Hey, what's up guys? And so we're gonna do a bit of an open session today, and we're gonna have Melinda participate in this one, even though she's got her head buried into the chat there. I think that's what she's doing. Either that or she's looking up whether or not phone.com has been brought up by Vonage. . Okay, so a few people asked some questions on the webinar today. So we decided that we were just gonna dedicate the next 30 minutes or so to addressing these questions. Now, two people actually asked me to talk a little bit about pricing psychology, and how do you come up with the price for a product? How do you determine whether I should charge yearly or I should charge monthly, or what the best model is? Well, you know what?


There, there is no end all be all answer to that. Every every business model is a little bit different. Melinda and I have products that we sell monthly. We have products that we sell yearly. We have products that we say we sell yearly, but we only do that so that we make more monthly sales. We have low ticket products. I think the different pricing structures that we have each serve a purpose. I've got products that range the entire gamut from I've got products that are free. I've got products that are $10. I've got products that are $20. I've got products that are $47, $97, $297, $997, $1,997, $3,000. I've got products that are $7,000, $15,000 all the way up to $32,000. And just recently I was chatting with Emilio, how we are considering creating a $64,000 product. And you're saying, well, oh my goodness, what do you sell for $64,000?


You haven't bought a nice car, you ever bought a house, you ever bought? You know, there's all kinds of stuff that people pay that kind of money for. And it's a different type of selling. We have to create financing options, we have to do all kinds of other things. But the point is that every product and pricing structure is unique for the business model and it's also unique for the funnel. For the funnel. You see, sometimes creating a product and pricing it at a certain thing isn't necessarily for the purpose of selling that product, but rather selling the product just beneath it. So, do you know why we sell so many 10,000 and $14,000 packages? It's because it's right in the middle. That is right in the middle of our price card, so to speak. So we've got the $32,000 package, we've got the 7,000, you know, the, the low ticket that, you know, the kind of, well, not low ticket, but we call those like mid ticket.


So between five and 7,000, those are our lower priced ones. And we've got the 32,000. And most people end up settling, Hey, well what can I do for, they go right in the middle and they wanna get the $14,000 package, right? Where we do the coaching, plus we build the, the, the entire system for them. We create the product for 'em. And, and, and they, they land in there. The, the higher one is we fly them in, we work with them side by side for a whole week, and we, you know, we wind them, we dine them, and we partner with them and we do all that. So there are different levels of packages, but the fact that we have that high package enables us to really position that middle one as the, the middle ground, the compromise. And that's usually the one that people want to take action on.
So sometimes creating this real high ticket product is solely for the purpose of making the other product that you have not look as expensive. So when Emilio and I were talking about doing this and creating a $64,000 product, when we get on the phone, or when we're in person talking with a client about a package that might suit them, we start at the high one and we say, okay, now look, we've got this package that may or may not suit you, depending on how serious you, you are about your business and how fast you wanna succeed and how much money you wanna make when you do succeed. We have an enterprise level package where we actually partner with you. We become profit sharing partners, getting in this type of a package with us. It's our highest end type of coaching and partnership package available. It's gonna require $64,000 investment. We have financing options. We, we've got all kinds of things that we can do about the finance, but it's only available for the right type of person. Now, you may or may not be that right type of person. If you're not, we may have smaller packages that you can get into. Now, that person right away, they're gonna balk, they're gonna be like


$65,000. Oh my God. F what? You hear what he


Just said. Okay, look, you know what, maybe that's not for you. That's the reason that we have our $32,000 product. Now, it used to be a $37 product, but a $37,000 product. But I noticed that you've already invested in launchpad, you've already invested in the other things, and I'd be more than happy to credit you those past purchases into this $37 package and make it a 32 for you. So you're gonna get an instant rebate. We could do it at 32,000. We could still do some creative financing things for you to make sure that we can collect that money from you. But $32,000, that probably sounds a little bit more in your price range, doesn't it? Well, you know, now you start getting different buying signals. You start getting different buying signs from that person. We might end up closing that person at 14,000, at 17,000, whatever, but what made that $17,000 sale possible?


