How To Price High-Ticket Programs & Services to Maximize Conversions, Increase Retention, and have Greater Customer & Client Satisfaction...

This will help you maximize price performance for customers/clients when it comes to selling high ticket coaching, consulting, and service-type programs.

Whenever someone creates a high-ticket coaching / consulting program, there is about zero consideration for the pricing strategy.

The usual methodology of pricing is to look to the market and see what others are charging and just model them.

• Oh...look at that $8k for coaching, I guess that works, so we'll charge $8k.
• Oh...look at that $20k masterminds, I guess that works.

I was guilty of this more than anyone...

...Until I started looking at my own internal data, and the data of people I consult with.

• I looked at the price of the programs.
• I looked at the payment plans of the programs.
• I looked at the total value of each member in the program based on paid in full and paid in payments.
• I looked at the attrition rates (this is the most important part)

And while looking at this data, I noticed a pattern that made sense as to why we charge one price, but largely collect another amount. 

• What you charge is never what you really collect and this is a problem, because if you're not collecting it, there is something fundamentally wrong with the pricing model, otherwise you would collect 100% of it.
• What I noticed is that the charging based on what the market is charging is flawed, and instead what we should do is look at the demographics of the target market, mainly income levels.

I call this the 10:1 ratio.

10 being the income and 1 being the price of the program.

So if your target markets income is $100,000 on average, then charging 10% of that is the sweet spot, 10:1 ratio.

So the way it would play out is, $100,000 income. 

$10,000 for the program.

or...$100,000 income, but $10,000 for the program on monthly payments $833 per month.

With this sweet spot you can get Maximum price, vs a few months / payments.

The way it works in the biz-op coaching space is that say you have someone with a ratio of 5:1, meaning $50,000 income with price of program at $10,000. 

What will happen is, if you get this person on payments, they're going to give you 2 months to raise that ratio up for them.

Meaning, help them go from $50k to $100k, so that ratio is in balance again, if this does not happen, you get 2 payments out of them, 3rd payment is card declined due to insufficient funds or card block the the bank.

You get the idea.

The main point here is being aware of the 10:1 ratio of income to price.

A 10:1 pattern of pricing that I call the golden ratio of pricing for high ticket programs for maximum conversions, retention and client/ customer satisfaction. 

1. Maximum conversions: using this ratio, it'll be easier to convert the leads into high paying customers / clients. You'll see why in just a second.
2. Maximum retention: using this ratio, it'll be easier to retain them long term so they continue paying you.
3. Maximum client / customer satisfaction: using this ratio they'll be overall happier working with you, due to lowering anxiety and stress due to better pricing that's based around "what they can afford" not "what you can make them afford) this is is a massive difference in terms of how you view selling / pitching to them.

So let's unpack this as to the points above.

As much as we want to toot our own horns in being able to "sell" "close" etc...the reality is, on high level purchases people pay what they can afford.

Some can afford it via cash in the bank and others can afford it via credit cards, but the affordability factor is very big.

Having the 10:1 pricing strategy will help you increase conversions.

People will stay in programs they can afford, that match their lifestyle. This is why certain people, based on income levels will drive Honda civics or Honda accords or Mercedes S class etc for a lifetime, it's what's best based on their income / lifestyle.

Having the 10:1 pricing strategy will help you increase overall retention.

And lastly...having the right pricing strategy will remove anxiety from them having to fork over over 10% of their income every month to you while they're going through something abstract in the ether of the internet and turning it into a ROI for themselves.

This last bit is very important, because once that pricing is out of that 10:1 ratio, anxiety goes up and they bounce.

Now of course, this is a rule of thumb and how do you make more money knowing this? Easy, go after people who have more money, so that 10:1 ratio balances out. 

This is why B2B = more money on the back end than B2C.

Aside from looking at the demographics of your market and "guesstimating", there is another way...

...The typical way to do it in biz op is a brute force question of "Hey customer how much money do you make per monty / year?" 

...and when you ask the question THIS way, if they make a lot, they'll tell you they make less (because they know what you're up to)...

...if they make less, they'll always tell you they make more (becuase they don't know what you're up to, they want to impress you)...

So all you do is flip it and ask this question "How much would it take for you to replace your monthly / annual income?" thats' it...it's very elegant and it'll give you about 90% accurate probability so you can engineer your 10:1 ratio.

...If you get 1,000 customers who have an income of $100,000, you have a total of $100.000.000 in money at your reach via marketing / sales.

...Then you focus on getting 10% of that, which is $10 million.

One more note on the above:

10:1 ratio...if your 10:1 ratio is off, you will notice your refunds spike up. That means your marketing is overpowering your pricing models, they're not aligned.

Any questions? Drop them in the comments section and if you got value from this please share it and like it for LinkedIn juice :-)