Figuring out how to price your digital products can be a nerve-racking experience.
Do you price it high? Do you aim low and hope to make up for it in volume? Or do you just avoid the whole problem by giving it away for free?
There’s a lot of psychology that goes into figuring out your prices. And we’re not only talking about the psychology of your prospects. We’re talking about YOUR psychology as well. Very often, people base their prices on their own fears.
What you’re about to read is a guide to product pricing – specifically for digital products or services. In other words, intangibles.
If you’ve struggled to figure out what to charge for your stuff, this guide will be for you. And if you struggle with the idea of asking for any money in the first place, this will be for you. Oh, and if you’re scared of increasing your prices… then yep, you’ll like it, too.
Low Prices & The Fear of Selling
Low prices. It is one of the lowest hanging fruits of all of marketing.
Problem is, when everybody is competing on price, we end up in a big race to the bottom. It is such low-hanging fruit that one can easily jump to a conclusion that being lower priced than a competitor is going to make you stand out.
In the world of digital marketing, though, low prices are all too often based not on competition, but on fear. Fear of failure on the part of the product creator. So, in an effort to get some sales and not shatter their own hopes, they join the race to the bottom and price their stuff really low.
[click_to_tweet tweet=”In the world of digital marketing, though, low prices are all too often based not on competition, but on fear. Fear of failure on the part of the product creator” quote=”In the world of digital marketing, though, low prices are all too often based not on competition, but on fear. Fear of failure on the part of the product creator”]
In some ways, it is a form of marketer groveling. It is like saying “Hey, look, I’m so cheap that you have to give me a chance!” It is borne out of a lack of confidence. A lack of feeling worthy of somebody else’s money.
We could easily peg a few emotional issues to this whole thing. Such as:
- The fear of being perceived as “salesy”, so you deal with it by having really low prices (or worse, giving everything away for free)
- The fear that nobody will buy it.
- The fear of failure.
- The fear of not being able to actually fulfill your promises.
But, all of this has it’s root in one thing: confidence. Your own personal certainty.
In most cases, too, I think all those fears would go out the window if you were truly confident in what you were offering. If you KNEW it was an awesome product. If you KNEW it would help them and you had TOTAL confidence in your ability to deliver the outcome to them. If you were confident in all of that, would you still be pussy-footing around with your price?
Your entire personal character as a product creator changes when you know that what you’re selling is freakin’ awesome and valuable. If you don’t feel that way, then you would be “selling from your heels”. A constant push and pull with yourself – total inner conflict.
So, the solution – right out the gate – is to make a product that makes you excited. That makes you excited for your customer. You need to be confident in your product’s ability to deliver the outcome.
[highlight]Further Reading: How To Sell Without Selling: Making Money Without Being A Pushy Salesman[/highlight]
But, notice I said “deliver the outcome”. About that…
Maybe Your Product Needs To Go On A Diet
Here’s the thing…
[click_to_tweet tweet=”Your product is merely a delivery medium for an OUTCOME.” quote=”Your product is merely a delivery medium for an OUTCOME.”]
What your customers want is an OUTCOME. They don’t care how many videos are in your course – or how many modules. They just want the dang outcome.
This is an important reminder because way too many product creators try to justify their own pricing by aiming for sheer size. Like, throw not only the kitchen sink at them, but the whole freakin’ kitchen. An entire scroll of bonuses with fake dollar amounts. Just overwhelm the heck out of your customer to where they’ll be so windburned by the whole thing that they’ll just assume they got a lot for their money.
Not necessary. In fact, it could be downright dumb.
You do not need to go for a major “thud factor” in your product to justify itself. Last time I looked, the Internet wasn’t exactly lacking for information. There are 300 hours of video uploaded to Youtube every minute, so your extra module with 5 hours of training just isn’t as impressive to people as it used to be.
[click_to_tweet tweet=”There are 300 hours of video uploaded to Youtube every minute, so your extra course module with 5 hours of training just isn’t as impressive to people as it used to be.” quote=”There are 300 hours of video uploaded to Youtube every minute, so your extra module with 5 hours of training just isn’t as impressive to people as it used to be.”]
