by dr2010
20 replies
Hello Warriors. My topic is about raising prices. I would like to hear everyone's feedback.

As it relates to raising prices, say that you sell ebooks; membership site subscriptions; software. How often do you raise prices for each item that you sell; every year,every 6 months or whatever and why?

What advice would you give internet marketers about how frequently they should raise their prices to their digital products or membership site subscriptions; should they raise the prices to their digital products or membership site subscriptions every year, every six months; or whatever and why?

How much is too often for internet marketers to raise their prices to their digital products or membership site subscriptions and why?

Depending on whether you are selling digital products or membership site subscriptions; what are your steps to raising the price to your product?

For digital products or membership sites subscriptions; depending on the situation; when would you contact people to let them know about your future price changes and when wouldn't you contact people about any future price changes and why?

That's it for my questions. I'am looking forward to having some dialogue. Please leave your feedback. Your feedback will be greatly appreciated.

Thank you.

Warm regards

- Dr2010
#prices #raising
  • Profile picture of the author fcf360
    Raising prices on the same product constantly doesn't look all that professional to me. Pick one price that you can be comfortable with and stick with that price for as long as possible. And change the prices if you need to, but only when you do modify, or update that product as well.

    To make more money for a product offering, it makes more sense to have more higher priced, and premium OTO products in the backend. There is no limit as to the number of OTO products you can have, as well as the price points.
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  • I agree with fcf360.

    The only reason to raise prices is because you have increased value to your produce. ie. You added video to your course or you added a couple chapters to an ebook.

    Another reason to raise prices is scarcity. If you have a limited quantity of an item or can only take on a certain number of customers or clients, that is an acceptable reason to increase your prices since you have gained experience and created a product or service that is outgrowing your supply.

    I would never put a fixed time on raising prices. Every scenario is different.

    Hope that makes sense...
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    • Profile picture of the author MNord
      Originally Posted by WritersAtYourService View Post

      I agree with fcf360.

      The only reason to raise prices is because you have increased value to your produce. ie. You added video to your course or you added a couple chapters to an ebook.

      Another reason to raise prices is scarcity. If you have a limited quantity of an item or can only take on a certain number of customers or clients, that is an acceptable reason to increase your prices since you have gained experience and created a product or service that is outgrowing your supply.

      I would never put a fixed time on raising prices. Every scenario is different.

      Hope that makes sense...
      This is a smart post. I agree almost entirely.

      However, for some products/services I would say that it's ok to try increasing prices to pace the market if the market tends to move. For example, when I was a kid, paperback novels often sold for about $3.50 - $5.00 new. Today, the same titles sell for $5.50 - $8.95. There's no added value--they are the same books they were 30 years ago. But pricing for paperback books has increased.

      (I know, an antiquated example. And yes, I still buy paperback books )

      Similarly, business attorneys tend to increase their rates 3% - 7% per year. Their services aren't any different, but that's the way the market tends to operate.
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  • Profile picture of the author aarthielumalai
    I don't have much experience with selling digital products (except on an affiliate level), but I do offer services.

    I increase prices depending on how well my offer is selling. If I'm getting a lot of sales and clients, then I'm confident enough to increase prices. But again, I'm usually hesitant to ask my current clients to pay the increased price, unless it has become mandatory; say, the time I'm spending is no longer worth the money I'm being paid and so on.

    So, I guess it depends on your offer, how many ebooks or membership subscriptions you are selling (every week, month, year etc), and if your audience will be comfortable with your new price point.
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  • Profile picture of the author ronrule
    If it's a subscription, you need to be careful you don't fall into the "Cigarette Tax Loop".

    When the state of Florida calculated how much revenue they would get by imposing a cigarette tax, they forgot to compensate for changes in human behavior. They showed all of these revenue models showing more money for schools, doctors, etc. But when the tax passed, something unexpected happened: people quit smoking. They didn't hit their projected revenues. So they raised the tax a little more, which caused more people to quit. They did this a few times, and each time the price per pack went up, more people quit smoking. They finally stopped messing with it, and it's STILL never produced the revenue they wanted.

    First, raise the price for new customers. See if your conversion rates drop - if they do, that means people aren't seeing the value in the new price that they were at the old price. If there's no discernible change there, then you can test your price increase on a segment of your audience and calculate the percentage of people who drop off. If the numbers make sense (the increased price produced more revenue in spite of losing some users), you can apply it to the whole group.

    You can raise prices without adding value - wages are being forced up, which results in everything else being more expensive, and prices are going to rise as a result. It's an economic certainty, and anyone who thinks that you should always maintain the same price isn't thinking about the big picture and the longevity of their business. But that said, some customers just won't be willing to continue paying, so you need to determine how many that is first. Don't ask them ... just announce it to the segment and see where the chips fall.

    Also note that this needs to be a large enough segment to be representative... if you change it on 10 people and two quit, that's a 20% drop but that doesn't mean it would be 20% across the entire customer base. You need at least a few hundred for it to mean anything.
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  • Profile picture of the author JensSteyaert
    I would only consider raising prices for new customers, never increase prices for existing customers. I haven't got data to abck my claim but i get the feeling you will have less income by the end of the day if you raise your prices due to customers leaving if it's a subscription site.

