Throwback: Pricing, Positioning, and the Art of the Upsell | Ep 895
In this episode of The Game, Alex Hormozi analyzes the business model of an artist community platform offering three tiers of service: free painting tutorials, a monthly art school subscription, and a high-end mastermind program. The discussion examines how the platform generates leads through YouTube, converts subscribers into paying customers, and sorts potential clients between different program tiers.
Hormozi provides specific recommendations to improve the platform's performance, including strategies for boosting conversions through exclusive content and a structured sales sequence. The conversation covers methods for optimizing YouTube content, leveraging the mid-tier program to drive high-end sales, and implementing systematic tracking to enhance the conversion funnel at each step.
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1-Page Summary
Business Structure and Offerings
Sam Earp has created a three-tiered community for artists: a free tier featuring painting tutorials, a $29/month "Art School" offering comprehensive tutorials and weekly live classes, and a high-end "Painter's Mastermind" at $5,000/year providing bi-weekly classes and personalized coaching. His business model not only focuses on teaching painting skills but also helps artists monetize their work and build online communities.
Lead Generation and Conversion
Sam generates leads primarily through his YouTube channel, directing viewers to a free "Landscape Painting Blueprint" lead magnet. Despite having 9,000 email subscribers, he faces challenges in converting leads to high-paying customers. Currently, Sam manages to close 1-2 sales weekly, with a notable 100% closing rate in recent efforts, though his regular close rate is around 25%. His strategy involves sorting potential clients between his "Art School" and "Painter's Mastermind" programs based on fit and affordability.
Optimization Recommendations
Alex Hormozi suggests several strategies to improve Sam's business. To boost conversions, Hormozi recommends incentivizing free community members with exclusive content access and implementing a five-video sales letter sequence. For the YouTube channel, Hormozi advises optimizing thumbnails and video intros, and testing different approaches to improve retention. He emphasizes the importance of leveraging the $29/month "Art School" to drive upgrades to the $5,000/year program, suggesting the inclusion of onboarding calls and proactive selling to existing members. Additionally, Hormozi stresses the need for tracking detailed metrics at each funnel step to make informed improvements to the conversion process.
1-Page Summary
Additional Materials
Clarifications
- Lead generation strategies are methods used to attract potential customers and capture their interest in a product or service. In this case, Sam Earp uses his YouTube channel to generate leads by offering a free "Landscape Painting Blueprint" lead magnet to viewers. Despite having a substantial email subscriber base, he faces challenges in converting these leads into paying customers. Sam's strategy involves segmenting potential clients based on fit and affordability for his different program offerings.
- Sam Earp faces challenges in converting leads to high-paying customers. His regular close rate for converting leads to sales is around 25%, but he has achieved a 100% closing rate in recent efforts. Sam's strategy involves categorizing potential clients based on fit and affordability into his different program offerings, such as the "Art School" and "Painter's Mastermind."
- Alex Hormozi's recommendations focus on improving Sam Earp's business by suggesting strategies to enhance lead conversion rates and optimize his YouTube channel. These strategies include incentivizing free community members with exclusive content, implementing a five-video sales letter sequence, optimizing video thumbnails and intros, and leveraging the lower-priced "Art School" program to drive upgrades to the higher-priced "Painter's Mastermind" program. Additionally, Hormozi emphasizes the importance of tracking detailed metrics at each step of the conversion process to make informed improvements.
- Sam Earp's business model for artists includes three tiers: a free tier with painting tutorials, a $29/month "Art School" with comprehensive tutorials and live classes, and a high-end "Painter's Mastermind" at $5,000/year with bi-weekly classes and personalized coaching. These tiers cater to different needs and budgets of artists, offering varying levels of support and education to help them improve their skills and monetize their work effectively. The structure allows artists to choose the level of engagement and support that best suits their goals and financial capacity. Each tier provides a different level of access to resources and personalized guidance, aiming to create a comprehensive learning and growth experience for artists at different stages of their careers.
Counterarguments
- The tiered pricing model may create a barrier for some artists who cannot afford the higher tiers, potentially limiting the diversity and inclusivity of the community.
- The focus on monetization and building online communities might not align with the goals or values of all artists, some of whom may prefer to focus solely on the development of their artistic skills.
- Relying primarily on a YouTube channel for lead generation could be risky if platform algorithms change or if there is a shift in audience behavior.
- A 25% regular close rate might indicate that the lead magnet or the sales funnel could be further optimized to better qualify leads or address potential customer objections.
