Setting Pricing
This topic contains 18 replies, has 12 voices, and was last updated by 
Bruce Hoag 7 years, 1 month ago.
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Topic
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Is there a guide or way to set product pricing before testing? Something to get you in the ball park?
Scott Hogue CChH
Scott Hogue CChH
Follow me in the "Use What You Learn Challenge" as I create a website using what I learn from Sean that is a Platform for my niche:
http://www.threestepstowealth.comThe thread on this group that explains it:
http://preneurpal.com/forums/topic/own-the-game-and-win-it/#post-1747
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It’s been my experience that pricing can often depend on where your traffic is coming from and what your potential buyers are used to spending. For instance, If you’re launching a product and your potential customers are used to a $1 – $9 dollar item on the front end, It’s hard to charge $27 dollars. Research is your friend here.
hope this helps
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You might try searching for other products in the same genre and see how they’re priced. Look for experts in the field because they’ve most likely split-tested their product pricing already. Gives you a place to start.
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Check the competition, then consider your own marketing strategy. Most folks want to low-ball. That’s seldom the best approach … but it can be.
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It is a personal view. Pricing too low can indicate a lack of faith in the product, while it is important to place a decent value on the product or service.
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Hi Agree with both James and Elaine, research is the keys seeing what is the standard norm by going to places such as jvzoo, clickbank, warrior forum, amazon (books and kindle) does help to decide on pricing, but also assessing what value you are giving. Also as you get a reputation for good courses than you can increase you prices to reflect your experience.
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Pricing was the hardest thing to get right when we started our craft group. We set the price at £2 but the people who came thought it was too cheap and some of them were giving us donations as they felt guilty at paying so little. After a few weeks we doubled the price. Not because we wanted the money but because people wanted to pay us more. We looked around and we realised that similar ventures run as businesses rather than charities charged £12 a session for children doing similar things to what we were doing. Bearing that in mind £4 still seemed very cheap!
The problem we had was finding something to make comparisons with as we have never found another group offering craft activities to adults with special needs. It was the carers who brought folk to the group who told us what they paid for their children going to such activities in towns a few miles away from us. We had not heard of those activities.
People ask us if we want funding but we are the richest group in the church. We have more money coming in than we can spend so buy things for the church. For example today I was talking to the treasurer to discuss what size of table we were going to buy for the church. After all we get free rent and heating.
Susan
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While I like the idea of researching the market and other products, I have to say that it is just as important that you figure out what makes you unique in the marketplace. The more unique you are and the more value you bring to the table, the higher the prices you can command.
I’ll give you a personal example. A few months ago I was helping someone who was getting started in blogging and writing emails. When she kept asking for more help, I gave her my rates. When I calculated the effort I put into what I did for her (email writing), I realized I had underpriced the project. Not only because of the effort, but because when I am writing or editing for someone else, I can’t write for myself. When I completed that project, I increased all my rates to reflect my knowledge and decades of experience as a writer, as well as the opportunity cost of writing for someone else.
Information products are different, yes. But don’t automatically participate in the race to the bottom, especially if you are in the IM niche. Yes, people will buy a $7 product more quickly than a $27 product, but if they see value in what you have, you should still see some sales.
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I probably do need to do more work on competitors. I am not really sure who to consider a competitor in a way, I do some pretty different things.
But the ones that I have looked at are all over the place. From $7 and $27, $97 to $6,000 and $24,000.
Of course we are talking about different products, downloads, memberships, year of coaching, but it still doesn’t fit with rhyme or reason.
I have seen items sold at auction on ebay to help determine demand and price, but this isn’t a widget exactly.
