People pay a premium price because they want to make a change in their lives. They want more confidence, improved skills, or a new mindset. If the product provides them with what they’re looking for, people will pay premium pricing to get what they want. But how do businesses create and sell premium packages that will give people the results they are looking for?
Let’s start with what a premium package actually is. This is a high priced package (could be a course or program) that will teach the prospect a skill or new mindset that changes how they act. This type of product is premium because it will change the results they get in their private life and business.
Social psychologist Robert Cialdini suggests that businesses can actually increase their sales by raising prices. The reason behind this surprising phenomenon is that in the “markets in which people are not completely sure of how to assess quality, they use price as a stand-in for quality.”
Why Premium Pricing?
For example, Dan Lok’s High-Ticket Closer ™ program changes how people view wealth and teaches them a high income skill. They will have a new career and/or reach a new income level. But not only that – they change their mindset about money and their own limitations. This is an example of true transformation.
You can’t get a life-altering transformation from paying $30 for a one-day class. This is not premium pricing. The program that offers transformation must be a high-end program. When a prospect has more skin in the game, they are more likely to put in the work and truly change their lives. The right pricing requires understanding the value to the customer versus the cost to serve customers.
So what’s the secret to creating and selling packages premium packages at a premium pricing?
Watch this video about how you can create premium packages.
High-Paying Clients Or Highly-Committed Clients?
The most important characteristic of a premium package is that it sells transformation and not information. If Dan just provides a bunch of information about the sales industry and defines a high income skill, no transformation is evident or possible. He must do a lot more than that to offer transformation to students and explain what the program really offers. He needs to deliver more and show them the process of transformation from point A to point B.
So if you know you want to provide transformation to your clients, the first question to ask is, what type of clients do you want to sell to? Who are these people and what are their problems? But more importantly – what kind of clients are they to you? Which of these three would you choose – High-end clients? High-paying clients? Or highly-committed clients?
Clients Committed to Results
As for our team, we would always pick highly-committed clients because they will pay whatever the price is to get the desired result. But the price is not the point. The point is that they’re loyal and that they’ll be committed to making the product work. They’re committed to themselves and when they are committed, they are going to get the results that they want.
This also means there is less friction between you and the client. When you’re selling high ticket, if you have highly-committed clients, you’ll get better results and happier clients.
Compare that to high-paying or high-end clients? They’ve got the money and they’re willing to pay, but does that automatically make them the highly-committed?
No, and if they’re not committed to the process and to what you do, you’re not going to get a result you want. That will create friction.
Here’s an analogy. If someone wants to lose weight, get in shape, and have six-pack abs, even if they pay for the best gym and the best trainer – they will not get the results if they don’t show up and put in the work. If they don’t do the work, they’re not going to get six-pack abs and there’s nothing anybody else can do about that.
High Commitment for High Pricing
We would rather pick a highly-committed client any day versus just high-paying or high-end. If you’re committed, we can help. If you’re not committed, we cannot help. What you learn over time in business is that talk is cheap. Very cheap. What’s expensive is the true value and results.
Start with yourself. You have to be committed to your own success. Dan Lok never works with anyone who doesn’t demonstrate this commitment first. This is why some claim that he is difficult to work with. He puts people through hurdles to qualify them and make sure that they are committed and that they are the right fit for him and his programs.
If you’re committed, then he’s committed to you. If you’re not committed, then there’s nothing he or anyone else can do. It doesn’t matter if they can perform a miracle or if they have superpowers, and it doesn’t matter what processes or strategies they employ: you’re going to find a way to fail if you are not in the game 100%. You’re going to find a reason to quit.
How Committed Are You?
So knowing this, ask yourself, for the sake of your business – how committed are your clients? And do you take on clients that are not very committed just because they pay you? If you work for an employer – how committed is your employer to the process and program you’re working on? Do you sense friction?
What are your priorities? What is your criteria? Be honest with yourself as this might be the most important question you ever ask yourself about your business. This can set you up for success or for failure.You have to be committed to your own success. The same is true for your clients. If you want to achieve the best results - choose clients who are committed to change. Click To Tweet
Commitment = Results
If your clients are not committed, they will not get the transformation they’re seeking and your efforts will be useless. Our philosophy is – be more selective, take on fewer people, but know they’re committed. Know that they’re in it with you 100%. When they go all in, you can give them the transformation that they want. That’s why commitment is the key.
This concept especially applies to coaches, consultants, and service providers. Don’t just be satisfied with getting paid. Offer your deepest transformation to your clients and set premium pricing for it. You want to have a compelling ultimate result, something that people have a lot of natural desire for at that particular moment in time.
But if you are not a business owner and you work in a job – then think about your employer as your client. Is this the type of client you choose for yourself? Is your employer 100% committed to you?
Do you believe that they are going to work with you to produce the results you desire? The answers to these questions will tell you if you are in the right place or if you’re wasting your valuable time.
Timing Is Critical for Premium Pricing
Timing is important. Sometimes it happens that a client wants your service or product now, but three months from now they no longer want or need it. Or, quite the opposite, they did not want to work with you a year ago because they couldn’t afford your product or service, but now they can. Have you experienced something like this before?
