{"id":12486,"date":"2010-11-01T00:05:55","date_gmt":"2010-10-31T13:05:55","guid":{"rendered":"https:\/\/problogger.com\/?p=12486"},"modified":"2010-10-28T17:04:48","modified_gmt":"2010-10-28T06:04:48","slug":"the-dark-art-of-product-pricing","status":"publish","type":"post","link":"https:\/\/problogger.com\/the-dark-art-of-product-pricing\/","title":{"rendered":"The Dark Art of Product Pricing"},"content":{"rendered":"

This post was written by the Web Marketing Ninja \u2014 a professional online marketer for a major web brand, who\u2019s sharing his tips undercover here at ProBlogger. Curious? So are we!<\/em><\/p>\n

One of the most common questions I get asked is how much I\u2019d charge for a given product. I guess the reason I’m asked this so much is it’s one of the hardest questions to answer, but the importance of price should never be underestimated.<\/p>\n

Here’s the process I go through when I\u2019m trying to arrive at a product price.<\/p>\n

1. Your existing readers<\/h2>\n

It doesn’t matter if it’s your first product, or your tenth. If you know your audience, you should have a feel for their propensity to pay for things\u2014and to what degree. If you’re unsure about this, look at the sorts of affiliate campaigns that are more successful with your readers. Do low-cost\/high-volume campaigns deliver your highest revenue? Or do high-cost\/low-volume promotions boost your bottom line the most?<\/p>\n

Outcome: My existing customers have a propensity to buy cheap\/expensive products.<\/strong><\/p>\n

2. Market perceptions<\/h2>\n

The general public has trouble valuing things\u2014and brands have been exploiting that for years. But what you need to determine for your specific product is this: is there a market-based status quo when it comes to the price people expect to pay? If you\u2019re selling music, or books, ask if there\u2019s generally an accepted price range for these products.<\/p>\n

Outcome: The community perception is that my type of product will be priced between $____ and $____<\/strong><\/p>\n

3. Where it fits in your product\/customer life cycle<\/h2>\n

If this is your one and only product, then this perhaps doesn’t have much of an impact, but typically, products fit into three key life-cycle categories: entry level, standard, and premium. Once you’ve slotted this new product into your product life cycle, you want to apply one simple rule: make the step from entry level to standard small, and the step from standard to premium high. For example, you might offer an ebook as your entry-level product, a webinar series as your standard product, and one-on-one consulting as your premium offering. An example price structure might look like this:<\/p>\n