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Does Price Affect Conversions?

by iRunThis
19 replies
I have a question, if I were to create a product in a certain niche, well I am. I'm debating on whether I should sell it for $27, $37, or $47. I may also add audio. The only problem here is that I've heard different things. Some people say that a lot of people believe that price determines quality so if I price it too low some might believe that it's low quality. Others say that higher price = lower conversions. Can somebody set me straight on this please? :confused:
#affect #conversions #price
  • Profile picture of the author Matt Morgan
    Originally Posted by iRunThis View Post

    I have a question, if I were to create a product in a certain niche, well I am. I'm debating on whether I should sell it for $27, $37, or $47. I may also add audio. The only problem here is that I've heard different things. Some people say that a lot of people believe that price determines quality so if I price it too low some might believe that it's low quality. Others say that higher price = lower conversions. Can somebody set me straight on this please? :confused:
    It might affect conversions for one product, for one niche, but it might not for another.

    so it depends.

    All you can do is test it, and see which one creates the highest conversion for your product.
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  • Profile picture of the author EugeneA
    This is a really good point. To be very honest with you, when I see a digital product priced low I do question the quality of the product. if it's not digital then I see it as a good buy.

    I'd say go with a medium to medium-high price.
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  • Profile picture of the author webapex
    Yea I have heard of raising the price improving sales.

    Another pricing scheme, multiple versions: Good | Better | Best
    often they make the better package a so-so deal so almost all buyers go right from good to best.
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  • Profile picture of the author Benjamin Ehinger
    Testing is how you will get your answer. I have purchased many very high quality products for $7 and low quality for much more, and vice versa. As long as your product is quality you will just want to make sure you test the prices to see how they convert. Also, make sure you watch your return rate because when people pay more they do expect more. I cannot ever remember asking for a refund on a $7 product, but I have certainly done some on some very bad products that were $50 or more.

    Benjamin Ehinger
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    • Profile picture of the author iRunThis
      Thanks everybody that has commented so far! I'm really trying to figure this out...

      Originally Posted by webapex View Post

      Another pricing scheme, multiple versions: Good | Better | Best
      often they make the better package a so-so deal so almost all buyers go right from good to best.
      Hmm...Thanks for this! That's actually a really good idea. So maybe say, the ebook is $27 and I'll throw in this audio for an extra $10... That just might work.

      Originally Posted by Benjamin Ehinger View Post

      Also, make sure you watch your return rate because when people pay more they do expect more. I cannot ever remember asking for a refund on a $7 product, but I have certainly done some on some very bad products that were $50 or more.

      Benjamin Ehinger
      VERY good point here! I haven't even been thinking about this. Not that I plan on my product being low quality, but it makes sense that the higher the price the higher the return rate. That's pretty much proven. I think I might just go with the middle price of $37 and see if that's effective. If not I'll bump it down to $27. I might just leave $47 completely out of the picture to avoid people asking for refunds. I've heard of paypal closing accounts because too many people demanded refunds.
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  • Profile picture of the author Crystal84
    I think you should first take your competitors' price to consider as yours can not be too lower or too higher than theirs. And then you can test and test to find which one is the most suitable.
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    • Profile picture of the author iRunThis
      Originally Posted by Crystal84 View Post

      I think you should first take your competitors' price to consider as yours can not be too lower or too higher than theirs. And then you can test and test to find which one is the most suitable.
      I'll be advertising this through a list, so I practically have no competitors. You're right though, I will be testing this month by month..
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  • Profile picture of the author dadamson
    TEST TEST TEST!!!

    Price it at what you feel it is worth at first.

    Yes, too low and it may seem less quality, too high and you will reduce conversion rates.

    In the middle of these two is the MONEY PRICE!!
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  • Profile picture of the author Mutiny
    Price naturally affects conversions. If you sell for $1, you'll make a lot of sales but little money. However, if you have a unique product, over deliver on your promise and communicate its value, people will pay a fair price. If the value is great enough, they will also encourage others to buy, thereby not only helping your wallet but your reputation as well.
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    • Profile picture of the author RubenJames
      Put all of your prices on an automatic rotator...

