Internet marketing legend Alex Mandossian reveals how you can increase your conversion rate and increase your prices using his “unselling” method. Even if you are NOT a salesperson you can use his selling methods successfully.
To get information on Alex’s COI strategy: AccessInfluence.com
Transcription Episode 78: Skyrocket Your Conversion Rate By “Unselling” AND Increasing Prices – With Alex Mandossian
Today, we’re going to be diving deep into conversion rate and conversion rate strategies. We’ll answer a really common question, “what is conversion rate.”
Wow, we’ve got a really special guest on the show today. Someone who’s been in the online marketing world, I was trying to think, but as far back as I can remember. He’s really a pioneer in the world of digital business and online marketing.
Since 1993, he’s generated almost $400 million in sales and profits for his students, clients, joint venture partners on five continents. His marketing strategies help convert his personal income in 2001 to a monthly income by 2003 to an hourly income by 2006. By 2007, his proven enrollment strategies helped him generate 1.2 million in less than 29 minutes in fact.
He’s been acknowledged by many of his colleagues as the Warren Buffett of Internet because of his unique ability to make money for his students and joint venture partners. He shared the stage with some really incredible people like Sir Richard Branson, Donald Trump, Tony Robbins, Suze Orman, the Dalai Lama.
As a master visual presenter with now over 22,000 hours, I think you need 10,000 to be a true expert, he’s at 22,000, of training experience. In 1989, he had a lifetime goal with his colleague Mr. Jack Canfield to influence one million other trainers by his 77th birthday.
Without further ado, I’d like to welcome the one and the only Alex Mandossian to the show.
Alex, thank you so much for being here.
In 1989, I was broke. I’m sitting on a park bench. My Volkswagen Jetta is parked on the street. 16 months earlier, I’d started a frozen yogurt and bakery store. It was a franchise. It didn’t work out. 16 months later, on the park bench, I’m 242,000 US dollars in debt.
Gone was all my grandparents’ savings and my accounts. Gone was the money that my mom and my dad gave me. My mother’s house was up for security, and it was up for foreclosure. I didn’t really want to go home to mom but that’s where I was going when I was sitting there in MacArthur Park in Los Angeles, California. It wasn’t a good time for me.
On that bench, this is not embellished, this is a true story, I watched a woman put a nickel, that’s what it was back then, into a birdseed machine. She wanted to feed the pigeons. Now, I’ve been to Venice before and the pigeons in the Venetian Square, they just come to you. They didn’t do that at MacArthur Park. This woman was walking towards the pigeons.
What do pigeons do? They walk away because they’re afraid. She walked, and turned around, and showed the birdseed to them. We’ll call that the lead magnet or the bait. The pigeons walked towards her. Let’s call the pigeons the prospects and the woman the marketer. She turns around again and the pigeons again are walking away.
I’m observing this. I’m not thinking marketing. I’m broke. I didn’t even know what I know today. I noticed that the distance between the pigeons and that elderly woman became less and less as she went through the dance. It took about 10 minutes until the distance came to a very close proximity.
She got on one knee. She was heavyset so it looked difficult for her to get on one knee. She put her hand out with the birdseed. I guess one very brave adolescent pigeon pecked her hand and got some seed and then everyone else, all the other pigeons followed.
It was amazing because she’d go back to the birdseed machine and she didn’t have to go through that dance anymore. She got the first sale. Then it seemed like her backend business was booming because they were landing on her shoulders. They were landing on her head. They were pooping all over her, which is good luck.
I noticed this happen and I didn’t think of it until about 15 years later. I thought, “Wow. That is conversion.” You have to do it gradually. When you earn the knowing, and liking, and trusting who was attempting to convert you, in that case the woman, then you can have your prospects feeding from your hand.
