How To Determine The Price Point For Your Info Product

Putting a value and putting a price on your information product can be a tricky business and it largely depends what you are using it for. Many internet marketers choose to give away information products in exchange for customer details to add to their list, or as a bonus for subscribing to their membership site.

If you’re not going to give it away then you need to set a price. Price it too high and people won’t want to buy it. Too low and it is deemed unworthy. So what is the right answer?

Following is a great 5 step process to help you determine your price point:

Step One. What is your product’s perceived value?

The perceived value of your information product will depend on two combined factors;

1.The amount of unique information rich content
2.The additional revenue streams you have included

The perceived value of your information product will be quite low if you have very little original content, and you have lots of additional revenue streams such as affiliate links and upsells throughout the product.

The perceived value of your information product will be higher if you have a large amount of well researched original content, and you are not relying on affiliate programs or further sales to make a profit.

Of course, your product will probably not fit neatly into one of these two categories, but will sit somewhere in between.

Step Two. Check out your competition

If you are setting up an online business, you will probably have a good idea who your competitors are and what they are doing. Make a list of those that are selling e-books or other information products and find out what they are charging. It is particularly useful to check out your competitors that are using AdSense or AdWords advertising. You can be fairly sure that they are making sales if they can afford to pay for advertising.

Once you have discovered what information products in your field are selling for, you can establish a range within which your products should be priced. If there are similar products to yours on sale for $67, there is no point in pricing yours at $27. It will be seen as inferior by your customers and is unlikely to sell very well.

Step Three. The magic number

We all know that the number nine is crucial in offline sales. As rational people we are all aware that $69.99 is not actually cheaper than $70, but we are more likely to buy something with the first price as somehow it seems less extravagant.

Well online the magic number is seven. Products priced at $37 or $67 will often sell better than products priced at $39 or $69.

Step Four. Comparison with offline information products

When determining your price, it is a mistake to try to compare your online information product with a physical book in a store. Books tend to sell for between $6.99 and $19.99, and you may feel a little uneasy about charging more than that for a product has such a low production cost. But there are a few reasons why you can charge more for digital information products…

Online information products have two major differences to physical books that allow you to charge significantly more.

1.The competition between book stores that brings down the price of physical books does not exist online.
2.Customers can access your information product instantly from the comfort of their own homes. This is a significant factor in today’s society where people want convenience, and are willing to pay for it.

It is a cliché to say that your product is worth what someone is willing to pay for it, but you should not underestimate exactly how much that is.

Step Five. Pricing within your customers’ comfort zone

While putting an extremely high price on your product will put it out of most of your customers’ price range, and therefore limit your sales, you should not be afraid to price your product at the high end of the market.

Many internet marketers will tell you that they have increase their sales conversion rate purely by increasing the price of their e-books or other information products.

It seems that information is one commodity that your customers are willing to pay a lot for, as they assume this will increase the chances that the information is valid and well researched. The thinking is that if your information product is expensive, it must be good. Pricing your product too low can give the impression that it is inferior, or poor quality, so don’t be afraid to keep your prices high.

Use the above 5 steps as a guide to ensure you’re pricing your information product correctly.