Pricing a product..

[Nick Sharp]

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.

[abbesnetwork]

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.

interesting, thank you sir

Razvan

[Oliver Olsen_]

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

[James Foster]

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.

[farfrombrooklyn]

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.

[KPSoftware]

I've always found $47 to be a good price. Not too high, not too low.

[Lemy Y]

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.

[AshleyGough]

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

[toriola1]

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.

[Oded Abbou]

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!