Consequence Pricing: 1 dramatic change to improve your sales by 15x

Bryan Harris —  Bryan Harris /

What if I told you there was one thing you could do to improve your sales by 15x?

Would you do it?

I bet you won’t.

Today I’m going to share the strategy we used to improve sales by 15x, show you how to do it and challenge your thinking.

Strap up.

🙂

3 weeks ago we ran our first-ever customer success experiment.

We’ve run 100s of marketing experiments over the last 3 years but have never once run an experiment solely designed to increase the number of people who buy our course and get their desired end results. Which is sad.

Quick aside: If one of our primary goals is to help people succeed, why aren’t there entire conferences, blogs and podcasts dedicated to this subject?

Instead of endlessly talking about webinars, podcasts, launches and every micro-optimization strategy under the sun, what would happen if we started focusing on… I don’t know… creating successful students or users?

<gasp>

Kathy Sierra has talked about this extensively in her book. Read it. 

Earlier this year we made it our #1 goal as a company to help 10,000 people per year grow their email list to 1,000 subscribers and launch a product by December 31st, 2024. That’s 7 years. And that’s a gigantic goal.

The primary reason we picked that goal is because I’m 1,000% convinced that with 10,000 people per year taking the ideas they have in their heads, creating them and shipping them successfully, our world will drastically change for the better.

Better presidential candidates

Better solutions to problems like diabetes and heart disease.

Better solutions to big world problems like global warming and clean water.

The way we see it, right now, some of our smartest minds, the people who were born to solve these problems, are stuck in stupid jobs doing stupid work they don’t enjoy. But if we can reignite that spirit of experimentation, creativity and entrepreneurship in the minds of these people and in the minds of their 5-year-old kids, all of these big problems are solvable.

And the world is just more fun, peaceful and enjoyable when these things are solved.

To reach that goal of 10,000 successful students per year, we’re going to have to get a lot better at everything we do and we’re going to have to stay maniacally focused on that goal.

In order to help us stay focused, we filter every major decision we make through the Fancy Little Graph™.

This graph is important.

Why the Fancy Little Graph™ is really, really important

The journey to becoming one of our successful students is broken into three major milestones.

Milestone #1: Getting 100 subscribers

Milestone #2: Reaching 1,000 subscribers

Milestone #3: Creating and launching your first product

Those three milestones form the basis of our Fancy Little Graph™.

Most people start out on this graph in the lower left-hand corner.

Sometimes they have an idea about a cool product. Other times not.

They have no list and no basic idea how to go from bottom left to top right.

But they’re eager and ready to do something.

For people to the Success Line they have to go through 4 different phases.

Phase #1: Wantrepreneur: A whole lot of dreaming, but no clue what to do.

Phase #2: Have what it takes?: Not really sure they can actually do it

Phase #3: Legit potential: It’s getting hard but I think I can do this.

Phase #4: Successful student: BOOM! DID IT!

Each phase has its own unique challenges and struggles.

But a successful student will navigate all 4.

Here is where it gets tricky though.

Most people who start this journey will not complete it.

They won’t reach the Success Line.

Each phase has roadblocks and challenges that cause people to drop off and quit.

We call these the Moments of Doom.

For people in the <100 subscribers (Wantrepreneur) phase, those Moments of Doom look like…

  1. Deciding on their topic or niche
  2. Getting their website set up
  3. Getting their first 100 visitors to their website
  4. Writing their first blog post
  5. Picking our their email service provider

At any point, a person on their journey to the Success Line could reach one of these items and experience a Moment of Doom. If they do they’ll almost always quit.

If they get stumped on picking out the topic they’ll focus on, then they’ll never move forward, they’ll never get to 100 subscribers, then life will get in the way and shortly after they’ll quit.

Then they’ll never realize they have legit potential, they never run for president and we’re all left sitting here trying to decide between Trump and Clinton, all the while shaking our heads and wondering how on earth it got to this point.

I’ll tell you how…

The person who should have run experienced a Moment of Doom and quit.

