“Here’s how we built a discount brand to accompany our premium services brand and capture sales at the top of funnel.”
Turn Sales Failures into Passive Income
- 1. Differentiate Your Brands
- 2. Value Delivery
- 3. Upsell and Downsell
- 4. Use Low Cost of Entry to Increase Customer LTV
- 5. Other Perks of Runoff Sales
Almost everyone on the internet is looking for a good deal. A “steal,” even. Here’s how we built a discount brand to accompany our premium services brand and capture sales at the top of funnel.
It also doubles as a top of funnel lead source for the premium brand. Win, win.
Turn Sales Failures into Passive Income
A good way to build a company is by solving problems for a neglected market. Neglected markets may not be familiar with what they should be looking for to build their own project. So the affordable cost to entry is often low for a lot of potential customers.
The difference between a $100 customer and a $5 customer isn’t big in the scheme of things, but big when capturing as many sales as possible.
I built a second brand after the minute success of my main brand to catch the “run-off” from customers not ready to dish out as much money. Here’s the how, the several reasons why, and the branding rules I followed.
1. Differentiate Your Brands
Bandturo was the core brand with a core product that helped artists get more paid gigs. The logic is: spend money to make money. So we built a fantastic service at a fantastic price. Even though the service is adored, I knew that a significant group of people/customers wouldn’t be comfortable shelling out $100+ the first time they invested in their craft.
So, I built a discount brand with a premium quality. The discount brand provides an even greater value than the premium brand. And since the price is lower, we can acquire more customers in theory.
Since I control both brands, I can link between both companies to encourage crossover sales between the two. Discount brand customers can graduate to the premium services brand. And premium brand window shoppers can get started with the sister company.
Since both brands have a premium voice, the discount brand looks very appetizing to our target customers. And since we share target customers we can share revenue and boost each other’s clientele without cannibalizing by targeting different stages of the buyer’s journey/sales funnel.
The big win? We monetize everyone. Even the big goal for the premium brand is to be a funnel for a big client agency, eventually. This is something like a vertical conglomerate strategy.
The dividends? Even leads from all brands that don’t convert to actual sales have been sending paying customers our way by word of mouth since we deliver so much value.
2. Value Delivery
The premium brand has a more premium look. Almost a luxury look. So getting a luxury looking service at a lower, premium price is a huge buy option for our target customer.
Our discount brand offers a higher end of funnel service by including the data we use to execute the premium brand’s services. So, if the customer would rather pay less to do more work they have that option. And if the customer understands that we’re using the data with expertise in a way that saves them time, you get an accurately portrayed perceived value. When your perceived value meets your executed value, and your executed value exceeds the perceived value, you scale.
Bandturo will reach out to generate leads from a database of talent buyers on behalf of the customer. We also talk about our experience and expertise as value additives. But if you think you can take our database and do it yourself, you can spend less than 10% of Bandturo’s core cost to DIY (Do It Yourself). Thus, our discount brand DIYT™ – Do It Yourself Together is named.
The discount brand not only offers the great data we use to provide our premium services on Bandturo, but we add a bit by offering a second value: community. The customer at DIYT™ is fully equipped to do things that Bandturo does, and maybe even more. So now, we’re offering a premium service on a premium perceived brand at a discount that also has additional value. All they need to do now is learn how to use Mailchimp and a couple other peripherals to execute. Which we’re willing to teach you how to do on DIYT™’s blog.
3. Upsell & Downsell
On both sites we cross-sell. And we don’t shove it in their face. We do I subtly, or “off the cuff.” One of our backlinks says something like “Or, you can get all our booking contacts for $4.99 on our sister site DIYT.” Notice we’re not afraid to show our direct affiliation. This helps keep trust between brands and show that we have enough resources to hold two companies at once.
Our discount company does the same. From there we have a few spots on the site that recommends Bandturo for more extensive services that we convey are “worth a look.”
Since the premium brand has a more luxury look, we withhold a lot of content there so we can put it on a more robust discount site. We keep things simple on the premium site for the more savvy client, but provide incredible value on the sister/discount site. The discount site is where we provide our free blog, podcast, and other content.
Both sites offer zero cost of entry perks like getting free promotion via blog and/or podcast. Another cross-sell.
4. Use Low Cost of Entry to Increase Customer LTV
Another thing worth noting: our discount brand is a subscription model. They get access to way more value than they’re paying for right away—access to great data. But we use monthly gates to release more data they can use and keep them subscribed month over month. At signup they get those great booking contacts, but vif they stick around and automatically re-subscribe they get more access to new stuff every month.
There are also options to upgrade to a more premium subscription, and to pay six months in advance so I can capture more customer LTV right up front. We even incentivize the bigger subscription by offering easy-to-execute perks right away. More artist promo.
Now, we’ve taken a $0.40 click from Google Search Ads or $0.07 click from Facebook and given the customer several easy to understand options to advance their career in a way they we’re actively searching for. Not only this, we’ve extended our impression and mind time by letting them navigate between sites for a while and building brand loyalty on two different companies at once.
So, even if we only convert 1/100 Bandturo customers into $300 sales, we have captured another 1/100 of them into $5+ sales while simultaneously retaining them for future sales after great customer satisfaction.
5. Other Perks of Runoff Sales
Even though it looks like we’ve created a lot of added value for two brands at once, there’s still more dividends to enjoy.
Since we’re getting clicks for less than $0.50 and converting at least two into $105 in initial sales, we can look at the basic customer acquisition cost against amount of the ROI. But since we use a subscription model on our discount brand without using the renewals in all of our balance sheet, we trickle in extra money every month that we ignore.
Our two brands have separate accounts for their revenue. I treat the discount company as a sort of “business savings account” and try not to touch it. One is Paypal and one is Stripe. Since I only link my advertising platforms to our Paypal, the money in the Stripe account is mainly ignored and just grows. I intentionally don’t account for the discount company’s revenue in marketing budgeting.
And since I convert the premium company’s advertising budget at a rate that is well over the amount put in, I don’t have to use the discount brand’s revenue to grow and scale both companies. This solves the cash flow problem for small business.
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