How to Set Prices for Your Community and Content – Ep 43
One of the hardest things to do is set a price for your digital products. In this episode, we talk about the psychology behind digital product pricing strategy and methods. We also have included a pricing calculator and PDF.
Listen to this episode to learn the psychology behind digital product pricing strategy and methods and how you can use them to set your own prices.
Tactic 1: Leveled Pricing
Using three prices usually makes the middle price more attractive, no one wants the cheapest and no one wants to pay the most. This is a powerful pricing strategy that tricks your mind to pick the middle option.
Tactic 2: Graphic Design Choices
Using a smaller font is usually more attractive and placing the price at the bottom left also creates the perception of a smaller price tag. Removing the comma in the price removes the fluid reading of the price, making it seem smaller. Punctuation stops the eye on the price.
Tactic 3: Anchoring
Let people know how much it would cost if they paid full price, then give your much lower price, along with the reason why you are offering it at this time. Alternatively, if something isn't selling, create a better product and double the price, offering your original product at the lower price.
Tactic 4: Just Noticeable Differences
Make small price increases more frequently to raise prices. This tactic is often seen in the form of a countdown timer when a product is launched at an introductory price which will be raised after a set amount of time. This tactic creates an urgency to buy.
Tactic 5: Down-Sell
Offer a smaller package for a lower price after a launch. Have something in mind before your launch which has fewer features, but will still capture sales.
Tactic 6: Reduce the Left Digit By One
For decades marketers have used charm pricing — prices that end in 9, 99, or 95. Charm pricing is most effective when the left digit changes. For example, the one dollar difference between $200 and $199 will make a psychological sales impact.
Tactic 7: Display Prices in a Small Point Size
Your brain has a universal conceptualization of size where there’s a blurred overlap between visual size and numerical size. That’s why customers perceive your price to be smaller if you display your price in a smaller point size. The reverse works for discounts. Since you want to maximize the size of discounts, you should display those numbers in a large font size.
Tactic 8: Offer Payments in Installments
When you give people the option to pay for your product in smaller increments rather than in a single lump sum, you anchor people on the smaller price. They’re popular because they are visually lower even though they could be paying more. As a creator, it is common to charge a little more overall in installments to make up for the risk you are taking in taking installments.
Tactic 9: Follow the “Rule of 100”
When you offer discounts, maximize their perceived size so people feel like they’re getting a better deal. Give percentage discounts when your price is under $100 and give absolute discounts when your price is over $100. In both cases, you’ll be choosing the discount with the higher number which inflates the perceived magnitude of your discount.
Tools, apps, and links mentioned:
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