So…

Our job is to do a few things:

Thing #1: Figure out what the Success Line looks like for our users.
Thing #2: Know the major milestones our users have to pass in order to reach the Success Line.
Thing #3: Identify the Moments of Doom for each milestone.
Thing #4: Keep those Moments of Doom from causing our peeps to quit.

$60k in sales from 1 successful student

The best growth hack ever invented is a successful user.

Increasing the number of people who use your product and pass the Success Line is the best thing you can do to grow your business.

Why?

Successful users buy more things from you.
Successful users go out of their way to make sure people buy stuff from you.

Don’t believe me? This post is a living example of that. In the introduction I shared Kathy Sierra’s book Badass with you. (Click here to get it because it’s incredible.)

Why did I share it? Because it made me successful and I love looking smart by giving people suggestions on things they’ve never heard of before. And you do too. And your users do as well.

Successful students are the single best point of optimization in your business.

Create 1,000s of them and you’ll never have to market a day in your life.

Quick example…

The first time we launched our course Get 10,000 Subscribers, one of our customers was Cathryn Lavery.

She bought the course, went through it and successfully built a list and launched a product.

She got to 3k subs and did over $300k in sales. All within 90-ish days of buying the course.

You can read her entire story here.

Now she is consistently one of our #1 partners for the course. She’s sold over $60,000 of the course to her audience.

Again…

Successful students are the single best point of optimization in your business.

1 dramatic change to improve your online course sales by 15x

Alright, sorry for the long intro, but none of the rest of this would make sense if you didn’t first understand the lens through which we are running this business.

I started this article by telling you about 1 dramatic change to improve your online course sales by 15x.

That change revolves around this hypothesis:

If we can get people who are in the Wantrepreneur (< 100 subscribers) stage to experience a tiny amount of success and overcome one of the most common Moments of Doom, then they are more likely to buy stuff from us and reach the Success Line.

So, this is what we did…

First, we looked at the Moments of Doom for people in the first phase on the our Fancy Little Graph™.

Second, we chose the first Moment of Doom, “picking your topic,” and built a mini-course to help people quickly overcome this roadblock.

We called it the Decide Already Course.

Third, we gave the course away to everyone on our email list for free.

BUT there was one significant caveat.

In order to get the course, you had to choose a consequence for yourself if you didn’t successfully complete it.

The consequence choices were $10, $50 or $100.

So, if you completed the course, you got it for free and you successfully blew past the “pick your topic” Moment of Doom!

Woot!

But if you didn’t do the work and successfully complete the course then you were charged for the amount you’d chosen for yourself.

(Note: I’ll give you a detailed rundown of the technical implementation of this in a minute.)

Here is were it gets absolutely fascinating…

Look at what happened to the success rate of students when they chose a monetary consequence for not finishing.

In the spring of this year we offered a free mini-course, Audience from Scratch. We offered it to the entire email list. There was a limited time to take the course (14 days), it was 99% video-based and it took less than 45 minutes to complete.

The success rate on that course was 12%.

Then we offered the Decide Already mini-course 3 weeks ago. It was free too, but you had to pick a monetary consequence. It had a limited time as well (10 days), it was 95% text-based and took 2 hours to complete.

The success rate on that course came to an average of 80%.

Here’s a breakdown of the results:

672 people signed up for the $10 consequence level. 474 of them successfully completed the course, for a 70.54% success rate.

69 people signed up for the $50 consequence level. 61 of them successfully completed the course, for a 88.41% success rate.

61 people signed up for the $100 consequence level. 55 of them successfully completed the course, for a 90.16% success rate.

Here is a fun graph version:

*mind = blown*

So…

Let’s summarize real quick.

Simply by letting people choose a $10 consequence for not completing the mini-course, our success rate went from 12% to 70%!

This is incredible.

But it gets better.

Check this out: Students who successfully completed the Decide Already mini-course were 15x more likely to buy our product, 10ksubs, than those who didn’t take it at all.

I’m going to type that line again just in case you are skimming this article.

Check this out: Students who successfully completed the Decide Already mini-course were 15x more likely to buy our product, 10ksubs, than those who didn’t take it at all.

15x!!