What your customers value is the outcome and how effectively you can deliver it. And this has everything to do with how you price your product.
You should look at your offer, not in terms of size, but in terms of effectiveness. You should brainstorm any potential thing which will trip them up and build a bonus into your offer designed to get them over the hump. When your product can deliver what they want in an efficient manner (if, of course, they actually apply it), then you price your product based on the value of the outcome.
How Prices Affect Customer Happiness – And Your’s
Price isn’t only about what it takes to close the sale. It is also very relevant to how things are going to go after the sale has been made.
To understand why, you need to understand just now ingrained a sense of fair exchange is to every person. We all have an almost natural sense of fair exchange. And when one party begins to feel that this natural balance of exchange has been violated, bad things happen.
To understand why this happens, you need to understand how human beings deal with guilt. When one person feels they have done something wrong by another, there is a reactive desire to minimize the transgression by minimizing the receiving party. In basic terms, if Fred feels he wronged Ted, then you’re more likely going to see Fred saying mean things about Ted. By doing this, it make the transgression less for Fred.
This is why you’ll often see spoiled children end up resenting their parents. Even at a very young age, us humans have a natural sense of fair exchange.
So, when it comes to our pricing, we can actually end up creating an exchange imbalance, depending on which direction the imbalance goes. This table gives some of the reactions that may occur based on the balance of exchange…
Effective pricing is a balancing act, then.
- Your price needs to be fair for the outcome you’re giving them.
- Your price needs to be in your “happy zone”. Meaning, you need to be satisfied with the amount enough so that you’ll be motivated to ensure that the customer is really taken care of.
- Your price needs to be in your prospect’s “happy zone”. They want to feel as if you over-delivered and fulfilled all your promises, BUT the price paid needs to be enough so that the customer will value it and be invested in the outcome.
Yes, I said it was a balancing act. 🙂
Why Low Prices Can Mean More Trouble
Based on what was just said in the previous section, it should now make sense that low prices generally lead to more troublesome customers.
This is just an observable fact, whether it makes one uncomfortable or not. I have seen it in my own business and I have discussed the matter in the past with many other online entrepreneurs who have seen the same thing.
Generally speaking, people who make a habit of buying up low-ticket offers are not invested in actually getting anywhere with the product. They tend to be collectors, no doers.
Also, generally, your refund rate will be higher. I’ve even had people file disputes with their credit cards over amounts less than $10. It makes little rational sense, but it is more frequent with low ticket buyers.
I firmly believe it is because the exchange of energy is off-balance (see the table above). They had little skin in the game, so they weren’t invested in really doing much. The resulting feeling of letting themselves down (again) results in attempts to minimize it by saying the product was no good, that you’re a scammer, etc. Such people will treat you as if you just scammed them even when you did no such thing.
I’m only mentioning this as something to be aware of. Certainly, not everybody does this. But, it should also be another reason why you don’t want to build a business on the back of basement level pricing. People who pay more are usually much easier (and funner) to work with.
When It Makes Sense To Low-Ball Your Prices (And When It Doesn’t)
We’ve talked about fair prices for both parties – and I talked about how racing to zero with your prices is a mistake. So, am I saying it is a mistake to low-ball your prices?
No, not in all situations. There IS a time and place for low prices. And that time and place is pretty specific.
It is called customer acquisition.
[click_to_tweet tweet=”There IS a time and place for low prices. And that time and place is pretty specific. It is called customer acquisition.” quote=”There IS a time and place for low prices. And that time and place is pretty specific. It is called customer acquisition.”]
See, there are 3 primary ways to grow the revenue of any business:
- Get more customers.
- Get your customers to buy more things.
- Get your customers to buy higher-priced things.
But, any real business – that is, any business which is actually going to generate respectable revenue – will have a sales funnel that does all 3 things simultaneously. In fact, the Blog Monetization Model is specifically geared to do exactly that.
The first phase of the Model is to acquire customers. To build your list of customers. And this is really the only time where low prices makes full sense.
In the Blog Monetization Model, the whole idea is to offer them a low-priced, front-end offer as their first entry point to your business. The purpose is simply to earn them as a customer. The amount of the transaction isn’t all that important – and, in fact, I generally recommend that people price these offers low.
