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Figures are inspiring!

by Strange
5 replies
Selling a product priced at $75 getting 200 unique visitors a day.

Conversion Rate = 1%

Visitors Per Day = 200
Product Price = $75.00
1% Conversion = 2
2 Sales per day = $150
Monthly Earnings = $4500
Yearly Earnings = $54,000


Conversion Rate = 2%

Visitors Per Day = 200
Product Price = $75.00
2% Conversion = 4
4 Sales per day = $300
Monthly Earnings = $9000
Yearly Earnings = $108,000


Conversion Rate = 5%

Visitors Per Day = 200
Product Price = $75.00
5% Conversion = 10
10 Sales per day = $750
Monthly Earnings = $22,500
Yearly Earnings = $270,000


Conversion Rate = 10%

Visitors Per Day = 200
Product Price = $75.00
10% Conversion = 20
20 Sales per day = $1500
Monthly Earnings =* $45,000
Yearly Earnings = $540,000

What are your thoughts in pricing a product?
Do i go for a higher price with less sales or go cheap with more sales?

Looking at my competitors they have priced their
products as a monthly cost say around $40,
i want to eliminate the monthly costs an set a fixed price.

Matt
#figures #inspiring #product
  • Profile picture of the author LiamMcIvorMartin
    Charge something ridiculously low to get them in the door then pop in some upsells. I have a product which regularly costs 300 dollars and I put it up for 125 then I upsell them to a 400 dollar product, the upsell works at approx 80%.
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    In Times Of Change, Learners Inherit The Earth

    Liam McIvor Martin

    Outsourced Facebook Marketing

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    • Profile picture of the author Strange
      Hi Liam,

      Do you mean sell the product low and once they have purchased, offer them a higher priced product? Thats an idea, i could offer more features.
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  • Profile picture of the author JohnMcCabe
    There are two things you might want to consider.

    First, there are certain 'threshold' prices that seem to work. In IM, with its obsession with the number 7, you might see $7, $17, $27, $47, $97, $197, $497, $1997. In general, setting a price point in between will lose you some buyers who perceive the total as "too high" and leave some money on the table as the people who do buy would likely have also bought at the next threshold.

    For example, you price an ebook at $19. You are above the $17 threshold, so some would-be buyers will see that extra $2 as an attempt to gouge them. The price will just seem "too high". If you raised the price to $27, you probably wouldn't see much drop off in sales, and what you saw would be made up by the extra $8 per sale.

    The second thing to consider is how long members are sticking in these membership sites. When Ryan Deiss launched his big membership course, he said in one of the pre-sell videos that the average member stayed for 3-6 months.

    At $40 per month, that works out to $120 to $240. On the average, each buyer is worth a total of $120 to $240 before dropping out of the membership.

    With that in mind, you have a couple of ways you can go.

    You can price at the high end and lower the price until you find the sweet spot. This has the risk that early buyers will be unhappy at paying the higher price.

    You can price at the low end, and raise the price until you find the resistance. This has the risk of leaving some early money on the table, but is offset by early buyers feeling like they got a bargain for getting in early.

    I've thrown the magazine away so I can't give a cite, but I read a case study where the biggest bump in orders came right after the first price increase, with another bump after the second. The sales copy promised price increases, and the first increase tipped a lot of the fence sitters, apparently.

    I know I haven't given you a specific answer, but you should have something to think about...
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  • Profile picture of the author Strange
    Thanks John, good info there.

    I do believe the product i'm selling is great in value charging say 97$ as this will include 1on1 support, regular updates, e.t.c.. however i wouldn't want to upset the relationship with my customers by lowering the price later down the line.. hmm gotta think this through.

    I'm curious about this $17, $27, $47, $97 pricing guide, is it a myth, factual or an internet marketing thing?

    Matt
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    • Profile picture of the author JohnMcCabe
      Originally Posted by Strange View Post

      I'm curious about this $17, $27, $47, $97 pricing guide, is it a myth, factual or an internet marketing thing?

      Matt
      As far as I can trace it back, it seems to have started with a case study by one of the old-wolf copywriters (Gary Bencivenga, maybe? Can't recall...) who noted that, in this particular test, prices that ended in '7' converted better.

      Later, Mark Joyner, in his "Confidential Internet Intelligence Manuscript" repeated the Magic 7 theory.

      And it was off to the races. Almost every IM product since has a price ending in a 7.

      As for the gaps, you'll find that most markets have thresholds where a product will have very little price resistance right up to the ceiling. Break past that, and again you have very little resistance up to the next ceiling.

      Look at candy bars, for example. When the price of sugar skyrocketed, many candy makers made their products smaller rather than raise prices to a point where people would balk at paying.

      What that ceiling is for you, you'll have to figure out for yourself by testing.
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