MBA2639 Q&A Wednesday: Do Low Priced Offers Work?

Summary

Episode Summary: MBA2639 Q&A Wednesday: Do Low Priced Offers Work?

Podcast Information:

• Title: The $100 MBA Show
• Host/Author: Omar Zenhom
• Description: Awarded Best of Apple Podcasts, The $100 MBA Show delivers practical business lessons for the real world. These no-fluff episodes are packed with pure business-building training.
• Episode: MBA2639 Q&A Wednesday: Do Low Priced Offers Work?
• Release Date: June 18, 2025

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Introduction

In the Q&A Wednesday episode titled "Do Low Priced Offers Work?", host Omar Zenhom delves into the effectiveness of low-priced offers in business strategies. Drawing from his extensive experience in entrepreneurship, Omar provides actionable insights on leveraging low-priced products to build trust, qualify leads, and fund business growth.

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Understanding Low-Priced Offers

Purpose of Low-Priced Offers

Omar begins by defining what constitutes a low-priced offer. He specifies the "no brainer zone" as products priced between $17 and $49, likening this range to the average cost of a meal—a purchase that consumers make without extensive deliberation.

“We're talking about $100 or less and I want to get even more specific. I call it the no brainer zone. Which is $17 to $49.” (03:45)

Why They Work

Low-priced offers are not designed to maximize immediate profits. Instead, their primary functions include:

1. Qualifying Leads: Attracting buyers who are genuinely interested in purchasing, thereby enhancing the quality of leads.
2. Building Trust: Establishing a relationship with customers by providing value at a low entry cost.
3. Recouping Ad Spend: Ensuring that the cost of acquiring a customer through ads is covered by the revenue from the low-priced offer.
4. Paving the Way for Higher-Priced Offers: Serving as a gateway to more substantial, higher-priced products or services in the future.

“Low price offers can be one of the smartest strategies that you can implement in your business today or they can be complete waste of time and energy.” (02:30)

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Framework for Effective Low-Priced Offers

Omar outlines a structured approach to creating and utilizing low-priced offers effectively:

1. Solve One Clear Problem

   • Focus on addressing a specific, pressing issue your ideal customer faces.
   • Example: For creators launching email newsletters, a Newsletter Kickstart Kit priced at $29 includes essential tools like a welcome sequence and opt-in form templates.

2. Make It a Quick Win

   • Ensure that the product delivers immediate value, allowing customers to achieve a quick success.
   • Avoid lengthy courses; instead, offer tools or templates that can be used immediately.
   • Example: A landing page builder that provides a ready-to-use template.

3. Make the Purchase Feel Risk-Free

   • Implement a 7 or 14-day refund policy to lower purchase friction.
   • Price the offer attractively, ideally around $30, to make it an irresistible deal.
   • Quote: “Just price it $29 and get started.” (07:50)

4. Follow Up with Back-End Offers

   • After the initial purchase, engage customers with higher-priced offers such as courses, webinars, or advanced programs.
   • This follow-up strategy ensures continued engagement and maximizes customer lifetime value.
   • Quote: “Low ticket is the on ramp, not the destination.” (12:20)

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Self-Liquidating Offers (SLOs)

Omar introduces the concept of Self-Liquidating Offers, which are low-cost products designed to cover or exceed the cost of advertising:

• Example Scenario:
  • Ad Spend: $1,000
  • Number of Buyers: 100
  • Revenue from $29 Offers: $2,900
  • Profit: $1,900 after covering ad costs
• Benefits:
  • Generates revenue to sustain further advertising efforts.
  • Builds a list of qualified leads for future high-ticket sales.

“Self liquidating offers allow you to afford ads.” (05:10)

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Common Mistakes to Avoid

Omar warns against several pitfalls when implementing low-priced offers:

1. Focusing Solely on Front-End Profits

   • Expecting substantial income from low-priced products alone.
   • Advice: Focus on the long-term value of customers rather than immediate profits.

2. Overcomplicating the Offer

   • Providing too many components (e.g., multiple videos, PDFs) can confuse customers.
   • Advice: Keep the product simple and immediately usable.

3. Lacking an Upsell Path

   • Without higher-priced follow-up offers, the strategy loses its effectiveness.
   • Advice: Ensure there are subsequent high-ticket products to maximize customer value.

“If you don't have anything that's higher ticket to later, the SLO or the self liquidating offer model loses its power.” (11:55)

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Personal Insights and Experiences

Drawing from his own ventures, Omar shares how low-priced offers have been instrumental in scaling his businesses:

• Building the Email List: Low-priced products helped in expanding his subscriber base with engaged customers.
• Funding Ad Spend: Revenue from these offers funded further advertising, facilitating business growth.
• Customer Behavior: Even minimal purchases, such as a $9 transaction, psychologically commit customers, increasing the likelihood of future purchases.

