You’re probably already familiar with the diagram of the typical marketing funnel: You start by offering freebies to everyone in your audience, “freemiums” they are sometimes called.
Next, you offer low-priced products and services. After that, you offer medium-priced products and services.
Then after that, you offer still higher-priced products and services. Once you reach the tip of the funnel, you’re offering premium-priced products and services.
In theory, this sounds great and makes sense, doesn’t it?
Now notice that as you proceed down this funnel, that increasingly fewer people take you up on your offer. And that makes sense, because as you start charging higher fees, fewer people are going to buy. That means that you need to start with a large number of people, who funnel down from “free” to paying you something, even a little bit.
Here’s the big problem:
If you’re going to make any money, you need a lot of people, paying you a little bit, to generate significant revenue.
Suppose your annual revenue target is $100,000. If you sell a low-priced program or product for, say $100, how many sales do you need to make? 1,000, right?
If you need to sell 1,000 of something, then how many people need to know about your offer? Let’s suppose your conversion rate is 10%. That means you need to present your offer to at least 10,000 people in order to have 1,000 of them buy whatever you are offering.
So where are those 10,000 people going to come from? (Okay, so maybe your conversion rate is higher than 10%. Well, even if your conversion rate is 20%, you still need to present your offer to 5,000 people).
Of course, you could build your list up to 5,000 people. But that’s going to take some time, even if your strategy is simply partnering with someone who already has a list of 5,000 or more.
Isn’t there a faster way to go?
Over six years ago, when I started my coaching business, I had no “list” of potential clients. In fact, I had no website, no business cards, and no reputation as a business coach. And, since I had left my plastic surgery practice, I had no significant income. Clearly, I needed to generate revenue quickly!
I didn’t have the luxury of spending time to develop a large email following. Social media didn’t really exist back then.
So I took the direct route: I set up a 3-hour seminar, invited anyone and everyone who had a remote interest in my topic of “earning more, with less stress.” After that event, I offered a free strategic consultation (I don’t offer them for free any longer). For anyone who was interested in my services after the initial consultation, I offered them a 12-month long premium coaching program for $1500/month. I only needed to enroll seven clients, resulting in a monthly recurring revenue of $10,500/month.
Effectively, I created an annualized recurring revenue stream of over $100,000 and I accomplished that within 73 days of setting the date for my live seminar. At the time, I didn’t realize that this was an unusual accomplishment. And I also didn’t realize that I had started at the “tip” of the marketing funnel. I was simply doing what I knew I needed to do, in order to avoid having to go back to plastic surgery to make money!
Since then, I’ve coached other clients to create rapid revenue streams, hitting the annualized six-figure level within 70-90 days of starting to work with me.
1. If you need to generate significant revenue quickly, enrolling clients who pay a premium for the value you provide is the fastest way to generate significant revenue. In other words, price based on value, rather than hourly or on “what the market will bear.” If you need a little help in that area, be sure to get on my Value Pricing for Prosperity special interest list; I’ll be running an open-structure webinar on this next week and only people on that list will be invited.
2. Start or solidify your coaching or consulting business by working private with clients (rather than starting group programs or investing time in developing a product). When I started, I remember lamenting that I didn’t have any “passive income” products to offer. So offering private coaching was the only valuable service I could offer. Good thing, too, because this forced me to focus my work only with high-end clients. I didn’t have this definition back then, but my good friend and colleague, Robert Middleton from Action Plan Marketing (www.ActionPlan.com), has a great definition of a high-end client:
- They are “ideal clients.” That is, clients you can really make a difference with and whom you love to work with.
- They are “long-term clients.” These are clients with whom you can offer programs and services for a year or more.
- They are “high-paying clients.” They understand the value you offer and are willing to pay you more than average clients will.
3. Use your experience in working with high-end clients to guide and inspire the creation of lower-cost knowledge-based products. Top internet marketer, Clay Collins (www.clay-collins.com), puts it best: “Working with customers is the best R&D activity I know of (despite all the [complaining] that’s done about trading time for money.)” I’ve worked with a number of private clients who struggled with revenue and getting clients until I taught them how to use my “Get Paid to Get Clients” system to effortlessly enroll clients, using introductory sessions that they gladly pay for; I’ve turned that approach into a program that costs less than one month of private coaching with me. (If you’re interested in advanced notice for the next program, fill out the form below.)