An argument could be made that these people would have bought anyway. Maybe. But people who successfully completed the course were 6x more likely to buy than those who took the course and didn’t successfully complete it.

In my estimation the point of successful completion is a critical inflection point at which someone becomes substantially more likely to buy than before.

Before we get into the how part of this article, here are my two major takeaways:

Takeaway #1: Consequence Pricing models can exponentially increase the success rate of your students.

Takeaway #2: Successful students are significantly (15x in this case) more likely to buy from you.

Conclusion: Creating more successful students = creating more revenue for your business

Here’s how we set everything up.

If by this point you aren’t convinced that creating successful users is really important, I’ve failed you.

But you’re smart and you get it.

So here is how we set up our Consequence Pricing program.

I’ll preface this by saying that we use Infusionsoft, which I am well aware that many of you don’t use. That’s why I’m going to lay out what we did, and then later on, I’ll share how you can do the same thing with a cheaper setup.

Step #1: Create a $0 order form.

This form is to capture the student’s information, including credit card information. We made the “purchase amount” $0, so we weren’t actually charging anything with the first official order.

decide-already-order
Step #2: Once they completed the form, they were auto-registered for the course that we created in Teachable.

We used Zapier to create this auto-enrollment.

zapier

Step #3: On the back end, we put everyone who enrolled into the course on a “Wait” sequence in Infusionsoft. (More on this in a second.

Step #4: We then created a Google Form to act as a “Success Form” that they needed to fill out within ten days of the course opening and placed it in the last lesson of the course.

If they filled out the form by that date, then they would not be charged.

This was done by using Zapier to tag their account in Infusionsoft if they filled out the Google Form. This would remove them from the “wait” sequence so that their card would not be charged.

Here’s a snapshot of the simple Google Form we created:

decide_already

Step #5: We announced the Decide Already course to the email list.

Since this was a first-time experiment, we didn’t promote it heavily.

We simply sent out one email (which you can see below) and added the information as a P.S. in a few subsequent emails.

screencapture-mail-google-mail-u-0-1476812889625

How can you do the same thing?

Do you like this idea and want to try something similar for your own course?

You don’t have to have fancy software like Infusionsoft to do it.

It will take a bit more hands-on work, but it can totally be done with much cheaper tools.

Here is how you can run a similar setup with SamCart:

Step #1: Set up your $0 product in SamCart.

dashboard___samcart

Step #2: Integrate the product with your Learning Management System (Teachable, Thinkific, Zippy Courses or whatever LMS your course is hosted on).

Step #3: Create your Success Form using Google Forms.

Step #4: Share the link to your Success Form in the last lesson of your course.

where_do_i_go_from_here____videofruit

Step #5: Announce your course and tell everyone to enroll.

Step #6: Create 3 more products in SamCart: the $10, $50, and $100 consequence charges.

dashboard___samcart

Step #7: Go through your Success Form submissions and see who didn’t complete the course. Add the correct product charge for the consequence they chose and charge them.

dashboard___samcart_%f0%9f%94%8a

dashboard___samcart_%f0%9f%94%8a

How we will use this going forward

Consequence Pricing gets me excited.

Why?

Because it creates more successful students who make the word better and generate more revenue for our business.

So, how we will use this going forward is…

In Q2 of 2017 we will be releasing a massive update to our course, 10ksubs.

In that update you will have the ability to start each module by selecting the time frame you want to complete the module within (we’ll give you a few suggestions) and a pick a small financial consequence for not hitting that goal.

We will also allow you to opt out of this if you’d prefer, but we’ll show students how much higher their likelihood of success will be by choosing this.

So… yay!!

Awesome successful customers are awesome for the world and awesome for you making money.

Your Action Items: Create a Fancy Little Graph™ for your customers, pay attention to top-of-the-funnel growth 10% less and start optimizing for the success of your existing clients 10% more. 

PS: What do you think about this experiment? Does it make you want to do something similar OR do you think it’s silly? Let me know in the comments below.