    If you raise your prices for new customers, you have to give more value so the price increase is justified. So i wouldn't let a time period determine the price, but the features of the product.
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  • Profile picture of the author dr2010
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    • Profile picture of the author dr2010
      Hello Warriors, I know you having been waiting on my post. Thanks for your patience.

      I don't agree that you should never raise prices on your existing customers. In some situations it may make sense to only raise your prices on new customers. But this is not true in all cases.

      In some cases it may would be appropriate to raise prices for existing customers depending on the situation. So if you plan on raising prices on your existing customers; say for example; you were planning to raise your prices of your service; and you had a lot of customers to let know in advance.

      You can send an email out thanking your customers then explaining the reason for your price increases. You may charge your new customers 2x more while giving your existing customers a percentage discount. So that means that your existing customers could pay 5% more or higher than what they are paying you now but end up paying you 30% less than your new customers depending on the discount that you gave your existing customers.

      I will hold off on asking my other questions or add any other ideas for now, but I plan to ask the questions next week. So check this thread.for the questions on monday. Thanks for the dialogue. If you Warriors have more to say feel free to share it.

      Have a good weekend
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  • Profile picture of the author stevenjacobs
    Banned
    dont raise your prices unless something is wrong
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  • Profile picture of the author Anne Laidlaw
    I wouldn't raise the cost unless there is a huge upgrade or much more added value in the service
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  • Profile picture of the author Steve B
    Originally Posted by dr2010 View Post

    How often do you raise prices for each item that you sell; every year,every 6 months or whatever and why?
    dr2010,

    You speak of raising prices like you were talking about changing your oil - something that you would automatically do every 6 months or a year.

    If you adopt this crazy practice, you're going to alienate your customers, scare away potential prospects and have your buyers wondering "what is this crazy fool going to surprise me with next?"

    There is no reason to increase prices automatically - ever.

    Yes, occasionally there is a legitimate reason to bump prices, especially if the cost of doing business to you increases. Another reason to increase a price is to bring your product in line with other similar products if you've been pricing the product too low. Sometimes updated versions sell for more if the value is there.

    But to talk of raising prices with no reason behind it (other than you want to make more money on each sale) is marketing suicide in most cases.

    Do customers like to pay more for the same product? Do customers like unwelcome surprises? Do customers want to do business with a company that raises prices like clockwork?

    Put yourself in your customer's shoes and cater to their needs.

    Steve
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    • Profile picture of the author dr2010
      Hello Warriors, thanks for your comments. No I didn't mean speaking of raising prices like I was talking about changing oil - something that I would automatically do every 6 months or a year. That's not what I meant. My example was about raising prices when you had a good reason to.

      I don't believe that you have to raise prices every 6 months.

      Anyway moving on I was very business over the weekend and today I was out running around
      do different things. So I didn't get a chance to work on my questions yet. So I will not ask my questions yet, I have other things that I have to take care of. So check back to this thread thursday. I will ask the rest of my questions then.

      Thank you for your understanding.
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      • Profile picture of the author dr2010
        I meant, that I was very busy over the weekend.
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  • Profile picture of the author writeaway
    If the quality is there, raising prices actually BOOSTS your sales. You don't want people to think you sell LOW QUALITY garbage because you put a low price tag on your products. I raised my prices and my sales are still very good. In fact, I get more loyal customers now.
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  • Profile picture of the author DavidTile
    Like asking for a raise, you should raise prices from a position of strength. If business is booming, then go for it.
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  • Profile picture of the author Brent Stangel
    Banned
    raising prices when you had a good reason to.
    For new customers I would say, "Yes."

    For existing members, you better have a very good reason.
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  • Profile picture of the author RogozRazvan
    The basic theory is to to raise your prices until the moment conversion drops.

    In practice, it is a bit more complicated. You could double your price and double your sales (because they'll consider your product more valuable) or a 50% discount could increase your profit by 200%.

    The best idea? Split-test, even today. Have one offer the control and one +50%. See which works better.
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  • Profile picture of the author jeremy49
    Why not raise prices for new customers only and tell existing customers their price will stay the same as long as they remain a member. That way you start to create barriers preventing them from leaving.

    You also can create creditability over future price rises with your community. When you say this product price will increase soon, so buy it now. People will be encouraged to buy it now rather waiting for someday, so giving you nice bump in sales before your price rise.
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  • Profile picture of the author Aira Bongco
    If it's a subscription, why not create two different subscription categories? Keep the first category at the same price then increase the price of the second category but add something of value. This is like the middle road for increasing your product's value while keeping your existing customers.
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    • Profile picture of the author dr2010
      Thanks Warriors, for your time and responses. I know that I said that I would ask my questions today, but I have decided not to. Please forgive me, I thought that I would have everything taking care of; out the way. I have some unfinished business that I have to attend to. Please check this thread next Tuesday or sooner.

      Depending on how fast I get the stuff taking care of, I may ask the questions sooner. Thank you.
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  • Profile picture of the author dr2010
    Hello Warriors let me apologize. I know you have been waiting for my questions. As of right now I'm writing this message in safe mode from my computer. I was going to post my questions earlier, but unfortunately my computer crashed. I'm not making this up not to post, but this actually happened. This is why I was not able to post earlier. I plan on getting my computer fixed thursday.

    I'll try to post my questions tomorrow, so check this thread tommorrow, Again I apologize.
    Thank you for your understanding.
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