Dubai: While jobs in sales are often associated with follow-up calls checking in to gauge your interest in what are referred to as ‘low-ticket’ or low-cost products, ‘high-ticket closing’ deals with a different aspect of sales and involves making money closing sales of items that are much more expensive.
With low-ticket products, the strategy here is to sell as many products as possible rather than selling just a few at a high price tag. With this method, you earn by selling volume. These types of offers can also be given away for free, and there are several advantages and disadvantages to doing this.
So if you consider yourself to be a small-scale business owner, a newbie micro-entrepreneur or someone just looking to make money faster, and had to focus on one price bracket, what would you choose – high-ticket or low-ticket items? Before coming to a conclusion, we need to factor in the perks and risks.
If you want to make as much money as possible, it’s worth identifying the merits and risks of both high-ticket and low-ticket sales to find out which is more valuable to you or your business model
Does this new avenue help make more money than other sales jobs?
“If you want to make as much money as possible, it’s worth identifying the merits and risks of both high-ticket and low-ticket sales to find out which is more valuable to you or your business model,” said Dr Rashid Hammad, a UAE-based independent business mentor and entrepreneurship coach.
“Most businesses, both online and bricks and mortar, usually sell a range of products or services. Some of them are cheap and some are quite expensive. And of course, there are those who mostly focus on a single type of product: high priced or low priced.”
Which would you focus on selling more of? Would you rather focus on high ticket sales and sell expensive products or services, or sell a larger number of low-ticket items? Let’s go through the two types of online products to find out what each one has to offer.
How are ‘high ticket closers’ different from other salespeople?
“As opposed to working in the conventional form of sales, a ‘high-ticket closer’ who closes deals on a premium product or service doesn’t fit the common perception of a salesperson who expresses interest in you to make a quick sale,” explained Ayesha Noorani, a retail industry researcher based in Abu Dhabi.
Here is an example. Let’s say you are walking through the cosmetics store, and sales representatives look to offer you a free sample of what is most often a ‘low-ticket’ product. If you take it, they may start engaging with you about the product features and start leading you toward closing a deal fairly quickly.
So such ‘low-ticket closing’ processes focus more on the product or service's benefits and less on customer-specific needs. Low-ticket sales are all about highlighting the value of a product or service to show why it's worthy of its price. Now let’s briefly describe the job profile of ‘high-ticket closers’.
As opposed to working in the conventional form of sales, a ‘high-ticket closer’ who closes deals on a premium product or service doesn’t fit the common perception of a salesperson who expresses interest in you to make a quick sale
How does the job of ‘high-ticket closers’ help customers?
To understand how ‘high-ticket closers’ operate, consider the process of shopping for, let’s say, a wedding dress. This sales process is initiated by the customer, who may need to take an appointment at the store, after which they typically work with bridal consultants who learn about their style and theme.
While bridal consultants then provide a custom selection of dresses and help clients envision how they may look on their wedding day, sales representatives for high ticket products or services similarly take a consultative approach. They work with clients to find the perfect option for their needs and pain points.
“For ‘high-ticket closers’, it's not about selling clients on your most expensive product — it's about maximising satisfaction. High ticket closers aren’t pushy and aren't afraid to take a relatively slow and steady approach to seal the deal,” added Noorani. But how are customers affected by this approach?
“When buying an item relatively economical, there isn’t a lot of particular tension felt in their mind, prior to making a purchasing decision. When you’re buying high-ticket products though – there is a lot more tension, and potential pain associated with it, because owning the product may not give them the satisfaction they desire, versus the money they’ll spend.”
“The advantage of being a high ticket closer is the fact that you don't need to create or own a product for yourself. You're simply selling someone else's product. This is why it has become increasingly popular as a way to do work remotely,” added Noorani.
“This can include booking international flights, luxury vehicles, high-tech appliances, or home renovations. A single high ticket sale is usually worth at least Dh500-Dh1,000, so it's not a purchase that clients will routinely make.”
Other examples of a high-ticket sales include marketing for an airline ticket to an overseas country combined with a one-night hotel stay, as opposed to marketing silicon-based covers for smartphones as an example of low-ticket sales.
What costs go into becoming a ‘high-ticket closer’?
