This week on the podcast, we are talking with Racheal Cook, an MBA-trained business growth strategist and founder of The CEO Collective. She shares her story of leaving the corporate world and starting her own business. She also explains how to get real conversation rates to decide which marketing strategy will work for you. In addition, we discuss the impact of small audiences and how they can help you reach your goals, the minimum recommended price point for your signature offer, and how you can verify if it will create the revenue you need to pay yourself well! Tune in for more genuine insights from Racheal.
Topics discussed in this episode:
- Why Racheal left the corporate world
- How Racheal started her solo career as a “yogipreneur”
- When low price point products make sense and how to serve fewer people at a higher price point
- Why audience size is essential for your business strategy
- The importance of thinking about visibility differently
- Three core ways to start growing your audiences
- How to optimize for simplicity in your business
- Why you have to know how many clients you want to serve and how much you want to make
- How to build all of your services into your selling prices
More on Racheal Cook:
Instagram | Website | Podcast Promote Yourself to CEO
Britney Gardner 0:03
All right, Rachel, welcome to the show.
Racheal Cook 0:06
Thanks for having me. Brittany. I'm excited to be here.
Britney Gardner 0:09
Yeah, I'm actually really interested in this topic. I've I've done low ticket offers, I've done higher ticket offers. I've done inbetweeners. I don't even know if people call those like middle ticket. That's, that's a weird name. But I am interested in hearing someone else's take on this, I've heard a couple different perspectives. And I know that everybody who talks about you know, their thing is like, this is the be all this is everyone, we should all do this. And I don't subscribe to that philosophy at all. But I'm interested in hearing your take. So before we get into that, if you could give us just a little bit of background, I'd be great.
Racheal Cook 0:43
Sure. So hello, everyone who's never met me before. I'm Rachel cook. I am the host of the promote yourself to CEO podcast and founder of the CEO collective where we help women entrepreneurs to scale service and expert based businesses. And I am really excited to talk about this topic today. Because I remember when I was coming into the business space, I had left corporate consulting, after basically a severe burnout, that had me thinking to myself, I can't go back to corporate consulting, anyone who understands the consulting world, you know, they like really grind you down to nothing, you're traveling all the time working 80 to 100 hours a week, you're living out of a suitcase on the road, it's exhausting. And when I decided to start my own business, bringing what I knew from more corporate work, working with much bigger organizations to smaller owner operated businesses, I was hearing a lot of really conflicting advice, it had me very confused. And one of the things that I heard, and this was probably around 2009 2010, when I realized I wanted to take my business in a more flexible direction was I heard so many of these so called experts saying, well, to grow your audience and your business online, you need to start with a low price point offer. And once they buy that $27 $47 offer, then you invite them to the $97 offer. And then you go up to the 190 $7 offer, and so on so forth, like you just keep gradually tearing people up in order to hit some goal. And when I started looking at the numbers, and really understand standing what it took to make a real business, a profitable business off of those lower ticket offers, I was like, This doesn't make sense for me. I did not have a large audience. I was starting from scratch in a niche where there were not many people doing the work that I was doing, I started as the yogi printer with my business because I decided to quit when I was crying on a yoga mat during my burnout to start my own business, when my own yoga teacher said, Can you help me turn around my studio, and that was my lightbulb moment when I was like, oh, yoga studios, wellness centers, like they don't have access to someone with my background.