- Closing 1-2 sales weekly may not be sustainable or scalable in the long term, especially if the goal is to grow the business significantly.
- Sorting potential clients based on fit and affordability could lead to missed opportunities if the criteria for sorting are too rigid or if there is not enough flexibility in the offerings.
- Incentivizing free community members with exclusive content access might devalue the content offered in the paid tiers if not balanced correctly.
- A five-video sales letter sequence could potentially overwhelm or deter potential customers if the content is not engaging or if it comes across as too aggressive in its sales approach.
- Optimizing thumbnails and video intros is important, but it may not be sufficient to improve retention if the overall content quality or relevance to the audience is lacking.
- Testing different approaches on YouTube is essential, but it may take considerable time and resources to identify what works best, which could delay other important business activities.
- Leveraging the $29/month "Art School" to drive upgrades to the $5,000/year program assumes that customers see enough value in the lower tier to want to upgrade, which may not always be the case.
- Onboarding calls and proactive selling to existing members could be perceived as intrusive or pushy if not executed with sensitivity to the members' preferences and needs.
- Tracking detailed metrics is crucial, but it also requires the right analytical tools and expertise to interpret the data effectively, which may require additional investment.
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Business Structure and Offerings
Sam Earp operates a dynamic community that caters to aspiring and established artists with various learning and mentorship options.
Sam Earp's Community Tiers: Free, $29/Month "Art School," $5,000/Year "Painter's Mastermind."
Sam Earp has structured his community into three tiers aimed at different levels of engagement and skill development in painting.
Community Catalog Of Painting Tutorials
The free community tier includes a catalog of full painting tutorials that extend beyond the content available on his YouTube channel. This enables members to develop their skills with more in-depth guidance.
$29/Month "Art School" Offers Full Painting Tutorials and a Weekly Live Class
The "Art School" tier, priced at $29 per month, provides comprehensive painting tutorials, weekly live classes, and courses that last 8-10 weeks. This tier aims to give complete beginners a solid foundation in painting and offer growth for more experienced painters. Some of these members are grandfathered from one-time payments when Sam started the Skooled group in 2023.
"$5,000/Year 'Painter's Mastermind': Bi-weekly Classes & On-demand Coaching With Sam"
At the top tier, the "Painter's Mastermind" provides a more intense learning experience for about $5,000 per year, depending on the length of commitment. It features bi-weekly painting classes, on-demand coaching from Sam tailored to the client's needs, and one-on-one coaching sessions with no set limit. The mentorship program mentioned at the end of his painting class may be linked to this offering, and Sam Earp also provides a free coaching call as a bonus for those who subscribe annually.
Some participants in this tier focus on mastering their painting skills, while others aim to build a career out of painting and are guided in building an audience on social media.
Sam's Goal: Inspire Painting, Pivot To Helping Artists Build Online Businesses and Communities
Sam Earp not only focuses on teaching painting skills and techniq ...
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Business Structure and Offerings
Additional Materials
Clarifications
- Sam Earp's community offers three tiers: a free tier with painting tutorials, a $29/month "Art School" tier with tutorials and live classes, and a $5,000/year "Painter's Mastermind" tier with intensive coaching and personalized sessions. The free tier provides basic tutorials, the "Art School" tier offers more comprehensive content and weekly live classes, while the "Painter's Mastermind" tier focuses on advanced coaching and career development for artists. Members in the top tier receive bi-weekly classes, on-demand coaching, and one-on-one sessions with Sam, tailored to their individual needs and goals.
- The community tiers offered by Sam Earp include a free tier with full painting tutorials, a $29/month "Art School" tier with comprehensive tutorials and weekly live classes, and a $5,000/year "Painter's Mastermind" tier with bi-weekly classes, on-demand coaching, and one-on-one sessions. The tiers cater to different levels of engagement and skill development in painting, providing varying degrees of mentorship and support for aspiring and established artists. Each tier offers a progression in benefits and personalized guidance, aiming to help members improve their painting skills and potentially build a career in the art industry.
- Monetizing art involves artists earning money from their creative work through various avenues like selling artwork, offering commissions, or licensing their designs. Building an audience means cultivating a following of people who appreciate and support an artist's work, often through social media, galleries, or online platforms. By combining these two aspects, artists can leverage their audience to generate income by selling their art directly to fans, securing collaborations, or creating exclusive content for supporters. This strategy helps artists establish a sustainable career by connecting with a loyal fan base and turning their passion into a profitable venture.
