Tiny or big – which one sells better?
Should you start your online business with a small offer or a big one? Pros and cons of each option.
It’s a heated debate: should you start your online business with a small offer or a big one? Pros and cons of each option.
Automated revenue streams can be real goldmines. You set up a sales sequence once and over time, the funnel feeds you a steady stream of income.
But how to choose the perfect automated product to deliver? A tiny, affordable offer is more likely to get more sales, because people can purchase it without too much hesitation. On the other hand, high-ticket offers typically have higher profit margins as well.
To help you decide, we decoded the pros and cons of both options!
Read more: Five simple email marketing strategies that will 10X your automated revenue
Entry-level offer suits beginners
Affordable offers tend to be more popular in the online space because when your ask is low, people typically buy more easily. Many people purchase a seven dollar downloadable guidebook or a fifty dollar baking course without blinking an eye, if that’s what they need. Over time, this modest income builds up to a considerable amount of income.
An entry-level offer can be an especially good choice,if you are just starting out and can’t share positive client testimonials to back your offer up.
Keep an eye on recurring costs
The downside of a tiny offer is your profit per unit stays modest as well. This means you need to sell bigger quantities in order to make a bigger income. If you opt for the small offer, make sure that most of your profit doesn’t melt away in the form of credit card processing fees or social media ads.
Another thing to watch over is your pricing point compared to your competitors: don’t underprice yourself over the long term only because you wanted to start low. Check your price regularly as your clientele grows.
Expert leverages high-end offers
Higher price range leads into the opposite situation: you might have a harder time to get your first sales but since the payout is bigger, you need to sell fewer units for the same profits. To make selling easier, collect client testimonials and social proof, even if it means giving your service away for free or for a reduced price for a few people.
High-end offers suit perfectly experts who deliver tailor-made and personalized service. To see that your future clients are a good match, you might want to offer a free trial or a refund guarantee. Yes, there is always a risk of someone taking advantage, but over the long term, your profits should cover that possibility.
Maybe you need both?
Still can’t choose? Think of your clients and what they need and can afford. If they don’t have a budget for a personalised high-end service, you need to cut corners somewhere and vice versa.
You can always build your offering up over time. So starting with a small offer doesn’t mean you’ll never have the big one.
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