And I realized that there wasn't a big enough audience for me to make a real living off $27 ebooks or even $97, you know, on demand video trainings, I needed to think, different than what I was hearing in the online space in order to make that business work. Within six months of me starting my own business, I was pregnant with twins, that was not planned. That's just how it went. But when my twins were born in January of 2010, I knew a few things that I had going for me, I had an audience of 100 people on my email list. Facebook was just starting to release business pages, I'm really dating myself right now. Just launched business pages, I had a small but growing community of people who mostly found me because if you start in a small niche, word gets out, word gets out very quickly, because every yoga teacher goes to the same trainings, they all know the same people gonna go to the same events and conferences. So I was getting a lot of referrals and word of mouth. But I knew I did not have the size audience that would make anything under the $500 mark worthwhile because there's no way I could go home and pay the babysitter, pay my mortgage, I couldn't make a meaningful living off of that with the size of my audience. And even though there was an opportunity to grow my audience, I knew I didn't have the bandwidth. And I think a lot of people that I work with resonate with this, they just don't have time to, like spend all day online trying to grow their audience or their email list. So when I sat down and crunched the numbers, I realized the fastest way to hit my revenue goal, which at the time was to replace my former six figure paycheck was to work one on one and to work with people at at least a 200 or $2,500 price point minimum. If I didn't start there, I was going to have to work 40 to 50 hours a week in order to hit my revenue goal. And that wasn't an option for me, because I was a new mom, who had twins, who didn't have the time and honestly, the energy to work 40 or 50 hours a week. So I knew I had to sit down and crunch the numbers. And that's one reason I think we need to have this conversation because I think a lot of times, there's just so much noise coming at us from all angles about should you go low ticket, should you go high ticket, should you have an ascension model, should you have one signature offer versus multiple offers. And at the end of the day, it depends. But we have to look at your business, we have to look at what works for you, in order to make the right choice to move forward.
Britney Gardner 5:45
100% I, like I've got a real stick up my bum, I'll tell you about the one size fits all, you know, advice that's that's out there. And and I do think that initially, people came from a good place on it, like something really worked well for them, it turned their business around, it finally gave them the income that they'd been, you know, long desiring and they're like, You should do this too. You know, and, and I get I truly do get it. But I also look at, you know, the different lifestyles of just just like my, my inner circle of like, online business friends, right. So I'm a mother of two, I have a 10 year old and four year old, four year old is in a lot of therapies has some special needs. So we spend a lot of time there and I will, for the foreseeable future, at least for the next five years, I do not envision myself being able to work a full time schedule, it's just not going to be possible, given my circumstances, right. And then I look at other people who have, you know, a live in nanny, or people who don't have children at all, like the childless by choice crowd or the childless because they're not with someone or they don't want to do that, right. Like, there's so many different kinds of people. And for anyone out there to assume that they know the time schedule allowances, right, for lack of better terminology of somebody else, I think is wholly unfair when you're marketing that message.
Racheal Cook 7:08
I absolutely agree with this. And I think that's one reason as small businesses who are looking for support or coaching or education, it's really important that we consider the source we're considering who we're getting that information from. When I was starting, there was not this conversation about being a mom, entrepreneur, now it's everywhere, right? The mompreneurs, mom, intrapreneurs, whatever. There was not that there was I was surrounded by men who were looking at me like I was insane for saying I want to make six figures, I want to take home six figures, I want to work 25 hours a week, these are my constraints. Because to them, they had never heard anybody say that. They had only envision that, of course you can hustle and grow. And you don't have to think about any of these other parts of your life. Because don't you have a stay at home spouse to take care of? And yeah, so I'm like, each time I talk to different entrepreneurs, I'm always digging a little deeper into what is actually going on for