Keep in mind that “low” is relative to your market. Obviously, a low price for the world of online marketing is going to be very different than a low price in the legal field, or in real estate. The idea is to lower the friction so that you can change their relationship with you from a lead or subscriber…. to a customer.
But, it is done very strategically because you’re supposed to have more things for them to buy.
Think of how retail stores do this on “Black Friday”. They’ll advertise that flatscreen TV for $100 (or something ridiculous like that), but only in limited quantities. It builds up all these lines out front and then they all rampage the store when it opens. A few people get the cheap TV – but everybody else inevitably ends up buying things anyway. 🙂
So, super low prices is a customer acquisition strategy. It should not be your end game.
[click_to_tweet tweet=”So, super low prices is a customer acquisition strategy. It should not be your end game.” quote=”So, super low prices is a customer acquisition strategy. It should not be your end game.”]
In fact, relying on low-end products for all of your revenue is going to have some negative effects, like:
- You will constantly be in a feverish quest to find new sales.
- You’ll have to make so many offers that it’ll tire you out.
- You’ll get customers which are more demanding.
- Higher refund rates and chargeback rates
- An entire customer based which is more or less “trained” to expect free or cheap things, so the moment you try to sell something more expensive, you’ll get a backdraft.
As an example, look at the App Store on iTunes. In the “real world”, people will drop a couple bucks on a candy bar without a lot of thought. However, the moment you ask them to pay 99 cents for an actual piece of SOFTWARE for their phone, they actually have to think about it! Or you’ll get people actually bothering to ask for a refund!
It makes almost zero rational sense, except for this one thing…
The average pricing of the App Store has “trained” people to think with those kinds of prices. So, now you launch an app for even just $4.99 and they’ll actually declare it as “too expensive”.
It is a matter of setting expectations.
What expectations are YOU setting for your audience if everything you put forward is cheap or free? What value are you telling them that you have to offer if you play in the sandbox of “free” all day?
Free has it’s place. Cheap has it’s place.
But, it will be incredibly difficult (if not impossible) to grow a high-revenue business on the back of super-cheap products. It just isn’t efficient.
[click_to_tweet tweet=”Use low-end prices to acquire customers, but always ensure you have a strategy so you’re not dependent on it.” quote=”Use low-end prices to acquire customers, but always ensure you have a strategy so you’re not dependent on it.”]
How Do You Figure Out What Price To Charge?
Figuring out your price for your product is usually a touchy subject.
One which brings up a lot of questions like:
- What is the competition charging for something similar?
- What if I price it too high and nobody buys it? Or worse, they think it is greedy?
- What if I price it too low and people think the quality is bad?
Pricing is a weird mix of your personal self-confidence, self-worth and prospect psychology. In other words, it can be a real mind game! 😉
I find that most people tend to undercharge for their own stuff. It’s very common.
A huge part of it is because we’re too often sitting lodged inside our own brainpans when we come up with our prices. Instead, however, you need to be firmly lodged in the head of your PROSPECT.
For one, you must keep in mind that your own value on your offer probably won’t be the same as your prospect’s. After all, you know your product intimately. You’re likely very familiar with the material. You’re good at it. You see it every day. Your view of it will be quite different than their’s.
But, the people you are addressing… THEY don’t see this stuff every day. They still need and value it, otherwise they wouldn’t be a good prospect for you.
So, if you price your product based on your own perception, you could make the mistake of aiming too low.
On the flip side, you could also end up aiming too high. You see this sometimes with marketers who think that assigning humongous price tags to things somehow makes them seem like a bigger deal. Here’s one…
Get a phone call with me for free when you buy. And my hourly rate is usually $5,000 an hour.
Uh-huh. Trust me, I’ve seen crap like that.
I’ve also seen people do things like take very common things and assigning an arbitrary super-high price tag to it. They’re intention is to make it seem like what they’re doing is really valuable – and to take advantage of a prospect who doesn’t know any better. I’ve seen this many times with SEO companies who charge exorbitant monthly rates for SEO when anybody in the know realizes they’re doing barely anything for that money.
(Note: I know not all SEOs are sleazeballs, but man, I’ve heard more stories from people getting fleeced by SEOs than almost any other thing.)
