Keith Goodrum

Ryan Healy answered a pricing question on his blog today. A regular reader asked his experience with pricing.

Here is his response…

Should Prices End in 7?

“…There are all kinds of opinions.

I’m not big on ending in the number 7.

Just test it and see what works best…”

Wait a minute… Are you saying that we should test pricing points?!?

That’s CRAZY talk!!!

Aren’t we suppose to follow the herd, and not question the mighty “7″?

All kidding aside… I’ve tested pricing with my off line business. There were some interesting results.

But first a little background…

My offline business was residential window cleaning. So, I would go in and give an estimate. They would book on the spot, call me for an appointment or not have us clean their windows.

When I first started out only 1 in 3 would book a window cleaning appointment. That was a lot of estimates to give out, and a lot of time spent running around town.

Finally A Customer Came to The Rescue…

This went on for 2 months, and it was tough earning a living. I couldn’t figure it out. I was establishing good rapport with the customers. I looked professional with a nice clean truck, clean clothes with an embroidered polo shirt… I looked the part.

Finally a customer took me aside and told me what the problem was. My prices were too low! She said that my pricing lack credibility. It seemed to good to be true. I was shocked to hear this… I thought I was giving a good value for my services.

I went out on the next estimate and raised my pricing by 25%. Over the next few months my closing ratio jumped to 84%. My calender stayed booked out for 6 weeks… it was great.

Another Valuable Piece of Advice

This time Dan Kennedy said in his newsletter if you are up to your eyeballs with customers then it’s time to raise your prices. I was afraid to follow this advice. I thought all my customers would jump ship.

I finally decided to give it a try…

It took almost a year of thinking about this to give it a try. I timidity inched my prices up by 10%. No one said a word?!? So, I kicked it up another 10%… no one noticed.

Now I got bold.

I decided to see how far I could go with this… I kept raising my prices 20% at a time. Now, my closing ratio started falling. But I kept raising my prices.

I kept going until my closing ratio fell to 47%. And I was thrilled. Why? Because I was making more money while cutting back on my hours. It was nice not working sunup to sundown.

Well, Ryan that’s one of my experiences with price testing. Maybe I write about another one next week.

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James Brausch was nice enough to send the first copy of his Testing Newsletter. I got home yesterday, and there it was sitting in my inbox. I downloaded it, and printed it out to read. I noticed that several people who have reviewed this also printed out their copy.

This edition is 15 pages chock full of testing results with James giving a summary of each test. The best part is that all the testing results come from one sales page. I like this because you get to see each test conducted, not just the ones James liked.

There is a lot of information to digest, and I have already read it over several times. Each time through the letter adding more notes in the margins. Good stuff…

The one thing that surprised me was that his intern program has a lifetime customer value. But, his explanation makes perfect sense.

I’m a big fan of testing, and this newsletter really delivered. He breaks each test down by variable and includes the results. And it gave me some great ideas on how to apply it in my testing.

I found his last page to be very thought provoking with the questions he asks.

The big question is can you afford not to test? Reading his newsletter further cements my answer to this question, which is no.

If you want to see behind the scenes of James Brausch’s testing, then this is the letter for you. You will learn a great deal about testing, and grab ideas to apply in your business.

You can get a subscription to his newsletter here http://www.diegonorte.org/testing/

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James Brausch is giving away a free copy of the first issue of his testing newsletter.  It will be cool to see what James has come up with.

There are 3 conditions he asks for each person to do to get a free issue.

1. Make a blog post about the free newsletter offer.

2. Give an email address in the post, if your whois information is not correct.  My email address is keithgoodrum@gmail.com

3. Promise to give a review of the newsletter as a blog post… good or a bad.  I promise to post a review here.

Thank you James for making such a generous offer.  I’m looking forward to reading the newsletter.

If you would like to get a free issue of the news letter, then do what I just did.  Check out the post by James here:

http://www.jamesbrausch.org/anyone-want-a-free-copy-of-testing/

James is giving everyone until noon Tuesday to take advantage of this offer.  Make a blog post, and take some action.   It’s not hard to sit down, and write a quick response. I’m curious to see how many people take him up on this offer.  Want to bet it’s around… Oh, I don’t know…. Let me take a guess… 2%! 

Rewards come to those who take action.

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It sounds funny to say that, but some people have that attitude. I’ve seen people actually say they can pick a winner just by reading the letter.   Nothing like a healthy dose of misguided confidence!

If that were true, then the big direct marketing companies like Boardroom, Phillips and Rodale wouldn’t need to test. All they would have to do is find these people, hire them, lock them in a room and make them read sales letters all day.

Imagine how much money they would save by not testing… they would have these folks pick out the winners and boom they would mail out the winning sales letters and rake in the big bucks.

If It Were Only That Simple…

It reminds me of when the newspaper will have the local stock pros in a competition with a monkey, or a dart board. They will give each contestant say $10,000.00 in play money and let them pick stocks. The contest will usually run for a couple of months. Each week they publish how each contestant is doing.

