Just Getting Started With Your High-Ticket Service? Shouldn’t I Build My List and Marketing Funnel?
The idea of immediately building a list and funnel seems like a really obvious thing to do. All of the internet marketers out there talk about list building and funnel building, and if you aren’t automating emails, creating lead magnets and doing webinars, you’re not really marketing, right?
The problem is that funnel-based marketing is built around the concept of marketing automation. What do you use automation for?
Automation is intended to take something that works and repeat it multiple times. But when you’re launching a new product, do you really know what works?
Creating marketing messaging you don’t know works and automating it is about as crazy as coming up with a new idea for a product that you’ve never sold before, and having it manufactured a million times in China in order to gain scale. You have no idea if you even have a market yet! That’s fundamentally the problem with building a funnel first.
So why do people talk about it so much?
It comes down to the kind of products those internet marketers usually sell.
When people sell low priced products like tripwires and information products, you have no choice but to build a list. You can’t sell one or two and make any money. You have to sell them in bundles of hundreds in order to satisfy the cash flow needs of a growing business. So you have no choice but to test and learn different marketing messages through marketing automation.
But when you create a high-ticket service the math fundamentally changes.
In fact, if you build a high-ticket program you really only need to sell it a few times in order to generate enough cash to validate the idea. If you’re selling a $99 information product you have to sell that 300 times to match the cash flow you would generate from selling a $10,000 program just 3 times.
So what do you do instead? I find that the best tool you have available for you in order to sell your high-ticket program is a concept called the validation call.
The Validation Call
A validation call is a call where you talk to someone who would be an ideal prospect for the program that you’ve put together to gain feedback.
You do 5 things.
- You confirm that the problem you’re trying to solve is one that is painful and worthy of investment by your prospect.
- You explain the outcome that you’re trying to achieve for your clients.
- You explain the program step by step as to how you get the prospect from where they are today to where they want to go.
- You ask questions to confirm whether or not they can see themselves executing that program successfully.
- And finally, you ask whether the investment in the program is justified by the value the prospect would get.
Those five things together give you information about whether or not your program is something you can sell.
Now you don’t actually sell on a validation call. That’s what makes it unique. Because you’re simply asking for feedback, it’s a very low pressure interaction.
You don’t have to be worried about closing the deal on the call. In fact, often times when these validation calls go well, the person you’re talking to may actually want to join your program immediately. My preferred reaction is to say no. I tell them, “Look, this isn’t a sales conversation. I promised to you that I wasn’t going to try to sell anything to you. I simply wanted your feedback. If you’d like to join the program, then we can set up another conversation where we can talk about doing that.”
Validation Calls vs. “Guess and Check” Funnels
Let’s contrast these two methods.
One, you can build a funnel; create a lead magnet, build a list, drive people to a webinar and a strategy session where you close the sale.
Or two, you have seven validation calls with the goal of enticing 3 out of the 7 to want to join your program. Follow up with actual sales calls and close your first 3 clients.
It turns that the difference between these two methods is very stark. In fact, if you execute the funnel building method, or as I like to call it, the “guess and check” method, you can actually leave $100,000 of sales on the table.
Here’s why. In the funnel building method you will have to probably build and rebuild your funnel a couple of times before it starts to work. If you don’t really know what the messaging is, you’re going to drive traffic to a funnel which the first time around probably won’t sell anything. You can measure through the metrics that your messaging isn’t effective, but you don’t have any information as to why.
So you’ll have to rebuild it and test it again. On average you may have to do this two or three times before the funnel finally starts to perform. Thus you are 3 or 4 months in and have spent almost $10,000 in marketing, advertising and traffic generation before you get your very first sale. Once you do, you break even and that funnel starts to perform in the next month – month 5, and then you’re able to generate additional high-ticket sales which start to generate maybe up to $40,000 by month 6. (See the figure below)
Contrast that with the validation approach. The validation calls don’t cost you anything and maybe you get it wrong the first time, but at least you have people you can’t talk to so you realize exactly where you’ve made a mistake. That means that the second time around you’re going to be much more successful and likely to actually sell 3 new clients. Instead of spending $10,000 on funnel building you spend nothing executing validation calls and by month two you’ve closed your first three sales. That’s $30,000.
Then you do it again in month two while you start to build the funnel because now you have validated information, so you close an additional $30,000 in sales while spending, say, $5,000 to $6,000 to build the funnel and drive traffic.
The brilliance of this method is that you have the cash in the bank to spend in order to get the funnel up and running. By the time you reach month six, you find that the validation call method has generated $150,000 of sales, outpacing the guess and check method by approximately $100,000. (See the diagram below)
That’s the price of doing this wrong: $100,000 in 6 months!
That’s one of the myths of high-ticket sales: that you immediately start with internet marketing and marketing automation.
But until you’ve actually validated your program and the messaging by putting the first few pilot clients in, you won’t know enough about what messaging works and what messaging doesn’t. So instead of building email automation and lead magnets and video sequences, start by talking to people.
It’s much more difficult to build a business if you choose to hide behind your computer and many of us feel safer doing that, but the fact is, in order to build a growing and thriving services business, you’re going to have to get out and talk to people – get their feedback. If you do that, it will pay off faster and with more sales.