Now, an interesting epilogue is there was about a five or six-year-old kid. It was summer. I love to say it was snowing and it was horrible, but it was comfortable. It was Los Angeles. I’m broke. I’m on the park bench. I watched this little kid asked for a nickel from his mom, got the birdseed. He wanted the same result as the woman. Who wouldn’t?
He got the birdseed. He ran at the pigeons. They flew away. He didn’t do the dance. He tried only once and he threw the birdseed at them. He never had the beak to hand relationship. I thought, “Wow, I have students who are like that boy, and I have students in conversion rate who are like that woman.”
If it takes a human being 40 weeks from the time that you’re released from dad and you’re received by mom, and then 40 weeks later, you’re out, born a genius. Many million times the size when you started … My son came out 37 weeks. That was really inconvenient because I had a teleseminar on that day. Nevertheless, it’s about 40 weeks. It takes time.
For this woman, it took 10 minutes. For the kid, he didn’t want to go through it because he was impatient.
Really, the world of marketing conversions is taking that story as a metaphor now that’s many years later, and you’ve got to be like the woman. Do the dance with your prospects. Do the dance with your buyers. Do the dance with your multi-buyers even suspects, people who are just clicking. Do that dance.
It takes a little time. Once you get them, then you will have beak to hand feeding from the palm of your hand ongoing if you do the right thing, and you won’t be like the boy who just wanted the conversion rate result and wasn’t willing to go through the evolution of the result, wanted a quick fix. I’d call him the bright, shiny object chaser that we have many students.
That’s how everything started and it wasn’t as poetic when it happened. It was horrible. It took me seven years to get out of that mess. It’s the best story I can think of that’s true that really makes an impact on the idea of what conversion rate is really about. It’s a relationship thing. It’s not a technology thing.
Then buyer, I use the word ‘buyer’ because there’s customer, patient, student, member, all these different words, client. I like to say buyer because a buyer is someone who spends a dollar or more. You turned pro. You’ve gone from amateur to professional. The conversion from prospect to buyer is one dollar or more. Steve Jobs made a fortune on 99 cents for so many years.
Then the multi-buyer, this is where a lot of people in my tribe get confused. They think an upsell, or a cross-sell, or a one-time-offer, an OTO, they think that that bump in revenue is a multi-buyer. It’s not based on my definition.
Again, these are just my projections and my definitions.
I believe a multi-buyer is someone who buys at another session. If you get an upsell or a one-time-offer sale, good. That’s a better buyer but that’s still one session. You don’t have a pattern. If they buy a second time, then that lifetime value of the multi-buyer, in my tribe, is five to eight times more than the single buyer.
The purpose of our company is to create multi-buyers. Then once we do, it’s up to them to choose what they want to buy from us, and we don’t have to promote to them as hard. The conversion process is a transformation from suspect to prospect to buyer and multi-buyer. If you get a bunch of multi-buyers, it’s like going to heaven without the inconvenience of dying.
People say, “Well, I’m not a marketer.” Well, that is the business. If you’re a dentist and you don’t market, you have no patient. If you’re a chiropractor, you don’t market, you have no patient. If you’re in financial services and you don’t market, there’s no client.
Marketing is the business.
Typically, coaches and consultants, now I’m just using that as a catch-all category, this works for any business, there’s usually a cash flow famine or feasting period depending on what they’re doing.
We’ve surveyed our list of over a quarter million, and we found that 87%, that’s over five-sixths, stated that they don’t have a tested and profitable lead conversion process. That lead conversion process is something that is what everyone else calls a funnel.
A funnel that we use for high-ends clients is, first, bring them in through a lead magnet and give them some content to educate them why it’s important to have high-end clients. That’s what we’re doing. We’re attracting high-end clients and we’re teaching them how to get high-end clients. The moment they say yes, we’ve already proven the concept.
We say, “If you spend $25,000 with us, you’ll never see that $25,000 again. We can’t guarantee the ROI. We can provide you electricity, but you got to flip the switch.”
