Pricing With Regard to Competition
So, with the formalities and generalizations out of the way, lets look at how you should price your products with regard to competition. The reason I want to talk about this first, is simple. When you’re looking at pricing, the very first thing you’re likely to do is say, hey, so what is everyone else charging for similar products? And you may go from there.
Now there’s nothing wrong with doing this at all, but there’s more to think about, and a lot more questions to ask than a simple can I beat what this guy is charging for his service?
Your price doesn’t have to beat everyone else’s out there for you to get sales. This is something that I learned a long time ago, and you may remember me talking about actually increasing my sales by putting the price of the monthly membership up, and offering an option that was actually ten times more money up front, which increased profits even further.
You really need to be aware of what other people are charging for their products, but that doesn’t by any means signal that you have to go out there and beat them. Imagine you’ve just started up an ad tracking and autoresponder script site that’s so detailed, and so professional that it smacks the pants off the competition. But see the other sites offering the same service are hanging around at the ten dollar per month mark. Does this mean that you have to go and beat them and have a lower price for anyone to look at you? Nope, not at all. What you have on your hands is a premium product, and you shouldn’t be worried to sell it at a premium price.
Rule 1: Premium Products Sell at Premium Prices
So, here’s rule number one. If you have a great premium product, don’t be afraid to bump the price up. You do not by any means have to beat a competitor’s price to be competitive, in fact, by putting your price up, it’s quite possible that you’ll outsell your cheaper competition. Why? Because a higher price screams quality. Don’t, for one moment, believe you have to have the best price to make any sales. That’s just not true, you just have to have the best sales system, and of course a premium product if you really ever want anyone to buy from you again.
Rule 2: Wowing Through Price Is a Bad Move
The fact is, if your price is too low, people look at you and wonder why the heck you’re charging that tiny amount. If your brand spanking new piece of advanced technology software is really as good as you say it is, why does it only cost ten dollars? So there we have rule number two. Never price yourself so low that you think people will look and think wow that’s a quality sounding product, look how little it costs! That’s not what they’re saying at all. They’re saying, “Wow, look at how little that costs. There can’t be that much to it.”
So in effect, all you’re doing here is adding even more value to your product through a higher price. It might be the same product, but I tell you now, it’s much more likely to sell more copies at a price that someone might look at and think that it’s reasonable, or average than something someone might look at and fall off their chair at how cheap you are.
Don’t Be Afraid
Too many people are afraid to take the leap and price their products as they believe they’re worth. Too many people look at competition and think they have to cost less otherwise no one is going to buy their stuff, or they’ll make less money out of it. This is simply not true. Don’t undervalue yourself just for the sake of being cheaper. If you have a better product, you put a higher price tag on it. The experimentation and playing around to find the right combination of offers, deals, follow-up and pricing options can come later.
I could show you so many products that are out there right now, in competition with each other, but one is charging a heck of a lot more than the other. How about this guide, for one? Here’s us charging you a thousand dollars for the complete set of manuals, but there are plenty of other guides out there that cost ten dollars. Will the quality of both of them be the same? Looking at the price alone, from a customer’s point of view, I highly doubt it.
Next post: Times Are Changing: Business Needs. Until then see ya later…