Picture yourself with a bow and quiver full of arrows. You aim at one of the five circles or rings on your target that graduate inward from WHITE to BLACK to BLUE to RED and finally, YELLOW.
The biggest outer circle is WHITE and directly surrounds the smaller BLACK ring closer to the middle. (Please refer to the picture to the left to see the five colored rings).
The BLACK circle surrounds a smaller BLUE circle, which in turn, surrounds an even smaller RED circle. That RED circle surrounds the fifth circle which is YELLOW and in the center of the target known as the “bull’s-eye.”
Why am I telling you this?
I’m telling you this because it is a useful analogy of how your prospects take aim at your marketing offers, whether they want to become first-time customers or multi-buyers.
The way I see it, the WHITE outermost ring represents your “get-to-know-you” offer such as a free Teleseminar, eBook, audio eCourse or video.
This is your opt-in email offer. To continue the analogy, it is that defining moment when a new prospect has successfully hit your target by aiming and shooting their imaginary arrow at your outermost WHITE circle.
“Outer Circle Marketing” is Time-Tested: Please realize that what I’m talking about here is not just another clever marketing analogy that’s untested. It is tested and it is time-proven.
OCM = “Outer Circle Marketing” and that’s also the formal name I’ve given to this new breakthrough strategy. If you want to experience it first hand, join my AskAlexToday Teleseminars scheduled on the first Thursday of each month.
I’ve utilized OCM for the past 2 years withthought leaders such as Jack Canfield, David Bach, James Ray, Raymond Aaron, and even Options Trading guru, Don Fishback.
Sidebar: One of the fastest, easiest and easiest ways to launch an OCM campaign is through Teleseminars. Just pick one day each month to have your OCM Teleseminar and answer questions that come in from your target market :-)
You can even have them sponsored.
My monthly OCM Teleseminars are sponsored by the Electronic Marketing Institute (EMI) and they occur at 10am PST/1pm EST and rebroadcasted at 5pm PST/8pm EST every first Thursday of each month.
If you’re an entrepreneur who wants to boost your productivity and profits, then these monthly calls were designed specifically for you and you may even invite one friend or colleague as your Accountability Partner.
“Target” Analogy Revisited: Let’s revisit what each of the circles (or rings) in our Bow/Arrow/Target analogy represent for Information Marketers.
As I mentioned, the outermost WHITE ring represents your free products or services.
When your prospects draw back the bow and aim their arrow at that WHITE outer circle, they simply want to know what you offer and who you are.
That’s what’s so great about OCM Teleseminars – they’re predictable (monthly), content-rich (ASK campaign-driven) and highly intimate (community building).
The slightly smaller BLACK ring that’s inside the WHITE circle represents offers in the $97 to $497 price range. These are typically ”How To” info products that are either digitally or physically delivered.
Are you following this analogy?
Since the BLUE ring is once circle closer to the bull’s-eye so it theoretically has more value and demands a higher price of say, $497 to $997.
KEY POINT: Notice how the purchase level for customers is their choice. “Outer Circle Marketing” is a prospect-centered strategy, not a product-centered one like the “Funnel Marketing Theory” which I’ll discuss in a moment.
Metaphorically, your product price points in the smaller BLUE circle are higher than products offered in the BLACK or WHITE ring.
Higher prices demand higher value propositions so offers in this category are Teleseminar series, multi-media eCourses and seminars.
The RED inner ring on the target has a broader price range, of say $997 to $4,997. Products in this price point category routinely involve one-on-one coaching, narrowly niched 3-day workshops and membership websites.
The yellow bull’s-eye is the solid, inner most circle. The prospects who aim, shoot and land their arrows in this yellow bull’s-eye have the greatest Lifetime Value (LTV) and eventually treat you like their trusted advisor.
The price range they are able and willing to pay is $4,997 to has high as $60,000. Offers in this category are referred to as “Inner Circles” or “Platinum Clubs.”
The people who come into your marketing mix at this level are your advocates and they can often become Strategic Alliance Partners.