“Low cost offers has proven to me that buyers behave differently. Even a $9 purchase changes the psychology. They voted with their wallet.” (12:40)

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Conclusion

Omar Zenhom concludes that low-priced offers are highly effective when implemented with a clear strategy. They serve as a foundational step in building a trusting relationship with customers, qualifying leads, and setting the stage for higher revenue streams. By avoiding common mistakes and adhering to a structured framework, entrepreneurs can leverage low-priced offers to significantly enhance their business growth.

“They’re for permission. They’re for qualifying people that are buyers. Permission to follow up with this person that just bought from you to offer more, to build trust, to ascend them.” (13:10)

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Additional Resources

For listeners looking to dive deeper into Omar's business strategies, he recommends subscribing to his Three Things Newsletter, which provides weekly actionable insights to help grow their businesses.

“Subscribe to my three Things newsletter. It's absolutely free.” (13:15)

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Note: This summary excludes advertisements, intros, outros, and non-content sections as per the podcast guidelines.

Transcript

[Omar Zenhom]

If you're a listener of the show, you probably own a business or looking to start one. So the question is, are you ready to thrive with your business? It's time to let Intuit QuickBooks take things like unpaid invoices and tracking expenses off your plate to take things to the next level. If you're a longtime listener to the show, you know how much I bang on about how important your finances are, getting your numbers in order, making sure your incoming invoices and expenses are all taken care of. That's where QuickBooks comes in. It's an all in one business platform that can help you with day to day tasks like invoice, invoicing and expenses. Manage and grow your business all in one place. Intuit QuickBooks your way to money get.

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[Omar Zenhom]

It's smart to always have a few financial goals and a really smart one. You can set earning cash back on what you buy every day. And with Discover you can get this Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show see [e-mail] credit card on today's Q&A Wednesday's episode, Gabe asks a sharp question. Do low price offers actually work? The short answer, yes, but only if you know what they're for. Low price offers can be one of the smartest strategies that you can implement in your business today or they can be complete waste of time and energy. So today I'm going to walk you through when and how they work, the biggest mistakes people make with them, and how to use them to fund your growth and qualify future buyers. Let's get into it. Welcome Back to the $100 MBA Show. I'm your host Omar Zenholm where I deliver practical business Less three times a week, Monday, Wednesday and Friday to help you start, grow and scale your business. If you got a question you want to ask here on Q and A Wednesday, just go ahead and ask it over at 100mba.net Q Submit your question and we'll answer it right here on the show. What's the purpose of low price offers? Well, when we say low price, let's get really specific. We're talking about $100 or less and I want to get even more specific. I call it the no brainer zone. Which is 17 to 49 dol. Why do I call it no brainer zone? Because it's the average price of a lunch, a meal. You know, you can go to a fancy meal at a fancy restaurant, but on average, this is a purchase you don't really need to think about too much. 17 to $49. Why do these offers work? Well, they help qualify leads, not maximize profits. You're not trying to build an empire off $27 products. You're trying to do a few things. You're trying to get buyers onto your email list, which is always great. Build trust. Right? You want to build trust with that audience. You want to recoup your ad spend that you spent to get this lead to get this customer. And you want to send them to higher priced core offers later. We're talking about 500 plus priced offers. You want to think of this like a trust building handshake that pays you back. So what makes low price offers work? Well, I got a formula that I've used that really works for our business. I want to share with you. Number one, I mentioned it before. You want to price it like a meal so they don't overthink it, right? You don't really think about purchases that are 17, $29. Most people don't think about those types of priced offers or products. Most people, if they're hungry, they just buy lunch, right? They don't think about it too much, they don't consult anybody, they just do it. Next, it solves one clear problem. For example, how to make your first sale or how to improve your free throw shooting in basketball. Very specific problem. Next is immediate value. You want to get people a win quickly. You don't want a long winded six week course. You want something that they can consume quickly, get a win and really feel like okay, this person is legit, this company's legit. And then lastly, really important feels like it should cost more. You want them to feel like they just got a crazy deal, like there's something wrong here, right? Maybe this is a glitch, a mistake. But they feel like they're winning by grabbing your deal, your low priced product or offer. So let me give you an example. An example of a $29 offer that works. Let's say you help creators launch email newsletters and your offer could be a low ticket product called Newsletter Kickstart Kit. This offer is $29. It includes a plug and play welcome sequence, opt in form templates and a quick start video. Okay, so as you can see, it's high value. It's get them going. It's something that will allow them to get a win quickly. Basically for $29, they get a shortcut. You on the other hand, now have a buyer who trusts you. You have their email, you have their attention and maybe even a pixel for retargeting. For other offers you might want to send them, now they're in your world, this is where you want them. The next use, or even just framework mind framework you want to think about is self liquidating offers. If you've never heard of this term, here's what it means. A self liquidating offer or SLO, is a low cost product that helps you break even on your ads. So a lot of people say I don't have money to spend on ads. I don't have money or a budget to market with. You know, Facebook ads, Instagram ads, whatever ads. But self liquidating offers allow you to afford ads. Let me break it down. Let's say you spend $1,000 on ads. With that thousand dollars, you get 100 buyers. Let's say for your $29 product, that's $2,900 in revenue. Okay? Your ad spend is paid for because you made more money than what you spent on ads. In fact, you spent $1,000 on ads. You made 2,900 in revenue. That means you actually made $1,900 on top of your ad spend. But best of all, you have a hundred qualified buyers now that you can then offer them your higher ticket offer like a $500 or $1,000 product. On top of that, you got a hundred free leads. No affiliate commission, you got to pay out. No agency to pay. Just smart unit economics. Now, even if it costs you more than $1,000 to get those sales, you have a budget now to actually run ads given the fact you're selling something. But this only works if you build your low price offer properly. Now I want to give you a framework to do just that. Number one, start with the first problem your ideal customer faces. Don't solve everything. Solve one annoying thing. They're dealing with the kind of problem they'd gladly pay to avoid.

