Ann wants to know how to set prices for entry level products. She asks:
I have a question about entry level products. You have said 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?
Here’s my advice for Ann on pricing entry level products:
Great question! When it comes to entry level products, they certainly can end up being money makers, but that you shouldn’t get too attached to them being money makers in the short term. 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 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 sooner 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 for something bigger (or aren’t ready to spend more yet) . 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. It 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 for here is a price that seems reasonable for someone who isn’t ready to spend a substantial amount of money (yet). In a lot of cases, the $27-$47 range is a good one.
It’s very much like buying video games for kids. When I walk into Best Buy and see a game for $49 or $59, I’m often thinking, “I’m not spending that much money on a game I don’t know anything about”, but then I see games for $19 or $29 and I’m 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 away from the price of your coaching. 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, period, 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 as much of a make-or-break. Again, it’s like books. If the back cover really sells you, you don’t let the price occupy your mind too much.