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Five Rules of Pricing Your Digital Products

Especially if you are a beginner marketer, the statistics show that you have the tendency to price your products out of the market. Let’s start with what you must cover if you sell a print book or you sell a digital product. A print book at a retail store has to cover: the printing, editing, marketing, profits for the author and publisher, a percentage for store.

Digital product owners have far more freedom to determine a price point than a retail store. With digital products, you only need to pay a percentage for your affiliates and you get to keep the rest. There is no inventory, miscellaneous upfront cost for domain, graphics etc, and nothing to dispose of if you make no sales. You simply take down the sales page and go to the next product.

What you have to know is how much will people pay for the information?

For instance, how do you price your new product if you are a beginner marketer and don’t yet have a large list and the people don’t know you yet? That’s the difficult part due to the long established form of the eBook. There is an eBook for every type of topic so the price point depends on what the market will pay and if the author is notoriety or not. A useful place to start is to do a little research on similar information products to see what they are charging.

Rule 1: Pricing for digital information products often end in a “7.” Looks like, it attracts more buyers. Did you notice that a lot of products are: $27, $37, $47, $97?

Rule 2: Another frequently used pricing structure is anything ending in “.95.” This is a very old trick of presenting a price that sounds less than it actually is. If you spend $27.95 rather than $28.00, you create the illusion that something is left in your pocket. When it comes to digital products that a customer receives electronically, the price advertised is the price actually paid. The $17.95, $9.95, $7.95 prices are a good idea because the buyer is left with the feeling of still having those five cents left in his pocket. It’s purely a psychological satisfaction on the part of the buyer and an old retailer trick.

Rule 3: The general wisdom is you must start with a medium price point. Do not undervalue your product by starting too low. Perception is everything and you do not want your product to appear less than worthwhile. A lot of experienced marketers will tell you to start with little higher than your competitors. This will leave room for a “discount” at the next lowest price. Again you live the impression that you create a bargain for your customers.

Rule 4: We call it “buy now” rule. How many times have you seen a commercial that flashes a $97 but “if you buy NOW, you can get it for just $27.95″? Or if you do affiliate marketing you announce in the top of sale page that you “just obtained a 10% discount for your list only”. This gets the buyer into the frame of mind that they have won something. Usually the next step is pulling out the wallet. That product was never going to sell for the higher price in the first place but the discount gets buyers excited and in a buying mood.

Rule 5: Keep your buyer focus on your product and not the price. Price is only a small part of the whole process. What you want is the buyer to see the value of the product and what it can do for them rather than what it costs. This is the reason why we have long sale pages for digital products in which we put the emphases on the benefits the product offer, the testimonials, and at the end in one sentence we tell the price and immediately follow a call for action.

Summary: it is mandatory to start with research, but after you find out the market value of your digital product, you try to apply the 5 rules.

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