Now I don’t know if you agree with my Outer Circle Marketing philosophy, but I do hope you agree that OCM is a more accurate marketing model that depicts customers more accurately than the obsolete Funnel Marketing Theory.
Funnel Marketing Theory: As its name implies, it is a ”theory” and it “confuses the map with the territory.”
According to the Funnel Marketing Theory, marketers are encouraged to develop their first line of info products at low prices to attract lots of low-end customers to start building a database.
This marketing theory is taught from two different angles: The prospect evolution angle and the product price point angle.
The prospect evolution angle depicts the linear progression of all first-time customers starting at the top of the funnel (Awareness) and graduating down to its narrow bottom (Advocacy).
This is a linear progression that starts at the top of the funnel with Awareness then narrowing down to Interest then narrowing more to Preference and Action/Inquiry and then narrowing even more to Conversion (Permission), narrowing more to Satisfaction and farther down to Repeat Visitor and finally to Advocacy.
The fatal flaw of this “Funnel Theory” angle is that prospects who become customers don’t always start at the Awareness level and many even decide to leap-frog to the Conversion (Permission) level.
In fact, the majority of my new Teleseminar Secrets students – who are referred by loyal alumni – started at the Advocate level. My experience with customer acquisition is that it is spatial, not linear.
If Advocacy is at the bottom of the funnel, then my own customer database would resemble an hourglass, not a funnel or inverted triangle as the image to your right.
The second “Funnel Theory” angle deals with pricing and reveals a progression (from top to bottom) of how product price points impact the total number of customers you can reach at each level.
The theory holds that as these prospects and customers get to know, like and trust you, they slowly move down your Funnel until they reach your highest-end and most exclusive “Inner Circle” or “Platinum Group” offers.
Because fewer people have the disposable income to belong to an “Inner Circle,” the Funnel Marketing Theory implies that you’ll attract a lot more low-end customers who enter the Funnel from its widest opening at the top..
This type of Funnel Marketing Theory is about demand elasticity and the inverted triangle to the right was the best 
example I could find on Google. (The prices are much too low for for me, but I think you get the picture).
Free or low-cost offers are at the top ”widest” portion where more customer transactions are possible because of low prices.
Your moderately priced offers graduate down where there are fewer customer transactions. Then at the bottom tip is where the highest-priced offerings are, so therefore fewer customers can afford them.
What surprises me most about the Funnel Marketing Theory approach is the fact that it is still the marketing model that most “marketing gurus” still teach.
In my experience, your first-time customers don’t buy based on a low-price to high-price linear progression, they buy based on value, appeal and desire to trust you.
If their trust level is high from the start, they can come in at the high price point level. That’s what many of first-time Teleseminar Secrets students do.
I remember an incident when I tried to purchase a $4,500 training program from a well-known marketer and was denied making the purchase because I wasn’t flowing through the funnel in his prescribed sequence!
So the fundamental problem with the Funnel Marketing Theory is that it doesn’t allow flexibility for customers to enter “from the side” or from the “bottom-up.”
When I began my Internet info publishing business in April of 2001, I empirically knew that a low-end offer would cause me more challenges to get my new business off the ground than offering a moderately high-priced offer.
So I started with a mid-range price point at $247 for Marketing With Postcards which is still available today.
The logic behind my decision was driven by the simple the fact that I would have to acquire ten times as many $25 customers to generate the same amount of income derived from a single $247 customer!
So if my first info product was offered at $25 price point, I’d have to expend ten times the marketing effort, I’d have ten times the number of “problem children” customers and ten times the refunds than the $247 price point.
Because your low-end customers have less discretionary income and often second guess their purchasing decisions, which, in turn, leads ”entitlement” behavior with your customer care team. If you have lots of low-end customers, you know exactly what I’m talking about :-)
Look, as long as your customer’s perceived value matches or exceeds your offers pricing point, attracting fewer high-end customers accelerate your profits (and productivity) than truckloads of low-end customers.