them. Because if your business doesn't align with your life, then what's the point? It's just going to be really hard and frustrating. And I'm also looking at, you know, where are they starting from? Because not everyone starts from scratch. Not everyone starts from zero audience. And I remember I ended up on a conversation with somebody early on. And she had never looked at her analytics before. And she was trying to figure out how can I monetize this blog that she had started, kind of by accident, where she was teaching moms how to get their yoga pant right and find cute outfits, like it was a personal styling type of blog. And she had no offers all she had on our website was maybe some Google AdSense. This was in the heyday of the blogging, of course, you know, 2010 2011 2012, she had never looked at her analytics before. So I'm like, Okay, let's look at what your traffic is to your website. And she had hundreds of 1000s of people hitting her website. Every month, she had a massive blog, but she'd never really looked at monetizing it beyond Google AdSense. Now for her a low price point product made sense. Her coming up with an ebook. That was you know, here's the capsule wardrobe for a new mom capsule wardrobe for X, Y and Z. And having it for under 50 bucks made so much sense because she had this massive audience she had built up. Now she didn't know what she didn't know, she had started a blog as a hobby for fun. And she didn't build an email list. She didn't optimize it very well. She just happened to be honestly in the right place at the right time. And this doesn't happen often. But I've seen it happen. There was a huge surge of you know, bloggers who suddenly had massive audiences they were getting tons of traffic in the early 2010s. Then we saw that resurgence of like huge traffic and huge followings happen on Facebook and Instagram in the mid 2010s. Now we're seeing it on on different platforms. And people don't always realize like, if you do have that built in audience, and you have, again, hundreds of 1000s of people, that's when it makes sense for you to maybe have a low price point product, because the math math, the math works out, you have to consider that, on average, you'll see one or 2% of people buy. So if one or 2% of 100,000 people are buying a low price point product, you're probably going to be able to make a little bit of money off of it. But if you only have 1000, people following you, or 1000, people hitting your website and only one to 2% Buy, then the low price point is not going to make sense, you might only make a couple $100 Instead of several 1000s or 10s of 1000s of dollars. And that's where I really think we have to be paying attention because I have so many people who start their business, and they just love what they do. And they're not trying to be influencers. They're not building these massive audiences. And if they go to that advice, which might have worked in 2010, when it was really easy and cheap to get traffic, and they don't have it now, they'll find themselves so frustrated that their business isn't making the money that it could make if they shifted from those lower price points to thinking about how can I serve fewer people at a higher price point.
Britney Gardner 11:31
I love that you're calling out audience size. Because this is something that I my clients tend to misconstrue. And we may end up having to have a hard talk about about numbers. Right. And, you know, you gave your own numbers earlier, right? Like you had 100 people on your email list Facebook business pages were just starting. And that was back when the business pages actually got organic reach right now. It's like,
Racheal Cook 11:54
that was back when no one had email lists, and your open rates were like 80%.
Britney Gardner 11:59
You know, it's and things change, right? So advice written or given in 2015? You know, yeah, it was really easy to rack up several 1000 Instagram followers and your Instagram followers, like you put a post and you had a pretty good chance that 20% of your followers would actually see that post. And now it's like, maybe you're getting 1% of your followers to see. So, you know, let's just run the numbers, right? If you have 5000 Instagram followers, and only 1% of people are seeing your post, it doesn't actually matter that you have those 5000 followers, because you're only getting what 50 people to see your post. Yeah, and, and then you know, then there's the actual number of people who are going to take action based on your post, which is going to bring the numbers down even further. And I really wish people were more upfront with this when they're talking about some of these marketing tactics because it sets a false reality of expectations up and then people hear from someone like you or someone like me. So this is the amount of organic traffic, you can probably expect to see your offer. And since, you know, it's generally considered pretty good if 2% of people buy your offer, you're looking at one sale.