We have this unique process called the COI method, which doesn’t require sales skills, which is really good for coaches and consultants looking to increase conversion rate because many of them don’t have the sales skills that sales trainers and sales people do.
It’s a 13 question method. It’s in one page.
We say, “Hey, if you’re having challenges with increasing conversion rate during your strategy sessions, or your discovery sessions to convert prospects into high-end clients, then here’s a 13 question template we use that has generated several million dollars in the past few years.”
We have people from age 13 to, get this, age 91, a guy with a cane and cataracts online, doing high-end sales for World War II veterans actually. It’s really interesting. He lives here in San Francisco. My youngest was eight years old in Melbourne, Australia. I told her she couldn’t come on board. Her parents were going to sue me. I said, “Okay. Fine. Come on board.” She was awesome.
That’s our lead magnet. It’s a one-page template. Then when they actually opt in, they go through a group strategy session that’s recorded. They see the 13 questions being used. Then if they decide to take an assessment, they take the assessment. Again, these are the points in our funnel.
Then they’re eligible for a one-to-one strategy session with one of our folks. Then, at that point, they have a choice of three different options. They already know the price before coming in.
It’s not a yes or no, it’s a yes, yes or yes. It works superbly. That’s one of our funnels that has worked really well, especially after product launches.
Rather than going to a 12-pay program, Derek, where you’re getting really the lowest rung of client or student, what we do is we close the cart.
Then we reopen it and say, “Offer is no longer available. It’s two grand, no longer available. Maybe next year. We do have an accelerated program where we’ll give you 2,000 bucks off because you get the product for free and the do-it-yourself version. We will take you through the accelerated version of what the do-it-yourself course was going to be.” This is post launch.
We’ll typically make more money on the high-end clients. Our affiliate partners know what we’re doing.
We typically make more money after the cart closes and reopens just for high-end than we do in the $2,000 or $1,000 sale before. That’s a new model to increase conversion rate. It’s post-launch training, not pre-launch content. It works really, really well with the Jeff Walker model.
Now, each step from lead magnet to watching the group strategy session on Wistia, we’re finding out when they’re leaving, et cetera, to actually going into the assessment each is making that prospect work harder and harder.
Now, I want to dig into this assessment thing because the assessment, I think, is a brilliant little conversion rate strategy there because effectively what you’re doing is capturing the information about them. If they meet certain criteria, then they get to talk to somebody?
That’s because they’re showing us their level of commitment. They can have the need to do it. They can have the yearning to do it. They can have the skill set to do it. Unless they’re committed to do it and they’re willing to pay for mentoring, then we don’t have the strategy session so that’s the pre-qualification, I guess, disqualification process.
With the COI method, we look at the cost of not taking action to increase conversion rate, cost of inaction, and all we’re focused on is making change. We ask them, “Where do you want to be?” Everyone got the same memo. They always say, “$10,000 a month.”
Then we say, “Where are you now?” That’s point A. Everyone got the same memo. They say, “$5,000 a month.” They say it routinely. Then we say, “Look, your cost of inaction is $5,000 a month or 60,000 a year by not making the change to increase conversion rate so that you can be where you want to be. We’re not making any promises.”
Then we ask them, “How come you don’t have that? What will happen if you go six months from now and you still don’t have higher conversion rate? What other barriers are getting in the way?” Then we tell them, “On a scale of zero to 10, how motivated and inspired are you to making a change?”
If they say, “Eight,” we say, “What would make it a 10?” They tell us. I say, “What if you could have that?” Then they say yes. If they say 10, we don’t let them off the hook. We say, “How come? How do you know?”
We’re focusing on how inspired and motivated they are to make a change because we don’t motivate anyone. We only get pre-motivated people. If they say 10 and they’re willing to make a change, then here’s our pivoting question and it’s in the template.
If anyone wants it, they can get it at the end. I’ll give an address. What we say is, “Okay. Is it okay if we share with you what making change with us looks like?”
