Do you need to attract high-ticket clients or sell to a bigger audience?
Your business model contains so much good information. It goes way beyond the sales and marketing to outline how you deliver to each customer, how long you serve them and how much you charge.
Making sure you have a plan on how to approach prospective clients, pitch them and ensure you seal the deal is critical.
Despite that, deciding on how many people to work with can be tricky! Do you want fewer high-ticket clients or many lower paying ones?
Today I’m sharing two different approaches, along with the pros and cons of each.
The first style is the many “low-ticket customer” model which allows a business to price their products or services lower than the average competitor in an effort to attract multiple clients at once. You’ve probably seen this often with group programs, monthly subscriptions, memberships and online courses that run on demand.
Then there are the entrepreneurs who go with the fewer “high-ticket client” model. They focus on securing a few clients while offering their services at a higher price. These businesses usually offer one-on-one services or operate as agencies who implement on your behalf.
There is no universal best option. It comes down to personal choice.
Two different approaches to the same business
There are many ways to generate revenue in today’s business world. Both many customers or fewer clients can bring in similar amounts of income for an owner. It’s the work put in to get to the endpoint and desired scalability that needs considering.
Picture the scenario below using freelancers:
Freelancer A: Is just starting out in the freelance writing business. He left his job in a haste and needs to begin generating revenue pretty fast. Freelancer A uses the cold pitching method and sends out almost a hundred emails offering to an article a month for $100. After a week, freelancer A gained 10 new clients. Each client accepted the pitch for one article per month for $100 total which leaves freelancer A generating $1,000 of net income within their first month. He’s writing 10 articles at $100 a piece.
Freelancer B: Freelancer B is new to the writing industry as well and, despite having a small savings, needs to begin generating income as soon as possible. Freelancer B also chose to use the cold pitch method for generating new clients relationships and sends out about 100 emails offering to write ten articles a month for $100 at piece. After a week, freelancer B gained 1 new clients. Each client accepted the pitch for ten articles a month for $1,000 total. Freelancer B generating $1,000 of net income within their first month by writing 10 articles at $100 a piece.
Looks the same? At the end of the day, it is. They are both earning $1000 per month and they are both writing 10 articles.
The difference is that Freelancer A has 10 clients and Freelancer B has 1. Which means that if Freelancer A gets one new client his earnings grow to $1,100 per month. If Freelancer B gets one new client, her earning double to $2,000.
If Freelancer A loses a client he’s only down to $900 per month while Freelancer B is down to $0 if that one client bails. That’s the benefit of the high-ticket client model.
Now the question is: which approach is the BEST approach for your business?
Many Low-Ticket Clients Model
For a newcomer to the online business world you need to start generating revenue as soon as possible. Offering services to many clients for a low-ticket price is beneficial. This allows you time to hone your skills, get experience and establish business relationships. This also is a great idea if you want to secure clients quickly in a limited amount of time.
One of the upsides to following this business model is that you are never fully dependent on a single client or even three. If you lose a single client or even two, but you have 10-20 clients on your roster, your income does not suffer a major setback. In many low-ticket client business models, the loss of several clients would be equal to another business losing just one client. This is almost the equivalent of putting all your eggs in three baskets vs. one.
Splitting up your revenue generating sources has its upside. The downside is that in order to grow you need volume. You will constantly be looking for new clients in order to grow.
You must enjoy marketing and generating new leads if you are going to sustain your current revenue. Sometimes it feels like you’re always hustling.
The other risk is by offering lower cost services or products to prospects you are focused more on output than you are on a high level of delivery. And when your quality diminishes so do your clients. It’s hard to ensure customer satisfaction if you have a small team.
Be careful of burnout tackling a business model like this.
Fewer High-Ticket Clients Model
This model allows a business to focus on creating high-quality content or products and not having to rush through projects to get to the next client. That is a big drawback of the many clients with a low-tickets business model – one is forced to work harder and faster – which usually means quality suffers in an environment of this nature. Speed can cause the quality of work to suffer that can lead to a loss of clients which in turn defeats the purpose of working to generate income.
When you sell high ticket services or products you spend more time nurturing your clients and much more time nurturing each prospect.
You may need to generate less transactions but it may take longer to secure the right client who can afford the higher payout.
Once secured, this model allows you more time and overall flexibility.
Can you offer both low-ticket & high-end products?
A business owner can choose either model in almost any type of industry. It’s possible to sell many smaller priced products to multiple consumers online or while packages of product lines or higher volume/priced products can be sold to few buyers.
A lot of it has to do with what you are selling and what type of customers relationship you are interested in having. Do you love spending time with your clients ensuring you get them great results? Or do you like selling to as many people as possible, maybe even facilitating their own relationships with each other?
What you sell to them will influence how involved you’d like to be in delivery the product or service.
In some cases, it’s possible to do both.
Lower-priced offers to supplement your suite of services
Adding an offer that sells easily to customers who are not ready for your full service can be a great supplement to a higher paying client model. The key is creating a fluid system to bring in those leads and convert them to the new offer. Because the offer will be less expensive and hands on, you’ll want that system to sell with less effort on your part.
The point of this approach is to secure the client, not to focus on the lower price point. The lower price point should naturally attract more prospective clients.
Attracting high-ticket clients to get off the client attraction treadmill
Alternatively, it can get exhausting working with countless clients just to make ends meet. After working the many low paying clients business models for a while it’s normal to want to switch to a business model that will generate as much, if not more, revenue. And one that will allow more time and flexibility in your schedule.
To do this, think through clients you’ve worked well with and established a trust. More than likely, they are not willing to lose your support so approaching them all with a new offer and a new price is the first step.
It’s likely some of your clients may not be able to afford your increase. But if you already have 10 clients, keeping even 2 or 3 of them at rates that may be double or even triple what you previously charged, is more lucrative.
The secret to winning them over is to explain the increase in value they’ll get via your new package.
This would also free you up to pitch new prospective clients who are comfortable paying more money for high-quality work. Be patient, this transition may happen in weeks or months, but once it does you’ll wonder why you ever did anything else before.
What kind of business do you want to run?
Whatever type of business model you choose to follow make sure it works best for your business and you.
Knowing all your options and how to execute them is over half the battle. Now that you have the knowledge, it is as simple as putting in the effort and waiting for the payoff.
Remember to always be consistent pitching to prospects and developing relationships.
If you stop going after clients, then you’re slowing down future revenue possibilities whether they are high or low paying.
Unsure of the best direction for your future business model? Let me help you build a profitable, sustainable business you will love building this year and beyond.