Pricing physical products are easy. You know how much it cost to make the product, and you base your price on how much profit you need to make. With digital products, it’s a completely different ballgame.
You can’t decide the price of your digital product the same way you sell physical products. They’re different beasts altogether. Many new merchants make this mistake, and it costs them, vital clients.
There’s an undeniable allure of digital products. There are no materials, no manufacturing, no complex storage, no shipping costs, etc. You can create it once and sell an unlimited supply.
With so many benefits, it’s easy to see why digital products are turning into a huge trend in ecommerce. So what are people selling? These are the digital products we’ve been seeing everywhere throughout the web recently:
- Online Courses
- eBooks
- Software
- Graphics and Digital Arts
- Photography
With so many choices, how would you realize where to begin when it comes to pricing? The go-to philosophy of pricing physical products doesn’t generally translate. Where does that leave your online store?
The following are six strategies ensure to sell your digital product:
Value-Based Pricing
Since you can’t base your price on the cost of creation, you have to base it on your value. While it’s brilliant to price high if you’re selling a high-value product, there’s another way to consider this: value-based pricing.
What is value-based pricing? Basically, it’s considering exactly how much value you’re bringing your customers. If you’re teaching a difficult skill or giving a money-saving solution, your digital product is high-value.
Your product is speculation for your customers. How much is that investment worth? Utilize this as an initial point for deciding your product price.
Try Before You Buy
Customers need to feel sure about your product before they’ll be happy to make a purchase. Utilizing your store as a way to build trust is vital, yet sometimes you need an additional push. Offering a try before you purchase option is a successful way to do just that.
Heidi Zak, co-founder, and CEO of ThirdLove is a major proponent of try before you purchase marketing as a way to overcome any worries.
Customers are more intelligent than ever. They don’t want to throw money away on a digital product that won’t be valuable to them. Offering a free trial, sample, or another money-back guarantee will help those on-the-fence customers dive in.
Price High
When you’re pricing your physical product, you base the number on how much it costs to deliver your product from start to finish. When you price your digital product, it’s about worth.
Pricing high can be smart pricing. It gives your product value, and that is something that isn’t constantly translated in the digital space. Why should your clients choose your eBook over the extravagant hardcover at Barnes & Noble?
You don’t need to be an accountant to understand this math. Indeed, you’ll most likely sell more eBooks if you price them at $1.99. However, you’d preferably sell one eBook for $25 than ten for $1.99.
Regardless of how high you price your product, the expense of acquiring that customer is the equivalent. You should need to make as much as you can per the cost of acquisition.
Added Bonus
Who doesn’t love free things? This is one of a couple of things true for both digital and physical products. Everyone wants to realize they’re getting a bargain.
Adding a free gift with purchase is an astounding way to give your digital product considerably more worth. Let’s consider that freelancer eBook once more. Consider adding a free downloadable invoice template that enables new freelancers to work with customers.
Even though small, these freebies show customers that your product is advantageous.
Psychological Pricing
Finally, when all else fails, fall back on fundamental psychology. You see these methods in action in most significant retailers across the country, yet you can utilize them yourself in your store.
If you’ve ever been to a high-end shop, you’ll see the prices end in zero. Go to your local bargain chain, and the products all end in a 9 or a 7. What gives?
Sure, there might just be a couple of pennies difference in this pricing, however, we fill in these gaps with value. It seems like a much better deal to snag a product for $29.98 rather than $30. Although small, this psychology trick has profound effects on how we get prices.
Offer a money-back guarantee
Money-back guarantees take away the last objection to purchasing a digital subscription by expelling the risk in the transaction. Customers leery of buying from an independent or unknown digital provider might be less cautious if they are sure their money is not at risk. If you offer a quality product, you should see hardly any returns. What’s more, if you aren’t sure about the quality of your product, return it to the drawing board for additional tweaks; don’t release it!
Sell more digital products
Pricing is a significant element of your digital product strategy. By utilizing these tips, you’ll build up a realistic, profitable and alluring pricing structure for your digital subscriptions and that’s only the tip of the iceberg.