- Alex Hormozi is a business consultant known for his expertise in marketing and sales strategies. In this context, his suggestion for Sam Earp to offer a one-month trial of the high-end "Painter's Mastermind" to the $29 "Art School" members is aimed at enticing t ...
Counterarguments
- The tiered pricing model may not be affordable for all aspiring artists, potentially limiting access to those with more financial resources.
- The effectiveness of online art education compared to traditional, in-person learning environments can be debated, as some may argue that art requires hands-on guidance.
- The promise of helping artists build online businesses and communities may not account for the highly individualized nature of success in the art world, and not all artists may achieve the desired results.
- The high price of the "Painter's Masterhead" tier might create unrealistic expectations for the level of personalized attention and success in monetizing art.
- Offering a one-month trial of the high-end tier could potentially devalue the perceived worth of the program if not managed carefully.
- The focus on monetization and building online businesses might detract from the ...
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Lead Generation and Conversion
Sam Earp's journey through lead generation and subsequent efforts in conversion to high-paying offers illustrates both the challenges and strategies involved in growing a successful online business, particularly in the creative realm.
Sam Generates Leads Through His Youtube Channel, Directing Viewers To a Lead Magnet and Opt-in Page
Sam Earp engages his audience by providing a free "Landscape Painting Blueprint," which acts as a lead magnet drawing prospective customers to his opt-in page. He mentions that YouTube leads are directed to the sales landing page created on system.io, capitalizing on his strong viewership relative to his subscriber base. To bolster compliance and enhance trust, Alex Hormozi reviews Sam's opt-in page, highlighting the importance of correctly representing the value of the offer.
Sam Struggles to Convert Community Leads Into High-Paying Offers
Despite a robust lead generation strategy, Sam faces challenges in converting these leads into high-paying customers. Out of 15 individuals engaged in conversations and messaged to book a call, only about two take the action to get on a call. From these calls, Sam manages to close 1-2 sales weekly for either his $29/month or $5,000/year program. Tracking metrics is essential, as Hormozi mentions, to understand how many people transition through the funnel from responding to booking calls, attending the calls, and ultimately closing the deal.
Earp's objective is to drive potential leads into the free community and begin conversations through direct messages to pave the way for discovery calls. Last week, he achieved a 2.69% conversion rate, with a total of eight signups for his paid community, including one annual membership for the mastermind and seven organic escalations from email or the free community.
Sam's 9,000-Subscriber Email List Isn't Driving Sales
While Sam has accumulated a significant 9,000-subscriber email list, it fails to substantially contribute to sales conversions. With th ...
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Lead Generation and Conversion
Additional Materials
Clarifications
- A lead magnet is a free incentive or offer provided by a business in exchange for contact information from potential customers. It is designed to attract leads and initiate the process of converting them into paying customers. Lead magnets can take various forms such as ebooks, guides, templates, or free trials, aiming to capture the interest of the target audience and start building a relationship with them. The ultimate goal of a lead magnet is to entice prospects to provide their contact details, allowing the business to nurture the relationship and guide them through the sales funnel.
- An opt-in page is a webpage where visitors are given the opportunity to provide their contact information, usually in exchange for something of value like a free guide or discount. This allows businesses to collect leads and build their email list for marketing purposes. Opt-in pages are designed to encourage visitors to willingly subscribe or opt-in to receive further communication from the business. They are a key tool in lead generation and are often used in conjunction with lead magnets to attract potential customers.
- Compliance and trust in relation to an opt-in page are crucial for ensuring that the page meets legal requirements and builds credibility with visitors. Compliance involves adhering to regulations like data protection laws, while trust focuses on creating a positive perception of the offer and brand. By maintaining compliance and fostering trust, businesses can increase the likelihood of visitors providing their information and engaging with the content on the opt-in page.
- A conversion rate in the context of online business and marketing measures the percentage of people who take a desired action, such as making a purchase or signing up for a service, out of the total number of visitors or leads. It helps businesses understand how effective their strategies are in turning potential customers into actual paying customers. A higher conversion rate indicates better performance in converting leads into sales, while a lower rate may signal the need for optimization in the sales process or marketing efforts. Monitoring and improving conversion rates is crucial for maximizing the return on investment in marketing campaigns and lead generation activities.
- "Organic escalations" typically refer to situations where individuals naturally progress or advance within a system or process without external intervention. In the context of lead generation and conversion, organic escalations could indicate the natural progression of leads from lower-tier offerings to higher-value programs without aggressive sales tactics. It suggests a smooth and gradual transition of prospects through different stages of engagement and purchasing decisions within the business framework. This term u ...
