#offerfeatures

Series Blog Post #4 - Choose Your Pricing Strategy

Contrary to popular belief, price isn’t the only thing that governs sales. The value and service you provide play just as important a role in buyer decisions, sometimes even more than the price. However, deciding on pricing remains one of the most challenging things entrepreneurs have to do. In this post, you’ll decide on a price that reflects the value that your offer, and you’ll figure out how you can make it easier for customers to say “Yes.” Price Your Offer to Sell Many entrepreneurs start out pricing low because they don’t value their own offerings enough. Don’t fall into this trap. Don’t assume that lowering the price on a product or service that didn’t sell last time will make people buy it this time. Choose a price that corresponds with the value your customers receive.  It’s important to test your price to see what works best for your customers. Test one thing at a time to see how it affects sales. For example, try a different pricing table for one month. Then try different value-add options another month. Most sales page tools like Leadpages or Click Funnels will give you options. Or you can just change one thing each month and measure your conversion rates and how they differ. Choose the Price It’s a business basic that you need to cover all your costs and make a profit. You need to choose a price that will give you the revenue returns you expect. When deciding the price you want, look at your competitors’ prices and see what they’re charging so you know what the going rate is. But don’t just copy them. What works for your competitors won’t necessarily work for you, especially since your value proposition should be different if you want to stand out. Focus on the value your customers will receive from your offer and the added value you will bring. Be confident in your pricing. This means being confident in yourself and your business, especially if you’re a service-based business where the ‘product’ you’re selling is yourself. When you work out the price, the figure might stretch you a little outside your comfort zone. You’ll ask yourself questions like, “Who would pay that much?” and, “I’m not worth that!” But don’t underprice your offering or people will think it isn’t worth buying. Be clear on the cost of every part of your offer and the total value in monetary terms: Cost out each of the features of your offer. Total this up. Compare the total cost with the price you’ve decided on for the offer. This will show that your offering is priced way below the ‘actual cost.’ For example: When you add up the cost of all the features in your 12-month coaching program, it comes to around 12000. You choose to offer it at 4997. Having this data helps boost your confidence level and dispel any fears of “It’s not worth it.” Some people use this comparison on their sales pages, showing it as a pricing table. You may want to try this in the future but for the first page, stick to the price you’ve chosen. You can always test the pricing table later.

How Price Influences Page Length A commonly held belief is that long sales pages are for higher priced offers and short pages are for lower priced items. But price doesn’t determine page length. There’s no one-size-fits-all strategy for the length or details you include on your page. The length of your sales page depends on how much information you need to convey to convince your visitor to buy. You should provide just enough information and no more. If you feel something is essential for the visitor to know, then include it. If it’s something that addresses a primary objection, then include it. If it’s a detail that doesn’t affect your argument significantly, then leave it out. Here are a few benefits and disadvantages to consider when deciding how long to make your sales page. Long-Form Sales Pages: Pro: More room to build trust and address questions and objections. Con: Too much detail can confuse the buyer. Short-Form Sales Pages: Pro: When visitors already know the solution works, more copy just distracts them from taking action. Con: You don’t have room to explain things for people who aren’t familiar with you or your solution. In general, people will only read what interests them, which means that almost no one will read all your copy, especially if you’re creating a long sales page. But that doesn’t mean you should exclude elements that you feel are important to persuading new buyers. Again, testing both short and long copy will ultimately determine which is best for your offer. Help Customers Buy While price is not the only basis for a buying decision, it does play a large part. Make it as easy as possible for people to say “Yes” to your offer by helping make it affordable. This doesn’t mean lowering the price of course, but consider offering payment plans or pricing plans, particularly for higher priced products and services.

Payment Plans For some people, the price you’ve chosen is just too high to pay all in one go. Others may have the money but prefer to spread out their payments for cash flow purposes. To counteract this, consider offering payment plans. Divide the total price of your offer into several monthly, achievable payments. Depending on the nature of your business and what you’re selling, you may restrict access to some of the features of your offering.  For example, if you are offering an online program, those who pay in full get access to all the content right away, whereas those who pay monthly get access on a month-by-month basis. If you offer payment plans, you are in effect offering a loan spread out over several months. Make sure you add on a percentage to cover this benefit (10% is common). Or offer ‘interest-free’ payments as your added-value if your budget allows. Pricing Plans Some people don’t need all the features you propose. If it fits your offer, you might choose to structure a pricing plan to propose different levels of service for customers, priced incrementally. Give pricing plans meaningful names that make it easy to understand which plan is right for which customer. For example, email services often have plans for solopreneur, small team, or enterprise levels. Make it very clear and easy to understand what the differences are between each level of your pricing plan. Whatever you choose to do: Show the price clearly towards the bottom of the page. Don't give so many pricing options that your visitor ends up in analysis paralysis. Only offer plans that make sense to your revenue model. Finally, the price is within your hands. You may only wish to offer the one price. Key Takeaways: Make it as easy as possible for prospective customers to say “Yes” if it suits your business model. Offer price doesn’t determine page length. The length of your sales page will depend on what you need to say on it. Action Steps: Quick Win: Write down your price for this offer. Do you feel comfortable with seeing it in black and white? Is asking for this amount a bit scary? Complete the worksheet in the Action Guide to check the cost for yourself of all the features vs the price of the offer to boost your confidence about pricing. Decide whether payment plans or pricing plans work for your business and this offer. Write down how you’ll explain them in clear, concise language on your sales page. Return to MikeConkey.com for the next blog post in this series for “Create Sales Pages That Convert – Turning Visitors into Customers”