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Ideas For Pricing A Product

by Tommyg123
10 replies
Hi all,

What do you find the most effective tactic is for pricing a product?

Assuming I have found out what my competitors charge (quite a wide range from $200 to $1500+) I know my product is better than the others in terms of information provided. It is in a niche that I am an expert in. The difference is the higher priced products have endorsements and big marketing budgets.

So do I try and undercut them all and hopefully shift some decent volume. Which would result in profits but ultimately be selling myself short a bit. (Plus there aren't am infinite amount of people to sell to)

Or, start high and see if it finds it's price point there and great if it does! And if it doesn't can start offering 'New Special Offer Price!!' which is a good sales strategy in itself.

I am also a believer in people associate price with quality. I don't have to know anything about cars to know a car that sells for 100k is better than one that sells for 10k and you buy into a product psychologically more if It costs more.

So I am leaning towards starting high.

However, I have a feeling the advice will be to start low

Thanks!
#ideas #pricing #product
  • Profile picture of the author keithb89
    Think about your target customer and what they might spend for your product. I think that will put you in the right ballpark. Also, you can always raise prices later when your product starts to take off.
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  • Profile picture of the author FolkenIII
    For me, the problem is NOT the price.
    You ABSOLUTELY need to explain WHY your product is better. This is the only way to convince people to buy your product at the right price.

    Reaching and engaging your audience is the key of your success, not the price.
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  • Profile picture of the author JaysonH
    Originally Posted by Tommyg123 View Post

    Hi all,

    What do you find the most effective tactic is for pricing a product?

    Assuming I have found out what my competitors charge (quite a wide range from $200 to $1500+) I know my product is better than the others in terms of information provided. It is in a niche that I am an expert in. The difference is the higher priced products have endorsements and big marketing budgets.

    So do I try and undercut them all and hopefully shift some decent volume. Which would result in profits but ultimately be selling myself short a bit. (Plus there aren't am infinite amount of people to sell to)

    Or, start high and see if it finds it's price point there and great if it does! And if it doesn't can start offering 'New Special Offer Price!!' which is a good sales strategy in itself.

    I am also a believer in people associate price with quality. I don't have to know anything about cars to know a car that sells for 100k is better than one that sells for 10k and you buy into a product psychologically more if It costs more.

    So I am leaning towards starting high.

    However, I have a feeling the advice will be to start low

    Thanks!
    First of all, I think you're looking at things from the wrong perspective.

    Price should never be decided by the amount of information you provide but based on the result your customer will get.

    If you focus your sales copy on the result, you can charge based on what that result is worth to the customer.

    Here's a great article on why you should never compete on price.
    10 Reasons Why You Should NEVER Compete On Price

    The morale of the story? Don't undervalue yourself just to get sales.
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  • Profile picture of the author wrcato2
    Obviously you have probably purchased the higher end products in order to know that your product has better information. I wouldn't compete on price. What I would do is first find your advantage.

    What makes your product different. Once you find that their really isn't any competition.

    The next thing that I would do is set up an affiliate center. give your affiliates at least 75% of the front end commission. Get every buying customers email address and create an upsell.

    If you do have an upsell and gather email addresses of purchasers you would make a whole lot more money in the long term if you set up a script and give your affiliates 100% of the front end commission.
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    • Profile picture of the author JaysonH
      Originally Posted by wrcato2 View Post

      Obviously you have probably purchased the higher end products in order to know that your product has better information. I wouldn't compete on price. What I would do is first find your advantage.

      What makes your product different. Once you find that their really isn't any competition.

      The next thing that I would do is set up an affiliate center. give your affiliates at least 75% of the front end commission. Get every buying customers email address and create an upsell.

      If you do have an upsell and gather email addresses of purchasers you would make a whole lot more money in the long term if you set up a script and give your affiliates 100% of the front end commission.
      I'm curious why you would suggest to giveaway 75% of your profits to affiliates when you could do paid advertising and get higher margins? I personally wouldn't want to rely on affiliates to sustain my business and ontop of that paid advertising can be scaled.
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      • Profile picture of the author Lance K
        Originally Posted by JaysonH View Post

        I'm curious why you would suggest to giveaway 75% of your profits to affiliates when you could do paid advertising and get higher margins? I personally wouldn't want to rely on affiliates to sustain my business and ontop of that paid advertising can be scaled.
        It depends on how you view the transaction.

        If you view it as gaining a customer, giving 75% or even 100% commission on the front end gives you a customer acquisition cost of $0 in theory because you have a paying customer on your list.

        However, if you figure the affiliate commission into your customer acquisition cost you would weigh that against paying for your own traffic and scaling.
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        • Profile picture of the author JaysonH
          Originally Posted by Lance K View Post

          It depends on how you view the transaction.

