Your price is another one of those factors that can make or break your entire offer.
If you price your offer too high, your prospects are going to hit the back button because they can’t afford your offer. If you price your offer too low, people may think your product is a heap of junk (and yep, they’re not going to buy).
That’s why you need to find the pricing sweet spot. So, how do you do this? That’s what you’re about to find out. Read on…
Step 1: Clarify Your Goal
Before you set a price, you’ll want to think about what you hope to accomplish.
For example, if your goal is to get as many customers as possible (to build your buyers list), then you’ll likely price your offer on the lower side, as low prices usually create a lot of sales. (Just not so low that you end up cheapening your offer or attracting cheap customers who won’t buy anything else from you.) Be sure to give customers a “reason why” your price is low. (Example: This is an introductory offer to attract new customers.)
If your goal is maximum profit on the frontend, then you may price your offer on the higher side. That’s because even though you may sell fewer products if you have a high price tag, you may still make more money.
NOTE: These are just generalities, as you’ll need to test your pricing to see what works for you. However, for this first step you do need to get clear about your overall goals, as your pricing strategy may affect these goals.
Step 2: Check Out the Competition
Next, you need to figure out how your competitors are pricing similar offers. You can check marketplaces like ClickBank.com, Udemy.com, and JVZoo.com. You can also search Google for relevant keywords (e.g., “dog training course”), and then check out what your competitors are charging.
Take note: when you start doing your pricing research, you’re going to see that similar offers go for a wide range of prices. For example, you may see a course selling at anywhere from $10 to $100 or more. You’ll also note that most courses fall into a narrower range (e.g., perhaps most on this topic fall into the $25 to $60 range). Take note of both the overall range as well as the range where most courses fall.
As you review these different prices, look closely at the offers to find out how they’re the same and different than your offer. Take note of any factors that influence price.
- Video formats tend to carry a higher perceived value than text-based products.
- Your bonuses can add significantly to the perceived value of a course.
- A physical product tends to have a higher perceived value than a digital product.
- Advanced/expert and intermediate-level information carries a higher perceived value than beginner-level information.
- Certain types of formats carry higher perceived values. E.G., courses are often valued more than ebooks.
TIP: If you are selling an ebook, then don’t call it an ebook. This will only serve to lessen the perceived value. Instead, call it something such as a guide, manual, blueprint, system or a similar term.
Take note that having a poor-quality website (with poor ecover graphics) can decrease the value of your entire offer. So, be sure you’re making a great impression by having a polished website and a polished product. As always, outsource this task if you don’t have the skills to create a quality product, site and graphics on your own.
Now let’s take a look at the next step…
Step 3: Consider Your Positioning
Now you’re getting close to choosing a price. But first, look at your product positioning and overall branding. If your branding or positioning will have some impact on pricing, then you’ll need to take that into consideration.
For example, a company like Godiva chocolates is known for luxury and indulgence, so you wouldn’t expect them to sell dirt-cheap chocolates.
On the flip side, a retailer like Walmart is known for low prices, so you wouldn’t expect to find a lot of luxury goods in the aisles. (Granted, some stores have made a foray into some luxury goods, but that’s the exception rather than the norm.)
Point is, look at your own branding to determine if it’s going to affect pricing in any way.
Step 4: Choose Your Price
Based on your goals and everything you’ve researched, you can now choose a price that’s generally within the average range in your niche, fits your product, and reflects your branding.
For example, let’s suppose most courses fall into the $50 to $100 range in your niche. And let’s suppose you have a video course teaching advanced information. In that case, you can pick a price that’s on the upper end of the range.
However, keep in mind that the only way to know for sure which price produces the most profit for you is to test it. You’ll need to not only track conversions, but refunds as well. That’s because you might get good conversions upfront but a poor refund rate, thereby reducing profits.
You’ll also want to see what sort of buyers you’re tracking, which you can determine by calculating their lifetime value. (In other words, are these buyers purchasing additional goods from you?)
Now that you know how to find the pricing sweet spot, your assignment for this secret is to do the following:
- Clarify your goals, and think about how your goal may affect your pricing.
- Research your competitors’ pricing. Be sure to note how their products are similar and different from yours, and how these various factors affect pricing.
- Determine if your positioning or branding will affect your price.
- Pick a price.
- Make a plan for testing this price.
You work on this assignment, and then I’ll see you in the next secret.