It’s not just product creation that’s hard, product pricing is tough too but it’s something you need to get right if you want to get buyers and increase your bottom line.
- How much should you sell your product for?
- How can you increase your profits from the product without creating much more work?
- How can you offer your clients the type of product they really want?
These are the main questions entrepreneurs will be asking before they launch their product and my experiences and experiments have helped me come up with some interesting answers on product pricing.
When I was launching my book Successful Blogging in 12 Simple Steps I was studying The Empire Building Kit, an 356 day email course, by Chris Guillebeau which was the precursor to his brand new book The $100 Startup.
Many of Guillebeau’s tips inspired and helped me while I was creating and launching my ebook but one tip stands out more than any other.
That’s the recommendation to offer your buyers three price points on a product: low cost, medium cost and high cost.
The theory is that most people will buy the medium-priced product so your challenge as an entrepreneur is to work out how to create an up-sell of your basic product.
I decided to try it but wondered how I could create three separate pricing options for an ebook.
Then I noticed from comments on other people’s ebooks that an audio version was commonly requested.
I never listen to books but it looked as if a lot of people did, whether they wanted to listen in their car, on the commute to work or while out exercising I didn’t know, but I determined to provide an audio version of my ebook for those who preferred to listen instead of read.
So I created three packages for my ebook:
- Low Cost – Hot Package – $29: For the ebook self-study course plus a bonus chapter on motivation because, even if people were only buying the ebook, I still wanted to offer them a bonus and make sure they stuck with blogging.
- Medium Cost – Super Hot Package – $39: For the ebook self-study course plus a bonus chapter on motivation, 5+ blog case studies and an audiobook recording.
- High Cost – Super Hot Consultation Package – S499: I priced this very high as the main aim was not to sell this but to provide a third and more expensive package which would encourage more people to the medium-priced package.
Then I launched my ebook a few years ago and waited to see what happened.
Lo and behold the up-sale of the ebook and audio book, the Super Hot Package, at a $10 higher price represented around 80% of all sales.
I’ll never know if that was because people wanted to listen to the audiobook, wanted to get the blog case studies or just didn’t want to buy the lowest priced product.
Whichever way you look at it the product pricing tip helped me and helped readers too by offering them an alternative format to reading the book.
Please note I didn’t create the audiobook myself.
I hired a professional voice-over artist to record it and supply me with the files all for under $500 so there was no time investment on my part.
The small financial investment in paying for a professional voice-over artist paid for itself many times over created a quality product I am proud of, and provided added value to the small business owners and creative types I help.
Finally, Guillebeau recommends you include a guarantee on your product sales page. Here’s mine:
I guarantee this course will save you time and make your blogging experience more successful and enjoyable.
If you’re not 100% satisfied there’s a 90-day money-back guarantee.
Please note: to give you time to try the course no returns within the first 30 days.”
In two years only one person has asked for a refund and that was a self-described “social media expert” who has a Twitter account with a few thousand followers but no blog.
I gave a full refund immediately and when I asked why she wasn’t happy with my book she said:
“I already knew it all.”
If you know it all already that’s great, but if you don’t and you need help getting your business off to a flying start then read The $100 Startup.
Chris Guillebeau’s business tips helped me and I know they will help you too.
What’s the best business tip you’ve ever actioned?