Being expensive & valuable aren’t mutually exclusive

Dec 13

Written By Andrew Woodbury

Study the AMEX Model

Read time: 6 minutes

Here’s our TTT for this week on how to grow your online teaching business.

What is TTT? A Tip, Takeaway, and Task. On Thursday.

Enjoy!

Tip: Study the AMEX Model

American Express is one of the world’s most popular credit cards.

And it's the most expensive.

Which makes it a great example of being expensive and successful.

Amex is pricey on both ends:

To have the card, you need to pay a monthly or annual fee
Many merchants don't accept it as the transaction fee can be 1-2% higher than competing cards.

And yet, over 141 million people have an Amex card globally (as of 2023). Users of the card also spend the most on average - more than Visa and Mastercard.

So, what's the secret?

Benefits.

American Express has a slew of benefits for users, especially their points system.

Last month, Andrew was able to fly Business Class from Paris back to Canada just on Amex points - he didn't pay a cent.

Takeaway: Be Worth It.

The main takeaway from the Amex model is this: If something is worth it, people will pay for it.

Many teachers we speak with are afraid to charge more or are worried about being too expensive for their clients.

But the reality is, if you’re worth it, people will pay.

Which begs the question: are you worth it?

To answer that, we need to define “it.”

From a business perspective, it’s important to have revenue goals. As we approach the end of 2024, it’s a convenient time to look towards 2025 and set financial goals for your business. You’ve likely already started this process.

Your financial goals and how your price your services are directly linked.

Let’s say you want to generate $60,000 in 2025 from your business. That’s $15,000 per quarter.

How can you do that?

Here are a few simple math equations:

$60,000 annually is:

1 client @ $60K [or $5K/month]
5 clients @ $12,000 [or $1K/month]
10 clients @ $6000 [$500/month]
20 clients @ $3000 [$250/month]

The more clients you need to hit your goals, the more difficult it becomes. Take a look at that very arbitrary chart above and try to do two things:

Define your financial goal for 2025.
Decide how much you feel your current offer is worth, honestly.

For the sake of argument, let’s say you landed on option 3: 10 clients at $500/month.

And then you decide that the transformation you offer isn’t worth $6000.

The next two options you have are:

Lower your price (don’t do that)
Add more benefits to your offer until it is worth that much.

People will pay for things that are worth it. Amex (and many other companies) have proven that.

If you have the benefits outweigh the cost, it's a win-win.

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Task: Create your AMEX Model

Any good offer solves an important problem. We say that in the lannguage teaching space, that problem isn’t linguistic.

For instance, many people won’t pay money to learn the passive voice. But that same person may need to use passive voice well in their research articles in order to publish to keep their university job.

The problem you could solve in that situation? Publish more journal papers so you can keep your job (and maybe get promoted or achieve tenure!).

Passive voice can be part of the implementation, but it’s not the valuable transformation.

Think about that transformation you offer and add key benefits that your clients will be happy to pay for - because it’s worth it.

Here’s to a 2025 full of helping people and getting paid, too.

You got this.