If figuring out how to price your digital product feels a little like stumbling around in the dark, you’re not alone.
Finding the right pricing strategy for a digital product is a challenge faced by all creators at some point. There isn’t a silver bullet strategy for every product but these 4 pricing tips harness the power of consumer psychology. Experimenting with these different tactics will help uncover the right price for your digital product.
Offer different price points for your digital product
As consumers, we have a bias to decide the value of a product by comparing contrasting prices. Tap in to this powerful psychological bias to steer decision making by offering multiple pricing.
For example, your price points may be a Basic $49, Standard $99 and Premium $270 product.
The $99 package is the one you want to sell. Create a premium offer to make your standard offer appear more accessible and a basic offer that makes the standard one look like excellent value.
You can see how this tactic allows you to steer customers to the product you want them to buy.
Marketing guru Neil Patel also suggests specifically naming each package. This gives some immediate context to different price points, guides the customer and increases memory retention.
Focus on value – not just price
A key part of a digital product pricing strategy should be mapping out Price vs Benefits as your ideal customer sees them.
A course on how to use Pinterest to increase sales may cost $150 but the value to the customer is an estimated 20% more income each month.
If a business is making $5000 a month, after implementing strategies taught, they’ll increase their profits by $1000 a month.
Over 12 months, that’s $12000 additional income from a $150 product. Focus on this value. It’s not just about increasing profit margins either, the value your product delivers may be time-saving or learning a new skill.
Re-frame the price
Selling a high ticket digital product? If you’re worried customers may baulk at the sale price, try re-framing it.
One way to do this is offering a payment instalment plan; a $600 course becomes 6 x $100 monthly payments. Consumer psychology kicks in again, you’ll anchor customers on the lower cost of $100.
You can use ‘daily equivalent’ pricing too. Over the course of a year, $600 is just $1.64 per day. Customers aren’t silly, they know the product still costs $600 but breaking it down into a smaller amount is a powerful tool to influence a purchase.
How you present your price matters
It’s not all about the price, the way the cost is presented is also important in a digital product pricing strategy.
Your product page should be easy to read and understand; keep price points close to round numbers and remove decimal points or commas. Research shows dropping commas and decimal points can make a price seem lower.
Ending your price with number 9 can also help; $29 instead of $30, for example. This is known as ‘charm pricing’, we’ve been conditioned to associate prices ending in 9 with better deals.
Use these tips to experiment and trial different pricing strategies. Don’t feel discouraged if your initial pricing plan doesn’t set the internet on fire. As a digital product creator, you control your price. This provides a lot of room to make tweaks and changes until you nail a profitable price that converts to sales.