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Pricing - struggling

pawon

Contributor
User Power
Value/Post Ratio
133%
Dec 4, 2018
21
28
Hi,

(sorry for the long post with many different questions, as you can tell, need some direction... )

What I do

I sell digital products (courses/guides) about a specific industrial niche topic (mostly b2b) . To give some idea, these machines cost anywhere between 2k and 30k and running costs are the same (yearly). (I'm not selling the machines, I am selling information about running and fixing them).

I am currently making 1 to 3k a month with this, 1k from normal sales, 3k if I launched a new product or did a special promotion, etc, etc).

Have sold 1 product for a few years now, but added more products in the past year.

I have two guides (PDF) that I am currently selling for $119 and a course for $199.

Pricing

I'm struggling with what to charge.

If you wanted to learn this info the ordinary way, you'd take a course from one of the manufacturers/distributers which would be 1-2k per person for 1 or 2 days on-site. There are some institutions that offer online courses - they sell for $199 to $499 typically.

My refund rate is extremely low (I can count the refunds on 1 hand for the last few years) - I am 100% sure the value is there, and customers also appreciate this value. Many customers that bought the first product buy the others as well (they are my 'fans').

I raised prices in the past - sales dried up pretty much.

I lowered prices in the past (evergreen promotion to new subscribers of 50% / $59 ) - number of sales increases but total profit about the same - but it makes monthly sales also more predictable / less fluctuations.

On the other hand, I sometimes get customers who just buy everything at the highest price (the company they work for probably pays). For example, I had a digital version, a hard copy version, and a bundle (digital + hard copy) - they would just buy the bundle and pay twice the price of the PDF only.

Lower the prices: existing customers might get upset. I get more new customers, to which I can sell more follow-up products .. total LTV, etc.

Raise the prices: the info I offer is valuable and worth something. I feel like it's worth the higher price.

Any advice on what to do? Anyone has been here? Suggestions?

Two main pricing strategies I am thinking about:

1) Have lower prices and mid-prices products. Increase the number of customers and offer them more value/products down the line.

Step 1: products around $59 (pdf guides)
Step 2: products for $149 - $199 (online courses about the same topic)

(for example, one of the guides I am selling now for $119, I could make it into an online course for $199 and make a PDF summary for $59 as well).

2) Make it all 'premium'.

Step 1: products around $149 (pdf guides)
Step 2: products for $249 - $495 and up (online courses about the same topic)

Of course, I just need to sell two course for $500 to make the same as 17 guides at $59.

I am leaning more towards the second option. In the future (I am still settling in a new country and learning the language, etc) I might consider doing in-person courses but I need to set up a test-location for this and invest in equipment, etc (people travel to me and stay 1-3 days for training). The 'cheap' option above doesn't fit with this business model.

Promotions

I'm doing quite some 'promotions' to my email list to increase sales, but actually want to stop doing that as it lowers to assumed value of my products, I think.

I've been down the whole funnel thing rabbit hole, including upsells, downsells, everything automated (I am a webdeveloper, so tend to over-do these things anyways ) ... it doesn't work with my audience. They're a bit 'old skool' and not internet-savvy.

I'm having trouble getting them to double-optin to the list for example - but they do send me an email if they don't receive my emails then).

Traffic

Is it a traffic issue? All my traffic is organic. About 700 uniques a day and around 10k subscribers on my email list. About 50% is from USA, as are the sales (I'd say 80% of sales are from USA, Australia, UK and Europe - the price is too high for most other countries I guess).

I also want to diversify my traffic, starting with Adwords and LinkedIn (I can target exactly who I want there: maintenance managers at medium to large factories).

Maybe good targeting will attract the right people with the right budget and insights (the value of the product in relation to the price), that will allow me to charge higer.

How could I test this (pricing strategy) without upsetting or confusing current customers and visitors?

Any input and suggestions are welcome.

Thanks :)
 
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pawon

Contributor
User Power
Value/Post Ratio
133%
Dec 4, 2018
21
28
Another idea... change the packaging.. make a 'online' version and a 'premium hardcopy' version.

Guide (pdf): $119 / $99 / ??
Premium Hardcopy Guide: $249
(ring binder / book with some extra bonuses)

Online course: $199
Premium home study course: $495
(this would be a DVD and ring binder with some extra bonuses - not sure what this costs to print/distribute).
 

Tiago

Gold Contributor
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Mar 22, 2014
785
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What could you offer extra, that would be a crazy value add, which would justify you charging a premium price ($1000+)?

You know your customers pain points. Is it only knowing how to use/maintain the machine?

Offer something so great that you aren't competing for price anymore.
 

Kid

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Mar 1, 2016
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You won't like the idea (especially if you're in engineering field) but this is what i would do:
Split your brand.

Make one website with sub $300 products and the other with $800-ish.

Make different name and website templates.

This way you could target and sell to different kind of buyers without worrying about lost sales.
 
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Walter Hay

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Sep 13, 2014
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You won't like the idea (especially if you're in engineering field) but this is what i would do:
Split your brand.

Make one website with sub $300 products and the other with $800-ish.

Make different name and website templates.

This way you could target and sell to different kind of buyers without worrying about lost sales.
I think this is a great idea. I once encountered unreasonable resistance to buying my product, but it was not management that was responsible. It was a lowly worker who seemed to just resist change, and told the owner that my product was "trash".

I told the owner of my suspicions and he agreed to cooperate. I obtained a sample of their current product from him, re-labeled it with a different business name and handed it over for testing.

The answer came back: "This is trash too." The worker lost his job, I got the business.

I used that business name for years in "opposition" to my real brand, and re-gained another substantial customer whose new purchasing manager had been unwilling to continue buying from my real company. Reason unknown!!!

@pawon could do as @Kid suggested and could sell at different price levels without damage to his reputation.

If you do some research you will find that many large businesses operate at two levels with the same product.

Walter
 

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