When I get on the phone with some of my peers and I say to them, yeah, man, I just closed a $17,000. They're like, holy man, you did it, man. And you just did another one two weeks ago. It was like 14,000. Yeah. And they're like, well, oh my God, how do you do that? Well, I do that because I pitched them on the 32,000. They're like, what? That's the way sales works. When you go to buy a house, and if you're going to a realtor and you say they ask you your budget, they're always gonna start. The first house they show you is always gonna be over your budget because they want it. You know what I'm saying? So they wanna try to get you to stretch. They want you to get comfortable with the fact that it's gonna cost a lot. That way they can lock you in at the one they wanna sell you.


And this is sales 1 0 1. So when it comes down to pricing, you have to think about the psychology of pricing the product and getting the person to want to buy and invest in the item. You know, the number one reason that people don't buy something is fear. We can slice it a thousand different ways, but it's gonna come down to fear. At the root of the reasoning, it might be fear of making a bad decision. It might be fear of, you know making a poor judgment call on who they're buying from. It might be fear. It's fear, it's gonna come down to fear as to why they don't buy. So if you can get them to overcome their fears, well, you know, fear of affordability is, is the number one you know, well, in, in many cases. It it for many audience types, it is the one of the greatest types of I just realized we're, we're still on Facebook Live.


I didn't, I forgot to shut it off. So with fear, lemme just shut this off here and just post it. When, when people are when, when people are making a decision on whether or not they should buy a product, a lot of things go into play. Affordability is huge. Affordability, whether or not they can afford it is huge. Necessity is huge. Is it a luxury? Is it a necessity? Remember, there's two motivating factors for making a purchase. And that is it. The item has to either increase pleasure or decrease pain. It's, it's one of those two things. If, if it doesn't, then it's not seen as either a necessity or a luxury, either one, it's gotta either increase pleasure or decrease pain. If it doesn't, then it's not even in their scope or their range or the option of, of buying it.


So what else is to be considered? Well, the, the price point affordability, can they afford it? Do they have the money? So a lot of this has to do, when you say Walmart, Omar, what should I price my product at? Well, who's your audience? What can your audience afford? Have you found the audience first? Or are you trying to price for an audience? See, if you're looking at the product and you're trying to come up with a price for the product, you're looking at it wrong because your product is always gonna be much more heartfelt to you. You're gonna have an emotional attachment to your product, much more so than anybody else. So what you really should be looking at is the audience that you're gonna sell to is this audience. What is the ideal price point for this audience? What is, what is this audience willing to spend to solve this problem or to get this luxury?


Whatever it is, that's, that's where you're gonna make your decision. And when you're not sure, you need to investigate and, and take a look at similar products that are being, that, that are being bought and sold in that space. Which ones are doing it successfully? Which ones aren't? What are the differences between the ones that are charging a lot of money and the ones that aren't? How long are the ones that are charging a lot of money? How long have they been around? What are their, what is their branding like? What do they look like? You know, as opposed to the ones that are charging a little bit of money, how long have they been around? What's their branding like, what do they look like? So a lot of factors go into deciding the price, but you've gotta look at the audience. The audience really has to be the, the source of traffic in the audience really has to be where everything begins.


If, if it, I, I say it over and over and over again, and I guess you could say the same thing about pricing as you can about product creation, it's a lot easier to create a product for the traffic than it is to create traffic for the product, right? Well, it's a lot easier to price a product for the traffic than it is to get your traffic to like a price alright? Or to afford a price, alright? Or it's, it's affordable to price it affordably. It's, it makes more sense to try to price your product affordably for the traffic than it is to try to get the traffic to afford your product. okay? I don't know. I, I know I confused a few people there, but my point is that you have to consider the customer when you're deciding whether or not to buy.


So you might have what you believe you can charge $30,000 for, but who's the audience? Who are you selling that to? Are you selling that to somebody that you just met yesterday? Or are you selling that to somebody that's bought 10 things from you in the past, has been a loyal customer for three years and is ready to make the investment completely different audience, completely different audience. You know, action takes place at the cross of an X and that's opportunity and readiness. Sometimes you have the right person, it's the right time, and they're ready. And that's where an action takes place. Sometimes, you know, the opportunity's there, but the person just isn't ready. There's no cross of the x, there's no action. So all of those little pieces have to be put in place. Now, what is the best model to use to price for an individual and for a product?


