Product Pricing?! Aghhh Driving me Crazyyy =D

11 replies
Hey everyone.

I am currently trying to figure out what sort of price to offer my product/s at for my membership site however I am worried that people will be scared to purchase my products because of the recurring payment for the membership.

Therefore I was considering doing a monthly price for each product that would work like this:

membership price:
monthly price: $67
yearly price: $497
One-off product price: $77

just an example but obviously the monthly price is cheaper therefore makes people feel more attracted to the monthly price however wouldn't they just stop their membership or get a refund because they would buy it one-off then never want to buy again so i would end up with nothing...

Any ideas?

Kinda stuck with this pricing...been thinking about this for months now and have so many figures wrote down on peices of paper, so many calculations xD
#aghhh #crazyyy #driving #pricing #product
  • Profile picture of the author Steven Wagenheim
    Okay, first of all, if the one off product price gives the same amount of
    info as X number of months membership, then that option makes no sense.
    Get rid of it.

    If it's a monthly membership site and each month provides new content
    (that is a key here) then have 2 options. One for paying monthly and
    another for paying yearly. If you like, you can add a third option, paying
    every 6 months.

    But before you even get to that point, the first thing you have to do is
    look at other sites similar to yours (I assume this isn't a unique niche) and
    see what they're charging monthly and what they're offering.

    If they're offering more value and charging less, you're going to get killed.
    You will either need to lower your monthly rate or give more.

    I hope you did all this before you even came up with a price. You must
    know who your competition is and what they're offering and for how
    much. Otherwise, you're just shooting in the dark.

    Do you have a USP...something that sets you apart from the other sites?

    If not...find one.

    You need to be able to justify the price you're going to charge.

    If it's a service site, like an Aweber, then you really don't have to worry
    about people taking all the info and then leaving. Once they stop using
    the service, they no longer get anything out of it.

    If it's an info site, it's harder. You have to constantly add content or there
    is no reason to stay beyond the first month and your turnover will be a
    nightmare.

    Membership sites can be a lucrative model.

    They can also be a royal pain in the ass and a total nightmare if you don't
    manage them right.

    And part of that management is giving your customers something that they
    will want to pay for month after month at a price that is fair.

    It looks easier than it actually is.
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    • Profile picture of the author willyboy104
      Originally Posted by Steven Wagenheim View Post

      Okay, first of all, if the one off product price gives the same amount of
      info as X number of months membership, then that option makes no sense.
      Get rid of it.

      If it's a monthly membership site and each month provides new content
      (that is a key here) then have 2 options. One for paying monthly and
      another for paying yearly. If you like, you can add a third option, paying
      every 6 months.

      But before you even get to that point, the first thing you have to do is
      look at other sites similar to yours (I assume this isn't a unique niche) and
      see what they're charging monthly and what they're offering.

      If they're offering more value and charging less, you're going to get killed.
      You will either need to lower your monthly rate or give more.

      I hope you did all this before you even came up with a price. You must
      know who your competition is and what they're offering and for how
      much. Otherwise, you're just shooting in the dark.

      Do you have a USP...something that sets you apart from the other sites?

      If not...find one.

      You need to be able to justify the price you're going to charge.

      If it's a service site, like an Aweber, then you really don't have to worry
      about people taking all the info and then leaving. Once they stop using
      the service, they no longer get anything out of it.

      If it's an info site, it's harder. You have to constantly add content or there
      is no reason to stay beyond the first month and your turnover will be a
      nightmare.

      Membership sites can be a lucrative model.

      They can also be a royal pain in the ass and a total nightmare if you don't
      manage them right.

      And part of that management is giving your customers something that they
      will want to pay for month after month at a price that is fair.

      It looks easier than it actually is.

      Thanks Steve, I was actually hoping you would offer advice here since you are rather well established I would say

      Anyways, in answer to your questions I have thought about the market which isn't unique and I have found a niche in the market which isn't being filled to the levels which it could and should be.

      I think I may of confused you with the one-time price that was for one months content off the membership site, where as paying the membership price gives you new content each month.

      I have done a lot of research and hope to offer higher quality, larger quantities of content for a higher price than normal.

      I totally agree with what you say about membership sites look easier than they actually are, I would definitely agree 100%

      However I do have a different angle on this market however I wouldn't say it is a USP as with most things online they can always be re-created/re-hashed and re-done.

      So you would recommend that I trash the one-off price for 1 months content and instead go in for monthly/yearly and perhaps bi-yearly?

      Thanks again everyone.
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      • Profile picture of the author Steven Wagenheim
        Originally Posted by willyboy104 View Post

        So you would recommend that I trash the one-off price for 1 months content and instead go in for monthly/yearly and perhaps bi-yearly?
        In a word...yes.
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  • Profile picture of the author Allen Payne
    All prices should end with 7 . Statistics say that people are more likely to buy your product if it ends with 7. I advise you to post a smaller fee first and increase it after a few months.Good luck.
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    • Profile picture of the author Steven Wagenheim
      Originally Posted by Allen007 View Post

      All prices should end with 7 . Statistics say that people are more likely to buy your product if it ends with 7. I advise you to post a smaller fee first and increase it after a few months.Good luck.
      This is the kind of bad advice that drives me crazy.

      Why should he start with a lower price? Based on what?