What To Do Now: Draw an imaginary target with 5 rings and fill-in product offerings with their corresponding price points inside each ring of the target. The right marketing mix has at least one product in each pricing category.
If you’re a first-time marketer, I encourage you to start with the BLUE ring and make offers of $497 to $997.
You’ll even find it’s just as difficult to attract a $97 customer as it is to attract a $997 customer, but the high price point brings you 10 times the income with 10 times fewer customer hassles.
Please give me your comment to this post.
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About Alex Mandossian
I’m very curious what you think about this post, especially if you’re a first-time marketer with a new product offering. Is your first info product on the lower or higher end? I hope this post convinces you to make it the latter.
Your candid comments will be most appreciated.
~ Alex
Alex,
Thanks for reconnecting me with Outer Circle Marketing. (OCM) I remember first hearing about this at the Teleseminar Secrets Reunion of 2008. What you’ve provided in this post is even better because is supplies additional context.
I too think the funnel model is outdated and a bit to linear for today’s marketing endeavors. You also bring up a good point about the sequence of your marketing and the related price points. Your example of not being able to leapfrog and buy a higher end product reminds me of Sean D’Souza and Psychotactics. He wants people to follow a certain path based on the content. Now, psychologically speaking, because someone can’t have something, they want it even more. I guess that’s something to test, right?
Finally, you’ve given me another layer to evaluate my current product mix: the “prospect evolution” angle. I’ve always seen the product funnel with pricing but not the emotional and psychological drivers so this is new and extremely valuable info for me.
I’m adding to my OCM in the coming months and you’ve given me an ideal blueprint to evaluate its viability on multiple levels. Thanks and great job Alex!
Marc
Alex,
You have done well my friend in this post to further illuminate how great the “product funnel theory” looks on paper and how useless and even damaging it can be in the real marketing world.
Thanks for providing a useful alternative and keeping us “on target.”
Jeff Herring
Article Marketing Guy
http://www.ArticleMarketingGuy.com
Alex,
I love the spatial marketing model –this makes complete sense to me. Why put the biggest emphasis on the lowest-end market when you can work on building relationship and exposure to the “right” market for you. And this still offers entry points that make sense.
Thanks!!
Jill Berquist, PCC
Career and Life Transition Expert
Hello Alex!
I really appreciate the information you offer here. I attended a Peak Potentials event about 2 years ago that you presented at. I have much respect for you and your success. I was only familiar with the funnel marketing system until reading this post. I have a membership-based training business for the automotive industry, the membership model is new since last September. I have been tossing the idea of how to restructure my offer since some feedback has been that my entry price is too low. After reading your article, I am going to start at the blue ring and work from there. Excellent suggestion, thank you. I REALLY like the FREE Teleseminar as a “get-to-know-you” offer and will include that with my events schedule for the balance of the year!
As always, you are brilliant Alex – thank you!
That was one big WOW in seeing how they are similar in idea but how the funnel approach is limiting.
Plus your model allows for thinking bigger and taking the approach that could attract the
customers who choose the higher end right away. LOVE that!
Thanks for your wisdom as always. Love seeing you in action,
Lynn
WOW Factor Hands-On Trainings
“REAL speaking that makes a REAL difference (and REAL impact)”
http://www.lynnrose.com
http://www.wowyouraudiences.com
You are very right about the flaws of the funnel theory.
For many years I was in Big Pharma. In Big Pharma we never used the funnerl simple because a doctors patients are a microcosm of all diseases in the larger world.
So we used to practice something similar to OCM, but I wouldn’t go so far as to say it was OCM.
I like the idea of less hassles with fewer customers who really like and trust me and are happy to pay me more for the high value I provide to them from the start.
And I have actually had the experience of clients who liked and trusted me enough, that they were willing to make a payment to me of anywhere from $400 (to as much as $2000 for the unconditional creation of wanted conditions coaching program), starting from their first exposure to me.
So I know first hand that OCM works. And I have to thank you, Alex, for training me with Teleseminar Secrets to accomplish that.
