How I Discovered The Perfect Price
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Pricing a product or service is an art and science. Big corporations have specialists on staff to do it. But small and medium businesses (like most of us) usually are left to our best guesses and hunches when setting prices. Usually. Do you wonder why The Handbook for Keyword Selection is priced at $28? Why not $19 or $35 or $55 or some other price? It's simple -- I conducted market research. Real, bona fide, mathematically accurate market research. A survey of my target audience told me what value they assigned to the information - what price they thought was right. In fact, through this research, they told me two more critical pieces of information: (1) how unique they think the information is (i.e., can they get it elsewhere?) and (2) how important the information is to them. That, my friend, is very valuable pricing research. And, amazingly, I got these insights for a lot less than I spend eating out for lunch every month. I used an online pricing research service called Make Your Price Sell (MYPS). (Sort of a funny-sounding name, but it basically says what it means: if you get the price right, the price itself helps sell your product or service.) The service was the brainstorm of Ken Evoy, a name you may recognize since Ken is one of the better known (and more down to earth) leaders in online marketing. Anyway, Ken retained a specialist in marketing and consumer behavior to develop this simple-to-implement pricing survey. Surprisingly, it consists of just six questions (customized to your particular product or service). But it extracts some fundamentally important insights regarding how you should price what you sell. In addition to the information above, it even determines the respondents' tendency to buy online. While valuable to anyone selling online, that information is extraordinarily useful if you happen to be selling information or digital products: eBooks, software, stock photography, house plans, memberships, subscriptions to an informational site or newsletter, etc. |
Graphs Make Your Pricing Data Easy To SeeThis online MYPS system was easy to use. You simply:
The MYPS service guides you through the process step-by-step. It's really quite easy. Ken also gives you a pricing manual which explains basic pricing theory. (And it even suggests ways to attract the right people to participate in your survey!) Participants read your descriptive sales copy and answer the six questions. The MYPS system collects the survey answers, performs a statistical analysis on the data, and displays the results as bar charts and price curves. And, clear as day, there's the price you should be charging - what Ken calls the "Perfect Price." In fact, the data suggests various pricing scenarios - penetration pricing, upscale pricing, and so forth - depending upon your broader marketing objectives. (The system estimates and plots how many units you might expect to sell at different price points, too.) Here are some examples of the charts and graphs taken from my own actual survey results. This one plainly shows that people believe The Handbook of Keyword Selection provides extremely important information: |
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| The composite graph below shows the price curve for projected sales at different price points. (Notice the peak at $28.): |
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| When all was said and done, I didn't have to base my business decisions on guesses and
hunches. I had objective, empirical data. People like you had told me that the information was valuable ... and told me exactly what the price should be: $28.
(If you need help objectively setting the price of a product or service, you can learn more about the "Make Your Price Sell" service at http:/myps.sitesell.com/expert_tools.html.)
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© 2003-2005 C. K. Britnell |
