Pricing Your Product For Maximum Sales

Pricing your product or service is very important and needs to be considered carefully. It is important to price competitively, but at the same time not to depreciate your product. It is important to have a good halfway price that creates the maximum amount of sales. Bear in mind the 20/80 rules when it comes to profiting from anything you sell. Your first initial sale will bring in about 20% of your actual business sales but your subsequent, or back end, sales will bring in as much as 80% of your profits. Therefore your initial sale must serve as a lure to bring in the customer for greater long-term profit.

Because your first sale is actually what will attract your customers in the beginning it is important to make sure the price is right. There are several ways to ascertain the proper price you should charge:

Price comparison: Keep an eye on your competition and see what they are charging for a similar product.
The market you are targeting: There 3 main categories:
a.    Those who are looking for bargains: Small cuts in price are appealing to these people. However be sure that you are still making a profit.
b.    The experimenters: These are exciting buyers, as they are not too concerned by the price. They just want to try the latest greatest thing. If you make a truly original, one of a kind product you will attract these buyers. You can charge a premium price until the novelty wears off.
c.    Those who want value for money: These are what a vast majority of your buyers will be. Just looking for good value. These are the buyers who will be prepared to pay a little extra if the feel you are giving them what they need and a little more, this is called perceived value.
Are you penetrating the market or actually trying to pinpoint a specialized market? Sometimes you just want to get a foot in the door. This will mean that you will be charging a slightly lower price than your competitors.
Split testing is comparing  a higher price and a lower one and see which one will draw the best sales conversions. Make 2 pages for this and send the same type of visitors to it.
You can take a survey from your subscribers to find out their opinion on a selection of prices.

Bear in mind that it is not always the lowest price that will fetch the sale. It is all about perceived value. Sometimes a lower price will actually cost you sales, as the discount price will reflect the product has less value in your buyer’s eyes. A higher price should be within reason and be comparable to similar product on the market.

March 30, 2007 – 8:56 pm by Constantin Chersin