In my case, most of the people who came in at $400 or $2000 had simply listened to free recordings that they found through online searches or in online podcast directories, such as this Dr Claude unconditional freedom and law of attraction radio interview , or this “Meet The Stress Experts(TM) Teleseminar”, all of which referred the listeners to my Ask Dr Claude optin/landing page.
The following unconditional freedom testimonials and case studies demonstrate the kind of values that such $400-$2000 first time clients created with my assistance.
Alex, it’s an interesting exploration of this topic.
However, looking at your own marketing, it seems you’re still using the funnel concept yourself.
For example, for your recent Teleseminar Secrets campaign, you had your affiliates hook their customers with a $20 teleseminar. Sounds like the low-cost entry point to a funnel.
And you still have many low/no-cost teleseminars and free blog posts that you are using to get people onto your list. So I’m not sure you’re deviating from the funnel as much as your post suggests….
– Vaclav
Dear Alex
Thank you so much for your audio coaching which I had listened to and got to askbobproctor.com/replay that I was again guided to the right path without charge from one of the top business guru since my education in Heriot-Watt University. May God, our Father in heaven, bless you abundantly, always.
Regards.
With lots of best wishes
Pauline Tan
I think it was itresting,to se things like that.
Mvh.Mikael
As always the way you explain things makes sense and is right on.
I need to do more work in the white circle.
Dave
Alex — I have always thought you were brilliant and this is another example of that. I beleive that clients, once they get to know and trust you, will pay whatever it takes to have access to your thinking and to you. The closer the access and the more cutting-edge the thinking, the more it costs.
The product funnel supposes that clients will make a progression in their ability to get to know you through the levels of products offered. That’s the assumption you are challenging — and I agree with you. The beauty of teleseminars is that it’s possible to create that instant sense of intimacy with your audience, enbabling them to buy at high levels immediately.
You are the man! Thanks for sharing your insights…I love learning from you and having access to the way you think. Please keep sharing…thanks again, Leslie Evans Thorne
Thanks for the background on your experience when it comes to pricing. It makes sense. It really does. is there a balance you take when pricing your programs at $497 level and still have a certain number of products (free to $20)?
Thanks for the information.
Thanks Alex! What a challenge. I am definitely a first-time marketer and I was totally following the funnel theory. I find the idea of making my first product offering mid-level to be totally frightening – and that is always a good sign for me. I’ll start working on it today.
Alex,
No ego stroking here, just a sincere thanks for the numerous moments of enlightenment over the past 4 months, which seems like a lifetime since there is much to learn.
Spatial marketing makes so much sense and even though I knew the funnel theory wasn’t cutting it over the years I wasn’t quite sure why….now I know!
I am doing my first tele-seminar next Wed and will now go back to the drawing board before the call since reading this post.
Excellent content as usual.
Kellie
http://www.kelliefrazier.com
Hi Alex,
What a great alternative…. You always deliver such great content…. I always look forward to getting an email from you in reference to your new posts…. Thanks again, and your deliveries are great….
Regards,
Philip J. Mutrie
http://www.ExtremeWealthStrategies.com
http://www.52OnlineBusinessTips.com
Alex,
This is exactly the information that I needed to hear at this particular point in creating and implementing my business plan! Thank you for reminding me of the better value OCM has for us over funnel theory. The most important take-away point for me is:
It is just as easy/hard to acquire a $97 customer as a $497 customer — and of course(!) we know which ones we want more of!
Thanks for all you do! You are my guru!
Linda Barnby
FloridaAdoptionAttorney.com
I’m with Vaclav on this one.
While the theory behind OCM is awesome the implementation is lacking.
For example, on your Marketing with Postcards product you have the forced opt-in where you offer a couple free chapters. Then you offer your product for $247. Correct me if I am wrong but you then have a larger backend offer where you will do the fulfillment.
Help me understand how this is not using the funnel marketing? The biggest difference is you offer a mid-range product instead of a low priced one. But it is still funnel marketing.
