There is so much information out there today about setting prices in your business - what you should and shouldn't do, how to set your prices, etc. But honestly none of that matters when it comes to your business.
First of all, this is your business. You are the one in charge.
Secondly, it shouldn't matter how anyone else does business. Their methods may or may not work for you.
When it comes to your business, no one else can experiment for you. No one else can do what you do for your business.
You have to do your own experimenting. You have to test the methods that everyone else says works for you. The only way that you will know if they work for you is if you actually test them for yourself.
It's true, setting prices can be hard, setting prices can also be easy.
But it's only hard because you make it hard by hemming and hawing and just plain not knowing what you want to do in your business. You really can set your prices so you aren't broke.
At the end of the day, a price is simply a made up number. It is someone's (usually the business owner's) perception of what they believe something should cost.
"My audience can't afford ... "
How do you really know what your audience can afford and what it can't afford?
It's not up to you to make this judgment. Let your audience make the decision.
When you pre-judge your audience on what they can and can't afford, it affects your business in more ways than you can even think about.
Never, and I mean, NEVER, set your prices just because you think this is what your audience can or can't afford.
If your product/course/service is absolutely worth it, your audience will buy regardless of the price. They will find a way to buy it.
If they don't find a way to buy it, then they aren't your ideal audience and soul mate clients.
And if your product/service/course isn't worth it, then you won't make the sales.
Being in business means creating products/courses/services that sell like hotcakes and it also means that you will have the flops as well. ALL businesses go through this. It doesn't matter what the size of the business is, there are always going to be things that don't sell.
But no one focuses on the things that don't sell. They just get right back out there and create something new to keep selling and keep making more money in their business.
Just because you think something is valuable, doesn't mean your audience does. If the price is okay, then it's the product/course/service. Sometimes it takes testing to figure out what you need to change.
Other times, you can just scrap what you have and create something new.
Don't judge your audience on what you think they can and can't afford when you set your prices. It's not a decision for you to make.
Don't judge your audience on what you think they can and can't afford when you set your prices. It's not a decision for you to make. @clarissaawilson
What is the actual value versus the perceived value of the offer?
When you list out the benefits and transformation your client is going to get when they complete your offer, what is the actual value of this versus the perceived value?
One of the things that always bugs me when I see sales pages is how business owners put a perceived value of what they think each component of their offering is worth. The reason this bugs me is because 99% of the time the business owner's perceived value of each item they are offering is astronomical. It is nowhere close to what you would think you might pay for something like that.
Some clients are going to see those numbers like I do and roll their eyes so far back into their head, they see stars. Other clients are going to take that perceived value and run with it. Then when they don't get that value in the offer, there are issues.
For example, why would I pay $1,000+ for access to a Facebook group? Facebook groups are free. Yes I get that you get the group access to discuss the course and ask your questions. But the value of the group is nowhere near $1,000+. It's actually priceless. Some groups that comes with programs and courses are the best out there, others (usually from business owners that say the group is worth $1,000+) are worthless and the group owner is rarely ever present, you just have your classmates to rely on.
Customers and clients have their own perceived value of what is being offered that is different from the business owner. And these usually differ very vastly.
Plus the customer always wants to know what transformation they are going to get at the end of the program.
Is the transformation that you are giving to the customer as valuable as you are saying it is?
Also check out: 5 Reasons You are Undercharging in Your Business
What is the transformation that happens upon completion of your offer?
Continuing on with this discussion of value, when the product/course/service is completed what is the final transformation that your customer can expect?
This has so much weight in your customer's decision to buy or not buy.
Customers don't care what they are going to get for the program/service, they care about the transformation that they are going to make at the end of the program.
What exactly are you promising your client they are going to be able to do or become upon completion of your program/service?
You are selling a course that helps business owners with their Pinterest marketing. So the end result would be that your customers are going to be getting more traffic from Pinterest to their blog. Is the value of your program really worth your customers getting more traffic from Pinterest?
You are selling a course that helps people who work a corporate job to create a work from home business. Are you clearly letting your potential customers know what they are getting when they complete your course?
At the end of the day, your customers really just want to know how their life is going to change for the better upon completion of your course/program/service and if the cost that you are charging clearly tells them that.
The higher or lower your price will affect the people who buy and who complete your product
When you price your offer on the higher side (but also include the transformation that your customers will get on the sales page), this usually results in more people buying your product.
This goes back to perceived value. Customers perceive the value of a product/course/service as valuable based on the price that you are asking for, it doesn't matter if it's high or low.
For example, if you price an 8 week workshop that will help your customer build a regular exercise habit and they get access to you for the whole 8 weeks at less than $100, the value of the workshop goes down.
A few questions run through my mind when I see this:
Does this business owner not think they can really help me transform my exercise habit?
What is wrong with this course that it is priced so low?
Am I really getting everything that is stated I am getting for less than $100?
When you think about this from another perspective, yes, more people will buy a course like this for less than $100 because they want to build a regular exercise habit and the program is cheap.
BUT less people will actually complete the course and build their exercise habit.
So do you want to make more sales or do you really want to help your customers make a transformation?
There are people who will always buy your offer when it is priced low. But these people won't always complete the course. It will sit on their hard drive gathering dust and they will completely forget they even have your course until the day when they have to clean up their hard drive.
Would you rather more people buy your offer and just let it sit on their hard drive and never complete it?
Or would you prefer less people buy your offer and get the transformation you are promising?
I honestly hope you go for the transformation process.
Plus when you help your customers create a transformation, they are now walking billboards for your offer to help you attract an even bigger audience than you had before.
Also check out: Money Mistakes Every Business Owner Needs to Avoid
What is the value you give for free versus what you give for a fee?
When you give value for the stuff you give for free, your customers will see so much more value in the stuff that you sell for a fee.
Think about yourself here. When you receive something for free, do you value it more than something you have to pay for?
I know I don't. I value the stuff the I pay for even more.
When it comes to course that I'm purchasing to learn something new, I get so much more out of that course than if I were just completing that person's free challenge.
The value of something always affects whether it is used or even completed.
It's true that at the end of the day, it's always up to you as the business owner to set your prices in your business. But I hope you will put more thought into it than just setting your prices lower to make more sales or higher because of your own perceived value.
Use your own logic. And if you really need more assistance with your pricing, you can join my workshop to Master the Psychology of Your Pricing.
I'd love to know how comfortable you feel with pricing in your business. Share with me in the comments below, what is the hardest part of pricing for you in your business?
Next read: How to Set Your Prices so You Aren't Broke