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Monetization

A Guide to High-Ticket Sales (2024)

We’ll show you what high-ticket items are and why high-ticket products and services offer a competitive edge.

By Mighty Team

August 28, 2023

9 min read

IN THIS ARTICLE

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    In this guide to high-ticket sales, we’ll show you what high-ticket items are and why high-ticket products and services offer a competitive edge for your business. Then, we’ll show you the ultimate business model for making high-ticket sales.


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    ((toc))


    What are high-ticket items?


    High-ticket items are products or services that have a large cost to purchase but are really valuable to the person buying. Unlike lower-priced products or services you pay for all the time, people usually buy high-ticket items infrequently (e.g. a car, an all-inclusive vacation, a house). This means that high-ticket items are special, and we often value them more because of the high price we pay for them.


    Usually, we think of a high-ticket item as $1,000 or more.


    By the same logic, a high-ticket product costs a lot but offers a lot of value. This is true for the examples we gave above, like your bike or that luxury vacation. But high-ticket products are also common online, as people create high-ticket digital products to share what they know. More on this in a minute.


    Examples of high-ticket items



    • houses

    • cars

    • boats

    • degrees

    • vacations

    • retreats


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    High-ticket digital products


    A high-ticket digital product is a high-ticket item that’s delivered in a digital form; for example, a high-end digital course, a coaching package, or a high-end virtual event. There’s a huge explosion of tech solutions and platforms for delivering digital products and services–the Digital Media market is projected to hit $627.7 bn in 2023. As a subsection of this, high-ticket digital products are growing fast too as more and more of us are comfortable with paying for high-end digital experiences or personal transformation.


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    High-ticket products in the digital space can also create a more profitable business for the creator or entrepreneur. A lot of online creators are trying to monetize by coming up with a cheap offer and selling thousands of them. This leaves them scrambling to get people in the door. And even if they do end up with the thousands of customers they need to make a living, they’re stuck providing customer service to those thousands of people, which they can’t afford to do because they charged so little.


    High-ticket digital products fix this problem by providing stable revenue from a smaller customer base.


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    What are high-ticket sales?


    High-ticket sales are the process of selling a high-ticket product or service. Unlike mass-market sales, high-ticket sales are razor-focused on the ideal member, and qualifying a buyer is a huge part of getting to the yes.


    We’ll go deeper into what high-ticket selling looks like below.


    Why you should sell a high-ticket product or service




    • Get to profitability FASTER: A lot of brands think in scale. “We’ll sell millions of these!” But what if you could get to a profitable digital business with fewer customers? If you sell something for $5, you need to reach 200,000 customers to have a million-dollar business. If you sell something for $1,000, you can get to a million a year by selling 1,000. Creating offers like a high-ticket product or even high-ticket coaching lets you make the money you need with way less people. Then you can focus on making sure those who do come are successful. It’s a win-win for both the entrepreneur and the customer.




    • Use value-based pricing: Too many creators and businesses start by pricing things according to what they put into them. It’s a common rookie mistake, and it’s called the Labor Theory of Value. For example, if it takes you three hours to make a course and your day job pays you $30/hr, you should sell the course for $90… right? NOPE! Value-based pricing means pricing according to what a product is worth to a customer, not the time it took to create it. If your course helps a business owner generate an additional $50,000 in revenue this year, then it’s worth much more than $90 to them.




    • Better engagement: Would you believe that paying more for a product can lead to better engagement? In the psychology of consumption, people are more likely to use a product if they’re aware of a higher cost. People value what they pay for thanks to something called the “sunk-cost effect.” When people put money into something, they’re more likely to use it. Or–in other words–people value what they pay for.




    • Better transformation: When it comes to selling a transformational product like an online course or coaching package, this engagement leads to… better transformation! It’s counterintuitive, but paying more for something helps someone value it, which helps them use it, which helps them transform. And that’s why pricing something too low can actually hurt your members.




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    Two marketing models for high-ticket sales


    The funnel


    A funnel has been the dominant sales model in marketing both physical and digital products for a long time. It focuses on moving customers through four stages: awareness, consideration, conversion, and finally loyalty (which creates repeat customers and word-of-mouth promotion).


    sales funnels - value ladder


    In digital marketing, the funnel has enjoyed a long ride. It makes it easy to reach mass users through paid social media and then to convert a small number of them into an offer. But if you’re running a funnel in the 2020s, you’re engaged in a mass, high-stakes competition with similar brands AND customers are frankly aware of what’s happening.


    We all know the feeling of being sold to–and the “this is your last chance” messages don’t work like they used to.


    Brands liked funnels because of their predictable revenue. For example, if you know you have a 2% conversation rate and you push 20,000 people through your funnel, you can be reasonably confident that 400 people will buy.


    Funnels have their place, but there’s a way better method.