Okay, there's a lot of frames of thought here. What I mean by model is do we go with a yearly price? And do we go with monthly pricing? Do we go with a one time lifetime access? What do we do here for pricing this person? Well, that is gonna come down to testing. That is definitely gonna come down to testing. I have a lot of different products in a lot of different categories there. A lot of people say, well, Omar, you know, why do you just like launch a product and then forget about it and not, you know, and stop selling it and, and you don't make you, you know what I mean? Well, here's the thing. I always come up with new, fresh, new things. Because the internet is constantly evolving. The internet is the most rapidly changing industry in the history of mankind.


And the internet ages faster than dog years. I mean, three years in the internet years is like, you know, 20 years and non-internet years. It just, it just evolves very, very fast. And people see things as old. The, the, the phone that came out that iPhone six or iPhone five, or whatever it was that came out just a year ago today, or the moment that the new one gets, it's, it's old, it's already anti, you got that old phone, you know what I mean? That's, that's, that's what happens in the internet. So when you ask questions like, well, why not just relaunch the product that you launched two years ago that you launched the year before? Well, because people are gonna see that as old because you would need a completely new audience in order for it to perform well. And when we're creating new products as affiliates, we're usually getting, or when we're doing product launches, we're usually tapping into the same core of affiliates.


And affiliates are the ones that are gonna be like, ah, I already promoted that. And you can try to talk them into doing it until they're blue in the face and say, yeah. But the thing is relaunches are like sequels. They're very, very few and far in between that do very well that even come close to doing the kind of numbers that the original movie actually did, right? So relaunches don't make you enough money, and there are reasons for that. Let's go back to the, to the pricing. I'll talk a little bit about launching, relaunching, and going evergreen in a minute. But when we talk about the pricing Melinda and I have launched several recurring billing products. And for our, generally speaking for our customers, the price range for, for rebuilding that seems to be the sweet, sweet spot is between 20 and 40 bucks.


We start going over that. It's tougher to get that to hit every single month. I think there's a lot of things going on there. I think attrition plays a very big role. People see $97 every month on their card. They see that they, they know that that is the average person on our list, the demographic that subscribes to us. They're median income people. 97 bucks a month coming out. When you're going through tough times, you start going down a list of bills and what you can cut out that's gonna be a bill that you cut out unless you're seriously committed to building your business and you're dependent on that service for $97. So there is a, there is a balance there, but you're a lot easier to get a higher, a lower attrition rate and longer retention on your rebuild with a lower the amount because it blends right into all the usual day-to-day charges that somebody does on their card, average person on their card. I don't know, this would be a good thing to look up. How much money does the average person spend on their card? Not my wife and not Amazon, but the average person. 


I am, I have an Amazon addiction.


What do you think the average person spends on their bank card every day? Average 20 bucks, 30 bucks. 20


Or 30 bucks,


You think between gasoline, coffee, lunch,


Coffee, lunch. Yeah, about 20 to 30 bucks.


So if you have one day where it's 40 or 50, you're probably not gonna freak out on that one. But if you have a day where you look and hundred bucks, you're, you're like, oh, $170 this day. What did I spend? Well, I spent my regular 20 or my 30 plus 97 that was hit on rebuilt. That's gonna throw a red flag. It's gonna make you look at it on that credit statement at the end of the month. So now you're, you're that person goes, oh God, it's kind. They're kind of hurting. And they're like, it's kinda like a gym membership, right? And most of these products and most of these continuity products, they're impulse purchases. That's something that you have to consider the average person when you're selling products online. When you're selling digital products online. The average person, I'm gonna say, I, you know, more often than not these purchases are made on impulse.
They might have been in interest already there, but the purchase itself is impulse. Nobody schedules this. Nobody writes this down on their calendar. Oh, on this day Omar Martin is launching a product and at 7:00 PM I'm gonna have to call out sick from work, honey. 'cause Omar's launching a product that that day, put it in the calendar. 'cause We gotta be home and make sure that we buy. Nobody does that. Nobody rolls out of bed in the morning and says, honey, I really hope that somebody launches a product today that Omar launches a product. Because I want, I really wanna buy an I want, I wanna buy an internet product today. No, that's not how it happens. They, they buy on impulse. They come across your email, they click your link, they buy the product. They didn't plan it, nobody plans on it happening. Now when you, when you get 'em on impulse to buy a continuity product, it's tough because that impulse isn't there when they see that rebuild hit every month.


