How’s that working out for you?
I’ve been there, done that, and bought the t-shirt.
It’s a tough business model, but many new entrepreneurs are willingly participating in a race to the bottom.
On its surface, the plan makes sense.
You reach the largest number of customers by offering the lowest price.
You watch a retailing giant like Walmart apply one knock-out blow after another with the bargain basement appeal.
So what’s the problem?
You don’t have Walmart’s size, buying power, distribution, product selection, or any of their other advantages.
They’re also something that’s almost impossible to do today online. They’re a one stop shop.
Amazon is the closest to this online, but they’re more upscale. They focused heavily on book buyers first, because book buyers are also better customers of other products. It allowed them to use their huge network into products at all price levels.
For a small “internet lifestyle” business on a boot string, you need to flip this model around.
Quit thinking about how to appeal to the broadest portion of your market. That’s what all your competitors are doing…and they’re on a race to the bottom.
Instead, consider what the most profitable portion of the market is.
Who is willing to pay a premium price for the best solution?
Maybe it’s only 5% of the market.
Who are they? What do they want to buy? What is the perfect solution for them?
What do they do differently than the average customer?
How do you reach them?
Those are the questions you need to be asking yourself.
Maybe this is a premium done-for-you service…your white glove service where you handle everything.
Or it’s a direct access coaching program.
Or it’s the exclusive watch where only 500 copies will ever be made.
It appeals to an audience who has the money to afford the best.
That’s a radical mind change for many of us. When I started online, I was worse than broke. I had over $50,000 in debts and worked a string of deadend jobs.
It was tough for me to realize that some people did have money. Just because you only buy $40 jeans doesn’t mean $200 jeans aren’t selling like crazy at SAKS.
You may struggle with this concept, especially with all the recession news media constantly pumps out.
Premium retail is booming. Neiman Marcus, for example, reported same-store sales increased by 7.9% in the past year.
It all depends on who you’re selling to.
Focus on the best, most qualified customers first.
In other words, don’t think about your mass market product first.
Focus on your “backend.” Create your brand around the premium side.
Then, if it fits your business model, expand out into other solutions from there.
Instead what most people are doing today is selling their “dream solution” for $7. But their backend “funnel” isn’t working like it used.
A few customers upgrade to your other higher priced solutions, but the majority don’t.
The majority are still stuck at the price you “anchored” them with originally. They only buy when you offer them other $7 products.
It all depends on who you’re marketing to…the solutions you offer them…and the value you set for your brand.
If you’d like in-depth personal help choosing your customers, finding your brand, and building a long-term profitable internet business, check out my one-on-one coaching programs:
Currently they’re booked, but you can join the waiting list for as soon as new slots open up.