What is your ideal price point?
As you set out to price your products take three things into consideration:
#1- What is the price my competitors are offering
#2- How much do I want to earn on each product
#3- How can I be competitive
If you are selling an information product be careful to not overprice or underprice your items. Some of my coaching clients have come to me wondering why they couldn't sell their eBook.
After getting specific details from one client, I discovered that 6 months ago they were able to sell 32 eBooks per month. At $ 29.95 per book and hardly any overhead at all, he was earning $958.40. But when their sales began to drop they thought the way to combat this decline was to lower his prices even more. He went to $ 11.95. Sadly, they weren't selling more than 5-8 eBooks per month for the last 3 months, and it was hurting his business.
We began to do some research together. Discovering that most of his competitors were charged $ 69.95 for the same niche and subject, it became clear to me that the reason people weren't buying is because it was way underpriced and not taken seriously. So I advised that to stay at market value (because his content was valuable) he should raise the price to $ 54.95. He was very nervous about this move and thought people would think he was 'just after their money.'
I began to coach him about the danger of a poverty mindset and how it can appear to the marketplace. If you price your items too low you won't sell more, because people wouldn't take you seriously. After working through a couple personal issues, he put the price at $ 54.95. We also added a bonus chapter that wasn't included previously. He sold 47 books that month. This came to a grand total of $2582.65. His next step was to raise the rest of his training materials.
That month he made more than $ 5400.00 in his information publishing company that before we worked together, was nearly falling apart.
Don't buy into the notion that it's the recession.
In this case it was a devaluing of the content and a severely underpriced product. But what if the problem is you've been asking to much?
More than anything I hear from clients and coaching students a concern that they might be asking too much. This can be the case as well.
First thing I always suggest is to run a sale. See if lowering the price brings in more profits. Be careful to not put the sale price so low that you shoot yourself in the foot, but a good rule of thumb would be a 25-30% price reduction. See how your client base responds.
Another important aspect of knowing when your price is at it's sweet spot is to take a good look at the size of your list. If you only have 349 people on your list there is not enough concrete data yet to let you know how you're doing. In this case you'll want to build your list more before rolling out a test with a discount. You'll need at least 2000 people or more on your list to get any kind of accurate feedback.
In many cases simply building a bigger list, sending some split-tests to the email list and PPC ads gives enough feedback to know what to adjust.
Being very aware of what the market is paying for what you offer is key. But it's also important to walk in integrity and not overprice services, for example, just because you think you can "get it". When you are marketing your skill, in things such as coaching, writing, marketing, etc, it's wise to know what you're currently worth and price accordingly.
If you've never written an email that has produced more than $ 50,000 in profits, than it's important to be mindful that you don't charge the same rate as someone who can write at this level. It can be tempting for someone just starting out to think that they can charge top-rates, just because people will pay it. Honestly and integrity however will earn you far more money in the long run.
When I started out as a copywriter I was willing to work for some low hourly and fixed rates. As my skill increased, so did my results, the stories I was able to create and therefore, my rates. If I had charged 3 years ago what I'm charging now my reputation wouldn't be as strong as it is. My writing matches that reputation that is proven by results, not simply because I know what I can 'get' from a client or customer.
In creating prices remember that it's smarter to work for $ 50,000 when you're first starting out rather than pushing the 6-figure card immediately. As well be careful to charge for each service accordingly. If you do VA services and you write copy along with graphics design, remember that these three skill sets are very different, and should therefore be priced differently. A VA shouldn't be earning what a writer or graphics designer earns and vice versa. The more above board you are on your fees, the more money you'll make in the long run.
Lastly, ask for feedback from clients and be open to receiving it. If someone has some constructive criticism be willing to listen. The one who always justifies errors or mistakes is the same one who never gets far in their business. Be humble, be willing to take less initially and you'll go ten times farther.
Setting your prices isn't a mystery- your own heart is a good check point. Also ask your mentor or mastermind group for their input.
Remember, pitied is the business owner whose only judgement is their own reflection in the mirror. Always have reliable and trustworthy people who can and will speak truth into your life so that you can soar as you grow!