The paper will show a picture & profile of each contestant. It’s fun to read the stock pros confidently discussing their picks. They talk about past performance, P/E ratios, debt to income… Then the paper shows a picture of the monkey with his thoughts - Oh, oh, oh, oh, oh, oh, oh, oh, oh!

The best part is the monkey often will do as good if not better than the stock pros. This goes to show how unpredictable the stock market can be.

And Can Be Said For Picking Sales Letters.

You can never know how your customers are going to respond until it goes out there. They are anything if unpredictable.

The moral of this post…

Testing & tracking is the only way to find a winning sales letter. One of the easiest ways to test is by doing an A/B split test. Google has an excellent split tester called “Website Optimizer”. It’s free to use, and easy to setup. I’ve created a procedure videos showing you how to set an A/B split test with Google’s Website Optimizer. Here is the link to the A/B Split test set up procedure.

I forgot to mention the procedure videos are also free.

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Did you know that within each business lies an untapped goldmine waiting to be found? And with rare exception it’s sitting there gathering dust waiting to be dug up.

The funny part is this goldmine is usually the easiest money most businesses will ever make. In fact this goldmine is usually begging to be mined. Loudly in most cases. But, the business owner will bow his neck, and ignore this goldmine at all costs.

It’s the easiest to find.

It’s the easiest to market to.

And the easiest to convert into sales.

Have you guessed what it is?

This untapped goldmine is past customers. OK, before you click away let me explain why you should focus on your past customers.

You created a marketing strategy to attract a certain type of customer. Intentional or not, you are bringing in a certain type of customer. Past customers fit very well into your demographics… That’s how they became customers in the first place.

Past customers have already responded positively to your marketing. Since you know how to sell to them… it’s easier to make a second sale.

They see you as an expert in solving one of their problems. In their eyes you have authority & credibility.

You have already established a relationship.

They are eager to do business with you again. Heck, they are looking for reasons to throw money at you. Why disappoint them?

Guarantee your highest conversions by marketing to your past customers.

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Testing is vital to the profitability of your online business. It’s the only true way to validate how well any ad will perform. You can get a parade of experts, friends and peers to review an ad and they will give different opinions. Notice I said opinions, because that’s all they are. Yes, some people’s opinions are better than others. Because they have varying degrees of experience and skill, but all the same they are still opinions.

Testing will give the opinion that matters the most… the opinion of your customers. The customers will vote with their wallets. If they like your ad, then they will buy… If not, then you don’t make any money. It’s as simple as that, and you must test to find out what your customers want.

Many of you are nodding your head in agreement. You understand the value you get from testing different headlines, optin forms or even pricing. You’ve seen other people report the results of their testing, and how much it has helped. Intellectually you know testing needs to be done, but many are not. Why? I’ve heard many excuses, and some of them I’ve used. Like:

“I don’t have time.”
“I don’t get enough traffic.”
“It’s too much of a hassle.”
“I never can get the *&?@*~%! Software to work right.”
“I’m not sure how to set it up.”

Here’s the answer to your prayers…

OK, so maybe it’s not the answer to your prayers. I realize that testing is not a huge priority for most people. But I do know this… You will become hooked once you start testing. You see the results, and start trying to figure out new ways to improve a page.

I’ve been working with a split-testing software that is free, you don’t have to download anything and it’s easy to setup and run… Once you know how. So, to help you with that; I’ve created some videos that take you step by step through the process of setting up an A/B Split test with this software. You can easily set-up your own by following my new product Set-Up A/B Split Test.

The videos are free so head on over there and check it out…

Here’s the link again: Set-Up A/B Split Test.

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When I started my offline business I studied a well known marketer and copywriter Dan Kennedy. He wrote that I needed to test all of my marketing.

The reason you need to test is because you can’t predict how well any ad will perform.

He said I needed to test Display Ads, Yellow pages, Val Pak, sales letters it didn’t matter. He also taught me that I needed to test elements within each marketing piece.  Like headlines, prices and stuff like that.

Well, I didn’t know any better… so I did what Dan said. I started testing ads and the different elements against each other. Finding out what worked, what didn’t and tracked the results.

This was exciting and fun. I could see how testing was profitable and saving me money. I would keep ads that were working and toss out the ones that were losing money.

Imagine my surprise the first time I met a business owner and found out he didn’t test! Then I met another business owner, another and another… not one tested. It finally dawned on me that I was the only one testing my marketing.

I guess I shouldn’t have been surprised.

Well, I’ve made the move to online marketing, and have transferred my testing habits here. Actually it’s much easier and faster to test online vs. offline.

And the best part… It’s free. That is if you use tactics to drive free traffic to your websites.

The least you should do is A/B split tests of your headlines. It’s easy to setup and return on investment is well worth the effort.

On Stephen Dean’s blog he give a great explanation why it benefits your bottom line to test. You can check it out here:

http://www.stephensblog.com/?p=209

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