Thanks,
Scott Hogue CChHScott Hogue CChH
Follow me in the "Use What You Learn Challenge" as I create a website using what I learn from Sean that is a Platform for my niche:
http://www.threestepstowealth.comThe thread on this group that explains it:
http://preneurpal.com/forums/topic/own-the-game-and-win-it/#post-1747 -
I want to focus on reaching as many people as possible because I truly care. However, when I was running my pet care business back in the late 1990s, I did make the mistake of trying to be everyone’s bargain at all times. I had worked in pet care for years and offered the best service in the industry in the Los Angeles area, but running my own business was brand-new for me and I felt a little insecure. This attracted a few nasty people who did not recognize the huge value I offered at such a low price. Of course I also acquired a number of most devoted regulars who adored me and my business became very successful… but I don’t think I would try so hard to always be a bargain, today. Always will I offer the most value for the best price (always remembering the little guy because I’ve been there), but never would I automatically offer a lower price than my competition offers for a similar thing.
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Good point, I want to help as many as possible too. We often get caught up in commodity pricing and thinking. I have seen results where raising a price actually sold more of an item, which meant more people benefited. It depends on the circumstances. Also, it takes money to broadcast your message. You can build a bigger megaphone with a little more money. On the other hand, we don’t want to price out people that could use our help. So I look at it like a ladder. The lower price items help them reach the higher ones, especially in financial courses.
The problem is I am not sure what to price each ladder rung…
Thanks,
Scott Hogue CChHScott Hogue CChH
Follow me in the "Use What You Learn Challenge" as I create a website using what I learn from Sean that is a Platform for my niche:
http://www.threestepstowealth.comThe thread on this group that explains it:
http://preneurpal.com/forums/topic/own-the-game-and-win-it/#post-1747 -
Scott,
You said you do some different things. Would you care to give a few more details – service, your niche – so we might be able to help more? We can all offer our opinion, but they might be worth more if we had some idea about what you’re marketing. 🙂
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TEST. That’s the only way to know. The rest is opinion and theory.
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Depends on your niche and your level of expertise.
In some niches, you can search for the industry standard. Then decide if it sounds about right, too little or too much for you.
If you’re just starting, don’t have much experience, or no recognizable training in it, then you’ll probably have to start on the low side.
If you have a track record and an advanced degree, then you can go for higher rates.
Ultimately, you’ll find out when a serious prospect starts to negotiate with you.
Bruce Hoag PhD
The Internet Marketing Psychologist
The Mindful Writer - for deep and persuasive copy -
Scott, nobody said pricing is permanent. You can start with a low price, and if you get a flood of buyers, you can either raise the price or keep the price low as an “introductory” offer. If buyers tell you that they would have paid 3 times as much, you can test higher prices. Pick a product, pick a price, and start.
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Scott, I heard a story told by Napoleon Hill – I think it was him – about a jewelry store.
The merchandise wasn’t moving.
So the owner wrote a note to the employee to say that the prices should be halved.
Something was lost in the translation, and instead of selling them for half-price, they were all doubled.
Every single item sold out that day.
Entrepreneurs who are just starting are often afraid that no one will buy their products if their prices are too high; and while that’s true, it’s also true of anyone.
What tends to happen is that they undervalue themselves and don’t charge enough.
Something to think about.
Bruce Hoag PhD
The Internet Marketing Psychologist
The Mindful Writer - for deep and persuasive copy -
AMEN, Bruce!!!
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As some have pointed out here, I would say check what your competition is doing. The temptation is to price lower than they are so you can grab the sale.
The problem here is that buyers have become very savvy in recent years. They can look at basically the same product, one selling for $7 and the other selling for $27. Many will choose the latter thinking that because it’s a higher price, it must be a better value.
Don’t get me wrong. This won’t always be the case. You’ll always find people who want the inexpensive (note I didn’t say “cheap”) route. I mean, who doesn’t want to save money? But many will look at the higher priced product as having more value.
As I stated in a previous thread, just make sure you re-purpose products that others may be (are) selling as well. I know that’s kind of a different topic, but it bears mentioning again here.
Bottom line, pricing is based on what the market is prepared to pay. Do your research. I hope that helps.
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Good point, Jan, though beginners tend to underprice the value they offer.
One thing I see from time to time is that after a product becomes popular, everyone on the list is offered a chance to “lock-in” the current price, and then it’s raised for new customers.
That approach creates scarcity and can cause people to buy.
Bruce Hoag PhD
The Internet Marketing Psychologist
The Mindful Writer - for deep and persuasive copy
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