          If you view it as gaining a customer, giving 75% or even 100% commission on the front end gives you a customer acquisition cost of $0 in theory because you have a paying customer on your list.

          However, if you figure the affiliate commission into your customer acquisition cost you would weigh that against paying for your own traffic and scaling.
          I think it really depends on what your front-end offer is. If it's a low-end $47 product then I can understand giving that away to potentially make $XXX or $XXXX on the back-end.

          But even then, if you know the total lifetime value of each customer you still wouldn't need to rely on affiliates.

          I guess either model would work, I just personally wouldn't want to rely on affiliates to sustain my business. I guess you could supplement with paid advertising, but that would beg the question why not just do only paid advertising?
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  • Profile picture of the author AuthorityBuilder
    Originally Posted by Tommyg123 View Post

    Hi all,

    What do you find the most effective tactic is for pricing a product?

    Assuming I have found out what my competitors charge (quite a wide range from $200 to $1500+) I know my product is better than the others in terms of information provided. It is in a niche that I am an expert in. The difference is the higher priced products have endorsements and big marketing budgets.

    So do I try and undercut them all and hopefully shift some decent volume. Which would result in profits but ultimately be selling myself short a bit. (Plus there aren't am infinite amount of people to sell to)

    Or, start high and see if it finds it's price point there and great if it does! And if it doesn't can start offering 'New Special Offer Price!!' which is a good sales strategy in itself.

    I am also a believer in people associate price with quality. I don't have to know anything about cars to know a car that sells for 100k is better than one that sells for 10k and you buy into a product psychologically more if It costs more.

    So I am leaning towards starting high.

    However, I have a feeling the advice will be to start low

    Thanks!
    My recommendation is to start at a high price, provided the fact that you are an expert in the niche and the fact that if you can prove others that your product is better than your competitors are.

    And I have seen and felt from the personal experience, people associates price with quality. So, if you have build a credibility and proven that your product is better, potential customers won't think twice before spending.
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  • Profile picture of the author Tommyg123
    Thank you all very much for the responses so far.

    My USP's are: (note I am still building everything now and haven't gone live yet)

    I have worked in this industry my entire career and not a faceless Internet business. I interact with my customers. Answering emails personally and updating new videos and articles depending on what I am asked.

    The information is controversial because I know how most people teach it and the knowledge they give is entirely incorrect and the information will be very different to anything people have studied previously so emphasise this.

    The approaches I teach are almost certainly unique because I created them.

    I provide video evidence of me acting on the information I give which not only teaches but confirms their authenticity.

    How does that sound? Is that enough? I feel like I have so many different selling points I'm a little unsure how to get my sales message across concisely...any ideas?

    I've heard about the upsell strategy but I really am not sure how this applies to me. I give away all the basic information for free to prove my worth and hopefully engage with people. Then all the approaches I teach are in a members area with a one off payment.

    Not sure how to add in an upsell here?

    Thanks again
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    • Profile picture of the author JaysonH
      Originally Posted by Tommyg123 View Post

      Thank you all very much for the responses so far.

      My USP's are: (note I am still building everything now and haven't gone live yet)

      I have worked in this industry my entire career and not a faceless Internet business. I interact with my customers. Answering emails personally and updating new videos and articles depending on what I am asked.

      The information is controversial because I know how most people teach it and the knowledge they give is entirely incorrect and the information will be very different to anything people have studied previously so emphasise this.

      The approaches I teach are almost certainly unique because I created them.

      I provide video evidence of me acting on the information I give which not only teaches but confirms their authenticity.

      How does that sound? Is that enough? I feel like I have so many different selling points I'm a little unsure how to get my sales message across concisely...any ideas?

      I've heard about the upsell strategy but I really am not sure how this applies to me. I give away all the basic information for free to prove my worth and hopefully engage with people. Then all the approaches I teach are in a members area with a one off payment.

      Not sure how to add in an upsell here?

      Thanks again
      The most important thing is you need to focus on the MAIN RESULT that your customers will get from your training.

      What is the main reason they are seeking out your information? What is their main frustration? If you can provide the solution (result) to that frustration... That IS your USP. It should also be the core focus in your sales copy.

      Remember, you're not selling information, you're selling a result.

      You should setup a squeeze page, promise the prospect you will show them how to solve this frustration by showing proof (using the video you recorded).

      At the end of the video say something like "if you would like to do this, or would like more training, I have a full training course"... Obviously the copy would be better than that but I think you get the point.

      As for an upsell... Hard to answer that question because I don't know what you're selling.

      I could give much better advice if I had an idea on your market. Do the prospects have multiple frustrations within the main frustration, or...?
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