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Hi
One of my biggest questions always was how to set a price for a new product. I saw many prices ending number 7 (ex: 67.77). More than this i have to follow a market trend (watch other similar products in nice) or what? Of course the price must be proportional with product value and work..
Thanks,
Razvan
yes, prices ending in 7 usually outpull other numbers... and i think Dan Kennedy says to include the cents when you're giving them something, but leave them out when your taking money... so your free bonus is worth $5, 697.23 but your product costs $197... but that's just general advice...
the smart way to set your price is to split test it... Try out a price you think is ridiculously low, one that's middle of the road and a third that is sky-high...
you could take it a step further and split test different offers at the various price points...
anyways, basically, let the market decide... and keep tweaking it till you maximize your profits...
When pricing a product, I usually think of the value the customer would get from a product, and also the content you provide.
For example if you have a video course you can charge more because of the value of video. Whereas ebooks are becoming less and less valuable. This is not necessarily true but I tend to think people put a higher price on video online.
It's all about what the customer would get out of it in my opinion, this will also make your customer much more likely to buy from you again.
Hope this helps
Long time ago, in many niches smart marketers used 9 instead of 0, because psychologically when people see $19 instead of $20, they think that $19 is much lower and this little trick increased the sales greatly.
But after a while, people subconsciously rejects the 9 trick, so marketers had to come up with something new... And they did! They changed the angle of attack and took 7 instead of 9. 7 is also referred as "lucky" number, and people like it.
But nowadays, in my opinion, product prices are ending in 7 just because everyone else does it, everyone just follows up the trend without even thinking :)
I have tested the daylights out of so many thinks and the 7 and 5's work best. But to set your price you need to know if you are going to make money or build a buyer list.
Charles
i agree with charles.the pricing strategy ultimately depends on the purpose of selling the product.if your purpose it to get more people into your marketing funnel,you should price your front offer as mid price or low price.usually its around $7-$47.
then you could choose whether wanna offer any upsell on top of the front end offer.create a back end product if you want to increase your profit.because if you price your front offer too high some people may not afford it.
so by keeping it between low to mid price,you can increase your customer list.always price your item according to type of media you are delivering your content.if it's just an ebook don't price it at high price like $77.people want to get more out of their dollar spend on your product.
if you want to create high price item do videos or webinar coaching series.videos and webinar have higher perceived value because now people can watch and follow the steps.people are lazy and they like to be pampered with exact steps they need to do.
Quote:
Originally Posted by Jess Gill
very usefull, thanks jess
Reason for prices to end with a 9 goes back to due to tax rules in the 40s and 50s.
Products less than $100, say $99.99 were taxed lower. A difference of 1 cent pricing made a big difference in tax paid by the sellers. Products less than $10, $9.99 had a different tax treatment. Finishing with a 7 is a recent phenomenon.
Now on pricing a product...think of current alternate choices if the consumer does not buy the product. For example if your product saves 20 hours of work/month, you can say it saves $50* 20 and a fraction of the cost for the life of the event, of even a month justifies the product price. Same can be demonstrated for revenue generating products.
max of marketers start up with $67 to up $97 but these days marketer looking for faster and best way to sell and get real profit with less price, I'm thinking to launch my own with $37 only 50% for my JV and rest for me, I think especially if this is your first launch, low cost price can work perfect
Hey Charles,
I was at Russell's event with you this week - you gave lots of great input. I like products with the 7s too.
Thanks,
Mike
I would agree with a lot of what is being said here.
There is a PDF somewhere that goes over various studies. It depends on what you are selling on whether to do $19.95 or $17, for example.. or $47 or $49.95.
But, in my opinion, look at what the competition is pricing their products at, and beat it. And end with a 7 or "9.95" and you should be good to go.
Or, become a "premium vendor" and offer a higher price with a lot better service or much higher quality if you believe there's a market for it.
Quote:
Originally Posted by tblrg
interesting, thank you sir
Razvan
Pricing products in the digital age is a strange land.
Certainly, you have to decide on your goals as Charles pointed out. List build or make money? Branding? (fame). Gaining their trust to sell them the big ticket?