If it was OCM then a customer would have the opportunity to bypass the $247 range product and go straight to your fulfillment offer, correct? But you can do that. Unless I’m missing something which is very possible.
I get using the Outer Circle to build your list, etc. But for OCM to work as you outlined once someone is one your list they need to have the ability to purchase your ‘bulls eye’ product immediately and I don’t see how that’s happening, especially with your Marketing with Postcards product.
Nevertheless, it is great information to challenge our thinking.
- John
Great concept Alex! It is a challenge for someone who isn’t a salesman – but I am good at creating relationships. I fear getting stuck in that “outer circle”. I will be sharing this on Twitter. By the way…your Ask Alex Today link points to last week’s teleseminar. Do you have one for this week?
John & Vaclav,
Quick history …
When Marketing with Postcards first launched, “squeeze” pages where not invented yet. I had no forced opt-in unfortunately and I sold a $247 during the era of $20 ebooks.
To see the webpage as it was, you can go to Archive.org and click on the early versions of the site.
Instead of offering a $20 ebook as my first product, I offered a $247 “How To” course which violates “Funnel Marketing Theory” but is in line with OCM.
Many of those $247 clients immediate became consulting and copywriting clients with first year Client Values exceeding $3K in many cases.
The $20 call also violates “Funnel Marketing Theory” and is in concert with OCM because $18 of the $20 goes to Affiliate Partners and the offer on the call ranges from $1,297 for Virtual Book Tour Secrets (VBTS) to $2,4797 for Teleseminar Secrets (TSS).
For example, over 550 of the 660 new TSS students had *never* purchased any other info products from me before. They aimed at and hit the RED circle or ring in the OCM analogy.
OCM accelerates Lifetime Values of students and gives them the choice to “buy-in” at any price level. Typically, the least number of my students come in at the http://www.MarketingMinuteToday.com level of $20 per month.
Even then over 65% opt for the Full Year option so they can save $40, so I get a $199 initial student rather than a $20 per month student.
I take responsbility if I didn’t make it clear, but in the beginning, new marketers who have an area of expertise are more interested in making money (“turning Pro”) than building a list.
So OCM give them the ability to do both – making money with higher end customers and build a list with prospects who aren’t yet ready to buy.
In any case, I do very appreciate your comments and hope our paths cross again here soon.
~ Alex
Hi Alex,
Thank you very much for this insight. I am in the process of developing a new product and your advice was just in time. I will try to add to it as much value as possible and sell it at a higher price.
People buy a product if they trust it can solve their problem and also based on the product’s perceived value – higher priced products have higher perceived value and if there is no trust you can’t sell even a $20 product.
Lia
Alex – Right on! –
The traditional funnel concept is a linear one way in and one way out concept. Today’s consumer wants to consume the way they choose and the way that is most meaningful to them. They want the ability to decide and create the experience they want as part of their buying process. The experiential economy demands that. Because of that it is important to provide the consumer multiple entry points as well as multiple modalities to access the experience, product or information such that they create the most meaningful experience to them. This cant be accomplished with a linear or process driven approach such as the funnel concept. We need to think 3 dimensional in the way we offer our products, services and information to the consumer and no longer 2 dimensional. The OCM method captures the ability to allow the consumer to determine their experience from the start not based on a predetermined process. Additionally OCM process is focused on getting the greatest results for all involved in the relationship versus focused on simply following a process where the process is more important than the results. Getting to a desired outcome (the customers experience) should take precedent and i believe that OCM does this.
Thanks again for your insights.
Mel Abraham
www,BusinessSuccessSensei.com
http://www.MelAbraham.com
Dear Alex, perfect timing for this post…I have been operating under the wrong assumption with my (mis) understanding of OCM vs funnel approach! This explains the frustration of way too much effort for our iffy $ results to date AND for the high quality of our programming we offer! Even that word…”entitlement.” We have been flummoxed as to why we were attracting that attitude amongst some of our tribe”. You have answered it all and once again hit the ball out of the park. Now I know what to do to take us to much higher levels of revenue generation for the same effort-now. WOW!
elizabeth
http://www.newPrimetime.com
Alex,
Thank you for your willingness to share what you are thinking and doing. I think you did a great job of reminding all of us to shoot higher and attract people who really value what we have to offer. It is true what you said. It takes just as much work to attract a $497 client and is does a $25 client. There is a different level or personal responsibility at the higher level and less of an entitlement mentality.
