Ask Diane: How do you price things?

Real Entrepreneurs. Real Questions. Real Answers.

Question:

How do you decide how to price things?  Products you sell like an e-book or ancillary products. For example, I’m doing a series of cards that have a scripture on the front and then questions on the back.

Answer:

First, good question. This is an area most of us face. If it were a set product with a specific cost to produce, there would be a certain formula I’m sure. A great resource for me has been www.quickmba.com where you can research the business pricing of products.

I also had that conversation with my local Small Business Development Center. Your own SBDA is an amazing resource for you to connect with; they have great resources, ideas, and practical help.

With an e-book or products, I simply research what the market will stand—see what feels comfortable. You might want to do an introductory offer to get things rolling. Maybe the first five who purchase get a specific deal. An introductory price.

One of our members, Debra, weighed in on this subject on one of our Members-Only calls.  As she sought to price her coaching services, a key factor for her was to look at how much her target market could actually afford with what they had left over after they paid the bills. Would they have liquid or lucrative money to be able to spend was part of the equation

And Debra agreed with our introductory pricing to help determine the set price. “Do a special,” Debra said. “Determine, say, I’m going to do $50 for the first five people. The reason they get it for such a low cost is that they give you feedback on the product and have them truthfully tell you how much money they would have paid for it. After they go through it, have them look at the product then give you feedback.  They will jump on the lower price and offer authentic feedback on its value.  You may hear, “I read through the product, this thing is worth $85, no problem or it’s worth $200…”

It’s helpful to solicit feedback from potential customers. Give them a discount with the understanding that part of the requirement is that they give you feedback on how much they think it would be worth out on the market. Establish your own focus group, per se.

Readers, what do you think? What are some successful pricing strategies you have established in your businesses?

Need help surviving in the business world? Submit your entrepreneurial questions to Diane at [email protected]. Please note that all questions selected for public display may be edited for clarity and privacy and become the property of NACWE.