This usually happens because of the wrong timing. You have to offer your service at the right time and the client needs to be ready for it. The kind of offers I’m talking about will help solve an urgent problem someone is having. It’s something that premium pricing would only encourage them to invest in.
It’s about offering and doing the best work that you can be really proud of. Set up your package so that it speaks to the client’s sense of urgency. The truth is, sometimes people need a little nudge to make the decision they have been thinking over for some time. They need a little push to make the jump and really commit to the transformation they only contemplated before seeing your offer.
The Commitment Test for Premium Pricing
Now, what if a prospect wants a transformation but they want it under an unreasonable timeline? For example, you don’t have time to take on a new client, or your transformation takes weeks and they want results in one week? This is also a very common scenario. Clients often want things to happen fast. They want to be served – now.
What should you do in this case? There’s are a couple of ways to handle that. If you can actually deliver fast, and you have the room to take them on then you just say – you know what, maybe I could squeeze you in. I could make this happen now. This will show them that you are committed and capable. But – tell them that they will have to pay a higher price for this. They will have to pay a premium for the fast delivery they want.
This is exactly what FedEx does – you want overnight delivery – you pay the price for that kind of service. Standard shipping? – there’s a price for that too. Do not offer to service clients on their schedule without extra compensation – if you do this, you will lose their respect. If they agree to the premium price – then you’ll also know how committed they really are.
When your client says that something is urgent but isn’t willing to pay the price – then it can’t be that urgent. Right? If the client says your price is too high – it might not be the price that’s the problem. It’s usually something else and you have to be strategic about talking them through this objection.
Rules Of Engagement for Premium Pricing
If you don’t want to charge more, or you really cannot take a client on under a tight deadline because you’re fully booked, then it’s the moment for posture. This is when you need to establish boundaries in terms of an agreement and agree on rules of engagement.
When you take on any type of client you have to clearly communicate expectations. Tell them details such as: how you do business, how you engage with and work with clients, what kind of deadlines you work with and how and when and why you might charge extra.
You can also state your terms – My turnaround time is 30 days. Are you comfortable with that?
Hold your ground when you tell your client how you work. You can even say – Yes, I’m expensive. If you want cheap work, go to Fiverr. I’m not your guy. I deliver high-quality work and that costs more.
When you come from that place of confidence and assertiveness, you earn respect from the client. This way you demonstrate experience and confidence and show the client that you are serious about your work and that you know what you’re doing.
Think carefully about your terms of engagement and make them known and visible to all - this is how you attract the right client. Click To Tweet
Rules To Build Trust
So think carefully about it – What are your rules of engagement? How do they engage you and how you do business? This will give them and you clarity and make dosing business smooth and easy. If your client is clear on rules of engagement from the very beginning, you’ll avoid friction.
This will also help you build trust. App development consultant Eric Gowens points out how even the smallest things can help prove to your client that they can trust you with their business.“I think the most important thing is to show that you are responsive and responsible right from the beginning,” he says.
Here’s a big tip if you don’t want people who are desperate and needy or just not the right clients for you – put your rules of engagement on your website. Be clear and say what types of people you do and/or do not work with. This is how you will ensure that premium pricing is the only pricing you use.
Establishing boundaries is equally important in the workplace even if you work for an employer and not your own clients. Creating healthy boundaries at work can be difficult because there’s the real worry of being demoted, fired, or disliked. However, with clear communication and practice you can learn to set limits and improve relationships at the same time.
It’s like a realtor who says – If your home is less than half a million, I’m not your person. I only sell properties worth ten million and up. That’s the category I work in. Other realtors don’t have these criteria, so go with them.
Do you see the difference? Your client has a clearer picture of what you do and don’t do. The problem is that most of us do not have those boundaries. We will do everything, even what we won’t tolerate, just to get the business.
Imagine Dan Lok teaching a high income skill and telling you that his program is very affordable at $29.95 (with three easy payments). Would you believe in his teaching? Would you believe it can truly bring you a high income skill? This price and the premise seem to be at disconnect. This is not premium pricing. How can it be a premium package then?
You have to be congruent with what you do. Low-ticket pricing never achieved transformational results. For example, Dan knows that to be at the ultimate service to people he needs to be their mentor and spend some time with them. He doesn’t do quick fixes and he believes in long and slow progress over fast and easy.
Dan purposefully set up rules to deter clients who want quick fixes. He learned over the years that those people lack true commitment. He recognizes this as desperation and knows that there is no true commitment to transformation in it.
Final Thoughts On Premium Pricing Secrets
Think about how much you’re worth. If you want to offer transformation and value to your clients, then sell to highly-committed clients who are willing to invest both time and money. If they’re not committed, they won’t get results and you won’t get results.
The timing of your offer is also important. Maybe they’re not ready now but they will be in the future. Or maybe they want your help urgently. If that’s the case, test them out. Are they truly ready to work on themselves right now?
Set rules of engagement. Make it clear to your clients how you work and what your standards are and apply premium pricing to your offers. Whether you work for your own business or as an employee for someone else – making sure that your client is committed and ready to pay the price your product or service deserves is the key to success.
To learn more about how to leverage clients and sell at premium prices, check out this free 4-day training series from Dan Lok.