Keep doing what you are doing, It is much appreciated.
Kim, Success Genie
Alex – thanks for this concept. When I speak, I find some students want to start out with more advanced education. They’re capable and ambitious enough to achieve results at a higher level than most inexpensive, entry-level products offer.
Your suggestion of starting out at a higher investment point is a good one. To me, a higher value means richer content that results in a more satisfying student experience.
For example, investing in your Teleseminar Secrets course in 2005 gave me an education foundation and membership in your student alumni community that continues to connect me with new opportunities. That’s value added and then some.
@wiredprworks on twitter.com
Great Stuff! I love the post
http://www.HealthLady.com
Great post! I was not aware of OCM… I like it.
I do see some similarities between OCM and the funnel, and I would suggest that the two are not mutually exclusive. It seems like OCM can still use funnel principles, but you’re applying a non-linear approach to it. After all, some elements of the funnel theory are more fact than theory. For example, using a free or cheap offer to build a prospect list is a sales principle that has stood the test of time.
The biggest takeaway for me, is that new marketers do not necessarily need to start with the outer circle, and may be better off starting with a higher priced product. Also that we should market to the inner circles concurrently with the outer ones. A lot of experienced marketers, including myself, are hesitant to develop very high end products for a niche until we go through the linear progress of building up to it. So thanks for that!
Alex,
Appreciate the clarification for Vaclav and John. The details were more subtle than the initial Ah Hah!
I appreciate your shining light on the other problem with funnel marketing, and that’s having a large list of freebie seekers. I don’t mind contributing to people that will never become ‘customers’, in fact I see that as a part of the Take 10 mission. However, I want to be sure I’m not spending a lot of my high leverage time in the contribution.
The idea that it takes as much work to enroll a $297 customer as it does a $97 customer is one of the places I think we get stuck in implementation. There’s a leap of faith there. I would add that it takes even more energy to convert a ‘funnel client’ to a supporter.
Alex you are without peer as far as I’m concerned. The only source more valuable than your thoughts is google. I will do the monthly teleseminar. I get it! Thank you sir!
Hi Alex,
I’ve been a fan of yours from the first time I found you on the internet. I’m an online marketer “wannabe” and am in the process of learning not only how it works, but the best approach. While I’ve still a lot to learn before I launch, the information you’ve provided makes real sense to me. Thank you!
Sandy
I’m a small business coach who just happens to be dyslexic (I was “diagnosed” when I was in college). Subsequently I learn and retain new ideas better in a visual way than in a written way. Your OCM helps me visualize to the 1000 degree how I can help my target clients. Now instead of a funnel, I have a better way to systematize it. Wow and thank you for that breakdown Alex!
Crystal
Being the guy who teaches the necessity having a target and hitting your BullsEye in your leadership, I LOVE your OCM post. OCM places the burden of value back where it belongs, on we the service providers.
Once again, well done.
David Porter
Alex, I can appreciate your approach to the sale. I’ve been in sales for over 55 years. I recently retired from 40 years in the Securities business and a series of events has me looking for income. We used to use the 80/20 rule there and dropped about 80% of our clients and kept the 20%. That’s how you build a clientele and we always made higher commissions from the 20 than the rest all put togeather. So your approach is sound. Right now I’m just entering the business and am about to finish the AWAI copywriting course. I’m also trying to make affiliate connections and figure how to advertise them to start an income stream. I’m also bombarded with offers to teach me the best way to make millions of dollars in a week or two. After I get at least some cash flow I’ll be able to look at targets.
