Price tag with less refounds

Luckies · 08-30-2009, 08:23 AM

Hello,
I am wondering wich is the best price tag for avoiding refunds.

I am talking about a product that is good with a good salesletter too. In the video tutorial niche.

In your experience there is difference between 67$ and 97$? I suppose it's easier to sell a 67$ product compared to a 97$ one. Although I see a lot of 97$ products for video tutorials these days.

What I am wondering is if the people are more likely to ask for a refunds for a 97$ product or if there isn't any real difference.

Randy Meirndorf · 08-30-2009, 08:30 AM

I think you mean Refund. Anyways, the price to refund ratio is going to be a function of Value. If the product over delivers and fills the need the customer was looking for, refunds will be low. If the product is crap, then your going to refund city.

Brad Gosse · 08-30-2009, 08:30 AM

There is no magic price to reduce refunds. I have had refunders at all price levels.

Your product and how it's sold dictates the refund rate.

Kevin-VirtualProfitCenter · 08-30-2009, 08:49 AM

The difference in refunds between $67 and $97 will be minimal. Randy is correct that the bigger issue is does the product deliver on the promises made in the sales materials.

ratracegrad · 08-30-2009, 08:59 AM

I second the response that refunds will be based on the quality of the product that you deliver. If people feel they are getting value for their money then they will not demand a refund otherwise you can expect to process quite a few refunds.

Also if you offer a lifetime money back guarantee, studies have shown that you will get less requests for refunds than if you offer a 30 day money back guarantee. With the shorter time period people may not have time to fully absorb the material you offer so they will ask for a refund before the end of the time because they don't want to be stuck with a product that doesn't offer value when they do evaluate it.

Luckies · 08-30-2009, 10:54 AM

thank you for the answers, and for the spelling correction

I am confident in the quality of the product, and I will overdeliver as much as I can.

I was already planning a 365 days money back guarantee but a life time money back guarantee is probably the best choice then

havplenty · 08-30-2009, 12:47 PM

Quote:

Originally Posted by Luckies

thank you for the answers, and for the spelling correction

I am confident in the quality of the product, and I will overdeliver as much as I can.

I was already planning a 365 days money back guarantee but a life time money back guarantee is probably the best choice then

I think the trend nowadays is to overwhelm your customer with information when they get to the product download page. I bought a product recently in Clickbank and on reaching the dload page was met with at least 3 'screen scrolls' worth of bonuses, my head started to hurt. A refund was the last thing on my mind. The bonuses alone made me feel justified in my purchase.

Hav

Jay Jennings · 08-30-2009, 01:52 PM

You asked about the refund rate between $67 and $97 and I think the answers here were right non -- it depends on value, not price -- but an associated question to ask is whether people will see the value at $97.

Because if so, and if you can make almost as many sales at $97 rather than $67, then I think you should charge the higher price.

Often there are ranges where, to the consumer, there's no difference in price (or, the difference doesn't cause any resistance). For example, the difference between $12.95 and $19.95 may be almost nil, in which case charging the lower amount is needlessly leaving money on the table.

It's easy to do a price test using an A-B split tester (I have one at Sonic Toolkit) so you can tell for sure whether you should be charging $67 or $97 for the product.

Jay Jennings

Luckies · 08-30-2009, 04:41 PM

Jay your point is very interesting, I focused on refunds and is actually a negative approach to the subject...

I am trying to figure out what is the price that is more appealing to the buyer. I guess I'll have to make some tests.

Kul · 08-30-2009, 05:19 PM

Luckies,

If you are trying to determine whether to slap a $67 price tag or a $97 one, I would say go for the $97 one.

The reason for this is very simple. Even before the price tag (because the price is usually mentioned at the end of the sales letter), the aspect to be looked into is whether the sales letter creates the "I want to buy this" emotion in the prospect's mind. If this state is not achieved, then no matter what price point you select, you won't make a sale.

Now if this emotion is generated, then the next state is whether the price point makes the prospect think "I dunno, it seems too expensive". Now at this stage, what you might want to consider is a trial offer for $1 and a billing of $97 a month later. The reason is that there's not enough psychological difference between $67 and $97 to help the prospect decide if he is stuck due to the price point. $1 vs $97 - that states something - that the seller has immense confidence in his product. And if your product does over deliver, you can be assured of the $97 income.

IMHO, slapping a lower price just means you are not pocketing what you rightly should be through this product.

