MBA2639 Q&A Wednesday: Do Low Priced Offers Work?

0:00On today's Q &A Wednesday's episode, Gabe asks a sharp question. Do low-price offers actually work? The short answer, yes, but only if you know what they're for. Low-price offers can be one of the smartest strategies that you can implement in your business today, or they can be a complete waste of time and energy. So today, I'm gonna walk you through when and how they work, the biggest mistakes people make with them, and how to use them to fund your growth and qualify future buyers. Let's get into it.

0:37Welcome back to the$100 MBA show. I'm your host, Omar Zinhome, where I deliver practical business lessons three times a week, Monday, Wednesday, and Friday to help you start, grow, and scale your business. If you've got a question you want to ask here on Q &A Wednesday, just go ahead and ask it over at 100mba.net slash Q. Submit your question and we'll answer right here on the show. What's the purpose of low price offers? Well, when we say low price, let's get really specific. We're talking about$100 or less. And I want to give it even more specific. I call it the no brainer zone, which is$17 to$49.

1:14Why do I call it no brainer zone? Because it's the average price of a lunch, a meal. You can go to a fancy meal at a fancy restaurant, but on average, this is a purchase you don't really need to think about too much, $17 to$49. Why do these offers work? Well, they help qualify leads, not maximize profits. You're not trying to build an empire off$27 products. You're trying to do a few things. You're trying to get buyers onto your email list, which is always great. Build trust, right? You want to build trust with that audience. You want to recoup your ad spend that you spent to get this lead to get this customer, and you want to send them to higher priced core offers later.

1:56We're talking about 500 plus priced offers. You want to think of this like a trust building handshake that pays you back. So what makes low price offers work? Well, I got a formula that I've used that really works for our business. I want to share with you. Number one, I mentioned it before, you want to price it like a meal so they don't overthink it, right? You don't really think about purchases that are$17,$29. Most people don't think about those types of priced offers or products. Most people, if they're hungry, they just buy lunch, right? They don't think about it too much. They don't consult anybody.

2:34They just do it. Next, it solves one clear problem. For example, how to make your first sale or how to improve your free throw shooting in basketball. Very clear, specific problem. Next is immediate value. You want to get people a win quickly. You Don't want a long-winded six-week course. You want something that they can consume quickly, get a win, and really feel like, okay, this person is legit, this company's legit. And then lastly, really important, feels like it should cost more. You want them to feel like they just got a crazy deal, like there's something wrong here, right? Maybe this is a glitch, a mistake, but they feel like they're winning by grabbing your deal, your low-priced product or offer.

3:17So let me give you an example, an example of a$29 offer that works. Let's say you help creators launch email newsletters and your offer could be a low ticket product called newsletter kickstart kit. This offer is$29. It includes a plug and play welcome sequence, opt-in form templates, and a quick start video. Okay. So as you can see, it's high value. It's get them going. It's something that will allow them to get a win quickly. Basically, for$29, they get a shortcut. You, on the other hand, now have a buyer who trusts you. You have their email. You have their attention. And maybe even a pixel for retargeting for other offers you might want to send them.

4:03Now they're in your world. This is where you want them. The next use or even just framework, mind framework you want to think about is self-liquidating offers. If you've never heard of this term, here's what it means. A self-liquidating offer or SLO is a low cost product that helps you break even on your ads. So a lot of people say, I don't have money to spend on ads. I don't have money or a budget to market with Facebook ads, Instagram ads, whatever ads. But self-liquidating offers allow you to afford ads. Let me break it down. Let's say you spend$1 ,000 on ads. With that$1 ,000, you get 100 buyers, let's say, for your$29 product.