So eventually you are gonna have attrition and like with any gym membership, people are excited when they get it and they're all in the mindset and getting healthy. And then the reality of work sets in and the attrition starts kicking in. So you have that combined with the fact that, you know, remember cards expire. So if somebody's card expires two months into that rebuild, that rebuild ceases and they gotta re re-update their card and now they gotta revisit their decision to buy that again. You know what I mean? So all of these things factor in attrition. So when you're making the decision of should I charge $997 for a year's worth of service or access to this product, or should I charge $97 per month? Well, you have to weigh two things out. You have to weigh your refund rate versus your attrition rate. And you've gotta say, which one of these puts my, my ability to collect payments at more risk as well?


'Cause You have to weigh out risk in the equation. There's multiple things in the equation here. So you might say, well, you know what, I'm gonna charge $997 because if I charge them for a year's worth of service, either way it's digital, I'm providing the same level of access. I just wanna provide the model that makes me the most money, the payment plan that makes me the most money. You can play one against the other. Like I, like I talked about, you know, giving the high one, it makes the lower one look more appealing. But the, the thing that I would preface you on is when you offer somebody $997 for a year's worth of access and they make $997 investment, you're getting a different type of person. You're getting somebody that's a little bit more a little bit more committed. You're getting somebody that's a little bit, probably a little bit more affluent.


They probably have a little bit more money in the bank to spare than the guy that just has the 97 or the 97 guy just being a little bit more tighter about it because you didn't build enough trust with him. One of those two things. But nonetheless, that person that coughed up that $997, what is your refund rate gonna be on that a thousand dollars refunds sting a little, especially when you get three or four of 'em in a row. Ugh, it's gonna sting a little bit, right? So what's the refund rate gonna be in comparison to the attrition rate? So are you gonna sell and you'll sell less at 9 97? You'll definitely sell less. But if you do the math right, and you say, okay, well I sold a 9, 9 7 yearly package. Now we'll talk about 9 9 7 rebel on a yearly thing. We'll talk about that in a minute. But I sold at 9, 9 7 and I sold a hundred of 'em. Okay, that's pretty sweet, right? So you made a hundred grand. So I sold 109 hundred $97 products a hundred thousand dollars about. Now what if that came with a 10% refund rate,


You still ended up keeping 10%, you still ended up keeping 900 grand. Am I correct? Is my math correct? So $900,000. Wow. Awesome. Now you sold the 97 per month one, but you sold 300 of those. Okay? So the gross order volume might have been a $300,000 gross order volume, but we know the gross order volume and attrition and, and the actual net revenue in comparison to the gross order volume is gonna be very, there's a very, very disparaging gap there. And that gap is gonna made up of factors that depend on attrition and that depend on refund. So you might have sold 300, but you still have a 10% refund rate. Okay? So now that 300, now how much did you collect on month one of that? You collected all of the month ones. So you collected 300 times 100. Let's do the math on this. 300 times 100 month one,


That's 30,000.


30,000, mm-hmm <affirmative>. $30,000 on month one. Okay, so now let's say you've got a 50% attrition. So month two you collected 100. You, you collected one 50 times 100, it would be 15,000, right? Mm-Hmm <affirmative>. Okay, so 15,000 a month, two. And then month three you collected still 15% attrition. Usually attrition will go up even more on month 3, 7500. But let's say 7,500 mm-hmm <affirmative> So let's add the first three months. 'cause Usually by month four in digital products, especially if you're using JV Z for billing, by month four, your attrition is negligible. Negligible. So 30 plus 15 plus 7,500, you've got $45,000 plus 7,500


Mm-Hmm <affirmative>. It's 12,000.


No, $30,000 plus $15,000 is $45,000. Plus 7,500. 45,000 plus 7,545, it's gonna be $52,500. So you made 52,500. We still haven't deducted 10% refund off of that. So you're gonna end up around 40 5K net, well not net 'cause we don't know what your affiliate payout and stuff is, but you're gonna end up with about 45,000. How good is that in comparison to the 9, 9 7 9 9 7, you collected all upfront day one, right? You made a hundred thousand dollars, you had a 10% refund rate, you still got to keep 900, you got less customers. Now, that's where the difference is. How good are you at your follow-up affiliate marketing? Because over here you had 300 to market through via email every single day. So in those three months, in those 90 days, if you're mail mailing, 300 people, more offers, can you make the difference between 45,000 and 900,000 work?