      Then...see what price sells the most!

      Simple, really!

      Ruben
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  • Profile picture of the author multimastery
    Great discussion... Price always has an affect on conversions. Money is always going to be an issue. Pitch too low and people become leery. Pitch too high and people become scary. Pitch just right and things will be alright!

    But finding this happy medium takes testing, testing and more testing.

    A great way to speed up your testing is to do market analysis. Find out how much similar products/services are going for in the marketplace. Then, try to find a competitive price in the mix.

    And nooo, you don't have to always have the lowest price to win customers. Don't think you have to lowball yourself. Build value and have confidence in what you offer and people will sense this. Now with a higher price tag, you must be prepared to build value enough to the point that it OVERshadows the value of the money your visitor is holding in his hand. At the point, this is when a sale is made and a customer is born.
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  • Profile picture of the author Agz21
    I have a case study on this...doing it tomorrow and will show you how just $2 in the price can make a difference...

    that will definitely help you
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    • Profile picture of the author iRunThis
      Thanks again for everybodies answers! I've read through all of them and I'm comparing them right now to see who's the majority and who's the minority.

      Originally Posted by Agz21 View Post

      I have a case study on this...doing it tomorrow and will show you how just $2 in the price can make a difference...

      that will definitely help you
      Really?! If you don't mind please PM me your case study! I'm VERY interested!
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  • Profile picture of the author Dee Odus
    It's true the perception of the quality of a product varies with price, if it's too cheap then it's low quality and if it's too high then you may sell less products, so all you have to do is test different price point until you find something that makes you more money.

    At $19.99 price point, assuming you sell 20 per day, that is approximately $400
    At $49.99 price point you may sell 10, that is approximately $500
    And at $99 price point you may sell only 5, that is also $500.

    In the above examples you make the same amount of money at different price points, most people will opt for more customer acquisition, but people that buy high ticket items will give you the least headaches, so your choice :-)
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    • Profile picture of the author stingrays06
      Originally Posted by Dee Odus View Post

      It's true the perception of the quality of a product varies with price, if it's too cheap then it's low quality and if it's too high then you may sell less products, so all you have to do is test different price point until you find something that makes you more money.

      At $19.99 price point, assuming you sell 20 per day, that is approximately $400
      At $49.99 price point you may sell 10, that is approximately $500
      And at $99 price point you may sell only 5, that is also $500.

      In the above examples you make the same amount of money at different price points, most people will opt for more customer acquisition, but people that buy high ticket items will give you the least headaches, so your choice :-)
      I agree.

      Your customer's Perceived value of a product can definitely affect whether or not they decide to buy and also which product they choose buy....

      For example, say you run a backlinking service and charge $10 for 10 million links. This cheap price will raise flags in your customer's head and they automatically assume that something is wrong. The same holds true if you were to offer 10 links for $100. They must be thinking, "wow these links are special!"

      You can use this concept of percieved value towards your advantage by offering, say, 3 different products on your site: a bronze, a silver, and a gold.

      Most customers will take the "middle of the road" package because they perceive it as the best value.
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  • Profile picture of the author John Romaine
    Do you have a list? If so ASK THEM, not us, we're not your customers.

    Give copies away for free, and tie it in with a survey, and ask what people would be willing to pay.

    This is also a great way to get feedback and testimonials.
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  • Profile picture of the author Targeted Traffic
    Take some time to check what level of quality your competitors are offering and see how your own product compares. If yours represents the better value, you can raise your price confidently. But it's important you know exactly how your product is different to the one your competitor is selling.

    Never be afraid to put a higher price tag on your product if it really delivers great value. True...some customers may view really cheap products as also being poor quality, and a higher priced product is often seen as offering better value, but then conversion might be low. However, when you offer only top rate products that really deliver on quality and value, a higher price is easily justified. You really don't want to attract the sort of customers who are only shopping around for the cheapest prices anyway. Aim at the type of customers who will develop some loyalty to you and your products based on your quality. You can't expect to raise your prices if you have no real reason for it.

    Bottom line:Make sure it really lives up to the price.
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