(note to Ramit: If you read this, I invite you to post a detailed response in the comments)
This year, Ramit Sethi at I Will Teach You To Be Rich launched a high-end information product called the Earn 1K. The basic idea is a detailed, step-by-step guide explaining exactly how you can earn your first thousand dollars as a freelancer.
Ramit has always put out great content, so I figured why not take a look?
And then I saw the price point: $999
I was skeptical. I didn’t believe there was enough of a market to justify this high price. $100-$200 was a reasonable possibility, but $999? That’s crazy! But after talking to some third party sources, I heard that the program has actually been selling extremely well.
In full disclosure, I haven’t bought or read the Earn1K. I don’t feel like spending $1,000 to learn things that I personally already know. However, I was intrigued by this success and wanted to dig a little deeper.
So I started walking through the Earn1K sales funnel. I went to Ramit’s site and clicked on the Earn1K link. Then, I signed up for his newsletters. I also read his most recent blog posts from the last six months to get a good idea of the channels he was using to promote his offering. Finally, I took a long look at his FAQ section.
There are several things that I like about Ramit’s approach:
On the Earn1K FAQ, Ramit is very upfront about the fact that this program isn’t for everyone. He goes out of his way to say that if you are in debt, you shouldn’t buy this product and instead focus on saving money.
This is a very unusual tactic. Most people would sell their product to anyone even thinking about buying, but Ramit has more integrity than that. He believes that there is a market for his product, but that there are also people who don’t fall in that category.
The good news: this integrity helps potential buyers trust him even more, which ultimately leads to more sales and a better overall brand.
Investment, Not Product
Ramit has done a masterful job of branding the Earn1K as an “educational investment.” People who complete the program are called “Earn 1K Graduates.” This helps put the Earn1K in the “online education” category of products, which are very expensive. Here, people aren’t just paying for information, they are paying for a brand and a credential.
The Earn1K is an impressive achievement in branding, especially considering that it isn’t an accredited program.
Price Signaling And The Allure Of Exclusivity
Ramit has a large number of preview videos and other material that helps drive sales. In all of these materials, he pitches the Earn1K as a very exclusive product. He implies that if you buy the product, you will have access to information that others simply can’t get very easily.
Another trick here is the concept of Price Signaling. By charging a high price, Ramit is implying that the product is worth a lot. The reasoning is that if others are willing to pay this high price, there must be something special about it…and I’ve got to find out what it is! This is the same concept that helps sell high-end cars and expensive timeshares.
While this is very smart marketing, I’m not sure I believe that this information cannot be found elsewhere for free, or at least at a MUCH cheaper price.
A Long Sales Funnel
Ramit doesn’t just try to sell you from the first moment. Instead, he first lures you in by offering a free “idea generation tool” which will help you determine ways you can make money. In order to get this tool, you have to sign up for the Earn1K newsletter. Ramit then sends you a long series of e-mails, starting out with softer sells that highlight his own successes. If you don’t buy, he then sends you significantly more aggressive e-mails.
In fact, one of his e-mails is actually called “The Hard Sell…Be Very Afraid.”
Some people might think this is over the top, but I actually think it makes a lot of sense. It is different, and bluntly honest. It is very refreshing from all the scammy stuff we see in e-mail marketing these days.
30-Day Money Back Guarantee
Some people are afraid to give a money back guarantee. Big mistake. Having a money-back guarantee is one of the best ways to increase sales, and very few people actually try to return the product. Tim Ferriss actually discusses this extensively in the Four Hour Work Week.
This is actually a fairly new development. Evidently Ramit was getting a lot of questions about the price from people who wanted to buy, but didn’t have the cash on hand.
Creating a payment plan is a very smart move. It opens the product up to a new market, and as a bonus, Ramit is giving away another one of his information products, the “Scrooge Strategy,” to anyone who buys right now.
Have you heard about the Earn1K? What are your thoughts?