting started. And that's a big hit. That can be really hard, especially if you put time, money and energy into the course launch. So I like that I have a lower refund rate on my low ticket products, and I find that that really, really helps me.
Let's go to another con, and that other con is that you have to be promoting it all the time, either via advertising and/or organic marketing, preferably a combination of both. So with low ticket offers, you have to be putting that offer out there on a consistent basis. It does not sell itself. It really doesn't. We find that we get a healthy amount of sales on a month to month basis between... when we're promoting it, we can get up to 100 to 150 a month, when we're not actively promoting it we get 20 to 30 sales through our advertising.
I share that with you, because I want you to realize that you always have to be promoting with a low ticket offer. With higher ticket offers, you can use the launch model, open/close, maybe you promote it for a couple of weeks, even if you're evergreen it's a little bit different, because you're not just running ads direct to a product and constantly messing with those ads. I find that with a low ticket product, I'm consistently testing, tweaking, and optimizing what is and isn't working. I'm trying to figure out how I make it better. That's great in the sense that you always want to be optimizing your offers, but it's tough in the sense that we can look at our chart and see, hey, when we're not advertising frequently, or we're not consistently talking about the offer, our sales go down.
And so the actual underlying thing you have to realize is that if you want your low ticket offer to sell, you got to always be growing your audience. Now, is that you always want to be building your audience no matter what, but now there is a very tangible, clear, end result that you've always got to be growing. And that means either always getting people to buy the product or always putting people into a sequence that sells the product. You've got to be consistently pushing it out there, and you always, always, always have to be selling.
Some people don't mind that. So for you, you might be like, hey, that's a pro. Right now I feel like I'm yelling into the social media abyss and I never have anything to sell until I launch. With a low ticket product, you could always be selling. So this one's kind of this middle of the road pro/con situation. It kind of depends on your angle. If you love social and love posting on social and love promoting. Awesome. This is great for you. But if you're like most people I talk to, you're like, more social media, more advertising, that's stressful. I'm the same way. And I get that. So just know that, yeah, it's going to take more energy and effort, but there's still a lot of benefit to be had there.
I want to talk about the big pro that a lot of people present and my thoughts about it. So we talked a couple of pros, we've talked a couple of cons, now we're kind of talking this could be a pro or a con. A lot of people say, well, this is a really good strategy because you're going to be generating customers, and somebody who buys once is more likely to buy again. The reality is that we find people who invest a low ticket with us are more likely to buy something else. That's just the bottom line. When we look at our numbers, someone who spent $37 is more likely to join one of our live workshops that we run for a few hundred, they're more likely to join our coaching programs, they're more likely to buy something else or buy another low ticket product. So we find that there is a lot of growth in the business, getting those people in the longterm.
The issue with that is that that also means, kind of like what we talked about earlier, there's more content to be created. So if you can get a customer on your $37 product for 37-$40, a lot of times you might be like, well, I'm spending what I'm making. Right, but they may buy something else. And if you can get them to buy something else 50% of the time, that is where the money can be.
We love our low ticket offer. We actually make a little bit of profit on our low ticket offer and that's great, but the actual money is in moving people into our membership and moving people into our bootcamps and moving people into our two day workshops, because that is where we charge a little bit more, and we promote those mostly organically, internally, and through warm advertising to attract people who already trust us. So the cool thing about a low ticket offer and something that I think is super important and super understated, is that you pack it with value. And so somebody goes, oh my gosh, I can't believe I got all of this information for $37.
We get a lot of testimonials from people, and I pride myself on this. I'm going to toot my own horn a little bit, toot, toot. That a lot of people say, oh my gosh, Zach, I've spent a lot more on courses that have given me a lot less information. And that is my goal. I want that to happen. I want people to say, oh my gosh, this is so dang good that I want more. That's what I want people to do. I want people to really value our first interaction.
And so I just want you to consider that it's not always about selling the low ticket offer, sometimes it's about growing the backend of the business. And I had a mentor who used to say the LTV is the winner. The person with the highest LTV will win the game of business. And LTV stands for lifetime value. It's how much somebody spends with you over the course of your business.
We have had customers spend multiple five figures with us. We've had customers spend seven bucks with us. But our average is always going up because we make additional offers. So this is where I kind of get caught up in the whole, you can only have one offer thing and focus on one offer. Is like, I don't disagree with that. But if you only have one offer, your lifetime customer value is the value of that offer. So I like having additional offers. I like having low ticket and a membership and a quarterly coaching program. That, to me, feels really good and it increases how much money somebody is able to spend with me.
If you're thinking about a low ticket offer, let's just recap some of the pros and cons. So the pros are, you can attract new customers. You can be promoting it all the time, so you're not just trying to grow your audience with nothing to sell. You can increase the value of your customers and attract customers on the front end.