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  • OMG I love it! I was actually thinking of doing this as a challenge instead of a course in early 2017 when everyone freaks out about their finances. So it’d be something simple like track your spending for 10 days or something like that. When I implement this, I’m SO sharing my results with you. The trick now is to promote it and get as many eyeballs on it as possible….

  • I like the way you laid down the process of creating, pricing and promoting online courses.

  • Maryna Cherniavska

    I wish I could like it, but I was in the minority that had to pay those $10.

  • coachroland

    Hi Bryan, this experiment was the reason I had enrolled in the “Decide Already” course. I saw immediately the advantage of it and knew I’d finish it – whatever it takes. Genius concept!

  • Shawna Barnes

    I really like it. In fact, I have been wondering how to sort of guarantee buyers stay engaged after purchase and don’t just add to their pile of shiny new objects never looked at twice. I’m curious what other ways there are to incentivize, in addition to monetarily.

    P.S. I’m also curious how we best create presidential candidates. I’m thinking that is a bigger task than we know. It also makes me wonder what we keep and how we have to adjust our expectations. Hum. More to ponder here. Thanks!

  • Love it Bryan –

  • Love this method.

    The only thing I noticed is a step was missing. Where in the process did they select the amount of the consequence they wanted to be charged connected with Sam Cart?

  • Bryan you’re definitely a trail blazer. We’ll soon be inundated by other marketers who’ll be so eager to jump in your footsteps with this strategy.

    • Probably not on this one. You’d be shocked at the resistance I’ve gotten from ‘big names’ when I tell them about optimizing for student success. It’s crazy.

      • KIC

        Interesting :/

      • Kimberly Ds

        Huh??! But why @bharris007:disqus ?! This concept makes a lot of sense… I was already thinking how I could use it in the future, when I received your email.
        Thanks for laying down the procedure for implementing this. One thing I do not understand though, is how does the card get automatically charged if the person doesn’t complete the course? How exactly do you set that up? Is that possible only with Samcart?

      • @bharris007:disqus what kind of resistance? What were the objections?

  • Robin

    As one of Bryan’s successful student , I can only relate to that, I always refer to Bryan and tell everybody who asks me about “marketing” to read Videofruit, which is kind of my 80/20 marketing ressource. His Santa-claus formula got me a job as marketing officer at one of the top european startups (fastest growing european fashion startup, all boot-strapped).

    A simple question though Bryan : how do you create the graphics at the top of this post ?

    • Not positive, but I know he used to do most of his graphics in Keynote. Just using the simple drawing/text tools.

  • I was part of the course and the financial consequence made me implement real-quick, lol…Yes, I’ll definitely be using this strategy in my upcoming mini-course launch on mastering starting conversations with anyone

  • I’m reading this and seriously considering building my courses/business totally on that framework….
    I personally think I would be 100% OK with making no money from courses if it meant that all the people who took it finished it (and maybe passed a simple exam as proof). Just knowing it would mean that the world was a better place because of it would be a great way to be paid….
    I think doing that and also mixing side products (like ebooks or other extras) with “pay what you want” sticker price would make a great business structure (for me).

    Thank you for sharing your results!

  • Bryan,

    Pretty sleek implementation of a concept I liked in the past, but forgot about it because it wasn’t served in a silver platter.

    Now I have no more excuses 🙂 Thanks dude, great post

  • Looks a lot like the graph from the Tim Cook / Steve Ballmer article posted 2 weeks ago….is this my imagination? https://uploads.disquscdn.com/images/a8ff0dcda8cc00b3e4c175de66067d49035e5afbb495660896e4264a957aeba3.png

    • Hadn’t seen that one. Love Tim’s work tho. Our graph came from Kathys book.

  • I can 100% vouch for this. I purchased Product Launch Formula in 2007, used it and have run successful launches over they years ever since. I have told thousands of people about this experience through my email lists, forums, on Facebook and Linkedin, and who knows how many people have purchased PLF through my recommendation before I was an affiliate.

    A few years ago I became an PLF affiliate and have sold tens of thousands of dollars worth of PLF since then. Same for Frank Kern (although I’m not an affiliate, I just share his stuff because it’s awesome). And Aweber, and LeadQuizzes, and LeadPages. I’m an evangelist for people and companies who have helped me succeed. And there’s a lot of others who are the same.

