When Charging More Goes Wrong

So your loud mouth tough guy competitor is charging nearly 3x what you are..

But their product isn’t as good as yours?

And your cash collected roas is a 1.4 - 1.8 or less historically?

I repeat back to my client a rendition of what I thought I heard them say.. After asking them why they charge so little.

Incase you’re new to my content, My name is Lance C. Greenberg. I’ve worked with 100’s of business owners helping them put out fires and optimize their traffic strategy so they can scale.

In this client’s IPM, we worked out a simulation of what all of their numbers would look like if they charged more.

The ROAs (return on adspend) and cac (cost per acquired customer) are far better in this scenario.

Their competitor charges more,

Their program results are AMAZING,

And based on their report they cover all the bases in the sales dept,

So I give the green light to charge more.

It worked! 

They make 2X minimum what they paid me in week 2.

Their ROAs goes up instantly.

Because this is an advisory client, and not an agency client,

I help them hire an A Player full stack media buyer in-house.

All is well.. We ride off into the sunset..

Until there’s a BIG PROBLEM.

Close % dipped to an all time low of 11%.

Here’s the thing about charging more..

It can decrease the gap between perceived value and what you’re charging if your offer and sales process isn’t strong enough.

It may require things like more rapport, more authority, higher perceived value, a wider gap between where they are and where they want to go.

If you have ANY gaps in your sales process such as lack of standardization, or a team member whose energy is up and down..

You will run into a huge problem.

So we hop on a call together to sort this out.

Now,

The thing I absolutely love about my clients is their focus.

“Lance, I want to do whatever you say. So I want to keep the price up. What should I do now?”

I want to explore temporarily lowering the price back to where it was.

We drive back into the IPM to see if there’s room to go back to the old pricing temporarily.

That’s where we find another surprise…

Their cost per call could be much lower if we make a slight adjustment to their sales process.

Periodically they get a significant number of qualified apps that never book.

This can be due to someone being busy or a desired calendar slot not being available.

Having someone outbounding these prospects is paramount.

If we can take qualified apps to booking from roughly 59% to 75% and all other numbers in the financial model stay the same, 

When I work the numbers,

We can still do a 2-3x on cash collected and cover all of their overhead, including the owners' paychecks, taxes, and profit.

This doesn’t factor in back end sales or upsells.

So they go back to the old pricing and the media buyer reports that their cash ROAs is over a 2X now.

They are closing a higher volume of the leads.

So the bottleneck now is how do we improve the sales process?

There are tons of things you can do.

Something I like to do in a scenario where the product is amazing with lots of results is find a person.

A closer who is experienced already selling at the price point they want to switch to will absolutely crush with an excellent service or product.

So I gave them my closer value proposition and ad formula and all the places they need to post that job.

They’re currently doing interviews, but they’re not doing it from a desperate place.

Numbers are looking good.

And if they are stringent enough they will find someone who can come in and sell it better than them.

Follow up better than the current team.

And then they can use the information to optimize with new standardizations.

Usually, a great closer or media buyer also has connections.

Making it drastically easier to bring in more people like them and scale up.

The best agencies, media buyers, and closers want to work with businesses that have great cultures and the best products.

Now, imagine if my solution was a “new funnel” or some kind of tactic or shiny object.

Or if our feedback loop took an entire week, didn’t include a granular look at the numbers with an IPM simulation and we had poor data inputs.

Man, we’d be up shit creek without a paddle right now.

Which is why I always focus on the overall machine.

The feedback loop never stops.

The optimization never stops.

Listen to your customers.

And hire open, unbiased mentors and vendors.

You’ll never lose.

Keep shining your light.

- Lance

P.S. I truly appreciate you being apart of my journey, following my behind the scenes content on social and reading my newsletter that shows real life client, client team, and team interactions and lessons. Here’s something i share with clients to grade their sales dept. There’s also other goodies linked inside including a resource on recruiting sales reps—> https://docs.google.com/document/d/1oxUjLdkzt3U171Pa1d9fPP7NtiZQleHdz6OyylHJxhs/edit