I asked our Facebook group what they thought the secret was to charging more. And then I got a bunch of good answers to what was essentially a “trick question,” like:
- Believing in the value you create/believing that you deserve the rates you charge.
- Being exclusive.
- Solving big problems.
In my mind, though, the secret to charging more is simple:
Who are you selling to?
That's the secret. And in this episode of the podcast, I'm going to give you a few examples to demonstrate this idea, starting with Tony Robbins.
When Tony Robbins Turned Down $1 Million From A-Rod
So everybody knows that Tony Robbins charges about a million dollars for one-on-one coaching. He's actually booked out at this rate. What a lot of people don't know, is that he has a backend on that fee. He gets profit-share on the growth he's able to help you create.
Now, if Tony Robbins charges people that kind of money, well, who are the best people for him to go after?
What made me arrive at this discovery is when Tony Robbins actually turned down A-Rod as a client. Which is insane. This guy is dangling $1 million in front of your face for one coaching call per month for 12 months and you turn it down. Why would he do that?
The answer is in here:
This is Tony Robbins finding his ideal customer, which is hedge fund owners usually. Big-money guys who get performance fees. It's pretty much the highest-paid profession out there.
If you can land Paul Tudor Jones as a client, who could make an additional $200 million a year off your coaching, your performance fee or your ability to anchor your pricing is going to be greater than any other industry.
So, of course Tony Robbins will turn down A-Rod because A-Rod's money is not worth his time when he can get a percentage of Ray Dalio's or Paul Tudor Jones' earnings.
He's using Money: Master The Game, not just to sell a product, but also to interview his ideal client profile. He's going after the world's greatest investors, the people who give him the greatest possibility of income.
So shifting who you sell to is how you create the ability to charge more.
This idea doesn't just apply to performance coaches.
The Easy Way To Go From $1,500 Retainers To $5,000 Retainers
I recently had a call with an agency owner who does lead generation for his clients. He told me his retainers are around $1,500 for chiropractors but $5,000 for solar panel companies.
You want to look at the greater architecture of the industry. Who actually pays for the roof? It's almost never the homeowner. It's an insurance company. And insurance companies are going to be some of the biggest people that you can get money out of.
That's why personal injury attorneys are a $30 billion industry. It's 30 times the size of the coaching industry and 6 times the size of the music industry. Because they aren't getting paid not by the people involved in the accidents, they're getting paid by insurance companies.
In the case of solar, the person who pays for the solar panels is a lender and then the lender is going to have a lien on the property. Because there's a lender taking a lien on the property, they can charge more.
Whenever financing is involved, prices will inflate.
Another example, higher education. As soon as student loans became common, and then student loans became something that you couldn't default on, the price of going to university grew and grew to astronomical numbers.
A Rule Of Thumb From The World Of Direct Response Marketing
If you choose the wrong niche, you'll be dead in the water from the beginning. If you choose the right niche, your odds of success will be massive.
There's a useful concept I learned from Direct Response Marketers and it goes like this:
60% of your response is determined by the list you're mailing, 30% of your response is determined by the offer you're mailing, and only 10% is determined by your sales message.
If you have a hard time raising your rates or charging what you want, and you know your offer is good, take a look at who you're selling to.
Repositioning your offer to serve a different audience can be the difference between you making $1,500 per month per client and $5,000 per month per client.
I experienced this myself when I was selling for gun.io:
“Our initial positioning was something like ‘we help you find badass developers to build your projects.’ Which is fine, nothing wrong with that, but I noticed we’d get a lot of startups. I hate startups. People use the word ‘startup’ to hide the fact that they don’t have a real f*cking business. And if they ever say ‘we’re a startup’ on a sales call, y’know, they’re asking for a discount.
“So we repositioned to 2nd-time entrepreneurs. People who’ve had an Exit and are on their second go-round. Where either the founder was technical or they had a co-founder who was technical.”
The new leads clearly understood the value of our offer and they were able to charge a lot more. This got us to $1 million a year. After that, it was just a matter of doubling-down on what worked. That got them to $2 million.
Over the years, I've been able to fine-tune this process into a proven system for getting clients to $1 million in revenue. In 2019, we helped 21 businesses hit million-dollar run rates.
If you'd like to discover this system for yourself, watch our free case study. Click on the link below to get access.