08-30-2009, 08:23 AM	#1
Luckies Active Warrior War Room Member Join Date: May 2009 Posts: 59 Thanks: 13 Thanked 4 Times in 4 Posts	Price tag with less refounds Hello, I am wondering wich is the best price tag for avoiding refunds. I am talking about a product that is good with a good salesletter too. In the video tutorial niche. In your experience there is difference between 67$ and 97$? I suppose it's easier to sell a 67$ product compared to a 97$ one. Although I see a lot of 97$ products for video tutorials these days. What I am wondering is if the people are more likely to ask for a refunds for a 97$ product or if there isn't any real difference.
	Luckies

08-30-2009, 08:30 AM	#2
Randy Meirndorf HyperActive Warrior War Room Member Join Date: Jan 2009 Location: Kelso, WA Posts: 163 Thanks: 11 Thanked 36 Times in 26 Posts Social Networking Contact Info	Re: Price tag with less refounds I think you mean Refund. Anyways, the price to refund ratio is going to be a function of Value. If the product over delivers and fills the need the customer was looking for, refunds will be low. If the product is crap, then your going to refund city.
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08-30-2009, 08:30 AM	#3
Brad Gosse Senior Warrior Member War Room Member Join Date: Jan 2009 Location: Orangeville, Ontario Posts: 2,906 Thanks: 1,311 Thanked 1,071 Times in 567 Posts Social Networking	Re: Price tag with less refounds There is no magic price to reduce refunds. I have had refunders at all price levels. Your product and how it's sold dictates the refund rate.
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08-30-2009, 08:49 AM	#4
Kevin-VirtualProfitCenter Full Frontal Lobe Nudity War Room Member Join Date: Aug 2009 Location: Knoxville, TN Posts: 912 Thanks: 519 Thanked 492 Times in 205 Posts Social Networking	Re: Price tag with less refounds The difference in refunds between $67 and $97 will be minimal. Randy is correct that the bigger issue is does the product deliver on the promises made in the sales materials.
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08-30-2009, 08:59 AM	#5
ratracegrad Jennifer Minge War Room Member Join Date: Jul 2009 Location: Atlanta Posts: 298 Thanks: 63 Thanked 45 Times in 33 Posts Social Networking Contact Info	Re: Price tag with less refounds I second the response that refunds will be based on the quality of the product that you deliver. If people feel they are getting value for their money then they will not demand a refund otherwise you can expect to process quite a few refunds. Also if you offer a lifetime money back guarantee, studies have shown that you will get less requests for refunds than if you offer a 30 day money back guarantee. With the shorter time period people may not have time to fully absorb the material you offer so they will ask for a refund before the end of the time because they don't want to be stuck with a product that doesn't offer value when they do evaluate it.

08-30-2009, 10:54 AM	#6
Luckies Active Warrior War Room Member Join Date: May 2009 Posts: 59 Thanks: 13 Thanked 4 Times in 4 Posts	Re: Price tag with less refounds thank you for the answers, and for the spelling correction I am confident in the quality of the product, and I will overdeliver as much as I can. I was already planning a 365 days money back guarantee but a life time money back guarantee is probably the best choice then
	Luckies

08-30-2009, 01:52 PM	#8
Jay Jennings Senior Warrior Member War Room Member Join Date: May 2003 Location: Everywhere , USA. Posts: 1,204 Thanks: 46 Thanked 98 Times in 65 Posts	Re: Price tag with less refounds You asked about the refund rate between $67 and $97 and I think the answers here were right non -- it depends on value, not price -- but an associated question to ask is whether people will see the value at $97. Because if so, and if you can make almost as many sales at $97 rather than $67, then I think you should charge the higher price. Often there are ranges where, to the consumer, there's no difference in price (or, the difference doesn't cause any resistance). For example, the difference between $12.95 and $19.95 may be almost nil, in which case charging the lower amount is needlessly leaving money on the table. It's easy to do a price test using an A-B split tester (I have one at Sonic Toolkit) so you can tell for sure whether you should be charging $67 or $97 for the product. Jay Jennings
	Instant Video Web Pages - Create Video Sales Letters, Video Opt-in Pages, and Video Postcards, Instantly! Free Article: The Pros and Cons of Video Marketing Free Article: Why Use a Video Landing Page?

08-30-2009, 04:41 PM	#9
Luckies Active Warrior War Room Member Join Date: May 2009 Posts: 59 Thanks: 13 Thanked 4 Times in 4 Posts	Re: Price tag with less refounds Jay your point is very interesting, I focused on refunds and is actually a negative approach to the subject... I am trying to figure out what is the price that is more appealing to the buyer. I guess I'll have to make some tests.
	Luckies

08-30-2009, 05:19 PM	#10
Kul Active Warrior War Room Member Join Date: Apr 2009 Location: India Posts: 79 Thanks: 7 Thanked 15 Times in 14 Posts	Re: Price tag with less refounds Luckies, If you are trying to determine whether to slap a $67 price tag or a $97 one, I would say go for the $97 one. The reason for this is very simple. Even before the price tag (because the price is usually mentioned at the end of the sales letter), the aspect to be looked into is whether the sales letter creates the "I want to buy this" emotion in the prospect's mind. If this state is not achieved, then no matter what price point you select, you won't make a sale. Now if this emotion is generated, then the next state is whether the price point makes the prospect think "I dunno, it seems too expensive". Now at this stage, what you might want to consider is a trial offer for $1 and a billing of $97 a month later. The reason is that there's not enough psychological difference between $67 and $97 to help the prospect decide if he is stuck due to the price point. $1 vs $97 - that states something - that the seller has immense confidence in his product. And if your product does over deliver, you can be assured of the $97 income. IMHO, slapping a lower price just means you are not pocketing what you rightly should be through this product.