Most entrepreneurs think that if they close enough sales and generate enough revenue, they are guaranteed to increase their profits. However, that’s not always the case. If you want to increase your profits, there’s a lot more to it than hiring more sales people.
It’s not about the quantity of sales people on your team. It’s about the skill level of the sales people.
For example, let’s say your goal is to generate one million dollars in revenue. There are many ways to do this. You can sell something for $1, and sell it to one million people. That’s one million in revenue. Or, you can sell something for $100 and sell it to 10,000 people. Again, that’s one million in revenue.
Better yet, you could sell a valuable product or service for $10,000, and you’d only need 100 people to buy it, to generate one million dollars in revenue. This is what I refer to as High-Ticket Closing.
The High-Ticket Business Model
The high-ticket business model is all about fewer transactions, fewer customers, less overhead, less infrastructure, and more profits. If you’re selling your product or service for $10,000 and you therefore only need to sell it to 100 people to generate one million dollars in revenue, then you’re running a high-ticket business.
This is what works for me. I prefer the high-ticket business model, because I prefer dealing with fewer customers, fewer clients, and achieving higher profit margins.
The high-ticket business model involves selling a product or service at a high price, to high-ticket clients. This means you can sell less while earning more. Your operating costs are lower when you reduce the number of transactions and the number of customers by focusing on quality over quantity. You’re raising your prices and qualifying those higher-quality prospects who can afford your high prices, and will agree to pay. You will effectively increase your profits, and your operating costs will decrease.
This coveted business model is highly scalable and promises an increase in your profits. This business model can only be achieved if you master the art of High-Ticket Closing, commit to it, and have team members on your sales team who have also mastered the art of High-Ticket Closing.
The More Your Offer Costs, The More Your Clients Value It
The more you charge for something, the more your clients value it. If you sell something for cheap, it will feel cheap. And, by offering big discounts on your product or service, you’re only cheapening your brand.
Your competition’s prices do not dictate your price. Perception dictates your price. What is the marketplace’s perception of your company? Do you agree that if you charge higher prices, you could improve the marketplace’s perception of your company?
As a general rule of thumb, people tend to attach a higher value on a product or service that costs more. It’s your job to ensure the value of your offer is worth its price. One of the best ways to solidify your offer’s value, is to clearly be able to solve a major problem for your prospects.
Double Your Prices and Increase Your Profits
What are you currently charging your clients for your product or service? Have you ever thought about doubling the price?
One of the quickest ways to increase your profits (and sell less) is to double your price.
The idea of doing this will scare some people. Many entrepreneurs will be hesitant to increase their prices, even if it could mean much higher profits. Many people think they’ll lose customer loyalty, and lose business, if they double their price. If you do lose business, however, that’s not a pricing issue. That’s a marketing issue.
With the right offer and the right marketing strategy, you can successfully sell your product or service at double the price.
As far as customer loyalty goes: Yes, you want loyal customers, but you also want the right customers who can afford your high-ticket prices.
If you adopt the right mindset, you’ll view the idea of doubling your price this way: Yes, you might lose some clients who would rather find something cheaper. But those aren’t the clients you want, anyway. The clients you lose are simply making room for better clients – high-ticket clients.
If you’re interested in adjusting to more of a high-ticket business model to earn more money, one of the things you need to do is get a sales team together who have been trained on High-Ticket Closing.
Another thing you’ll need to do is increase your prices. The high-ticket business model involves higher prices and therefore higher profit margins.
Improving Profit Margins
In business, your margins are the difference between your selling price and your actual cost for the product or service.
For example, if you purchase toy cars from China for 20 cents each, and you sell them on your online store for $1 each plus the cost of shipping, your sales margins are 80% which is pretty good. Your net profit margin, however, is not 80% because you have to factor in the cost of running your online store, the cost of marketing the product, etc.
To build a sustainable and scalable business, you must figure out which products or services generate the biggest profit margins.
Often, your highest-priced items will have the biggest profit margins. Other times, the highest profit margins are attached to products that only have to be created once. Let me give you an example. Imagine that you created a resume template document. You only had to create the document once, and now you can sell the document as many times as you like, to as many customers as you like.
Every quarter, you should do a margin analysis on all of your products and services. Since the goal is always to have big margins, you may want to consider getting rid of your low-margin offers. Alternatively, you can always figure out a way to add more value and then increase the prices in order to increase the margins.
The 3-Step Formula for Scaling Your Business
When it comes to scaling your business, my 3-step scaling formula is:
1. Social Capital
2. High-Ticket Offers
3. Remote Sales Team
1. Social Capital
In business, social capital is the personal relationships and social networks that contribute to an organization’s success. These personal relationships help build brand loyalty and trust, which are crucial elements to your company’s survival. From a social standpoint, brand advocates who trust and respect your organization, will tell their friends and family to buy from your organization.
Chris Cancialosi told Forbes, “Social capital — the connections and shared values that exist between people and enable cooperation — is the key to entrepreneurial success.” He also explained that the other two types of capital you need include financial capital (the funding you needed to get your business started and fund operations) and human capital (your valuable team members).
2. High-Ticket Offers
We have already discussed that if you want to sell high-ticket offers, you need to raise your prices and learn the art of High-Ticket Closing. You can’t sell your high-ticket offers on your own, though. This brings us to the third step.
3. Remote Sales Team
If you’re the only person who can sell within your company – if you’re the only closer – you won’t be able to scale your business.
Dan Lok Organization has 120 closers. They’re selling my products and services for me. They’ve all been trained on the art of High-Ticket Closing.
The answer is not to hire more salespeople, though. The answer is to hire closers. Often, when entrepreneurs want to scale their business, they’ll hire more salespeople. But what happens if these salespeople you’ve hired haven’t been trained in the art of closing high-ticket offers?
What you need is a predictable sales system in place, which requires a reliable team of excellent closers. It’s wise to put your remote sales team through High-Ticket Closing training.
Having a performance-based (commission-based) remote sales team, all of whom are trained closers, is the way to go.
It’s not about selling more, it’s about selling less at higher prices. The key is that your remote sales team should be focused on selling High-Ticket Offers, which means their goal is to qualify leads. They must qualify high-ticket clients and expend their energy selling to the right people.
Want To Discover How To Sell Your Product at Double The Price?
Selling your product at double the price – and therefore perhaps doubling your profits – requires a couple of specific skills. First, you and your sales team must develop the right mindset and confidence to sell at a higher price point. Second, you and your sales team must learn the art of High-Ticket Closing and commit to this practice. Do you want to change your mindset, boost your confidence, and increase your closing skills so that you can double your prices? Do you want to make more money, selling less? If so, reserve your spot in my exclusive High-Ticket Closer Certification Program.