So, you can aim too low with your price because you’re not looking at it from your prospect’s viewpoint… but you can also aim too high and totally blow the sale before you get off the ground because the price doesn’t match the value.
So, instead of making this a lesson in how you can screw it up, let’s talk about how to actually get it right.
Pricing Must Be Determined By Benefits AND Survey
You’ve probably heard this before, but…
People buy benefits, not the features.
People are buying an OUTCOME. Your product is just a medium for delivery of that outcome. So the price really needs to be set according to the benefits of that outcome they’re going to get.
If you set your price based on the features, it is really easy to mess it up. You could end up under-pricing yourself big-time because you don’t think there’s enough of a “thud factor” to your offer, yet the VALUE your customer would get from it would be very high.
If I could turn around and deliver a really solid course which will be guaranteed to make you $100,000 in the next year with your blog, what do you think that would be worth? Even if it was a course which only consisted of a few videos, the BENEFITS of that information would be very high. I also know that the more the person pays, the more invested they will be in doing the work to get that outcome. If I set the price simply on the fact that it was just a few videos, I would be short-changing myself AND making it less likely that the customer would get the result.
So, ask yourself… what are the real tangible benefits of your offer? What impact will it have on their lives? What are the benefits of the benefits?
This is all good stuff to know when it comes to your copywriting, but it is also very important to know when you figure out what to charge for it.
But, this takes care of one side of the equation. YOU know that the benefits are strong. But, perhaps they don’t. So, how do you deal with THEIR perception of the value of those benefits versus your price?
Well, you absolutely have to know your prospects and your audience extremely well. This is going to involve the use of survey.
How To Ask What They’d Pay (But In A Strategic Way)
Now, you probably don’t want to come right out and ask “What would you be willing to pay?”. Its just too blunt. Their shields go up. Plus, it doesn’t mean very much anyway, since the only true test would be them actually paying what they said.
So, in the spirit of Priceline, let’s have them “name their own price”.
A potential way to ask this question is:
What would you expect to pay for this?
If you were offering this product yourself, what would you charge for it?
The idea behind these questions is to have them talking price while trying to remove themselves as the one doing the buying. To have them think objectively about it.
A completely different approach would be to ask them questions to gauge their personal buying habits on other products. The point is to get an idea how liberal they are with their money. For instance…
How many times do you eat out during an average week/month?
You could ask the same on other non-essentials a person may buy (i.e. Starbucks). The point would be to get a guage of their level of spending. Plus, you can equate your price point later to these items that are very real to them to put it in perspective (i.e. “this product will only cost you the average cost of one meal out”.)
Another option would be based on what is called Van Westendorp’s Price Sensitivity Meter, which is a marketing technique created to determine price sensitivity. Questions would be on the order of:
- At what price would you consider the product to be so expensive that you would not consider buying it? (Too expensive)
- At what price would you consider the product to be priced so low that you would feel the quality couldn’t be very good? (Too cheap)
- At what price would you consider the product starting to get expensive, so that it is not out of the question, but you would have to give some thought to buying it? (Expensive/High Side)
- At what price would you consider the product to be a bargain—a great buy for the money? (Cheap/Good Value)
Image Credit: The Pricing Gurus
With questions like that, you could even use little number sliders if your survey system supported such a thing. The questions themselves do the heavy lifting here, so open-form entry isn’t really needed. We really just want the numbers when surveying price using the Van Westerndorp questions.
Arriving At Your Price Through Experimentation
The most accurate way to determine optimum price is through actual testing in the marketplace. In other words, put the offer out there at different price points simultaneously and test out the conversion rates and order quantity at each price. It is a form of simple split testing.
The concept of price elasticity is important to understand here. It is defined as:
Price Elasticity is a measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. If the quantity demanded of a product exhibits a large change in response to its price change, it is termed “elastic”.[*]
The way to determine the price elasticity of your market is to split test the product at different price points. You could do this with simple split testing software.
Each price point will result in a certain number of sales – and hence a certain conversion rate. However, each price point will generate a certain amount of revenue which might be different than the conversion rate. In other words, a higher conversion rate is not necessarily the best price if another price results in more total revenue.
