What is the biggest spending threshold you will ever overcome with a customer? One penny. There is free, then there is anything other than free. Moving someone from a consumer of free content to a purchaser of premium content is the biggest sales hurdle. The jump from $10 to $100 is much simpler.
I’m on my third time through the Start Up School. It’s a free podcast put out by Seth Godin, and each time through I pull out a few more nuggets. This idea is one of them. Seth explains why a penny is the greatest obstacle in sales.
Selling has been labeled a negative, but lets face it, we are all selling all the time. If you go in for a job interview, you are selling yourself. Trying to trade in your car? You are selling the dealer on why they need your car. And if you have any sort of product offering online, you are engaged in sales.
But I digress. our point here for today is simple. Getting someone over the hump to becoming a purchaser is the biggest hurdle, especially in today’s economy. There is so much information available for free that it can be difficult to describe your value in a manor that makes people want to break out that credit card.
The trick isn’t in the product, it’s YOU! What value do YOU add to the process? I’ve known of people who simply bundle other people’s stuff to resell. The value they add is their time to track down the best of the best and offer it in a nice tidy package. Your value add might be your ability to cut through the BS and give clear answers. Maybe it’s your unique perspective people like. Whatever it is, you must add some value to the transaction. Otherwise you are just one of a million others out there trying to make a buck, and you’ll get lost in the sea of irrelevancy.
One Penny. If you can get someone to spend one penny with you, it’s a lot easier to get them to spend a dollar. Once they’ve spent a dollar, $10 is a piece of cake. Moving from a Free to Paid customer is a huge hurdle. Anything not free is easy once you get past that initial hump. It then becomes simply a matter of getting the numbers right. At what price do you relay quality and value? How much is too much and will price you out of the market? How much is too little making people think lesser of what you have to offer?
Plus, people are more likely to use what you sell them if they have some “skin in the game” so to speak. Most of the eCommerce people I know prefer to do a paid trial vs. a free one. With a free trial, people are much less likely to use it, and of course, less likely to buy. But, with a $1 trial, that gives them an incentive. It’s only a dollar, but most people don’t want to waste that. So, the paid trials, while fewer people may opt into that trial, the conversions at the end of the trial period are often much higher.
This is why we speak so much about branding. You and your brand have got to be known for the value you bring. What is your USP (Unique Selling Proposition)? If you can nail down your perfect customer, your “Avatar”, and your USP, your odds of succeeding just went WAY up.
Keep in mind, there are some people who will never make that transition. There is nothing you can do to persuade them either. They have made up their mind that they can track down whatever they need, so let them. That is why you need to put out tons of free content. Eventually, some percentage of your community will make a purchase from you. If you keep delivering, they will keep coming back for more. But just know, it’s only a small percentage of your community who is going to be a paid customer. Your job is simply to provide value. If you do that, the rest will work itself out.
How do you provide Value?
What is your USP?
Who is your Avatar?
Who is willing to spend a penny for what YOU have to offer?
Answer these questions and you will be well on your way to a successful business.