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I feel like I have to give you something in return for karma.

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[T Mobile Customer]

I don't really have much in my purse. Oh, let's see. Hand sanitizer. It's lavender.

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Let me check this pocket. Oh, mints.

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Oh, I have raisins. I'm a mom. Wait, wait one sec. I've got cupcakes in the car.

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[Omar Zenhom]

Here are some examples. I don't know what to post on Instagram right? For those who want to grow their Instagram account, here's another example. I don't know what to say on sales calls, so a script would be really helpful. One more example. I don't know how to build my first landing page. The next part of the framework is make it a quick win. Low ticket buyers want fast traction, okay? They want to be able to get from 0 to 1 quickly. Give them a shortcut, give them a template, give them a done for you element. Don't build a course, build a tool. Third part of this framework make the purchase feel risk free. Use a 7 or 14 day refund policy and price it like a launch. Under $50, ideally around $30 is perfect. This keeps the friction low and conversions high. Now you may want to test this if you know $29 converts better than 24 or 17 or 49 for that matter. But don't overthink it. Just price it $29 and get started. And the last part of the framework is follow up with back end offers. Now after they have bought your offer, your low price offer, don't let them disappear. Have a follow up funnel, a thank you email with a bonus, a three day flash offer for your course or your program or whatever you sell that's at a higher price. You can even invite them to a webinar or a workshop where you sell them that higher price product. Low ticket is the on ramp, not the destination. Now before we wrap up, there's some big mistakes I want you to avoid. Let's talk about where people go wrong. Number one, they try to profit off the product alone. If you're expecting to get rich off a $17 ebook, just stop. It's not about the $17, it's about what that buyer is worth to you over time. Focus on customer lifetime value or ltv, not the front end sales. Next, making it too complicated. Don't sell 18 videos or 4 PDFs or 6 calls for $29. That's not a product, that's confusion. Keep it simple and immediately usable. Another mistake people have is not having any kind of upsell path later on. If you don't have anything that's higher ticket to later, the SLO or the self liquidating offer model loses its power. So even if you have a basic $197 offer or a $500 offer, that's enough to turn a break even into a profitable growth instead of just, you know, breaking even on your leads. Here's some real talk from my own experience when I ran ads for the $100 MBA. Our low ticket offers help us fund our ad spend and grow our list with buyers. Not just freebie hunters, people that are just looking for free things. And those people are right. They might buy later on, but you want to have levels of leads in your CRM. Like people that are loving the free content, but you also want a level of customer that has bought something that's low cost. They have high potential to buy again. What I found is that low cost offers has proven to me that buyers behave differently. Even a $9 purchase changes the psychology. They voted with their wallet. Gabe, who asked Teddy's question? Low ticket offers absolutely work if you know why you're using them. They're not for profit so to speak, but they're for permission. They're for qualifying people that are buyers. When I say permission, I'm talking about permission to follow up with this person that just bought from you to offer more, to build trust, to ascend them in their progress as a customer and as a learner. As somebody that is going to achieve great things with your products, with your knowled your value. And if you do right, that $29 product that you offer might just launch pad you to the next hundred thousand dollars in revenue. Thanks again for being a listener, being a subscriber of the Hundred dollar Mea show. If you want to go deeper with me, if you want to learn more from me and grow your business, subscribe to my three Things newsletter. It's absolutely free. Every week I send you something to think about, something to do, and something to learn. This is real world business coaching delivered straight to your inbox. Let's grow your business together one smart step at a time. Just go to 1-000- MBA-NET sign up for any of our free guides and you get added to our newsletter automatically. Thanks again and I'll check you in the next episode. Take care.

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