      With some markets and products, lower prices actually produce less trust
      because the market thinks the product is cheap.

      You price your product based on research, starting with what the rest of
      the world is charging for the same product or service.

      You just don't pick a low price at random.
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    • Profile picture of the author ozduc
      Originally Posted by Allen007 View Post

      All prices should end with 7 . Statistics say that people are more likely to buy your product if it ends with 7. I advise you to post a smaller fee first and increase it after a few months.Good luck.
      Hmmmm, can you show us some of your research and testing to validate this?

      I would not lower your price at all but you could offer a free (or $1) trial period for x days and give them limited access to some of the material. Just let them have enough to wet their appetite and maybe have a list of "what's to come" when they pay up for the monthly.
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  • Profile picture of the author willyboy104
    Yeah agreed Steve.

    I am not entering the market with a low price on my product since my product will be high quality, therefore lowering the price will only make people assume the quality is low.

    I am just trying to find a good pricing structure, thanks for your advice though but you need to think about what your saying first, good intentions though
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  • Profile picture of the author Alexandru
    An interesting thing to do that has always worked for me is to set a higher price for your product and let the buyer find a special offer with a lower price.

    Say you price it at $77 monthly and on your sales page it clearly says $77, but you provide your email list with a $20 discount coupon. That way, they will the think the product is valuable since it's worth $77, and they get it for $20 less. But don't do the "You have 5 more minutes left" method. I hate it and I don't care if people say it works, it shouldn't work unless you're selling a product to dumb people!

    Now, don't write the discount coupon on your page with a 25 font size. You can either email it to your list and at the bottom of the email you can post the coupon, or at the footer of your site you can post a page called "(secret link)" and on that page write something like: "Statistically, very few people read the 'fine print', and being observant can pay off. That's why I'm going to offer you a $xx discount coupon code."
    I've seen this being used by some hosting companies.

    I've tested it with a few of my non-entrepreneurial friends and 7 out of 9 that I've sent to my page and told them to read it until they've realized what the product is about and what the price is, have found the secret link in the footer. Means that it's not that hard to find it, but yet it seems like it is. Because by saying that statistically very few people read the fine print you make them feel special.

    Conclusion: The higher price of a product makes the potential buyers think the product is worth a lot and that it's not some cheap junk, and after discovering a coupon code for a product that's worth more than they're going to pay for, the chance of them buying it is higher. Of course, this also depends on your sales page type, but it can increase conversion rates.
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  • Profile picture of the author Silas Hart
    Originally Posted by willyboy104 View Post

    Hey everyone.

    I am currently trying to figure out what sort of price to offer my product/s at for my membership site however I am worried that people will be scared to purchase my products because of the recurring payment for the membership.

    Therefore I was considering doing a monthly price for each product that would work like this:

    membership price:
    monthly price: $67
    yearly price: $497
    One-off product price: $77

    just an example but obviously the monthly price is cheaper therefore makes people feel more attracted to the monthly price however wouldn't they just stop their membership or get a refund because they would buy it one-off then never want to buy again so i would end up with nothing...

    Any ideas?

    Kinda stuck with this pricing...been thinking about this for months now and have so many figures wrote down on peices of paper, so many calculations xD
    I break it down like this. People will probably throw a fit, but this is what I have split tested and learned so far, and I work with pricing a LOT as I sell on eBay, often selling unbranded non-competitive items that allow me to just "come up" with a price of what I want for something.

    1, 2, 3, 4, 5 are considered low numbers. 5 sounds much lower than 6, although it is only by one.

    6,7 are neutral numbers. They sound low, but depending on the placement, can seem very high. You see 7 a lot online, and you are starting to see it much more offline as well.

    8,9 are High numbers.

    With this information, I come up with a "Value" price, which is often a neutral and a high number together, with the high number as the last digit. IE: $69.00 as I find its often the last digit of the whole number (not the remainder, which would be cents) that determines a persons feeling on a value, then with the addition of the digit in front of the last digit (the first or first two digits which would be the "6" in the $69.00 value)

    Many marketers and sellers online often Value a price with two or more High Numbers. I do not, as I feel this discredits the value of a price and you lose psychological trust with your potential buyer. If someone says the value of something is $99, I would put a Low number in front of the $99 and make the prexisting first High number a Neutral OR a Low. $99 would become $119 OR $168 (depending on the marketing of the product itself)

    I present the potential customer with the "Value price" and then offer my actual pricing, so instead of $119, I actually want $57, and I'll throw in a couple additional content/freebies.

    "Buy one hammer for $7, and I'll throw in an extra one free and a box of 300 galvanized nails for free too!"

    I don't believe in the remainder pricing. IE: $47.99 as I feel this starts a psychological snowball effect. Most people see that price and think "Thats a good price, but thats actually $48... and thats awfully close to $50.00" in which a person will probably decide it is too high, a decision based on a small feeling of deception and lack of trust.

    I've split tested "Savings" with a bundled payment at a reduced cost, such as your $497, and my testing shows that showing any kind of bulk amount, or high cost, will make people feel wary about actually purchasing and signing up for monthly payments, in your case, I would charge $57 a month and leave it at that, and not offer a large bulk payment with a reduced cost unless requested by someone who has paid at least 1 months membership and is already signed up for automatic withdrawl.
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