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A Question About Product Pricing.

by taskemann
4 replies
A product should be priced to what the product is worth for the costumer. For example an eBook that provides customers great value, can be priced higher than an ebook that does not give customers as much value.

We all understand the fact that a price reduction from $ 49 to $ 37 will lead to more sold units, but can it be more profitable? I have noticed that more and more ClickBank vendors sets the price to $37 now than before.

Is this an effect of lower demand, competition, or is it because it's more profitable?


Thanks,

Jimmy
#pricing #product #question
  • Profile picture of the author Jayson Masters
    Hello Jimmy

    It really boils down to the perceived-value of your product

    My own tests in products have shown that higher priced products usually convert better... and it also depends on WHO you are marketing to

    Does your market have the financial income to pay for over $100 for your product?

    If you are targeting a mass and general market, lower prices would usually be a competitive advantage

    But if you were to target niche market, lower prices doesn't necessarily mean higher sales volume

    Think about price-value justifications for niches
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  • Profile picture of the author Alexa Smith
    Banned
    Originally Posted by taskemann View Post

    We all understand the fact that a price reduction from $ 49 to $ 37 will lead to more sold units
    To me, that isn't a fact, Jimmy. It's a variable and unproven assertion which will be proven for some people's split-testing and disproven for other people's.

    I've only ever seen in detail the results of three pricing split-tests, adequately performed on traffic from the same sources over an extended time-period, but in all three of them, as it happens, more sales (not just "more income") were made at the higher price (none of the three compared exactly those two prices, though).

    So, call me a skepchick, but I'm deeply suspicious and regard it as, in principle, "unproven theory", when someone claims that "we all understand it as a fact".

    In internet marketing, there are many things "we all understand as facts" which turn out not be true, on testing. I'm "just saying".

    Originally Posted by taskemann View Post

    I have noticed that more and more ClickBank vendors sets the price to $37 now than before. Is this an effect of lower demand, competition, or is it because it's more profitable?
    Neither, is my guess.

    I think it's probably self-fulfilling: most of them do it because they imagine "This must work better because otherwise everyone wouldn't be doing it". :rolleyes: :p

    That is how most consensuses of opinion are arrived at, in internet marketing.
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    • Profile picture of the author JohnMcCabe
      Originally Posted by Alexa Smith View Post

      So, call me a skepchick, but I'm deeply suspicious and regard it as, in principle, "unproven theory", when someone claims that "we all understand it as a fact".

      In internet marketing, there are many things "we all understand as facts" which turn out not be true, on testing. I'm "just saying".
      Truth...

      It isn't 'what you don't know' that gets you.

      It's 'what you know for a fact, that is just plain incorrect' that gets you.
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  • Profile picture of the author angela99
    Originally Posted by taskemann View Post

    A product should be priced to what the product is worth for the costumer. For example an eBook that provides customers great value, can be priced higher than an ebook that does not give customers as much value.
    Jimmy, pricing is all about the MARKET. It's only one of the 4Ps of the marketing mix, viz http://en.wikipedia.org/wiki/Marketing_mix:

    Product
    Price
    Promotion
    Place

    In some niche markets (weight loss, make money) the price points of $47, $37, etc are "me too" marketing. Here's why. They're "me too" products.

    In other markets, let's say where you're marketing to corporations, $47 would be laughable. You'd better price your product at $600 to $900 just to be taken seriously.

    Only the market counts.

    So, forget pricing initially. Consider the market and what it needs. All of the 4Ps work together, but the market itself comes first.

    Angela
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