Racheal Cook 13:14
Yeah. And this is where I see a lot of people who kind of buy into a lot of the online marketing hype get really frustrated. And unfortunately, what I see happen is they buy a program promising well, all you need is a webinar and an online course. And that program doesn't teach you anything about getting traffic, anything about growing an audience or building an email list. They put in all this time, energy and effort to create that put it out there, and then they don't get very many sales. They think it's the problem with the webinar or the online course. And so now they're shifting tactics again to well, the webinar didn't work. Let me run a challenge. Well, that didn't work. Let me go try a three part video series. So meanwhile, they've spent $10,000 on all these different tactics. And they've never stopped to think, am I actually getting in front of enough people to make any of these strategies work. And when they don't stop to think about that they don't actually have an attack strategy in place. They feel like a failure, like it's something they've done, or that their program or service isn't good enough. And I'm here to say like, chances are your program or services are amazing. I work with so many women who are kind of the top secret experts of their field. They just don't know how to go out and get in front of enough people. And that's where I want to see more entrepreneurs really ramp up is think about visibility in a different way. Because to be honest, your emails are going out to the same people again, and again, unless you're growing your email list. Your Instagram posts, your Facebook posts are going out to the same people again and again, unless you're growing those platforms. And those aren't organically growing anymore. They're just not in fact, they're probably having some attrition there. Thinking. So we have to think differently about how are we getting in front of people in order to, in order to grow our audiences. And when I think about this, I really think about three core ways. The first is search. Now, I think this is something that is going to be so very important. And a lot of people have kind of not paid attention to search. But I get a lot of organic search traffic to my website. And because I get a lot of organic search traffic to my website, I'm not having to go out there effort all the time in order to bring that traffic and that people are finding me because I create amazing content. I make sure it's optimized for what people are looking for. And I'm putting it in front of them when they're actively going to Google or going to Pinterest or going to YouTube and saying, How do I do this? And once I know that I'm hitting on it, a thing that people are actively searching for, I make sure we maximize that as many ways as we possibly can, because that's a great free source of traffic that will grow the lifetime of your business. And it's something
Britney Gardner 16:03
that comes from work, you've already done that. Yes, some source work you did, you know, three months ago, six months ago, three years ago, maybe?
Racheal Cook 16:11
Exactly. I mean, some of my highest ranking pieces of content are things that we wrote a long time ago. And so we're constantly looking at that and going, how can we continue to optimize this? How can we continue to add value to this and maybe add additional content that feeds into that. So search is an amazing opportunity for a lot of people, especially if you're more introverted, you just want to create key content. If you're a local business owner, please use search because people are searching photographer, Richmond, Virginia, you know, they're, they're not just searching photographer in general, they're niching, down to specifically where they are. So that's a huge opportunity. Another great opportunity is other people's audiences. And there are so many ways you can get in front of other people's audiences to grow your own audience. This is piggybacking off of an existing audience, instead of starting from scratch, go into rooms virtual or real, where there's lots of people there. So for example, I'm here on your podcast, getting in front of your audience. So I'm piggybacking on your audience are hearing from me, they're hearing my message. And if it's resonating, they're gonna be curious and want to follow me on the other platforms that I'm on. And I do this all the time. So I do this through speaking through being a guest teacher for other people's programs, I do interviews all of the time, I'm always looking at where are existing audiences that I can get in front of, and then invite them to come follow me in this other way. So it's a great way to leverage your experience and expertise. And the final big one is paid advertising. But I will say paid advertising is not my favorite, especially right now. This is another one of those things that a few years ago, anyone could jump on Facebook ads and build an audience very, very quickly. Now, it has flipped the the Facebook marketplace is overly saturated, they're actually losing users, the expense of ADS has gone way up. So that is not my go to for a lot of small business owners unless you can be super, super, super specific about who you're trying to get in front of. And you have a proven product program or service that you know will convert. This is another reason why I'm seeing the shift. And you might be seeing the shift to Britney, there's been a lot more talk about high ticket offers. Whereas a couple years ago, it was very much like make your tiny offer, make your bite size offer, etc. The biggest reason we're seeing this flip is because of ads because of the impact of Facebook ads, people used to be able to sell a $100 $200 product or program and sell it to cold traffic all day long and make money off of it. But that's not the case anymore. Very few people can do that the ad cost has just pushed those products out of you know what is profitable, unless you're willing to run that product. As a loss leader. It's not worth running. And so we are seeing some people do that where they are running. And I've seen this shift in the online space to there have been a rise up people who instead of running a free funnel, they're now running ads to a paid offer knowing that if if they break even they're lucky if they lose money, it's okay. But now they're getting a list of buyers to then sell into a high ticket offer. But works
Britney Gardner 19:27
as long as the high ticket offer is converting. It's validated
Racheal Cook 19:31
as long as it's converting and that's the thing if that lower ticket offer like let's say you decide you're going to run a workshop for $100. And you're going to run ads to that. Well, if you lose money on that, but you're hoping it's going to convert on the back end and then it doesn't. Now it's even harder because you're just constantly in the hole. And this is why your numbers are so darn important. Like if you don't know your numbers, you can't pivot and adapt fast enough.
