Another great piece of advice from, Showcasing women.com
My experiences with pricing go way back. I’ve personally been through the same things you have encountered or are currently dealing with – the dollar amount decision, the anxiety of being wrong, and the fear of NO purchases!
With any business, it’s important to make sure that your offer and your pricing are both competitive and valuable. Since a person’s “perception” is their reality, if your perceived value is too low (by being underpriced) you’ll lose sales. If your perceived value is too high, you’ll also lose sales. Pricing is a “fine line” decision for both the seller and the buyer.
When I wrote my first informational book and created a TV commercial to sell it, I tested my pricing at $19.95, $24.95 and $29.95. To my surprise, I sold the most books at the highest price because there was a “perceived” value placed on the information. That perceived value was enhanced because I had the foreword written by world-renowned author and speaker, Tony Robbins… even though, with or without Tony’s contribution, the information inside the book was exactly the same!
This shows that testing is a vital component in creating the pricing that will give you the most profit. My results could easily have been that I sold more books at a lower price and then made up the difference with volume. But the market placed its own perceived value on what I was selling – and without testing I would have short-changed myself and never even known.
Before you create your offer and test your pricing, you need to do research. This is essential for giving you better clarity on your market and audience needs, as well as what any competitors are doing. But don’t make a career out of research… do it, analyze it, then make a decision. Always remember that research is meant to help you make a profit.
When you start pricing your products and/or services, it’s important to know what the current market value and price is in your specific niche. It’s crucial to know what your industry average pricing is. For example, if your product is priced at $99, and the current going value is $29, it’s obvious that it’s not going to sell well. You can’t let greed or need (the need to make money) be your decision-maker.
Alternatively, if the current market price is $99 and you are trying to “give it away” at $19.97 (because of need) you will get a lot of “freebie customers” grabbing your low-hanging price – but in the long run you may end up losing credibility and future sales.
Can a low pricing strategy ever actually work in your favor? Yes – when you are seeking to do lead generation to attract “qualified” customers.
For example, here at Showcasing Women we may offer a report, or even a series of reports, for a mere $7 each. The charge is low enough to be a great lead generator, attracting women to purchase and opt-in to our mailing list. And because someone was willing to pay $7 versus simply opt-in to a free download, they become an ideal customer for future purchases. Again, this is the fine line of pricing and strategies, combined with how you “message” your offer.
One of the greatest problems women have is underpricing. When you are priced far below what your competitors are offering, you will be perceived poorly and not taken seriously.
Beware of the price drop! It is one thing to offer a short-term, one-time-only or a limited-time price discount. BUT if you price your product or service too high, and then decide to drop the price because your sales are low, you’ve now set a perceived value of, “It isn’t selling so they dropped the price, so it must not be that good… so I’m not buying it, either.”
To read 3 tips Suzanne gives, click on this link: http://www.showcasingwomen.com/pricing-your-items-to-make-fingers-hit-the-buy-button/
Feel free to comment or share this great advice.
“This article is reprinted with permission by ShowcasingWomen.com, the Premier Resource For 30+ Million Women Entrepreneurs. Visit them for free instant access to their Success Tools.”