This has been a recurring question that many entrepreneurs keep asking themselves: "What should I charge?"
Choosing the "right" price for an ebook, an online course, a membership, a coaching program or any other digital products or programs is never easy.
What I recommend, when possible, is the go-to solution that always works, testing!
This is what I’ve been doing this month with a client in the classical music niche.
We started a Facebook Lead Ad campaign and quickly got amazing results. Leads have been coming consistently and as of today, they average about $0.82 a lead.
How cool is that?
What’s even better is the testing we’ve been doing with the campaign, more specifically with the backend offer in the form of a tripwire.
If you ever wondered how to price your products or offer, read this!
We initially set up the tripwire offer at $47 for an online course. It converted at 2%.
That means for every 100 leads that came in, 2 people purchased the $47 offer. For $82 spent in ads, that’s $94 in revenue.
Essentially, the ad campaign pays for itself. This is called a SLO funnel (self-liquidating offer).
I know many entrepreneurs would be happy with this result.
We continued testing by raising the price of the tripwire to $67. The conversion dropped to 0%. Nobody was buying.
I suggested we test the offer at $39. After some convincing, the client agreed.
What he was looking at was the price, that’s it.
BUT, within a few hours of changing the price to $39, the first sale came in.
And the second.
By the time we had reached 100 new leads, the tripwire offer was converting at 4%!
So what does it mean to the bottom line?
4 sales at $39 = $156
For $82 spent in ads, the campaign now generates $156 in revenue.
Huge difference, that’s a 65% increase in revenue compared to the initial pricing of $47.
By reducing the price of the product/offer, more people purchased and we raised the revenue by 65%.
Who wouldn’t want that?
The takeaway here is that finding the sweet spot to price a digital product is not always easy.
When time permits, testing is always the best option.
AND, a higher price may not always work to our advantage.
Have you ever struggled pricing a product or an offer? Drop a comment below and let me know!
If you liked this article, take a minute to share it via one of the social share buttons. I appreciate it.