How We Raised Prices Without Killing Conversions

Online coaches and consultants, if you’d like to sign your dream clients and scale, there's a link below that shows how we can help. It's a funnel, obviously, but it explains what we do if you're looking to scale. 

https://youtu.be/P_H2U2jxYCQ 

I keep seeing coaches panic when it comes to raising prices.

They either leave money on the table by keeping prices too low, or they bump the price and watch conversions crater — then immediately roll it back out of fear. Neither is a strategy, and both are expensive mistakes.

We recently helped a client raise their offer price without tanking their funnel. The process wasn't complicated, but there's a specific way to think through it — and the most important step keeps getting skipped.

In this video, I walk you through the thought process we used. The $3K threshold, how to calculate whether a price increase actually puts more money in your pocket after commissions, and a hybrid method that lets you sell high-ticket directly on a webinar while still capturing the people who need a little more time.

Transcript

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We've made over a million dollars for our partners using webinar funnels, and in this video, I'm going to walk you through pricing strategies for your webinar funnels so that you can determine when it makes sense to raise your prices, the type of webinar structure to use for specific webinar price points, and so on and so forth. So one of our clients came to us recently and she wanted to raise the price for our offer that we sell via a webinar funnel. And the thought process that we went through together to determine what the price should be, how we should approach things moving forward, and so on and so forth is exactly what I'm going to walk you through in this video. So for context, we've been working with this client since December and we've been using the webinar funnel for the client ever since December, and we've made over at least $300,000 from this funnel for this client. So the price point for the client is currently £1999. And if you convert that to dollars, you see that that is about $2,600 give or take. And she wanted to increase the price for the offer to $3499, mostly because she's providing them a lot of value, and she genuinely feels like she could charge more for this particular offer that she has. So if you convert that to dollars as well, that is about $4699 thereabouts. That's about $4699 thereabouts. First thing you want to consider when you are raising your price for a funnel or an offer that you use a webinar funnel for is for webinar funnels, there are certain thresholds that you can get away with when it comes to webinar funnel and whether or not you need a sales team. So if you're doing a free webinar, this is for free webinars specifically. So if you're doing like a paid workshop, if you're doing a three-day challenge or thereabout, you can get away with a lot more. But if you're doing a free webinar where you run ads to an opt-in page, opt in for your webinar for free, and then you invite them to the webinar, you pitch them. You can get away with selling an offer that costs at least, you can get away with selling an offer that costs at least three thousand dollars. So once you start selling offers that cost more than three thousand dollars, you can get away with selling that without a sales call and just selling that direct to cards. But once your offer is already more than three thousand dollars, then you want to do your webinar the same way and then run that traffic to a sales team. And the reason for this is because at price points that are higher than three thousand dollars, people tend to have more questions, it tend to be more payment issues that you might need to troubleshoot for the prospects, they might need financing and so on and so forth. And it's very hard, it's not impossible, but it's very hard for you to effectively do that when you are live on a webinar with multiple people at once. So even if you're even revealing the price and everything on the webinar, it still makes sense for you to have a sales team on the back end of that to actually help you close those deals that are coming from the free webinar. And again, this is free webinar specific for other types of models like a paid challenge, a paid workshop, and so on and so forth. You can use a different approach. But for free webinars specifically, once you have an offer that costs more than $3,000, it makes sense for you to use a sales call. You would see a drop in your conversions if you don't use a sales team because there's just more questions, there's more doubts, there's more things they need to clarify, and so on and so forth. So that was the first thing that we had to consider. So it means that step one here pretty much meant that for this client in particular, if we wanted to raise the price to $3499 and then that's like $4,669, we needed to involve a sales team in order for us to sell this. What this means now is there are other factors that come into play here because now we are adding a sales team to the equation. So the next thing that I asked the clients in this case was we literally did the math on this because if you are introducing a sales team to the equation, first off, you have to pay them commissions. Ideally, you don't want to be the one recruiting salespeople yourself, so you want to have a sales manager, you want to have a closer, and you want to have a setter if you truly want to maximize this. So when all of this is said and done, you're looking at about 15 to 20 percent in commissions whenever you get a sale. So the first thing we have to do was do the math on this for the client to see if even having a price point of $3499 even made sense at all for the client. And we don't want a case where we would charge $3499 and then prospects would pay $3499, we would have to pay the sales team commissions, and then we will now still end up making less than what we were making before. That's the $1999 we were making before, which would just be a waste of our time, pretty much. So we didn't want that to be the case. We wanted a place where even if we increase the price, the price increment is enough for us to see that increase in sales even after we've paid off the commissions. So that was a very important thing that we had to pay attention to for this client. And when we did the math on that, we saw that the minimum the clients could charge without seeing a dip in our revenue, without making less than what she was making before, even after paying out commissions, was $2499. So we now had a decision to make here. Either we do $2499 is the minimum we can charge. So we knew for a fact that okay, as long as we charge above $2499, then it would make sense for us to involve a sales team into this, and the client would still be more profitable. So once we considered this as an option, the next thing we did was we talked about just selling the product itself for $2499 via the webinar because right now the price point is just $1999, and the jump from $1999 to $2499 is not that plenty, it's just £500, and