The answer to “I’m confused! How should I price my products?”

Today we’re sending you another example of the kinds of answers we give people in our live classes to help you see what kinds of answers we can give to *your* unique and potentially complicated questions.

(Basically, we know that if a stock answer was good enough for your question, you’d already be set. But you’re not set. We can help.)

For those new to IttyBiz, this is all part of our re-launch of the “Let’s Fix Your Business” classes that teach you how to get more people buying already through simple changes to your content, website and list. The class details are below:

Click here to see everything we’ll cover in the class!

… and there are a bunch of free sample sessions from the classes in the sidebar. Enjoy.

(Don’t forget, registration closes TUESDAY.  So don’t miss it.)

Moving on to the Q&A!

Here’s a lovely question that Ann sent in about pricing her products. See what parts of our answer to her can help you make decisions about your own pricing.

Dear Naomi–

I have a question about entry level products. You mentioned that they are not [ultimately] meant to be money makers [and that their real value is helping customers see what your paid offerings look like so that they can trust your higher priced offers].

I had arrived at the idea that I needed to offer a low priced product so that people could feel they know me a little before considering whether they want to buy coaching.

My question is — What about creating products that do make money? Where does that fall in the process? My vision for my practice is to coach one on one for about 50% of my available time and then to have one or two solid product offerings that would round out my services.

Also, what is your definition of low price? How low? I know one person I work with sells her products for $27 which seems very low to me however, she has a big list and if 1000 people buy well, that’s a good product. Any thoughts on that?

Thanks,
Ann

Our answer to Ann’s pricing question!

Hi Ann,

Good question. The main point that we’re making with the lower priced products isn’t really that they aren’t going to be money makers, but that you shouldn’t get too *attached* to them being money makers. We see a lot of people who make a lower-priced product expecting it to be the thing that gets them to that “50% of their income” point. It can certainly happen, but it’s not necessarily easy to do.

To answer your question about “where do the other products fall in the process”, you can pretty much put them anywhere you want. But it’s very useful to have something simple and lower priced in place *first* rather than “later.”

To match up with your vision, we’d say that the best path for you is to get an entry-level product out there and have it be something you actively sell – as in you mention it in emails and blog posts, you have it visible in your blog sidebar, etc. – for two reasons.

First, you’ll get money from people who don’t have the funds (or aren’t ready yet) for something bigger. So that’s money you wouldn’t get otherwise.

Second, you keep your audience conditioned to the commerce – basically, they see you actively selling one thing, so when you come out with your larger offerings they’re already accustomed to you selling things. May sound like a little thing, but it’s actually a pretty big factor in terms of sales. Then, when you have your one or two big guns, you’ll be able to sell those more easily while still getting some smaller sales from the entry-level product.

Now! About the “definition of low price”.

This is another good question – and there’s no globally applicable answer to this. What you’re really aiming here is a price that seems reasonable for someone who isn’t ready to bite for the big cost yet. In a lot of cases, the $27-$47 range is a good one.

It’s a lot like getting video games for kids. When we walk into Best Buy and see a game for $49 or $59, we’re often like, “We’re not spending that much money on a game we don’t know anything about”, but then we see games for $19 or $29 and we’re much more willing to give them a shot. So in that case it comes down to “Well, it’s not as expensive as that other thing, so it feel safer.”

Also consider what people are used to in terms of pricing. Books have their own “normal” price range. With information products, $27-$47 cover the low end. Audio programs can be $15-$30 on the low end. So there’s no “right” number. But you do want it to be relatively far from the coaching price. So if you charge $200/hr for coaching, $27-$47 products are “not as expensive as that other thing.” If you charge $100/hr, you might want to try a little lower, like $27-$37, to preserve the gap.

At the end of the day, the price is really not nearly as important as the marketing. If you can communicate the benefits of what’s in the product well enough, the price isn’t really that noticeable. Again, it’s like books. If the back cover really sells you, you don’t let the price occupy your mind too much.

We hope that answers your question – if you have others, shoot ‘em over. :)

xx
Naomi and Dave

Want your questions answered? Join us in the class!

Registration closes Tuesday for the Let’s Fix Your Business classes, so if you’re interested in joining us, head on over here:

Click here to see everything we’ll cover in the class!

… and register on that page. We have some lovely pre-class lessons for you to enjoy, and on Wednesday class begins!

If you have any questions, email ninjas@ittybiz.com and they will take care of you.

PS – If you were in the class last year but want to join us again for the 18 weeks of live support, just ask the ninjas for the Alumni rate! They’ll verify your records and send you a link.

About the author: Naomi Dunford started IttyBiz in 2006. In her free time, she likes to… ha! Free time. You’re adorable. Learn more about her here and catch up with her on Twitter or Facebook.