The cons are, you have to be promoting it consistently. Advertising, they make it sound a little easier than it is. And it does require content creation with upsells, downsells, cross sells and backend offers if you want it to work.
But here is the thing that I really want to stress about low ticket offers. If you're thinking about doing it, try it. Just try it. See what happens. You are not committed forever to something that you do. And I think that one of the big concerns that people have is like, if I sell something for $37, I cheapen my brand or I cheapen my positioning on the internet.
The reality is, let's just be real talk about it. Let's say you email your list and post on social media about this idea you have for a low ticket offer. Great. 3-5% of your social media is going to see it and 20% of your list is going to open it, 10% of your list is going to read it, and 1-2% are actually going to click. So how much are you really risking?
I have a good friend who I've had on the old version of the podcast. His name is Bobby Clink, and I was talking to Bobby the other day because we're doing a low ticket offer, which I'll tell you a little bit about in a minute, and I said, "I'm nervous about sending this email because I don't know how people are going to respond." And he said something so profound, I hope he doesn't mind that I'm sharing this, he said, "Well, I'll tell you what happens if you don't send the email. Nothing."
And it's like, that's what we get so caught up in. We think that it's an all or nothing, but the reality is you could launch a $37 product, sell it to 50 people and decide this is not for me, and that's okay. It's okay to do that. And we have to remind ourselves that business is just one big experiment, have fun, play around, try new things. And if it works for you, fantastic. And if it doesn't, that's okay too. Seriously, that is okay.
I want to encourage you to really get out there. If it makes sense for you, test it out. And if you're like, hey, this idea does not appeal to me. That's okay too. We've had great results with our low ticket product. We love it. We plan to keep on doing it. And I just encourage you to experiment. And if you want to, only if you want to, give it a shot.
The last thing that I want to do before we wrap up is just remind you that it is important that you have an audience. And a lot of people struggle with building an audience, especially because we've been told use Facebook ads to grow your audience. But Facebook ads costs have gone up, iOS 14 has made it more complicated, and things are just more challenging than they've been in the past.
However, we are running a five day bootcamp, running October 11th through the 15th, where we're going to teach you how to generate leads with Facebook ads at a very reasonable cost. We have been testing this out inside of our membership and we're bringing it public. You can head over to boot.campheartsoulhustle.com.
I just want to read you some of the results that our clients have gotten inside the membership. We have one client who has been spending $20 a day and in four days generated 115 leads at about %1.08 each. We had another client who brought their lead cost down from an average of about $3 to about a $1.50 or less. She cut her lead cost in half. Another client who brought in 120 leads in just over 48 hours. Another client who actually brought in leads for $1.50 a piece, she's been running them for over a week and she, or, I'm sorry, she was getting leads for $1.50 a piece, now she's getting them for 53 cents a piece.
This is a very simple process that we teach to our clients that leverages Facebook lead ads. So if you want to learn more about it, you can head over to bootcamp.heartsoulhustle.com. We have all the details for you about the bootcamp there. The cost to join is 10 bucks. It is one of our low ticket offers, which we enjoy, and you can check it out.
Also, one other thing to note is that the minute you join, I know some of you are anxious, you're like, I have to wait until the 11th to start running ads. We actually give you an instant 45 minute crash course on how to set up your ads, so, if you were like, I really just want to start running ads or I've run ads in the past and I just want to amp it up, you can start doing it as soon as you join the bootcamp.
And then the 11th through the 15th, we'll help you write copy, we'll help you create images, we'll set everything up together, we'll help you talk about custom audiences, we'll help you with scaling and next steps together. So we're going to give you instant access to a training, do it together, and then we'll talk about next steps at the end of the bootcamp. 10 bucks. Check it out. Bootcamp.heartsoulhustle.com.
As we wrap up the show, I just want to say, thank you so much for listening. I want to give a shout out to one of our most recent reviews from Tamisha R who said, "If you need another online marketing podcast [inaudible 00:22:42] to listen to, the answer is absolutely yes. And this podcast is definitely one to follow. What I love about the way that Zach shows up on his podcast is that you really get a behind the scenes look at his business. From what works to what doesn't, it feels like you're a fly on the wall seeing what Zach is testing and doing in real life. In a sea of podcasts full of fluff, I'm glad Zach always delivers actual values and takeaways you can walk away with after each episode."
Thank you Tamisha R, we really appreciate it. And for those of you listening, if you haven't left us a review yet, we beyond appreciate it. We had a little five star review over on iTunes with 174 ratings, and my goal is to get that up to 250 by the end of the year. But I need your help. So head over to heartsoulhustle.com/itunes, leave us a review. Of course, we will put this on our website, heartsoulhustle.com with the show notes, the transcript, the replay, all that good stuff. So if you want to check it out, heartsouldhustle.com.
Get out there, experiment, have fun, and until next time, this is Not Your Average Online Marketing Podcast.