The ‘cost of acquisition’, which is the total cost of acquiring a customer, is often the same for both high-ticket and low-ticket items. With low-ticket items though, you’re only going to make a small profit from that lead, which means that you will need to sell a lot more products in order to achieve your goals.
So if it costs you Dh100 to acquire a lead and your low-ticket item is Dh150, it means you’ve made a profit of Dh50. But if you sell a programme or product worth Dh1,000, you’re making Dh900 in profit.
If you were to make the same profit selling only low-ticket items, you would have to sell 18 products in order to make the same profit. That means 18 times more work and more hours spent finding leads, chasing leads and then trying to close those same leads.
It also means more frustration for you and a much smaller chance that you’ll be able to ultimately grow and scale your business.
High-ticket sales means less money spent on promotion
“Focusing on high-ticket sales can also mean less money spent on promoting your products. For example, if you want to make sales of Dh50,000 a year and you’re selling low-ticket products for Dh50, you would then need to sell 1,000 products to achieve your goal,” added Noorani.
“But if you focus on selling a high-ticket product or service priced at Dh1,000, that would mean you would only need to sell 50 items to achieve your yearly goal. That means considerably less work for you and fewer expenses on promotional and marketing strategies like advertising.”
On the other hand, with low ticket items, you’ll need to constantly run ads and promote your products – after all, you’ll basically need to sell almost three products every day in order to achieve your goal.
Focusing on high-ticket sales can also mean less money spent on promoting your products.
High-ticket is not always the winning strategy
“High-ticket sales is not always the winning strategy. It certainly has its downsides, apart from the fact that you’ll need to create a product that is worth this money. Not only that, but there also needs to be a market for it before you can attract clients who would benefit from your product,” said Hammad.
“One should also not forget the fact that low-ticket items help you get more people into your sales funnel. These impulse buys and pressure-free purchases get them hooked and give them a taste for the high-end version – get them in your the high-ticket sales funnel so that you can later upsell to them.”
“Later, when they have more disposable income or are ready to take the next step, they’re more likely to come back and buy a high-ticket item from you,” he further explained.
Key challenges: Slower success rate, higher user investment
Hammad further explained that the key challenge when it comes to high-ticket sales strategies that need to be factored in is that selling high-ticket items equals slower success rate, particularly when deciding whether or not to venture directly into it without experience in low-ticket sales or no clientele.
“Most people won’t be ready to buy something very expensive from a business they don’t really know,” noted Hammad. “Additionally, high-ticket items are big investments, so if you want people to buy them, you need to first hook them somehow and then build on their trust.”
Possible fix? First building a client base with low-ticket items
“One of the best ways to achieve this is to first sell them low-ticket items and from there nurture the relationship until they’re ready to make a bigger investment. That being said, low-ticket items are simply not enough to build a scalable business.”
Also, Noorani stressed on the fact that you should ideally only look at your low-ticket items as a gateway to people buying your high-ticket items, as a way to build a high ticket sales funnel that ultimately results in them buying a more expensive product or service.
“That’s not to say that it’s impossible to make money with low-ticket items, but the only way to make a respectable profit with these types of products is if you have a huge list that you can sell to and high levels of web traffic that converts well. If you don’t have a big list you will need to invest too much in acquiring clients and your profit margin will drop even more.”
One should also not forget the fact that low-ticket items help you get more people into your sales funnel
Verdict: How can I benefit from high-ticket sales versus low-ticket deals?
In a nutshell, the biggest benefit of having high-ticket clients is that you get more revenue through fewer clients. One high-ticket sale yields a much better profit margin than many low ticket sales.
With the latter, you’ll have to acquire and cater to a great many more clients to make the kind of profit you make with a single high value client.
So with high-ticket sales, you have fewer clients to provide support to. This means you can focus more of your efforts on the high-ticket clients paying more for your services.
Additionally, high-ticket clients are less likely to be fazed by high prices. While low ticket clients find it easy to shop around different agencies for similar services at lower prices, high-ticket clients expect to pay higher prices for quality work.
So when you target high-ticket clients, you don’t have to worry about the competition as much. There’s no need to lower your prices or offer discounts here. In fact, you’re in a better position to maintain or even increase your high prices.