Let’s say you had the following sales numbers after testing 4 difference price points:
As you can see, the lower price would have had the higher conversion rate. That’s actually fairly normal. Yet, once you work the math, the $50 price resulted in more total revenue. Even though the conversion rate was lower, $50 would be the optimum price.
The only way to determine this is through real-world testing.
Some ways that you can work on testing this would be:
- Taking your best selling offers and raising the price as an experiment.
- Run occasional special offers as a way to test different price points
- Continue to stay on top of competitor pricing and TEST price points around their prices. Don’t copy them, but use it as a guide.
Using Discount Pricing
Regardless of the optimum price point you find through testing, there will always be people who are more likely to purchase with a discount.
That’s called human nature.
Many ecommerce stores use the strategy of discount pricing. This means that the NORMAL price of the product is one amount, but they offer it at a discounted amount. You see this in retail all the time. The “retail price” is set artificially high so that the sellers can offer discounts to prompt sales.
This is very common in retail and ecommerce, but can be used with digital products in certain circumstances.
For instance, perhaps you offer a product on your products page at all times at one price, however inside of one of your sales funnels you offer that same product at a discount as an upsell. It gives them a reason to pay attention.
It is easy to do this kind of thing with digital products because, typically, your profit margin is 100%.
How To Use Price Anchoring
Much of the time, a consumer will judge the relative “goodness” of the price by comparing it to other things. Those things they compare to are known as price anchors.
Once you establish the price anchor, you can present your price in relation to it.
Look at how Steve Jobs introduced the price of the iPad:
That’s price anchoring at it’s finest. He established all the reasons why $999 would be the expected price for the new iPad. Then proceeded to release it at $499.
Another way to do price anchoring is by creating multiple versions of the same offer, but in a way which clearly establishes one of the options as the best deal. For this to work the best, typically the anchor is established first then your real price is shown for the sake comparison.
Siteground has an example with their pricing of their various shared hosting plans:
The person will typically see that lowest price first. But, they clearly get much more for only $2 more per month. There’s also that social proof of the “best seller” label there on the price table. Clearly, their GrowBig plan is the better deal.
You also see price anchoring used a lot with monthly and annual membership plans. You’ll see the annual plan displayed as a monthly cost which is lower than the regular monthly cost, thereby establishing the annual plan as the better deal.
Comparing Your Price To The Competition
If you go to the bookstore, you’ll see that the average price of a book might run around $30. People kind of expect that.
In such a marketplace, if you were to price your book way lower than everybody else, they might conclude your book sucks. It is priced for the bargain bin for a reason, so they’ll think.
If you priced your book really high – say $100 – then it is going to be an outlier. You’ll have a lot of people automatically dismiss it because it costs way too much, but you’ll potentially cause a little mystique. After all, what makes that book so much better than the rest of them?
(Unless it is a college textbook, where they somehow get away with inflating the prices of those things. But, again, it just shows that the gravity of prices is dependent on the market.)
This all goes to say that you will affect the perception of your offer by how it prices out to your competition. So, you need to know what the average pricing in your niche is. Just like when you’re looking to buy a house you’ll want to see the comparables. Average home values in the neighborhood. It is a major factor.
So, take the time and do the research. Find out what similar offers in your market are being sold for. Combine that with feedback from pricing surveys (see above) and with the benefits that you’re going to deliver.
Now, don’t make the mistake of trying to undercut your competition. Like I said previously, there is a time and place for low prices but you won’t want your entire marketing strategy to depend on low prices (or even just being lower priced than a competitor). If you’re going to lower prices as a way to attract sales, do it with a strategy in mind and not merely because you don’t know how else to get people to buy it.
You’ll gain better positioning by making your product slightly higher than the mean average in your market. Then, you tweak the offer and the product so that the benefits they’ll get from it are in alignment with your price.
[click_to_tweet tweet=”You’ll gain better positioning by making your product slightly higher than the mean average in your market. Then, you tweak the offer and the product so that the benefits they’ll get from it are in alignment with your price.” quote=”You’ll gain better positioning by making your product slightly higher than the mean average in your market. Then, you tweak the offer and the product so that the benefits they’ll get from it are in alignment with your price.”]
