Product Owners... How do you choose your price?

No different than then buying gas, demand dictates the price. If your product is something that's in demand, you could raise the price, something that the market needs bad.

Testing. Start out with a price that you're pretty sure will sell, based on the rest of your niche. Then start testing different price points to see which one maximizes your revenue.

Look at what competing products are selling for and use that as a baseline.

But you also need to consider the differences if you are selling information products. As Eben Pagan has said, "people don't know how to value information, so you have to translate the value for them" (paraphrased).

Basically what it means is that when selling products like ebooks or instructional videos, you can alter the perception of the value of the product by selling it in a way that makes it seem more valuable to the customer.

Also, sometimes customers just assume that higher priced products are worth more. I remember another video from Eben Pagan where he talked about how when he increased the price of the first ebook he ever sold from $29.95 to $39.95, the conversion rates actually increased.

A good way is to sell them something high value but inexpensive like 5 to 10 dollars, get their email address, then upsell them more expensive products.

The price has to depend on the market.

Look at other similar products and see what it and is not working.

Always focus on a price that will leave your customers thinking they got a steal of a deal. If you do that, subsequent sales will be easier.

Always for $1 Million Dollars... You just need one sale then.

I'd say starting out, you should pitch low until you build up your reputation, and understand what people want, then you can create bigger offers like membership sites, webinars, coaching and the like.

Yep, test and keep testing.

I've run the range from $29 to $89 on one of my products and I'm considering a big jump to $139 as my next test. Track everything, and keep testing...

During the market research phase I look at comparable products / services and make notes on what they offer and how much they charge.

Then I will buy traffic (such as PPC, PPV, etc.) and send it to different webpages with different price points. These pricing tests can last up 6 months (or more) because I need a statistically significant number in order for the pricing testing to be valid.

A FAQ that I see get asked a lot is:

"What if the customer sees the other webpage and see's that there is a lower price?"

The answer to that is simple: tell them you were running a pricing test and that you will gladly give them a credit for the difference in price (or offer them your next product for free).

I've seen people send traffic to two different web pages with two different price points such as:

Product A is $47

Product B is $37

After sending an average of 100 visitors per day after a week Product B was showing more sales, so the marketer thought that Product B was the way to go.

Yet if they would have run the test longer and with more statistical data, they would have made more money going with the product A price point of $47.

RoD