I got a couple of key insights on sales at the Los Angeles conference. This hierarchy of sales breakdown came from someone who used to be the only guy in the US to have a PHD in sales.

1. Commodity items

This is the lowest level at which the hierarchy starts. I think most of us can agree that, when it comes to commodity items, the only factor that matters is price. If you really don’t care what the commodity is, you’re only going to look at the price.

2. Products

This comes after commodity. You can think about cereal and other such items. Every time you walk into a supermarket you see a lot of different products. here, you’ll potentially look at couple more factors than price but not many more…it’s mostly a simple decision that’s mostly price based.

3. Service

After product, not surprisingly, comes service. Everyone’s talking about the service economy age we’re moving into. Service commands a bigger price premium than just a product. The goal is to move down the selection criteria: the further down you move, the further up you can move the price. You can charge more for service than you can for ‘just a product’, as it were.

4. Experience

Experience comes after service. Sadly, most people stop at this point. Remember, our biggest competitor, Centerpointe sends out a demo in the mail so that people really experience their product.

One brand that a many people know is Starbucks. Starbucks is an experience. The coffee may cost more than it does elsewhere, but it’s the experience that matters. You’re not buying coffee when you go into Starbucks –you’re buying a lifestyle (which is really the experience).

Are you selling a product? If so, how are you going to start selling the experience?

However, you don’t stop here.

5. Transformation

A transformation is even more powerful than an experience. I can go to Starbucks, but it doesn’t change my life. If you can help someone quit smoking or otherwise completely change their life, how do you put a price on that? What’s the price tag for an experience that completely transforms an individual?

Are you selling transformations today? If not, how can you really capture that?

There’s only one thing better than transformation.

6. Guaranteed Personal Transformation

This is the only step after transformation. If you can guarantee someone that they’ll have a positive personal transformation, that’s way better than just a transformation. With normal transformation, they might go on holiday and it might or might not work out…who knows?

Antony Robins, for example, has tons of fans; anyone who has ever gone there is an evangelist and raves that he is the go-to person to take your life to the next level. When you hear it enough times, you think to yourself, ‘it seems to work for so many people, maybe I should check it out’.

Efficient Frontiers is also a good example. They go into companies and say that unless they get an immediate boost of 20% by using their technology, they don’t have to pay. It’s guaranteed transformation. They are managing ad spends of hundreds of millions per month –almost shockingly high. That’s the power of guaranteed personal transformation.

Jay Abraham always talks about risk reversal. “If you’re not satisfied, get your money back” is not nearly as compelling as “If you don’t get at least 20% improvement, you don’t pay”. That sounds even more powerful. Obviously, you must have an incredible offer to be able to do that, but that is the power of nestling at the high end of the hierarchy.

If you have a truly guaranteed personal transformation, it’s the easiest sale –you don’t need to greatly convince people especially if you are addressing one of their core pains.

Eliminate your competition. The days of basing your product solely on its USP are almost gone, and this is why the UEP is so important. Today’s lesson, in short: a guaranteed personal transformation is hard to duplicate and replace. What are you selling?

Here’s something quite astounding to most marketers.

Centerpointe.com is a site that sells relaxation audios. The product sells for $179 plus shipping.

Yet…every sale of that $179 product will bring Bill Harris an additional $800 in revenue over the long run.

How?

Well, each customer that buys his product will come back or send their friends to Centerpointe over and over again to buy additional modules.

From a $179 sale, Harris will end up making $800 from the average customer.

Harris does this through a savvy combo of personalized emails, bonus gifts, surprise follow ups and an excellent upsell system.

What’s your Customer Lifetime Value? And how can you increase it?

We’ll share ideas and tests in this blog over the coming weeks.

Now here’s a question for you.

If Harris was making $800 from the average new customer. And just 1% of his new visitors made a purchase. How much could he afford to bid on Google Adwords for a click without making a loss?

The answer is a whopping $8.00 per click.

I bet Harris isn’t bidding this much. But he’s certainly bidding high because he dominates Google for highly competitive terms like “Meditation”.

This advantages comes from understanding the concept of Customer Lifetime Value, learning to boost this value and knowing how much you can bid to get a new customer.

Knowing this can help you dominate adwords and strike a blow against your competitors.

Below: Centerpointe’s Site Screen Shot (www.Centerpointe.com)

Upselling is a great way to sell informational products. This is a case study showing how you can pursue an upselling strategy to gain in the long term. We’ll then let you in on an ultimate upsell that works – all the evidence will be there too.

Scenario

David Murphy runs a successful offline consulting company that helps out small business entrepreneurs. He offers his services for 2000 dollars a month and has 30 clients. He wants to expand online but is struggling to picture how he can sell his premium and star performing products to this wider market and potential customers.

Does this sound familiar?

