You'll Never Succeed With 5 Dollar Products. Raise Your Damn Prices!

I see a lot of founders with products that cost $5 a month.

This kind of pricing is fine for large companies with money to burn and employees working hard to market the business.

However, for most founders with limited time, money and marketing skills this is a mistake.

Do you really want to have to get 400 customers to make a measly $2000 MRR?

You're going to have to do a lot of work to even get that many customers, let alone manage them and keep them happy.

And growing from that point is gonna be tough. You'll have to get thousands of customers to even be anywhere near a decent sized business.

Instead, you need to be making your solution as expensive as possible.

"But, people won't buy because it is too expensive".

I've been making, marketing, and selling products for nearly 20 years at this point.

And if there's one thing I've learnt (and that has been hammered into me by my peers, bosses, and experiences with customers & clients) is that price is not a real objection.

When someone refuses to buy a product because of the price, what they are really saying is "I don't see enough value to justify spending this much money"

The truth is that, unless you are selling to an incredibly impoverished country, the majority of people you are selling to are spending AT LEAST 10x what you are charging on other products.

If someone refuses to spend $50 a month on your SaaS solution, but will spend thousands on a new computer, the problem isn't your price - it's the perceived value of your product.

If you want to be able to build a successful business that you can live on, then you need to be able to increase the perceived value of what you are selling.

The standard way of doing this is by increasing the amount of stuff that you sell - adding more features, more benefits, etc. etc.

The problem with this is that it's super hard to know what is valuable to potential customers and what isn't.

Hell, even potential customers don't know what they would find worth spending more money on. It's a case of 'they'll know when they see it'.

So many founders spend weeks building new features for a product that they think will convince more people to buy and it doesn't work.

Instead, rather than trying to work out what people will find more valuable, an easier way is to just tell them what they should value in your product.

Here's what I mean.

Tell Them What They Should Value

Imagine you want to open a gym.

Your competitors charge anything between $10 and $50 a month.

But you don't want to play the high volume, low price game.

You want to have high prices - so you decide to charge between $100 and $300 a month.

How would you justify that price?

What would you do to make the value of your gym worth that much money?

Most people would probably think tons of amenities - sauna, swimming pools, personal training, cryotherapy, tons of machines, rowers, etc. etc.

In other words, make it a luxury experience with more stuff.

After all, that is generally what we ALL believe justifies high prices.

The problem with this is that it, the higher the quality you offer and the more things your product gives, the higher your costs and the lower your margins.

And this leads us to the same problem as before - having to get a LOT of customers to make measly returns.

Fitness and gym brand CrossFit avoids this problem altogether.

The average CrossFit gym costs between $100 and $300 a month.

And these gyms are bare!

A few boxes, some rings and some basic weight lifting equipment and that's it.

Yet tens of thousands of people are happy to pay these high prices for what is an objectively lower value product.

Why?

Because CrossFit was able to rewire what its target audience believed was valuable in a gym.

Instead of machines, gadgets and luxury being valuable, it is now pain, suffering and a spartan environment that is now the measuring stick of what is valuable and worth paying for.

CrossFit's customer's value system goes - more pain = the better the workout = worth more money.

How?

So, how exactly did CrossFit do this?

And how can you replicate it?

Well, first things first, it's important to note that, although we are talking about CrossFit, which is now a large multi-national company, this can be done by ANY business of ANY size.

In fact, CrossFit used this strategy from its very beginnings when founder Greg Glassman was just a personal trainer bootstrapping the brand and business by himself.

The reason it can be used by any business is because the way it works is by leveraging human psychology.

Religious, political and social movements have all used this same strategy throughout human history to change people's values and therefore their behaviour.

As a result, it works regardless of culture, era or what type of organization uses it because human beings haven't changed. Our psychology has always been the same, and always will be.

That being said, how exactly did CrossFit change its target audience's value system about what it should pay money for when it comes to a gym?

By selling them a new belief system rather than a product.

But not just any belief system - a belief system that didn't require CrossFit's product (or any product for that matter) to implement.

Here's what I mean.

The belief system that CrossFit sells to potential customers IS NOT "you need to go to a gym where you have minimal equipment".

That wouldn't have worked.

Why?

Because it's obvious that it's trying to sell a product.

The vast majority of CrossFit's target audience (like every business's target audience) is NOT actively looking to buy the solution that it sells - aka a gym membership.

As a result, if the belief it sells had required a CrossFit gym membership to implement, it would have been ignored by them because it would have triggered sales resistance (after all, they aren't looking to buy).

Instead, the belief that CrossFit sells simply states that the best way to get fit is to prioritize high intensity workouts that combined strength, endurance and flexibility work. This, it says, leads people to becoming truly fit (because, for CrossFit, true fitness is a combination of strength, endurance and flexibility).

Because this belief doesn't require CrossFit's product to implement (you can do these kind of workouts at home without paying CrossFit any money) selling them this belief didn't trigger any sales resistance in its target audience.

And, because there were no consequences to accepting CrossFit's belief system (they didn't have to buy anything to believe in and implement the belief), its target audience readily accepted this new belief system about true fitness.

As a result, and without the target audience even realizing it, their value system about what to value in a gym had now completely changed.

High intensity and pain became the measuring stick of what was worth paying for - because they now believed that only this type of approach would get them the results that they wanted (being fit).

Many CrossFitters try to work out at home (and many do so successfully) but the human condition means that they're often unable to put themselves through as much pain and suffering by themselves.

Instead, they realize that the best way to get as much suffering and pain possible is to get someone else to force them to go through it. And that's where the CrossFit gym comes in.

The instructors and the peer pressure from everyone else working out in the same class puts CrossFitters in a situation where they can't back out and are pushed to higher and higher levels of physical exertion.

As we can see then, the CrossFit belief system is almost paradoxical - it doesn't require the target audience to pay for a CrossFit gym membership to believe in it and implement it (which makes it easy for them to adopt and believe in), yet when they do adopt and believe it, they're highly likely to buy the CrossFit product because it's the only way for many to properly implement it in their lives.

Implementing This Yourselves?

The belief that CrossFit sold is what I call a BLUNT belief.

This is because it is made up of five characteristics that are summed up by the mnemonic BLUNT.

This kind of belief not only enables you to charge higher prices, but massively increases word-of-mouth growth, increases the amount of money your able to generate from your existing customer base, and dramatically increase the amount of new paying customers for your business (regardless of what you sell).

What's more, if you don't have a product or business yet, you can use this strategy to create one.

To learn more about this strategy, how it works and check out case studies, visit www.thebluntmethod.com

About Chris

Chris has spent nearly two decades (and counting) creating, marketing and selling conferences, products, services and software, both on and offline, in multiple countries around the world.

He has worked with businesses of all sizes – from startups to companies like Microsoft, Google, SAP, Oracle, Groupon and others, and has also created, marketed and ran multi-million dollar industry conferences in many different industries and countries around the world.

Chris is also, an accomplished writer, having written for numerous publications including The Times, one of the United Kingdom’s most well known newspapers.

Chris helps startups and businesses find and maintain breakthrough growth using The BLUNT Method.