In other words, compete on quality, not on price. And you can make the product match the price, not necessarily make your price a reaction to the market.
Why You Can’t Give It Away For Free In Order To Get Feedback On Pricing
I’ve worked with a lot of budding online entrepreneurs who are working out the details of their first product. And all too often, they end up wanting to allow a few people into it for free in order to get their feedback. The plan is to use some free people to gain feedback for what they think it would be worth.
That’s a mistake.
The only valid form of product validation is if somebody yanks out their wallet and hands you money for it.
Many, many times, I have seen (and experienced) prospects give all kinds of validation for a product. They’ll tell you how awesome it is, that they’d buy it – blah blah blah. But, then when it comes time for them to actually purchase what they said they would purchase, it is crickets.
There are two things going on here:
- If they don’t pay for it, they’re not invested in the outcome. They won’t value it and they just won’t take it seriously.
- They don’t want to disappoint you. And because they’re not invested it in, it is all too easy for them to extend platitudes to you. Sure, they like your product. Because you gave it to them for free! But, there’s no value exchange so therefore it means absolutely nothing.
There can be a time and place to give away your product for free. For instance, if you would like a review from an opinion leader in your market, hooking them up with the product for free makes sense. However, don’t use freebies and the feedback they get as any form of product validation or pricing feedback.
So, how do you validate and test a product?
Here’s the abbreviated version…
- Put together the offer (before the product exists).
- Pre-sell it.
That’s right. Take orders for your product even though you haven’t made it yet.
If this is going to be a digital course, then it’s awesome. You can teach the course in real-time with any customers you get, record the whole thing, and you’ll actually complete your product quickly.
If you want to offer a discount to them because they know they’re in the “first run”, then so be it. That’s fine. But, do NOT give it to them for free.
And if nobody buys it, you just saved yourself a lot of hassle. Iterate. Make some adjustments to the offer and try again. Don’t go “all in” and make the product until you have an offer which converts. If you only get 1 or 2 sales, then make a judgement call. Either tweak the offer and see if you can get more, or simply refund their money and move onto the next idea.
[click_to_tweet tweet=”The way to test your product – and your pricing – isn’t what they tell you. It is whether they buy it.” quote=”The way to test your product – and your pricing – isn’t what they tell you. It is whether they buy it.”]
Does Ending The Price In 7 Really Matter?
It is funny how some things just happen because “everybody knows that”. It is one big herd mentality. Nobody is being the leader, but everybody thinks everybody else is leading.
And so it is with prices which end in 7. In the internet marketing field, people just end their prices in 7 as a reflex reaction. Nobody really knows why – except that they see everybody else do it.
It’s pretty damn funny, actually. 🙂 I’ve even done it myself.
I’ve done some searching around and I can’t for the life of me find any actual split-test result which statistically confirms that ending in “7” really matters. Lots of people asking if it matters, but no definitive answers.
It seems to have begun with a well-known marketer named Ted Nicholas. He said in one of his workshops that the number “7” raises sales – and from there it started what became almost an urban myth.
There IS some psychology behind the dollars and cents of your prices, however. For instance, we all know that $29 is going to be a lot more attractive than $30. It might be just a dollar difference, but it seems a lot lower than that. You see that “2” there rather than the “3” and it seems really different.
There’s also the idea that “7” is a common lucky number for people. Gamblers apparently like it. I guess the number is “less threatening”.
But, honestly? I think online marketers are just making this crap up. 🙂 From everything I can tell, everybody in the field seems to think that the number “7” is actually based on some sound research – and that everybody must know something. But, all anybody knows is they see everybody ending their prices in 7.
If the number 7 had some magic factor to it, you’d see retail stores using it constantly. But, you don’t. At least not more than any other number.
Also, watch infomercials. The infomercial industry tests the hell out of everything. Do you see infomercials going out of their way to end prices in 7? No, you don’t.
In the end, when you look at big industry (you know, industries that make any online marketer look like the small-timers they are in comparison), you don’t see ANY fascination with the number “7”.
The Herd Mentality Of Pricing
Internet marketers keep pricing their stuff with prices ending in 7 because of the herd mentality. They’re all just following each other blindly.
