Backend Products
Can You Give Away Too Much?
I’ve often thought seriously about that statement. Is it true or not? Could it be that for some businesses it could be true … for others, maybe not. What do you think? Are all information businesses alike when it comes to what they should be giving to their audiences?
I have noticed on several occasions that there seems to be a tendency among new business owners to price their products and services too low in the hope that they will attract more customers and not be given a reputation of being “overpriced.”
I see several problems with this strategy.
First, the kind of information business we propose as solo online business adherents won’t have any direct competition. The products, information, reports, courses, etc. that we suggest you create are likely to be very unique – one of a kind.
If you base your business on your own knowledge, skills, education, and experiences, how can anyone copy those attributes, thinking, and resulting products?
They can’t and that’s a good thing. You will be able to set your own pricing without having to worry about direct price comparisons. Sure, there will be prospects that compare your offerings with others’ products … but in reality, there is no valid item to item comparison if the products are not the same thing. Correct?
The second problem with under pricing your information is that you will likely be seen as a run-of-the-mill product or service creator that has nothing of special value. The cutthroat businesses thrive on razor thin margins and moving carloads of products. “Stack ’em deep and sell ’em cheap!” That will almost certainly never be your business strategy as an information publisher.
In addition, cheap pricing is often associated with poor customer service and experience (valid or not). Your prospect may be saying to himself “How can a business afford to spend time with customer’s product issues if there are only a few cents of profit in each sale?”
On the other hand, if you charge a higher price for your information, in whatever form it takes, you will have the benefit of being perceived as having a high value offering. It’s the “you get what you pay for” effect. Again, this thinking is not entirely valid as a high price does not guarantee a quality item. To my way of thinking, higher priced items do make one stop and think about or wonder why a particular product is priced so much higher than the competition – there must be some good reason!
Here’s probably the most important reason why you should attempt to produce high quality products and sell them at a higher price than others in your same space: higher pricing will attract a different kind of customer. Instead of appealing to the buyers that are always looking for a discount, you will more than likely appeal to those who are after quality products, unique and special information, and a quality web site and customer service experience.
These people, usually in higher income brackets, will become the excellent customers that understand value in products, who don’t question pricing as often, and who appreciate your personalized service. They expect to pay a premium for the way they want to be treated.
Higher pricing will tend to push your business into the less populated territory at the top of your niche. You will be able to differentiate your products and services from those of other competing businesses. The caveat here, of course, is that you must deliver that quality and customer service in a way that’s unmistakable! It must be readily apparent that your business is truly different.
Higher pricing will allow you to sell fewer products and generate similar or greater revenue. Since you have to sell fewer products, you will have fewer complaints to deal with, fewer customer requests for your time, and fewer follow-ups, downloads, etc.
If you decide to follow this strategy, it goes without saying that you must provide your customers with products and service that are “above” or unmistakably better than the other lower priced options available to them. You will need to “earn your keep” so to speak, but your customers will be loyal and attracted to staying with your service because they will recognize its superiority.
To your online business success,
Steve Browne
www.SteveBrowneDirect.com