If you’re creating your own information product (and that’s what most successful affiliate marketers typically aim to eventually do), it is something that can be difficult to price. This is due to their uniqueness, as well as their perceived value. What is worth a lot of money to one person may not be to the next – it depends largely on what type of value the customer feels your information product will provide.
If you are pricing information products too high or too low, profitability will certainly suffer. How, then, do you determine exactly the right price point? Take a look at these scenarios and tips to help you sell the maximum amount of information products at the biggest profit.
Pricing Information Products Too High
Two things happen when you set a high price for your information product. The first one is somewhat of a good thing – the customer thinks the value of your offering is greater than that of other, similar products.
The second thing that occurs is that a potential buyer either can’t afford the item, or they find the information elsewhere cheaper. In either case, you end up losing a sale.
Pricing Information Products Too Low
You may think that there is no way of pricing information products too cheaply. After all, aren’t most consumers looking for the best deal? Yes and no. Yes, customers do not wish to pay anymore than they have to for the information they are seeking. No, in that a low price is often perceived as low value; the old “you get what you pay for” adage.
How To Get The Price Just Right
Before you even think about setting a price for your information product, do your research. Undoubtedly your product fills a unique niche market otherwise your competition would be overwhelming – but you can still find others that are similar.
Do some online research for all keywords surrounding the topic of your information product. Then do an apples-to-apples comparison and list the ways your offering is different. For instance, if you are selling an eBook and it has more pages than one that is similar, you can conceivably sell yours at a higher price because it contains more information. Think about your potential customer comparing various options and make yours appear to have more value!
The best price is between the highest and lowest you can find elsewhere, online or offline. You want your product to be associated with the best (perceived as being the most expensive), but add value by offering it lower.
You might try doing a survey of friends, family, and associates. Ask them what they would pay for your information product.
It may take some time of adjusting the price to find just the right one. Consider starting at the high end of your range and if sales suffer, offer a discount based on a limited time special or in conjunction with a minimum dollar amount purchase from your site. This accomplishes two things. The first is increasing the customer’s perception of value. Who doesn’t want to get a great deal, to get something for less than its normal price? The second is compelling visitors to make a purchase. You are giving them a reason to act, and to act now.
Pricing information products is often treated as a subjective task, rather than an objective one. Remember that if you offer your product too cheaply, you will meet resistance when you later raise the price. If you sell it at too high of a price point, you may lose sales without ever knowing why. Do your homework and chances are that you’ll come up with the price that affords you a profit and one your potential customers are willing to pay.
Have a most outstanding day.
Sean RasmussenAussie Internet Marketing
www.SeanSEO.com © 2008 - 2010
{ 6 comments… read them below or add one }
Hello Sean,
Great tips on how to price your information product. I have heard from another Affiliate Marketer to end prices with a seven online. I think that with the more people get to know “who you are” then you are able to offer your product at a higher price. Also if your product is offerin more one on one help, you would not like to have too many people purchase your product so your price can be higher.
I am so happy that when I do have a product I can play around with the price
Cheers
Lisa
Interesting suggestion to “end prices with a 7 only”. But makes sense. Ending on 9 looks like you just wanted to stay on the lower digit, 5 is already very low. I will keep that in mind
My technique for pricing my information products so far has been to consult my “inner marketer” who is very intelligent in these matters. Doing it empirically, as you suggest, is an excellent way to verify my subconscious method (or raise appropriate questions). The more good sources of information, I find, the more useful ideas are generated, and greater potential for good outcomes.
It’s a tricky one; pricing. One key thing that affects perceived value is the sales copy. Top copywriters in the game can make anything sound like a good deal. There are internet marketers who pay top dollar for a top copywriter, because they know what a significant impact the copy has.
Hi Sean,
I would have difficulty in pricing my own products. I would do all of the comparisons with similar products on the market and seek advice from other people. I just think that pricing is extremely important. If I get this wrong it will definitely have an impact on my sales.
I see where you suggest to start at the high end of the range and discount the price for a limited time etc; I’m just a little wary of this. Won’t it make me look desperate?
It could possible make you look desperate if people keep returning to your site and see the price coming down. In my experience, this won’t happen too often, as once someone leaves they have generally made their decision and will not return.