Then we give them three options. Now, the options we give are very high, $25,000, then mid-range, $5,000 and then low, $2,000. That’s one of the funnels that we have. The key is a very steep drop. 25,000 is private consulting with me or private coaching. It has to be a huge drop from 25 and we go all the way down to five.
The reason for that is you’re taking access away from 25 to five. We find that a lot of people say yes to five as a result of that contrast that I learned from Dr. Robert Cialdini who I got to interview several times who is from Arizona State University. It’s that contrast.
Now, if you started by saying, “Hey, we have 2,000, 5,000 and 25. What do you think? Which one?” All of a sudden, 5,000 seems like a lot. We go backwards. We go top-down and we flip the funnel from high-end to low-end.
Most funnels are low to high. The reason we do that is that’s the way it’s in the real world.
If you’re going to buy a refrigerator, a really good enroller, a sales person would take you to the $3,000 model and if you don’t want your name inscribed on the ice cubes, then he takes you to the thousand dollar model and takes away a bunch of feature. Then if that’s not good, then you go to the $500 model which cools food.
I believe downselling, Derek, is a lot easier than upselling as far as conversion rate goes. We live and die by upselling in tripwires, and OTOs, and stuff like that, all the marketing jargon. Downselling is what really makes attracting and increasing conversion rate of high-end clients a lot easier because of this law of contrast. That’s how we do it in that process.
It took me, what? I’m a grandfather in Internet marketing. It took me 25 years to get to that level. When I first started $10,000 was high-end. If someone is listening now and you don’t have a $10,000 product but you do have a thousand dollar product, say that you are creating a $10,000 product, which is authentic and genuine, if that’s your intention, but it’s not available yet.
Just by mentioning the $10,000 product, it will make the thousand dollar product so much more appealing. That’s what the law of contrast does.
Now, I tell my students, “Sell the $10,000 product.” As soon as you get your first yes out of a hundred people, if 99 say no and one says yes, you will be so motivated and inspired to create a $10,000 product that I can help you with versus trying to build one and then see if anyone wants to buy it.
We believe in selling it first and then creating it versus creating it. Guessing wrong and then trying to sell it and it’s trouble and struggle.
I got on stage, sold it. I sold the hundred thousand dollars and went, “Okay. It’s for real now.” I tell you nothing motivates you to get to work and create something than having people knock on the door wanting it. It’s such a shift and people are afraid to take that approach but it works well. I’m sure you’ve done the same thing many times.
They allowed me to fund all the little things that you need from the platform that you’re going to use to the copywriter that you’ll pay, if it’s not you, to write the copy of all the content and auto-responders, the drip process on the students or clients, whatever you call them. Just having a beta launch will pre-fund a course. Make sure that you’re not guessing wrong.
You never want to play pin the tail on the donkey with your marketing dollars.
You can go back to every spiritual tradition that was always enrollment. In the Christian tradition, the 13th Apostle Paul was probably the greatest salesman ever. He converted people. That what’s you do in spiritual tradition or religion, you convert. They have a successful conversion rate.
This has been going on for thousands of years. I think the reason people don’t do it is because they don’t know how to do it genuinely and authentically. Secondly, they are afraid of selling high-end because their self-esteem is attached to a bunch of zeros.
The example I give is let’s say you had hundred dollar clients and $10,000 clients. Let’s say you were talking to a hundred people a month. If you had a 50% conversion, one out of two people said yes, I would pay you as a mentor because I need to learn that skill. I don’t have that track record. Let’s say you converted one out of two, you would have $5,000, 50 times a hundred at the end of the month.
Now, let’s say you’re going after $10,000 clients. You’re talking to a hundred people and two people say yes, 98% rejection, but yet you got $20,000, which is 400% increase from a 50% conversion.
Many people think it’s the conversion rate percentages that count. No, it’s the conversion rate coupled with the pricing structure, in my case, high-end clients. They are less problem children. We flip the funnel. We offer the high-end first.