  • jaredkimball

    Bryan, this is epic.

    Setting people up to succeed should be the primary goal of any product or service.

    I bet when people purchase a product or service and they achieved the results/goal that was promised to them they’ll be more likely to buy additional products and services from the same company (like Apple for example).

    It’s not about making as much money as possible now it’s about creating a customer for life.

    Customers prove a business idea but repeat customers sustain a business for the long term.

    Thanks for sharing this!

  • Very clever Bryan and so genuinely good. It reminds of those who make you support a cause you don’t like if you fail. Evernoting this puppy for when I’m launching something

  • Ladislav Rydzyk

    This is something what I Was looking for.
    I have high number of people opted in for my free programming training (http://abapacademy.com ), but very few students get into action. My percentage rates are about the same as in your graphs.
    And this is great strategy Bryan 😉
    Thank you for sharing it.

  • Justin Carter

    Sensational work Bryan, really inspiring stuff. Love how much free quality content you are giving away!

    I’m sure you have already noticed it, next to point 5 under the Moments of Doom chart part I think you wanted the word out instead of our which is written.

    Again thanks for the awesome work, I can’t wait to enroll in the next course!

  • April Ebeling

    Love knowing how you implemented this. It’s so step by step simple and a genius concept!

  • Michael Katzmann

    Wow! This is one of the best post I have ever read!!!! Thanks a lot :-D. I will have this Tab open till I implemented the knowledge I got here. Thanks a lot !

  • Quick aside: If one of our primary goals is to help people succeed, why aren’t there entire conferences, blogs and podcasts dedicated to this subject?
    Instead of endlessly talking about webinars, podcasts, launches and every micro-optimization strategy under the sun, what would happen if we started focusing on… I don’t know… creating successful students or users?

    Kathy Sierra has talked about this extensively in her book. Read it.

    Afreakinmen.

    Excited to read it.

  • Great focus on driving results!
    I was just chatting with Brian Kurtz this week about my internal angst with info-marketing since I know that most never take action on it, but spend plenty of money on.

    I was looking at doing a more choose-your-own-adventure type email series that continually reminds users to move to the next step in my upcoming book, but this is so much more simple, and likely way more effective, too.

    Thanks for blazing the trail on this, and sharing your results!
    I’ll let you know how it unfolds with my book launch and related materials in the next few months.

  • Another way to implement behavioral conditioning like this is to reward them if they achieve the criteria. I’ve been doing this for a couple of years and it’s incredibly effective. It’s partly how you word it. Let’s say you have a $897 mini-course. Instead of charging $897 for it, you charge $997 for it, but tell them that if they achieve a certain set of criteria, they will get $100 back. I’ve gotten a 90% completion rate including very high interaction and engagement during the course, every time I’ve run it that way. I think the people who don’t get their money back don’t feel quite as “punished” as people who are charged money later. My whole focus is on client results, so I love this post and the fact that you’re focusing on results!

  • Rob

    When/If you get to that 2nd moment of doom, I’d like to partner with you. It’s my mission to help starters with their business websites, all the confusing technology parts. Anyway, love the on-the-hook mentality here. I’ve been considering this scary thing for a while, giving away all my services and digital products, for free, at least people first purchases of them, even if they cost me hours and hours and hours of work…why because I think once you work with me you won’t go anywhere else.

    This post gave me the idea to do that, but also put the buyer on the hook to accomplish their goals, whats if I gave it all away if they didn’t abandon their sites, or they made their first sales, what if I built their website for free, only if they made their first sale, or hit some measurable target, then they’d be overjoyed, would most certainly come back, and get their first work from me for free, if they failed, well they would pay normal pricing and continue on, hopefully more prepared for the future. Likely though, both me and audience would do more succeeding. Hmm cool thoughts

  • Bliss O. Oharisi

    Menh…. this is just superb believe me, I haven’t seen anything like this and I have had more than three different ideas reading this.
    I’m just blown away with this idea and I’m so loving it.
    Thanks Bryan.