We talked in the beginning of this course a bit about pricing and how much format can swing a price on similar content – for example, an ebook might fetch $12.99 but an ecourse might be $197. A portion of that is related to the value for the student – no doubt it’s worth a lot more because the teacher is there, available for questions, plus there’s an assumption the content will be structured in a way that’s geared towards learning. However, one thing that I’ve learned over the years is that pricing is largely subjective.
What makes one online course $499 while others are ranging from $1500 – $2000? I’ve looked at Marie Forleo’s B-School, Danielle LaPorte’s Desire Map Facilitator training, Kimra Luna’s Brand Course – all at the $2,000 range. Are they much different than the offerings I’ve reviewed at the $250-$300 range? Not really. In fact, there is less interaction from the teacher. There might be more content and it’s certainly more slickly produced (training videos that look like they were recorded in a studio) but in fact most of the content seems to be simplified and somewhat generic. So how do they get so much more for their courses?
Or how does a blogger like Chris Guillebeau charge $79 for what is essentially an ebook when others struggle to sell their books for $2.99 on Amazon?
Why are some coaches or consultants making so much more than everyone else?
Yes, part of it is quality, experience and the look and feel of their offering. However, a big piece of it is just having the guts to charge what you’re worth. Here’s what I know, and I hope you don’t have to learn the same things the hard way:
- If you charge too little, people will assume the quality is not good.
- The people who pay the least as often the most difficult customers to have. They will complain more, take up more of your time and generally be a big pain in the butt – because they don’t respect your time, because you’re signaling that you don’t require their respect, by charging too little.
- People who pay more for your offering will be more satisfied with the result – the psychology at play is the same as the one that makes expensive wines taste better – in blind tests people can’t tell the difference, but if informed it costs more, the perception of quality goes up.
You want to charge more not just because of the money but because of the experience you’ll have as a creator. It can be emotionally draining to answer lots of emails from people and never get a thank you. Or to have students in a course who don’t do the coursework because they aren’t invested – or waste your time because they don’t value it. Often creators try to ensure their success by pricing themselves as low as possible because they are afraid otherwise they won’t make any sales. What ends up happening is massive burnout because those kinds of customers – the price-incentivized – are just kicking the tires. They aren’t committed. You can’t actually help them yet because they haven’t decided if they need the help. They are like people who go to open houses to just look at how their neighbors live, but have no intention (or often the means) to buy a house.
Pricing becomes not just a way to make a living, but a way to find your ideal customer.
So how do we find the HIGHEST price that makes sense? We don’t want to hurt sales but we do want to charge enough that we’re attracting the right kind of customers.
- Look at the competition.
- Consider your format and bonuses.
- Weigh your experience and credentials.
- Factor in the pain point for the problem you’re solving.
In general, the competition and marketplace will be the biggest factor in how you price yourself. There’s a range for how much certain products in certain niches routinely charge. A $2,000 ebook would have almost no hope of selling, even if you’re a celebrity blogger. It’s just too far outside the range. So the first thing you’ll want to do is collect the competition’s pricing:
- What are similar products in your niche, even if they don’t solve the same problem?
- For the products on the high end, what are they offering? Is it similar to your product?
- For items that are very closely aligned with your planned product, what is the range of pricing?
The next factor, after the competition and your format/bonuses, will be your experience and credentials. You’ll want to eliminate items from your competition list where the creator has some celebrity or special experience that you don’t have. That doesn’t mean you should comb through their resume and figure out how you’re lacking. You don’t have to be perfectly matched to them – you just want to eliminate people who have, for example, been on Oprah and have a TV show, if you haven’t done that (yet!). For example, I wouldn’t seriously consider charging in the $2,000 range for a product unless I could compete with people in that sphere, either by having a NYT best selling book, a 100,000 subscribers or TV appearances. While there are people selling products in that range, it would in fact hurt my sales because I’m not steeped in an aura of celebrity or near celebrity. That’s beyond the limit of what I can do. However, I would look at people outside of that bubble and choose as price point at about 70-90% of the highest price. We want to expensive, but not daunting.
NOTE: sometimes there’s not a great selection in your niche – so feel free to look at other niches as your model. For example, there isn’t a lot of lifestyle coaching in the travel niche (where I write) so I might look at the life coaching niche for examples of appropriate pricing because there’s just not enough data points in travel. It is totally okay to be far and away the most expensive in your niche, especially if there’s little competition, it’s just better if you can tie that price back to what is working for others elsewhere.
Finally, there is no over estimating the value of solving a problem. You might see that books, courses or workshops in your niche are charging X amount, but your product is going to make them a ton of money, make then super fit and healthy and unleash a torrent of happiness upon them they have never experienced before. How much is that worth? WHATEVER YOU WANT TO CHARGE. If you can change people’s lives, charge for it. It’s worth it.
(PS: We will talk about testimonials and sales pages next week – if you charge an insane amount, it’s okay, but you will need real humans to vouch for you, including some “big names” in your niche).
What’s your price? Get stuck? Ask questions in the FB group…