Suggested Strategy

We suggest that David should give away a free ebook with mindblowing information that will provide an upselling platform which will eventually lead to the sale of their star product – getting 2000 dollars a month from the relationships that form.

This is called the REVENUE SCALE FOR INFORMATIONAL PRODUCTS

If you give away mindblowing free information you are essentially running a loss leader . . . BUT this has the effect of developing trust and a relationship with potential clients who will reward you in the long term by buying more of your premium products over time.

Sounds Simple?

Here’s what we mean. . .

• David could give away an ebook for free
• then upsell a course of audio CDs for around 90 bucks
• from this upsell an online course or a seminar to the full value of 2000 dollars.

It does sound very simple, BUT how can David implement this strategy?

Implementing the Strategy

The 2 stages of Upsell

1. UPSELLING THE AUDIO CDS WITH THE FREE EBOOK

The purpose of the ebook is to gain an audience. The idea is that when people open your ebook, they read the knowledge that you have and you astound them with mindblowing information and you create a viral marketing campaign.

This can easily be done using Viral PDF. It allows you to turn your ebook into a viral marketing mechanism.

The Ebook should contain . . .

• killer content
• philosophy of the company
• testimonials
• customer successes

From this platform David would upsell to the next level of the revenue scale – the audio CD sales. He would provide a link to a sales page for the CDs selling for around 90 bucks.

Here’s where the campaign will truly get viral . . .

Why not use an Affiliate Marketing Campaign?

David could buy an affiliate software, then he could tie the affiliate program in with the sale of the audio CDs. For example he could offer 45 dollars commission for every sale of 90 dollars and get people to market his products for him.

We would recommend post affiliate pro. Combining post affiliate pro and viralPDF is a very powerful marketing tool. Not only will it create a viral effect, it will also mean you can capture no end of email addresses.

2. UPSELLING THE SEMINAR OR ONLINE COURSE WITH THE AUDIO CDS

Using a One Time Offer

After someone has purchased the CDs, for example, a great tactic that many internet marketers use to upsell is the one time offer. As soon as somebody purchases the CDs David would offer his seminars or access to his online course with a 200 dollar discount voucher as long as they bought there and then.

If you’ve truly hit people with gripping and enticing copy and stunning information they are more likely to buy straight away.

Email Marketing 

Having captured no end of email addresses David now has a mailing list which he can use to sell his online course or seminars. He could potentially send out an email every 3 months selling the seminars and then towards upcoming seminars send emails more frequently.

If David follows this strategy he could get rapid results in selling his premium products online, and grow his business to exponential levels!

I’m sure you’re wondering by now ‘where’s the evidence of this strategy working?’

SO . . . here’s the proof

Wealth expert, T. Harv Eker,  has used this strategy to remarkable effect. He sells a book fairly cheap for 13 bucks on Amazon; from this book he upsells emphatically his follow up seminars.

Left: Secrets of the Millionaire Mind by T. Harv. Eker

T. Harv Eker gives a bonus when you purchase his book, shown in the red box:

“FREE BONUS – 2 Tickets to the Millionaire Mind Seminar worth $2,590 – details inside”

 

From this a Millionaire Mind seminar draws in about 1000 guests. At this stage T. Harv Eker is still not very high up the revenue scale . . . BUT WAIT . . . here comes the ultimate upsell.

A One Time Offer!

Of these 1000 people he then offers them a complete package of 5 premium seminars for 16,000 dollars, but only if they buy it there and then.

Let’s say only 50 people in the room sign up for the seminars T. Harv Eker is walking away with a cool ( yet staggering)  800,000 dollars in his back pocket. That is truly ultimate upselling!

Learn More about Upselling Techniques

One way to collect information is via the sign-up form on your site. When we were in the process of designing our sign-up for our seminar newsletter, we brainstormed on what information we could ask for that would be useful for our marketing campaign to get subscribers to register for a seminar.

This was the sign-up form we came up with:

As you can see in addition to subscription details, we asked our subscribers 2 questions:

- What areas they were interested in.

- If they wanted to receive area-specific seminar information.

As a test we decided to shorten the form by removing the radio buttons. Our resulting sign-up form looked like this:

The results of this change boosted our sign-ups with 3.3%. Because sales directly correspond to sign-ups, this 2-minute change gained us $33.000 US a year!

Was the basic polling information on seminar interests worth this amount? We decided it was not.

We used the information we collected on subscriber’s seminar interests purely for polling purposes. We did not need this information from every new subscriber, a sample of perhaps 500 people would already give us the information we were looking for. So instead of asking these questions on your sign-up form and possibly losing a sign-up, just email the question to a sample of your subscribers. This is just as effective and a lot less costly.

Take a look at your own sign-up forms and test what you are paying for your information. Keep in mind that information is only powerful if it increases your sales level.

The more complicated your signup form the less signups you’ll get! Carefully think every additional form addition beyond the usual firstname, email or password.