Hey Alex-
This article was very timely for me as I just created my marketing funnel. As I read your article, it became very clear to me why the “target” design is much better overall. I too am very visual, but also I like to do things quickly. Would I rather sell a 10- $20 programs or 1-$200 program? The answer is obvious. By having to sell less at a higher price, it leaves more time for creating quality products or even spending it with my family.
Great advice, I am going to re-draw it RIGHT NOW!
Anne Berryhill
Alex,
One thing about this model is that a person must be in a market that supports high prices such as marketing, making money, golf etc. I think this can even work in niches like weight loss in which people spend thousands of dollars to look the way they want.
I think a key point to make is that this philosophy not only helps you come up with a marketing strategy but also to decide which markets to enter.
If you’re thinking of entering a market for which people aren’t willing to spend more than $20 like hamster care (and a lot of niche marketers tell people to do just that), you’d better think twice because you could be selling products worth several hundred dollars for the same amount of effort using “Outer Circle Marketing.”
I found this extremely interesting since that’s the way I’ve always done marketing. I just didn’t know it had a name! It makes total sense to me to do it this way and works to respect the intelligence and integrity of my prospects — their initial investment is fairly low and as they get to know me and my subjects, they’re willing to pay more if they find the value in it.
Thank you Alex – I knew there was a disconnect between the way my customers buy and the funnel theory – you have just made it crystal clear.
My lowest priced product is $97 – and I agree completely that as long as you deliver excellent value, it’s MUCH better to start higher rather than sell $27 products.
If I were starting again now, I would choose $147 as my base, for all the same reasons you cite in your excellent post.
Kay
Hi Alex,
I have experienced just what you are saying with my new getdialingfordollars.com webinar workshops.
I have an Inner Circle where I allow only a limited number of participants and my Outer Circle is unlimited paritcipants at half the cost but they don’t get the one-on-one interaction and coaching and leads. I offer the outer circle for those who do not think they can afford the inner circle.
What I have discovered is that most people will opt to wait to take the inner circle training in a month or two because it has such a higher perceived value to them. So there’s no funnel, they want to go directly to the bulls eye!
What I have decided to do is give them a partial credit toward the Inner Circle in the future if they take the Outer Circle NOW. I think that will help them to get the training immediately rather than have to wait until they save up and they’ll be repeat students, furthering the power of the learnings.
Do you think this is a good strategy?
Tracy ‘Power Gal’ Monteforte
One thing about product launches…
If you’re new to the Internet or Info Publishing world, I’m not saying that you should get rid of free Teleseminars or low-end offers.
What I am saying is start at the mid-range – like I did with MWP at $247 – and then take your offers in both directions. Go higher end and lower end almost simultaneously and your target audience will decide what price points they’re most comfortable in doing business with you for the first time.
Worst case, your highest end offers will create a contrast – like the “Law of Contrast that my friend Bob Cialdini teaches – and your mid-range price points will be perceived more reasonable.
Give it a try and leave a comment on this post. I’m curious how this OCM strategy works specifically with first-time or less experienced entrepreneurs.
Thanks for reading,
~ Alex
Hello Alex,
I am very new to all this marketing stuff and I am amazed at what I am learning each day. Your teachings certainly give me something else to think about, indeed because (as you’ve mentioned in your text), most people use the Funnel System. That was the system I was thinking of using. I guess you wrote this at the right time, as I still have to develop the first product.
Thanks a lot for sharing OCM with all of us out here.
Rutger.
Hi, Alex,
I am glad to see an alternative marketing strategy to the Funnel theory. OCM makes a lot sense, and I plan to incorporate it into my marketing plan.
Thanks for sharing this strategy!
Kathy
Makes a lot of sense, Alex, and “feels” better than the funnel theory. Definitely will use this when I get my offerings set up. Thanks!
Val
Thanks Alex.
This really clarified the difference between the two marketing theories, which you had alluded to during Teleseminar Secrets. OCM is about giving your prospects the choice to become a customer at whichever level they see the greatest value based on where they’re at personally, and on how effectively you communicate that value to them. This is distinct from moving them through a product pathway in which their choice is limited, as you said you experienced in your post.
