Determining a price for your product?

by Sardent 6 replies
If you have developed your own product, how did you determine a price for it?

What factors came into play and you think are important when considering a price?

Thanks.
#main internet marketing discussion forum #determining #price #product
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  • Profile picture of the author Vincenzo Oliva
    Use your main targeted keyword phrases and examine the top 10 sites. What are they selling, how much are they asking, what type of products are they selling may give a clue as to what the market needs. Audio and Video versions of your product also increases the perceived value. Check clickbank, and other affiliate sites to gauge the market pricing.
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  • Profile picture of the author Sardent
    It's an info product that deals with special circumstances with setting up online payment receiving and accessing of the funds.
    I stumbled across the method while setting up my daughter's craft website for her.

    I've spent the last week researching to see if anyone else had this information or similar product, or even articles on the subject, and haven't come across any so far.

    It's unique (as far as I know), but it only takes a couple of pages to explain in detail. So I was wondering what price to set for the first test.
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  • Profile picture of the author CDarklock
    Originally Posted by Sardent View Post

    If you have developed your own product, how did you determine a price for it?
    Pretend you're the customer. You actually have the problem this product solves. This is the hardest part - since you wrote the product, presumably you don't have the problem anymore. Or, at the very least, you already have the solution you're giving them. But you have to pretend you still have the problem and you don't have the solution.

    (Otherwise, the product isn't worth anything to you. Why would I want a product about how to do this? I already do this, and I do it just fine, and in fact I'm doing exactly what this product says. It's a complete waste of my money. So take a deep breath and get into your target market's shoes.)

    Make something up that ends in a zero. Ten, twenty, fifty, a hundred.

    Then ask yourself "if I paid that much for this product, would I be happy?"

    If the answer is "yes," add ten bucks to the price. Repeat until you get a "no."

    If the answer is "no," which it certainly is if you started with a "yes," take ten bucks off the price. Repeat until you get a "yes."

    Now take three bucks off the price so it ends in a seven. Your product should cost this much or less. You can always reduce the price of your product. People will still be happy.

    Imagine I've got a new product on the way out. I think "would I be happy if this were $10?" and I say "yes." So I go to $20, and it's still "yes" so I go to $30. Now I think "no, $30 is too much." So I drop the price to $20 again, which gives me that "yes," and then I subtract $3 to get a final price of $17. The most I should charge for this product is $17. I don't know what the final price will be, but it's definitely going to be $17 or less.

    There are good psychological reasons for prices to end in 7, and people are comfortable with them. Primarily, the 7 at the end signals to other marketers that you know something about marketing and have paid enough attention to know that "prices always end in 7." This, in my opinion, outweighs every other psychological factor in using a 7 for pricing within the IM niche.

    Outside, the market doesn't know a damn thing about pricing, so using the 7 slips right under their radar and gives you a minor boost to your sales for psychological reasons.

    Everybody argues about those reasons, and whenever I explain them, someone always insists that "people most certainly do not think that way because I do not think that way myself." And while synecdoche is a useful literary construct, it's not so useful as a component of logical debate.
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    "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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    • Profile picture of the author Sardent
      Originally Posted by CDarklock View Post

      Pretend you're the customer. You actually have the problem this product solves. This is the hardest part - since you wrote the product, presumably you don't have the problem anymore. Or, at the very least, you already have the solution you're giving them. But you have to pretend you still have the problem and you don't have the solution.

      (Otherwise, the product isn't worth anything to you. Why would I want a product about how to do this? I already do this, and I do it just fine, and in fact I'm doing exactly what this product says. It's a complete waste of my money. So take a deep breath and get into your target market's shoes.)

      Make something up that ends in a zero. Ten, twenty, fifty, a hundred.

      Then ask yourself "if I paid that much for this product, would I be happy?"

      If the answer is "yes," add ten bucks to the price. Repeat until you get a "no."

      If the answer is "no," which it certainly is if you started with a "yes," take ten bucks off the price. Repeat until you get a "yes."

      Now take three bucks off the price so it ends in a seven. Your product should cost this much or less. You can always reduce the price of your product. People will still be happy.

      Imagine I've got a new product on the way out. I think "would I be happy if this were $10?" and I say "yes." So I go to $20, and it's still "yes" so I go to $30. Now I think "no, $30 is too much." So I drop the price to $20 again, which gives me that "yes," and then I subtract $3 to get a final price of $17. The most I should charge for this product is $17. I don't know what the final price will be, but it's definitely going to be $17 or less.

      There are good psychological reasons for prices to end in 7, and people are comfortable with them. Primarily, the 7 at the end signals to other marketers that you know something about marketing and have paid enough attention to know that "prices always end in 7." This, in my opinion, outweighs every other psychological factor in using a 7 for pricing within the IM niche.

      Outside, the market doesn't know a damn thing about pricing, so using the 7 slips right under their radar and gives you a minor boost to your sales for psychological reasons.

      Everybody argues about those reasons, and whenever I explain them, someone always insists that "people most certainly do not think that way because I do not think that way myself." And while synecdoche is a useful literary construct, it's not so useful as a component of logical debate.
      Thank you, that's a methodology I hadn't thought to apply.
      It's been difficult separating myself from the problem since I know the solution.

      Thanks.
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      • Profile picture of the author CDarklock
        Originally Posted by Sardent View Post

        It's been difficult separating myself from the problem since I know the solution.
        A useful story I once heard from an IM coach... perhaps apocryphal... these stories always seem to be "a friend," but the friend never has a name.

        Someone with a local offline coaching business recommended to a coaching student that he should buy a certain GPS system. The student did, and then after his next coaching session (in person, at the coach's house) he tried to "reverse" the directions on the GPS - so instead of directing him to his coach's house, it would direct him back to his own house. The GPS system didn't make this easy, and he was confused, and he was trying to drive, and he ended up lost.

        So he called up his coach on the phone to ask where the hell he was and how to get somewhere he recognised.

        As luck would have it, they had been arguing that day about cost and value. The student had been pricing his products too low, but insisted that his coach's recommended prices were too high. Nobody would pay that much for his services.

        So when the coach answered the phone, he listened to the problem and said "I know the problem. You can fix it by pressing two buttons on your GPS."

        And then he asked "How much would you pay me right now to tell you what those two buttons are?"

        And with that, as we say in the software industry, the student was enlightened.
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        "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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