Counterarguments
- While Sam's YouTube strategy for lead generation is innovative, it may not be scalable or applicable to all types of businesses, especially those that do not have a creative, visual component to leverage on video platforms.
- The 2.69% conversion rate, although specific, might not be impressive in certain industries where higher conversion rates are the norm, and it could indicate that there's room for improvement in the sales funnel or lead qualification process.
- A 100% closing rate from two calls in one week, while exceptional, is not a large enough sample size to be indicative of overall sales effectiveness or to predict long-term success.
- The struggle to convert leads from the 9,000-subscriber email list suggests that there might be issues with the list quality, the relevance of the content being sent, or the alignment of the audience's expectations with what is being offered.
- The focus on high-paying offers might limit the potential market, as not all leads will have the financial capacity or willingness to invest in expensive programs, potentially overlooking a larger segment of the market that could be monetized through other means.
- The strategy of downselling to a $29 program when leads cannot afford the higher-priced offering might not be the most effective way to maximize re ...
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Optimization Recommendations
Alex Hormozi provides detailed suggestions for how Sam Earp can enhance his customer journey, from community membership to higher-tier sales, and improve lead generation and conversion on his YouTube channel and website.
Improve Conversion From Community To Sales Calls
To boost the transformation of community members into potential sales leads, Sam is recommended to utilize a mix of strategies.
Incentivize Members to Book Calls With Exclusive Content
Hormozi recommends incentivizing free community members to book calls by offering exclusive content access. He advises that Sam should lock modules as a motivator for leads to get on the call, which would increase the number of weekly calls from 4 to a much higher figure. After the call, Sam can manually unlock the content for them.
Sales Letter Sequence to Nurture and Qualify Leads
Hormozi suggests that Sam should create a five-video sales letter as part of the onboarding for the $29 group to introduce and guide them through the process, potentially towards a sale.
Leverage $29/Month "Art School" to Drive $5,000/Year Upgrades
Sam Earp is advised to leverage his $29/month "Art School" to encourage upgrades to the $5,000/year "Painter's Mastermind" program.
New "Art School" Members: Free Trial or Discounted "Painter's Mastermind" Access
An onboarding call included with the $29 subscription is advised, which could lead to discussing higher-tier offerings such as the "Painter's Mastermind."
Proactively Sell "Art School" Members on Higher-Tier Offering
Hormozi advises using the "Art School" and free coaching calls as opportunities to pitch the "Painter's Mastermind" program first and lead with the high-tier option when on sales calls.
Boost Lead Generation and Opt-in On Sam's Youtube and Website
To increase lead generation and email opt-ins, several strategies are recommended for Sam’s YouTube content and website funnel.
Optimize Intros & Thumbnails to Communicate Value
Hormozi suggests that Sam should test different thumbnail concepts for his YouTube videos, including plain paintings with minimal text, a mix of his face with paintings, and ensuring text on thumbnails is legible on small mobile screens. Sam is also advised to integrate elements like a promise, a hook with pain, and clear roadmap in the first 15 seconds of the video intros to improve retention.
Integrate Prominent Calls-To-action, Like Email Opt-ins an ...
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Optimization Recommendations
Additional Materials
Counterarguments
- Incentivizing with exclusive content could create a divide between paying and non-paying members, potentially alienating those who cannot afford to upgrade.
- Locking modules might frustrate users who expect free access to content, leading to a negative perception of the brand.
- A sales letter sequence could be seen as too aggressive or salesy, which might turn off some community members who prefer a more organic engagement approach.
- Leveraging the "Art School" to drive upgrades assumes that all members have the financial capability or willingness to invest in a higher-tier program, which may not be the case.
- Offering trials or discounts for the "Painter's Mastermind" could devalue the perceived worth of the program.
- Proactively selling higher-tier offerings might come across as pushy and could damage the trust built with the community.
- Optimizing YouTube intros and thumbnails is important, but focusing too much on marketing tactics could compromise the authenticity of the content, which is often what attracts viewers in the ...
Actionables
- You can create a personalized progress tracker for members of your online course to encourage them to book calls by showing them their learning journey and potential next steps. For instance, after completing a module, the tracker could highlight the benefits of a one-on-one call to discuss advanced techniques that aren't covered in the course material.
- Consider hosting a virtual art showcase where "Art School" members can present their work, with the best entries getting a temporary pass to an exclusive "Painter's Mastermind" session. This not only provides motivation to improve their art but also gives a taste of the higher-tier program's community and resources.
- Start a peer mentorship program within the ...
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