Many people offer the open mouth of the funnel, the top of the funnel usually is with the less expensive stuff, and the lead magnets, and the tripwires, and all that stuff. We flip it for more profitable conversion rate.
We go, “Hey, if you were to by the kitchen sink, here it is a 100K. Well, if that’s not working, 50. It doesn’t work, 25. That doesn’t work, 10. That doesn’t work, two. That doesn’t work, 500. That doesn’t work, 20. If that doesn’t work, you can come in for free.” It’s at the bottom. We flip the funnel.
We feel that the lower end should be on the bottom and the high-end should be at the top. In the traditional funnel, it’s just flipped. At the bottom are the high-end and that shouldn’t be.
This comes back to, I think, everything you’re talking about here, Alex, is conversion rate, making it measurable. Once you can build a business that’s measurable and built on a process that you can predict, now you have a real business.
If you’re relying on one hot salesman for conversion rate, your business lives or die by that salesman staying or going. For everybody listening, this is where you need to be. Alex’s approach to this is very systematic in developing that sales process. Effectively, you’re handing out the funnel blueprint here to them which is awesome.
That being said, before we start to wrap this episode up, Alex, what’s the next logical steps that they can take as a result of listening to this episode? Where do people go?
If you want to see it, it’s on a single page. I recommend that you put a laminate around it. Go to a local Office Depot, or Kinkos, or whatever and laminate it like I do so you can spill coffee on it or water and it’s still good. Mine is laminated.
If you go to AccessInfluence.com, you’ll see a little screenshot of it. Just opt in and you’ll get it on the next page. Print it out and look at the sequence of questions. You don’t have to use all the questions. Some people don’t use all 13.
We have relationship consultants and couples therapists using it. We just change the questioning so rather than saying how much money do you want to make 12 months from now? I have a relationship coach client who says, “Okay. On a scale of zero to 10, where do you want your relationship to be 12 months from now?”
They say, “10.” “Where is it now?” “Five.” “Good. We want to increase it 100%. If we can increase it by 50% in about three months, are you okay with making that change with me as your couples therapist?”
I’m truncating it and shortening it, but that’s the essence of COI for improving conversion rate.
You can apply it to any business, not just in the area of money which, for me, is business and sales, but it can be in the softer areas, too, especially spiritual practices. Well, we have spiritual psychology graduates from the University of Santa Monica, which has a great program, and they’re coaches. They’re very spirit-centered.
My marketing buddies would go, “That’s woo-woo. I don’t like that.” They’re utilizing it to increase conversion rate and typically that particular tribe of people just loathe selling. If it’s good for them, then I think it passes the sniff test.
Effectively we just reverse engineered a funnel that’s made you millions of dollars, and you just shared all of it so thank you so much.
As always, all the links that Alex mentioned, I’m going to include those in the show notes. I don’t care what you’re selling. I would go grab a copy of this. Understand his funnels. Like he said, reverse engineer that. See what he’s doing.
This is a master of selling online, somebody that’s been doing this longer than most people have known about the Internet for that matter.
Take action and utilize those resources he’s sharing to increase your website conversion rate. Study those funnels.
Again, if you haven’t done so already, make sure you subscribe to this podcast. If you’re on an Apple device, head over to iTunes, click subscribe. If you’re on Android, head over to SoundCloud or Stitcher Radio. You’ll find us there as well.
While you’re there, if you like what you heard, please leave us a rating or a review because that’s the fuel. It gives me the momentum and motivation to continue making this the best info-packed podcast for digital entrepreneurs.
Now, it’s time to take all of the tips and strategies that Alex so generously shared with you here today and apply that final essential ingredient that’s actually going to make it work for your business. That ingredient is action.
Go forth. Take action. Go study Alex’s funnels. Download those resources he shared with you. You’re going to start to see conversion rate results guaranteed.
Once again, guys, this is your host Derek Gehl signing off.