3 Factors that influence pricing

If you plan to provide a product or service you will have to consider how much to charge. A facetious response to this would be “as much as possible”, but there are some factors that will limit the viable return you can get for your hard work. Here are three of them:

Acceptable price range

You may be tempted to price your product or service high. However while some of your prospects may regard a high price as a sign of quality others will consider it an attempt to take advantage of them so you can make as much profit as possible.

Price the product or service low and some prospects might be tempted to buy because it is cheaper than the alternatives, while others will consider a low price too good to be true and steer clear.

Products and services in a niche will be priced in a range that customers find acceptable. Do some research in your market to discover that range, identify the price points your competitors are using and only rise above that level if you can clearly justify the extra you are charging.

Format

Different formats have different perceived value. An ebook is a fairly basic and common digital product these days and, unless it addresses a topic that people will value highly, tends to be the lowest priced of information products. Video can command a higher price because it is possible to put more information and better training in that format. An ebook can include screenshots of a processs, but a video can show a process as if it were being demonstrated live in front of you.

Live webinars are often free to attend, but that’s because the content is incomplete or limited and you promote a product in the second half of the webinar. A webinar that is designed to teach rather than promote can be better than a video because it can be interactive and therefore you can charge even more.

Essentially the more valuable and useful content a product contains and the more interactive the format is, the more you can charge.

Repeat business

One way to encourage repeat business is to offer discounts if a customer buys from you again. It’s easier to keep a customer than to find a new one and a discount can be a good way to retain those who have already bought from you. However you’ll have to monitor sales and check that the discount generates more business in the long term.

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