Thanks again Alex. I’ll be re-reading this one for sure.
Jason
Hey Alex,
I never thought of Funnel Marketing in this linear manner where prospects are ‘forced’ through a channel. It surprises me that anyone would market that way or that ‘gurus’ would teach this. I thought of it as just making sure that you have a variety of price points, the low-end being for affordability and trust-building.
What I gained from your post and comments, though, is to START with the mid-range price-point and then let the lower price seem like nothing, the higher seem like a possibility and the mid-range, as you said, seem quite reasonable – for the value. Of course, the value has to be there. And…I think I’m going to raise my prices on a few of my sites. Ironically, in my desire to be generous, I’m actually thwarting sales, I think, and thus the value I can deliver and receive.
Cheers, Eric
PS. I’m overwhelmed with all the self-proclaimed ‘marketing gurus’ out there. I need one to focus on, and I think I’m going to park on your blog for a while. Your teachings always deliver practical value. Thanks.
Sweetly-said Alex,
In my industry, the home-based business opportunity niche, the concept of the low-end $50 “funded-proposal” as an entry point is accepted as gospel. Here’s the catch though, the $50 ebook or whatever has such low-value perception that it drives away hordes of people who are actually looking for big ticket, high value stuff. Thus, I have always just led with the big ticket approach, and it comes across as less “gamey” to my prospects.
Dear Alex
Thank you for helping me to gain a social website at twitter.com where I could express my goals & objectives in life.
With lots of best wishes.
Regards.
Yours sincerely
Pauline
There are several Funnel Marketing Theory Videos on Youtube, but when I looked for some Outer Circle Marketing Videos I couldn’t find any YET that are relevant to this discussion. Looks like there is some potential here for those who want to take advantage of Youtube to rank higher in search engines for the keyword “Outer Circle Marketing”. Thanks for the interesting post; it is clear that identifying the needs and wants of prospects is much more important than talking about product features and benefits to them.
Hi Alex!
Excellent!!!! Excellent! Excellent!
Thank you and you know, came right at the right time. Was just debating pricing and “where to start.” Seems like “God opened the heavens” and handed me this just minutes after I was deeply pondering a decision I was to implement today!
You always are so very helpful and deliver excellence in all you do.
Have the best day ever!
Thanks Alex… great post. Coming from a Corporate Marketing background, I can see where the marketing funnel still makes sense. However in an info-product internet-based business your Outer Circle MArketing makes much more sense to me.
All the best,
Karen
Your excellent article is an eye opener. I thought there’s only the Funnel Marketing Theory available. It’s nice to read about your OCM model. It terms of returns, it’s very convincing. However, it seems that it will take a lot of confidence (and experience of course) that most beginning marketers don’t have much of. That said, I’ll think a lot about how I can employ the OCM strategy in my business.
Thanks!
Twitter drives MOST traffic to my sites
That was some quality information.
Thank You
That was some quality information. Keep it coming
Thank You
Alex, insightful. I’ve studied just about everything there is to study or learn about “how to create a funnel” and this perspective shared here is worth it’s weight in gold.
I’ve had both funnels at the low end and the higher end for customer acquisition, and from my own empirical results higher end front end price points create a better business.
The things people don’t see is, at higher end price points, you just have better customers, more profit, and less hassle overall. Support costs and stresses are down.
It’s just easier to run your business. From an advertising perspective, you can more clearly laser target your marketing for only the highest ROI “honey holes” which again adds to your bottom line.
On the point of a “bullseye” instead of a traditional funnel – It’s so true. I’ve bought and had customers who only buy when the prices are higher. I know I don’t need qualifying purchases to buy at higher price points, just trust. Same holds for everyone as well as their customers.
Genius advice.
Oh,nice article. Good informations..
Wanted to drop a remark and let you know your Feed is not functioning today. I tried including it to my Yahoo reader account but got nothing.
Interesting take on the funnel model — I think you nailed it though when you talk about value and trust level These are the important take aways for me. I am just starting out in this online arena so I appreciate this article. THks.