Britney Gardner 19:58
I mean, you're speaking to the choir, you're like I am such a numbers person. And I think a big part of why I am so tied to the numbers is because several years back, I wasn't. And I was in that that hole that you were talking about, right? I would do this one thing, it didn't pan out. And then I would try and do something else. But that's something else costs money. And I'd be looking at it. I'm like, well, I already lost money here. And yes, I understand the sunk fallacy, you know, idea and everything. But that doesn't change my personal finances, right, like, so I got involved and measuring and analytics, and really having an easy way to look at your numbers. So I could, like boost myself back up, right. So I would always know where I was at so I can make better decisions and make them more confidently.
Racheal Cook 20:47
Yes, I think it's so important to know your numbers, I feel like it can feel overwhelming for a lot of people. But even quick back of the napkin math will save you so much heartache. At the end of the day, there's one reason I created what I call the Get Paid calculator. Because I was tired of hearing people who would throw out a revenue goal. But it wasn't tied to anything concrete. So when I created my get paid calculator, it's based on the idea that first we need to figure out what you want your take home pay to be, because too many entrepreneurs are just taking whatever is left, instead of saying, No, this is actually the salary I want to take home from my business. So first, we got to know what you actually want to pay yourself, then we design the revenue goal to fit that and to make sure you can account for profit and taxes and owners pay and operating expenses and your team all of those things. And then we figure out, what is the right price point for the right offer? And how many people do you need to sell to in order to make that happen? Because if you realize you need to make 100 100 sales is actually really hard for a lot of businesses. But a lot of businesses can break six, or even seven figures with 100 or less clients. And that's where I want to help more people get is how can we optimize for simplicity in your business? It's a lot easier to serve, you know, 10 clients at $5,000 Each than it is to try to serve 500 clients for $10 or $100 each.
Britney Gardner 22:20
Yeah, absolutely. I love that you. Because I love that you're calling this out, right? You mentioned earlier that you've seen and I've probably seen the answer is yes, I have seen a huge resurgence and people talking about high ticket offers and selling high ticket programs. And first of all, I'm kind of over that language, right? Like, it's not about high ticket, it's not about that. It's about how much value you're really bringing and how much time you're going to spend working with that client. And sometimes not even time but how many resources you're going to pour into that client, you know, there's a $1 amount that you need to assign to that amount of work, right. And your high ticket to you might not be high ticket to me or vice versa. And I used to get so angry. I was a wedding photographer back in the day. And people would come in, they're like, Well, you know, I'm on a budget. And I'd get so annoyed, right? Because let me tell you, I did weddings in New York. It's a very lucrative wedding market. i It was fairly normal for me to be photographing $100,000 weddings, and I did not make $100,000 at the time. For me, seeing people spend this kind of money was ridiculous. So they would say, Oh, I'm on a budget. I'd be like, yeah, we're all on budget, your budget might be 10 times my budget, but we're all on a budget. So what does high ticket mean? And to me, I really enjoy what you're saying, like, figure out how many clients you want to serve and how much you want to make. That is what you're charging. You don't need to put the high ticket label on it.