we felt like we could still get away with selling that directly on the webinar. Now, if you do the math on this, you will find that this is more than $3,000, which means we need a sales team in order for us to sell this. But I'll show you the strategies that we introduced to mitigate this so that the clients could still increase her prices, we can still sell the webinar directly, and we can still hold the same conversion rate, which is exactly what we are seeing right now on this account. So we decided to sell $2499 directly on the webinar and not introduce a sales team yet. This helps us do a couple of things. First off, it is a lot more simple to execute. That's the first thing, and it's simple to execute because, like, compare just doing exactly what we've been doing, making a few changes to the checkout page to increase the price. Compare that to finding a salesperson, hiring a sales manager, the sales manager has to train the salespeople, we have to do product training and so on and so forth. It's a lot of things for not a huge jump in revenue, right? But with this, we can still keep everything simple. The only change we literally made to this was to update the checkout pages, and we still held everything as it was before. So this was a lot more simple to execute, and we would still see a jump in revenue regardless without involving the sales team yet. So if we want to increase the price a lot further and like charge like 4,000 pounds, like we were planning to do before, then it will make sense to bring on a sales team. But for now, we can still keep what we are doing and get the same outputs in the meantime. So whenever we see an opportunity to keep exactly what we are doing without making too many changes and still see an increase, that's always what we opt to do because if you've heard about the almozi is like more new and better analogy, you always want to try and do more or better. You rarely want to ever do new as much as possible, you want to avoid doing new things, especially when you're in the beginning stages of scaling a business. So you want to do more of what is working or try to make what is working a lot better. So that's the simple thing. Second thing is less changes. That's literally what I just explained just now. And less changes here just mean that we didn't make too many changes at once, literally, just raised the price by 500 pounds, and we're going to test that for like a month. If that is working, and if you still feel like we want to increase the price a lot further, then we might now have conversations around bringing on a sales team. Another thing that we did as well is the hybrid method, and the hybrid method is when you use a sales team without using a sales team, pretty much. And what I mean by this is right now our price point is more than $30,000 threshold. So in order for us to still hold the same conversion rate, even though we've increased our price point and we are selling direct to cards for a program that is more than $30,000. We basically want to have a hybrid approach, and what we are doing now is we are pitching the offer as it is, as we used to do before, but then in the email automations, we are inviting those who are on the fence to book a call with a team. And since they've already seen the pricing, we've already sold them pretty much, and the closers on this will just be answering simple questions. First off, we don't need a setter, so we don't need to like set our commission yet. Second off, we can afford to pay the salesperson 5% on this because they've already seen the offer. This is going to be like a layup deal for them, pretty much. We're able to negotiate five percent for the closer for this. Yeah, that's pretty much it. So we have an automation on the back end that gets people to book calls. I've been booking calls so far, and that has allowed us to still hold the same conversion rate that we're having before. Before we introduced this increase in price, we were seeing about a five-ish percent conversion rate on our webinar. And when we introduced the price now, it went to about like three percent. But with this new like hybrid approach, we're able to get some more deals that is pushing it towards that five percent level, and it means we literally kept the business the same, we increased the price slightly, and we've been able to make more money for this client as a result of that. And we didn't have to pay like this huge sales team commission because first off, the sales team will only get paid on deals that they close. Majority of the sales is still coming from the webinar itself, and this means that the clients can charge more and still hold the same simple business that we have, not have that sales team complexity yet, like the massive sales team complexity, and we are still able to be profitable on this. Now, the last note I will make here is when you are raising prices on a webinar like this, there's going to be a slight drop in convention rate. It doesn't always happen, but when it does happen, most coaches would see this and then they would decide not to do this anymore and like reduce their price back or something like that. Say, okay, for example, you're charging $2,000, you raise your price to 2.5k, and your conversion rate goes down to from like 5% to 2%. So most people would stop doing this, but the conversion rate is not as important as the net new cash that you generate. There's a difference between conversion rate and net new cash, and the net new cash is way more important than conversion rate. So if your conversion rate should go down slightly and you still make more cash overall, that is the price point that you want to hold. And you basically want to have a situation where you have conversion rates on this side of the of the map, you have net new cash on this side on the map, and you want to find the points where you have the maximum conversion rate with the maximum net new price. This is where you want to have your price be where you can have the max conversion rate for the max net new cash, is where you want your price to be. But most people don't test this, they just choose one price and then they stick with that. But maybe if you charge a little bit more, like an extra thousand dollars, an extra two thousand dollars, you'll find that your conversion rate might be slightly less, but your net new cash is more, and you keep doing that, keep testing that until you find a sweet spot where conversion rate is the highest it can be, and net new cash is also the highest it can be. Because if you keep raising the price, you should get to a point where the conversion rate starts to be less and you start to experience net new cash than what you were experiencing before. So you want a sweet combination of net new cash and conversion rate. So that's pretty much what I have for you in this video. I hope you found value in this. If you found value, make sure you like and subscribe and leave a comment if you have like any additional questions or clarifying questions. Thank you so much for watching the video, and I hope you implement these simple strategies into your online education business. Cheers.