4:49That's$2 ,900 in revenue, okay? Your ad spend is paid for because you made more money than what you spent on ads. In fact, you spent$1 ,000 on ads, You made$2 ,900 in revenue. That means you actually made$1 ,900 on top of your ad spend. But best of all, you have 100 qualified buyers now that you can then offer them your higher ticket offer, like a$500 or$1 ,000 product. On top of that, you got 100 free leads, no affiliate commission you got to pay out, no agency to pay, just smart unit economics. Now, even if it costs you more than$1 ,000 to get those sales, you have a budget now to actually run ads given the fact you're selling something.

5:38But this only works if you build your low-price offer properly. Now, I want to give you a framework to do just that. Number one, start with the first problem your ideal customer faces. Don't solve everything. Solve one annoying thing they're dealing with. the kind of problem that they'd gladly pay to avoid. Here are some examples. I don't know what to post on Instagram, right? For those who want to grow their Instagram account. Here's another example. I don't know what to say on sales calls. So a script would be really helpful. One more example. I don't know how to build my first landing page.

6:15The next part of the framework is make it a quick win. Low ticket buyers want fast traction, okay? They want to be able to get from zero to one quickly. Give them a shortcut. Give them a template. Give them a done for you element. Don't build a course. Build a tool. Third part of this framework, make the purchase feel risk-free. Use a seven or 14 day refund policy and price it like a launch. Under$50, ideally around$30 is perfect. This keeps the friction low and conversions high. Now, you may want to test this. See if$29 converts better than$24 or$17 or$49 for that matter. But don't overthink it.

6:55Just price it$29 and get started. And the last part of the framework is follow-up with back-end offers. Now, after they have bought your offer, your low-price offer, don't let them disappear. Have a follow-up funnel, a thank you email with a bonus, a three-day flash offer for your course or your program or whatever you sell that's at a higher price. You can even invite them to a webinar or a workshop where you sell them that higher price product. Low ticket is the on-ramp, not the destination. Now, before we wrap up, there's some big mistakes I want you to avoid. Let's talk about where people go wrong.

7:32Number one, they try to profit off the product alone. If you're expecting to get rich off a$17 ebook, just stop. It's not about the$17. It's about what that buyer is worth to you over time. Focus on customer lifetime value or LTV, not the front end sales. Next, making it too complicated. Don't sell 18 videos or four PDFs or six calls for$29. That's not a product. That's confusion. Keep it simple and immediately usable. Another mistake people have is not having any kind of upsell path later on. If you don't have anything that's higher ticket to offer later, the SLO or the self-liquidating offer model loses its power.

8:17So even if you have a basic$197 offer or a$500 offer, that's enough to turn a break even into a profitable growth instead of just breaking even on your leads. Here's some real talk from my own experience. When I ran ads for the$100 MBA, our low ticket offers help us fund our ad spend and grow our list with buyers, not just freebie hunters, people that are just looking for free things. And those people are right. They might buy later on, but you want to have levels of leads in your CRM, like people that are, you know, loving the free content, but you also want a level of customer that has bought something that's low cost.

8:56They have high potential to buy again. What I found is that low cost offers has proven to me that buyers behave differently. Even a$9 purchase changes the psychology. They voted with their wallet. Gabe, who asked today's question, low ticket offers absolutely work if you know why you're using them. They're not for profits, so to speak, but they're for permission. They're qualifying people that are buyers. When I say permission, I'm talking about permission to follow up with this person that just bought from you, to offer more, to build trust, to ascend them in their progress as a customer and as a learner, as somebody that is going to achieve great things with your products, with your knowledge, with your value.

9:43And if you do it right, that$29 product that you offer might just launch pad you to the next$100 ,000 in revenue. Thanks again for being a listener, being a subscriber of the$100 MBA show. If you want to go deeper with me, if you want to learn more from me and grow your business, subscribe to my three things newsletter. It's absolutely free. Every week I send you something to think about, something to do and something to learn. This is real world business coaching delivered straight to your inbox. Let's grow your business together one smart step at a time. Just go to 100mba.net, sign up for any of our free guides and you get added to our newsletter automatically.

10:22Thanks again and I'll check you in the next episode. Take care.