This is a special post on how to set your price. I hope you remember it.
For my 100th post here on Code My Own Road I wanted to mark it with something really special. Which is why it took me so bloody long to figure out what to write about. Although it’s not long in words, a lot of thought has gone into this article on how to set your price.
Today, I want to touch on something that I believe can make the biggest difference to you as an entrepreneur. We’ll start with a (somewhat ambiguous) statement:
Value is not the same as value.
What the heck do I mean by that?
Value (the price of something) is often not the same as value (the relative worth of something).
This is kind of touched on by many people writing about how to set your price, but is mostly skirted around as we all struggle to figure out what to value (price) our products and services.
I’m no pricing expert, but I’ve learned a few things over the last little while about value (in both senses of the word) that I’d love to share. Comments are welcome – I’d love to hear what others with more experience know.
How To Value Your Products & Services
To put a price on something is to put a measure on how much you think it’s worth.
Or how much your think your customers should think it’s worth.
I was talking with a friend of mine recently (you know who you are), who sells small, but, incredibly useful WordPress information products for a few dollars a pop.
Recently, he realised the value (worth) of one of his information products far superseded what he was selling it for. He raise the price over 1000% and it’s still selling.
The reason is because the value of this information in the right person’s hands is literally worth the price.
Worth – to the correct customer – overrides price.
Obviously there is a cap to this and a great example of that is my own eBook.
I recently wrote a 10 page, 2000+ word eBook aimed at amateur web site designers. The book details an incredible system that I’m using at the moment to generate side income using a mini web design business.
My eBook, in the right hands (I believe), is worth the money. I don’t want to sell it to everyone. If you don’t have the correct skill set, it’s not even going to be worth the $5.95 to you. For those with the skills I outline on the sales page, it’s probably worth more than that.
I’m pricing it so low because it’s really a trial to see if there is any market for this kind of information (Edit: it’s looking like yes – many thanks to those who have purchased already!).
With That In Mind, How To Set Your Price?
At the start, it’s really just a guessing game.
My first guess was pretty way off at $19.95. After a period of no sales (and pretty much no effort to monitor it on my part), I decided to look at it again.
My conclusion: $19.95 for a 10 page, 2000+ word eBook is overpriced even in the right hands.
With a few tweaks to the sales page and a price adjustment, I re-published with a lower price tag of $5.95 and it started selling almost immediately.
The Feedback Loop
In the programming world the latest (and greatest) software development life cycles all pride themselves on one thing: Feedback.
It’s the lifeblood of software in the modern age.
Feedback with your customer is essential to determine how to develop the software including what features are truly desired and what the features look like and operate like.
So it is with pricing as well.
Feedback is essential and if you listen to the signs you’ll be able to adjust as you go along.
That One Magic Rule is to not be disappointed with failure because you can adjust along the way. Be nimble. It’s the biggest weapon we have as small business people.