Racheal Cook 23:54
Yeah, I think that's one of those things that it becomes a key word that actually means nothing. Just like you're saying there's so many times I'll talk to somebody, like one potential client will be like, Oh, it's expensive to work with you. And the other is like, Oh, this is such a good deal. And you never know, like, you don't need to worry about spending other people's money like that's on them. That's their decision. And so many people have preconceived notions about what things should cost. But I think the more you can get clarity about what you need to charge for that offer, and really make a strong pricing decision up front. It is really hard to overcome under pricing and then trying to incrementally up it. So research has shown that women on average underprice their services by 28 to 30%, compared to their male counterparts doing the same, the same exact work. So if we're already under pricing, and then we're just trying to incrementally increase little bits at a time. We're never going to get actual lead to where we were supposed to be in the first place. So this is why I love talking about these pricing decisions. Because if we're not willing to crunch the numbers and get crystal clear about what the pricing actually needs to be, it's going to be so hard to overcome it with small price increases, you're going to have to sit down and actually think, Okay, what do I actually need to bring in from this business to make all of this worth it? How do I make sure I'm accounting for and this is a huge one, too, especially those who are in the scaling stage. How are you building into your pricing the cost of your team, too often I hear from entrepreneurs, who they don't even building the time that it takes to deliver that product, program or service. So if you have a service based business, you're going out and shooting weddings, and you're not adding in all of the time to sell that client to prep that client, all of the customer service leading up to it, the travel time, the day before the day of all of the follow up with that client, all of the editing, you know, if you're not building all of that into your pricing, and you're just pulling a number out of thin air like Oh 5000 Sounds good, then you're doing yourself a massive disservice. Because if you ever get to the point where you're like, you know what I'm going to have other people actually shoot the wedding, I'm just going to be the front end of bringing in the clients. Well, how are you going to pay for those people? If you haven't built that into your pricing model? How are you going to pay for the editor? If you haven't built it into your pricing model? How are you going to surprise and delight your clients in between this whole year long, or however long process of being engaged with them. If you don't build that into I mean, we even price in all of our gifts that we send out, we price in all of the little touch points when my clients fly into Richmond, Virginia to see me, we price everything into their experience that we can, because if you don't, then you're just hemorrhaging cash trying to keep up. And it's so much easier to surprise and delight clients, when you've got a great profit margin, it's so much easier to hire help when you can pay them really well, instead of having to, you know, pay the least amount for that person to take something on. And when you're priced appropriately. It's it's actually a whole lot more fun to run a business with a great profit margin than one where you're like, Oh, I can't afford to send my clients a thank you gift. Because I didn't build that in.
Britney Gardner 27:25
Absolutely. And I think it's a really great place to kind of close up this conversation. So where can people find you if they would like a little more information on what we've been talking about?
Racheal Cook 27:37
Absolutely, I would love to send you all over to the CEO collective.com. And in fact, we have a free resource that can be a great help when you are working on your pricing. And it's called the Get Paid calculator. It's absolutely free. Once you download it, there's a little three part training to go along with it to help you plug it all in. With that get paid calculator will help make sure that you are actually pricing the right amount and you're getting in front of enough people to hit your revenue goals and ultimately pay yourself what you want to take home to your family. So head over to the CEO collective.com. I think we had a specific link for you all as well. For the show notes.
Britney Gardner 28:20
Racheal Cook 28:23
I think it was just the CEO collective.com/no like trust.
Britney Gardner 28:28
I believe that you had it as no hyphen, like hyphen, trust. Yeah. Yeah. We'll make sure that we have that in the show notes for everybody. So it's the CEO collective.com No hyphen, like hyphen, trust. And we'll make sure that everyone has access to the Get Paid calculator.
Racheal Cook 28:45
Perfect. Thank you so much, Brittany, this was such a great conversation.
Britney Gardner 28:48
All right. I'll talk to you later.
Transcribed by https://otter.ai
Sign up to receive email updates
Enter your name and email address below and I'll send you periodic updates about the podcast.
To Market Your Business Online:
Navigating how to market your service business online–especially when you’re moving from 1:1 services to a 1:many model–doesn’t have to be hard even when you have a lot of moving parts.
You just have to know where you’re going. The Biz GPS Intensive is the best way to get that 30,000-foot view of your business–and a concrete plan for the next six months.
Stitcher | Google Play Podcasts | Podcast Feed | How To Subscribe
LEAVE A RATING & REVIEW HERE
Music by Michael De La Torre. Thanks, Mikey!