I don't know. Is no, not 900,000, 90,000, what am I talking about? 990,000. So that's a $50,000 difference, okay? Because you sold, if you sold 997, you sold a hundred copies of it, $997, that's a hundred grand and a 10% refund rate. It's 90 grand. That's 90 grand after refunds all collected, you have that. You got it. Refunds taken care of, it's in your bank. 90 grand. Okay? The other way, you gotta factor in attrition. We're conservatively saying 45 grand. Might be more, might be more, but there's a $50,000 difference and the attrition kicks in. So you'll have less customers to deal with. You only have a hundred customers on this side. You have 300 over here. So now you have more to market to long term here. Can you make the difference up in affiliate marketing? Yeah, maybe. But remember for those 90, those, those 100 that bought, you're also marketing to them as well.


And you're also gonna make more, more money from them. So higher ticket sales, when you can do them, they're always gonna be more profitable. They're gonna be more profitable. They're gonna have, they're gonna, they're also more profitable because less risk involved. It, it's less risky to do. But then again, is it right? So dealing with 100 customers, doing 100 transactions as opposed to doing 300 transactions, right? On an account that's processing money, 300 transactions versus this amount of transactions, where is your refund amount gonna be more 10% of 300 is 30. That's 30 refunds. 10% of 100 is 10, that's 10 refunds. So when flags are going up for the amount of refunds, and you also gotta consider the the amount of money being refunded. So risk plays a factor. Which one of these methods is gonna put my banking at my merchant account or my PayPal account in a greater risk?


Which one's gonna be more profitable? Which one is gonna have less risk? Which one is gonna be long term more conducive to what I wanna do? So why not create both? Why not create a $97 per month product that offers a thousand dollars one time? And, and that's kind of what Melinda and I have done. We have so many different types of products, and obviously over time you can do this over time. You can create various products and have a portfolio of products. We have dozens of products now. We have dozens of products. We have three high ticket webinars that we sell. We have multiple high ticket coaching packages and done for you packages that we have ranging all the way to 32,000. And we're thinking about doing one that's 64,000 now. So those are the considerations. Is there a right answer to the person that asked me this?


Should I charge 9, 9 7 or should I charge nine, seven a month? It, it all comes down to you. And like I said, you gotta look at the traffic. Look at the traffic, the source of the traffic first. Someone asked about launching, launching the product. Omar, why is it that you launch a product you spend all this time getting it ready and, and doing it and putting it out there and launching it, and then kind of, that's it? Well, you know, something happens with a you know, I I, I often compare product launching to movie releases. Alright? Why don't they release the same movie two years later? Same exact movie. Why don't they do that? Why doesn't one particular movie theater that didn't play that movie, that during the launch of the movie, during the release that week, why don't they play it, you know, two years later?
'Cause It's gonna bomb because everybody's seen it, because they've heard about it, because the buzz, it's all the same. Doing promoting during the launch is all about capitalizing on the buzz, the buzz that's been built. People are talking about this. People are out there looking for the bonuses at this time. There's a competition going on. People are all going, affiliates are fighting for that money on the top prize. There's, there's excitement, there's buzz, there's talk. The forums are talking. Social media is talking about the launch. Your images are out there, your picture's out. All of that's going on during launch week because there's hundreds of people involved. There's affiliates that are involved. So there's a lot of link, there's a lot of talking about that. A year later, a month later, two months later, having one affiliate trying to get similar success without any buzz.


People are, there are other launches commanding attention at that time that do have buzz. So you are the one man band trying to fight for, for traffic and for buzz and just trying to get, you know, the attention of your list to just go after this one product while they're being pulled into the buzz of other products. So it's always more powerful to capitalize on existing buzz and promote. Now during the launch, why don't we reopen? Well, a couple of reasons. Same exact reason that a movie theater doesn't try to play the movie for the first time ever. You know, except, I mean, well, you know, when you see the movie again, you see it five years later at the dollar theater, that's where you see it. You don't, you don't see that same movie getting released at that same price in another theater, you know?