    What is a high-ticket sales funnel?
    A high-ticket sales funnel moves your ideal customer or member through a series of steps, losing people at each one until you serve up an offer to the percentage of people who make it through.


    The community flywheel (better)


    The community flywheel is an emerging business model that focuses on getting your supermembers into community with you and letting the conversations and engagement build the brand and drive sales. It was McKinsey that identified the community flywheel as the best way to build a brand in the 2020s.


    It comes down to this. Your goal should be to constantly be converting your subscribers, followers, customers, or whatever, into members.


    Community Flywheel


    All those things are transacitonal. But members belong. Businesses who choose a member-led approach see a huge benefit in growth.


    According to McKinsey’s study, flywheels require five things: Entering into community with your members, choosing “hero” products, bringing in a powerful brand story, and co-creating content with members, all of which lead to effortless transactions.


    Unlike funnels, community flywheels can experience rapid member-led growth as your supers become your biggest promoters. AND unlike funnels, a community flywheel is a content engine that you don’t have to run (at least not entirely), since your members show up and create content and conversation for free–or even pay to do it.


    If you’ve experienced thriving brand communities, you might have experienced a community flywheel.


    For example, the women’s apparel brand Oiselle created a member community, Oiselle Volée, as a place for runners to come together and get inspired. The result is a community of 3,500 members who show up, support each other, create content, learn, and even generate new product ideas.


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    A community flywheel is the secret to building a thriving member-led business, and you can unlock it by giving your members something to belong to.


    Funnels vs Flywheels: Which is better for high-ticket sales?


    What happens to prospects who don't buy?



    • Funnels: They’re gone. Maybe they stay on your email list if you’re lucky.

    • Flywheels: Members stay in your ecosystem and buy when they’re ready OR find other offers they love.



    Who does the selling?



    • Funnels: You do.

    • Flywheels: You and your members are both involved, thanks to member-led growth and word of mouth.


    How does the sale happen?



    • Funnels: Through a high-pressure offer or slick marketing copy.

    • Flywheels: Effortless sales because your members are in your ecosystem ready to buy.


    Customers move in a…



    • Funnels: Straight line (until they drop off)

    • Flywheels: Circle (staying engaged)


    How do additional sales happen?



    • Funnels: Upsells or finding new customers

    • Flywheels: Engaged members look for more products and services (sometimes they even ask for them).


    How does customer acquisition work?



    • Funnels: Keep spending money to fill the top of the funnel.

    • Flywheels: Member-led growth means that it grows organically through word of mouth.


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    How to master high-ticket sales


    Understand your Ideal Member


    Every product needs an ideal user, customer, or member–but it’s even more crucial for high-ticket sales. Nailing this is the foundation of everything else. You obviously need someone who can afford what you’re selling, but you also need someone who sees the value and is willing to spend to get it.


    We have a free training on finding your Ideal Member in our Mighty Community!


    Get the high-ticket psychology right


    There are different reasons people buy high-ticket products.



    • People who buy Bentleys and Rolexes pay for status.

    • People who buy high-ticket courses might pay for a transformation they can’t find anywhere else.

    • People who join a high-ticket mastermind might be about exclusivity.


    It’s important to understand why people will pay for your high-ticket product.


    Qualify leads


    Somewhere along the line, you make sure you’re selling to the right person. For example, with a high-ticket course this could be a person who needs the transformation you’re selling. Say you’re selling a social media marketing course, you might want businesses that already have a product and revenue.


    Lead qualification for high-ticket sales isn’t just about making the sale–it’s also about ensuring your members have the right conditions to be successful. Because successful members will become your supers, they’ll tell the world. You want them.


    Create members, not customers


    Customers are transactional. Members belong. Imagine you sell high-end BBQs. Which is going to help you sell more? Optimizing a funnel perfectly with Facebook ads? Or creating a membership community where grillers can come together, share ideas, recipes, and talk about the product. (Of course, you might do both).


    Creating an environment where people feel they belong is what makes high-ticket sales work. That's member-led growth.


    Exceed expectations


    Of course, when you deliver a product or service, it’s important to make sure you exceed expectations too. The ability to create a “wow” factor is what creates the all-powerful word of mouth and drives member-led growth.


    Choose the right business model


    It’s so simple, but true. Mastering high-ticket sales isn’t about creating the perfect sales letter or copy. It’s not about setting fake deadlines to force “urgency” or pressuring your leads. That’s the funnel approach to high-ticket sales, and it’s becoming less and less effective.


    The way to master high-ticket sales is to choose the right business model to begin with. When you choose a community flywheel business, you’re creating the environment where sales happen organically and–in McKinsey’s words–effortlessly.


    And that makes selling a high-ticket product or service much easier.


    Now Read: How to create your own flywheel

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