But, that’s not to say there isn’t a herd mentality to pricing. There is something to be said for pricing your product using prices that your customers are used to seeing.
For instance, let’s say you want to price your product around $40. Take a trip over to Amazon (you better believe they test their prices) and see what kind of prices they use around the $40 mark.
If people are USED to seeing those kinds of prices, then your’s won’t stand out as an oddball.
This same idea can be translated over to how the transaction will appear on their credit card statement. Most transactions on the statement are going to be odd prices, not numbers conveniently rounded off to a whole dollar. So, pricing your product similar to that is again just remaining true to what they’re used to seeing.
Effects On Conversion?
Any testing which has been done regarding the last digit in the price tag is all rather meaningless to YOU. At the end of the day, you have to do your own testing to see what matters.
Aside from the rather obvious observations that $29 seems a lot more attractive than $30, when it comes to the actual digit which the price ends with, you’d need to test it.
But, keep a few things in mind here:
- Testing the quantity of cents on the price probably isn’t worth the effort.
- There’s no “magic number” which is going to mystically make people hit the buy button more often. So, stop fooling yourself.
- Any incremental changes in your price should be more about recouping your cost of lead acquisition. If you find that your cost per lead is a little high given your sales conversion, you may find that you can increase your price slightly enough to break even and have no noticeable effect on your conversion rate.
See, by thinking about it like that, then you’re playing around with the cents for an actual REASON – but not on some foolish quest of thinking you’re actually going to find some magic number here.
Success = Naming Your Price.
At this point, I want to step back and look at the big picture. And I want to talk to those of you who might not even have an offer yet. Or perhaps you’re still playing in the sandbox of cheap products and haven’t done anything more than that.
Here’s the thing…
The Blog Marketing Academy is the academy for real blog monetization. That word “monetization” can mean a lot of different things, but the way a lot of bloggers think of it, it is all low-end crap. Banners, affiliate links, crap like that.
That’s all child’s play.
You keep playing that game and you’re most likely going to never get any real traction. If you play a small game on other people’s turf, you’ll stay small. And banners and affiliate links are other people’s turf.
If you want to turn this whole online thing into a real life changer in terms of your income, the answer lies in creating a real exchange of value.
Produce and provide value and insist on charging for it.
[click_to_tweet tweet=”Be the creator, not the consumer. Be the creator, not one of a million middlemen.” quote=”Be the creator, not the consumer. Be the creator, not one of a million middlemen.”]
The difference is stark.
Simply by putting an offer on the table, drawing your line in the sand and naming your price, you’ve already accomplished a major milestone. The amount of aspiring online business owners who tell me they have no product to sell (often after several months) really astounds me.
Having an offer is really where things start. If you don’t have an offer, you honestly haven’t even stepped up to the starting line yet.
I find this is also true in other areas. For instance, one of the classic signs of a person who is NOT going to make it is they don’t assign a value to their own time. They’ll literally spend HOURS on some stupid thing that they could have paid somebody else a very reasonable fee to do for them. Your time isn’t worth zero. It is literally the only asset you have that, once spent, you can never get back.
So, the simple act of naming your price is also an acknowledgement to yourself that you ARE valuable. That you have value to offer. And that realization in and of itself goes very far in securing your eventual success.
You see how that is different than what so many bloggers do?
They try to do everything for free. They’ll spend their time on useless things. They place no value on their own time. They more often than not never actually put forth an offer of any kind – for a variety of reasons. If they do, they’ll low-ball the price or perpetually give everything away for free.
I’m not here to BS you, so if that describes you, then you’re on the wrong road if you actually want to build up an entirely new revenue stream and a business online.
So, yeah, I’m ending off this pricing series with a huge commentary on mindset…
[click_to_tweet tweet=”Name your value. Name your price. Own it. Succeed.” quote=”Name your value. Name your price. Own it. Succeed.”]
It really is that simple.
If you don’t ACT like you have anything of value, the world isn’t going to act like it, either.
BE valuable. DO valuable things. Then, you’ll HAVE value (in the form of money and goodwill).
And all that we have talked about in this pricing guide are the tools and principles to help you facilitate doing all that.