So again, it, it really, it, it doesn't mean that you can't do it, it doesn't mean that you can't create a solo page for a particular, I I do this all the time. An affiliate wanted to promote, but he was committed to promote something else. So I create a page for him and he promotes it. So, you know, what sucks about that? I've already given away the prize. That guy doesn't get to compete for the prizes. That guy doesn't get to capitalize on the buzz. People have already seen the offer, right? Because it's a, it's a community. You know, internet marketing, especially if you're marketing to marketers, it's a community of about 20,000, 30,000 or so active buyers. Maybe a total of 200,000 people interested in the internet marketing space. And everybody's on everybody's list. Everybody's on everybody's list. Everybody's getting product of the day. And, and everybody's on jv, w's list. Everybody's on J's, w's list. Everybody gets that product of the day. Email, everybody does. So we're, we're all playing in the same pond and we're all making the splash. You know, all these people are splashing in the pond and you're over here outside saying, Hey guys, come on, come


On over here. Don't, don't, don't be in the splash. Don't be in the splash. Come


Over here. It's nice and dry. You know, and this is, this is why the relaunching and, and stuff like that aren't, aren't as effective. It doesn't mean that you can't do it. It doesn't mean that you, you know, the other thing is, remember, I don't just close my launches down. I keep the launch evergreen. I just raise the price. I make something different after the end of the launch. I might double the price. I might remove the bonuses. 'cause You can't just say, Hey, for launch week it's special. And then do nothing when the launch week ends. That's stupid. You know, the whole purpose of it is of having the launch is to give them a reason to buy. Now it's a grand opening sale. Once the grand opening is over, now you go to normal pricing or you remove whatever free gifts or whatever you're giving.


So that's about it. So I hope that this was beneficial to you. Do you have anything that you want to add about our pricing of our products? What was your favorite continuity product? Or what, which one was your favorite? My favorite vantage, your my favorite vantage? Mm-Hmm <affirmative>. We have a quite a lot of sales on that one. Yep. I think we've had like 6,000 sales or something like that. I saw it in JV Zoo the other day when I was looking at the funnels. Mm-Hmm <affirmative>. We've had over 6,000 people that have bought that product continuity. And, and you do the math at $37, but those people aren't all active. No, they aren't all active. So, you know, it trickles down. And what we do is we run a special a few times a year, but that is a very active website.


That is a very active website that we're always maintaining and managing and stuff. So a couple times a year running a three day sale, a three day blowout. We're gonna be doing one for black Friday. You know, that's been very successful for us the last few years. Black Friday, we do a three day sale and we make, you know, hundreds of thousands of dollars. So, you know, again, consider the model. Consider what it is that your audience is going to be able to afford. And remember what people buy to either increase pleasure, decrease pain, they have to justify that purchase. It's an impulse purchase. It's hard to justify that impulse payment every single month because that impulse is dropped. That impulse is gone, that rebuild hits that impulse is gone. So you wanna try to create rebuild amounts that are gonna go under the radar.


And that's going to increase your, at your well, it's gonna decrease your attrition, meaning that people are gonna stay on longer. And these are all important things to consider when you're planning out your you know, your price point for your product. Psychology and pricing matters, matters. There is a there's a guy by the name of Nick Kolenda and he's got a product he's got a a blog post called the Psychology of Pricing. It is amazing. You should read it. Nick Kolenda, the Psychology of Pricing. Kolenda is spelled KKOL. As a matter of fact, you know what, I'm gonna find it right now for you. Nick Kolenda. Nick Kolenda, I believe. Pricing, pricing psychology. Let's see if we can find it. Nicole, Linda, psychological pricing.


This is it right here. The Psychology of Pricing. A gigantic list of strategies by Nick Kolenda. And this is the blog post. It's got its own. He's got all the tactics in here. He's, it's, this is an amazing, amazing article. And Nick Lindo, when it comes to psychology and marketing, he's a really, really good guy to learn stuff from. And I've read a lot of his material. And if you're into this kind of stuff, when it comes to psychologically persuading people to take action ethically getting people to, you know, raising that impulse, increasing that propensity to buy, using words and numbers. Great, great guy to learn from. Nicole, Linda. Okay. So I hope that you enjoyed this. And that's by the way, Nick cole linda.com/psychological-pricing-strategies. I hope you enjoyed this presentation, and I look forward to seeing you in the next MUA episode. Take care.