Value is certainly an issue but sometimes pricing on "good value" overprices products - espcially if they are digital. Sometimes crazy value is what the doctor ordered. The argument against this is that you will "cheapen" the product. Low priced product must mean low quality etc. But not if you PROVE the quality.
And then there's opposite case where you price over value...as long as it still feels like excellent value. Has your marketing done the job?
In the end the plus or minus 30% you decide to charge has to do with how persuasive your marketing message is. Did you prove your claims? Do you have powerful social proof? Are you the real deal / expert? Have you shown overwhelming benefits? Did you gain trust beyond doubt?
Hope this helps,
Oliver
Really, pricing a product is all about positioning.
How can you maximize the perceived value and price?
Do you need to be an established expert to do that? I don't really think so....
Who was John Reese before Traffic Secrets?
Get my point? He was an unknown... a newbie with no credibility by most people's standards.
He just created a product that he positioned as valuable, got the right people to agree with him, and got people to sell the crap out of it.
Done deal.
Great advice! At the end of the day it's about testing, testing and more testing.
Jess's rule of thumb sounds great, what is value here and now?
Once you have a benchmark it's all about acquiring traffic for less (or more for more) while increasing your returns.
Did I say testing? if not...
Lead gen, product, e-book, e-learning, system, etc... look at your market space, this is where you'll be competing.
Good Luck! and Careful, sometimes more is actually less.
I've always found $47 to be a good price. Not too high, not too low.
Lol...
i agree that pricing ending with 7 has been used lots of marketers without thinking...haha
it seems that many use it, and the rest just follow it.
Anyway, i think that pricing must consider the content you give to your customers. the rest is strategy
(like putting cents --> $69.99 instead of $70).
AND i think one day, IM products should be able enjoyed by all persons in the world that are willing
to try to make money from internet. So it should be reachable for as many as people can afford it.
Thanks.
It does come down to perception of value, if you can get people feeling a certain price you have charged is worth it,
or in fact that you are over-delivering, you can change prices that may well be higher than your competition.
It is always worth checking out your competitors prices though, and definitely split test until you see the best results.
9s and 5s do work well too
A problem is that the internet world is a peculiar case. Information products are not like physical products. With physical products, you can determine your price because the cost of producing the products can be ascertained. Hence, you know the value of your product.
In the case of information products, valuing content of a product is relative. There is no way of really valuing the content to justify the price you are charging. That is why you see someone selling ebook for $97 and another person selling the same ebook with similar content for $27.
This is a great topic!
One thing about testing your price- you need to avoid high starting point (your product price) because it will be much smarter to start with a low price tag rather than decreasing your price if sales doesn't come...
Good luck!
I would go with Ted Nicholas's Advice on this..
let your market decide the price.
In my case i would set up 3 price combination in Google optimizer and see where i get maximum conversions.I would also keep a watch on refund rate with the associated price.
As an example in of my niche products there was no difference at $27 or $37 price point but at $47 conversions dropped and refund rate increased.
The market told me that beyond $37 i was stretching them - the product did not have the perception to exceed that price.
Don't be afraid to charge your product a little expensive, like if it's a software, should fall in a range of $67 - $97. Don't under charge because that's going to hurt your budget and actually make people suspicious in your product :)
I agree completely. While I may not have a lot of experience with product launches, I can say that if I look at a product, I often try to determine it's value based on it's price. If someone is selling an amazing article submitter for instance, I'd be more likely to buy it if it was $77 then $7. People don't want to waste their time with anything they consider to be of low value.Quote:
Originally Posted by Mike Nguyen
A few other things to consider are this....
I would agree that ending in the number 7 seems to work the best.
I wanted to add this - if you are going to have a monthly recurring membership site then it is best to stay below 100. I only say this because if the "pain in the butt" factor.
Interestingly, I have had membership sites in the past that charge $17 for the content. And, I have people that have not accessed the site in years.
I have sites that charge $47 and have people that are still involved and will never cancel their memberships.
It seems that if you stay below the 50 price range for most membership sites then more people will stay with you longer.
Now, with this said - I am about to release $97 monthly membership site on driving traffic. So, I am going against my own advice (go figure). Haha.
Austin
