Price Point Strategy
June 30, 2008
What is your price point strategy?
Or for many internet entrepreneurs, maybe I should be asking if you even have a strategy to your price points?
If you look at my business, you’ll see I have products at multiple different price points:
Low Priced Lead Generators
Do you really think I see www.ChooseYourMarket.com as a major income generator?
No I don’t. It’s a lead generator. The product is using the $7 secrets script so that affiliates can promote it and keep 100% of the money (all buyers are able to promote it).
As a sidenote, I originally priced it at $7. I tested it against $9.95 and $10. Ten dollars even has been the best price for it by far (I’m going to be testing it a little higher soon as well such as $12 and $15).
This product is a “self liquidating” lead generator. When I use it for any type of advertising, my only goal is to try and break even. Generate a lead for free (that’s why it comes with 100% affiliate commissions). I will have a couple of similar products offered like this soon.
Those products are not my business. They simply lead generators.
Have you ever ordered from a infomercial?
If so, you know they have a whole series of upsells (often 5 or more) once they get you on the phone. Without those sales, they’d be losing a fortune on the front end from all the leads they’re generating. The real money comes in how they follow-up on those leads with higher ticket and continuity items in the future by mail and phone.
Low to Medium Ticket Product Sales
A majority of my “products” fall into this category from the $50 to $200 range.
For example, www.MyBloggingMastery.com and www.MyEmailMastery.com are both in this price range.
These are low ticket products still, but I also consider them the “bread-and-butter” price point in my business. They can be sold directly from a website. You’ll see I often link directly to these items from my blog and in some of my advertising instead of using a squeeze page to get the email.
While at times I will have email followups in place for products like this, they’re not as essential as they come in for the next type of product.
Medium to Higher Ticket
Currently you don’t see any what I’d consider “high ticket” products being offered here. The Internet Lifestyle Retirement System is still in medium ticket range although it’s at the point where it requires more than just the sales copy to make the sale.
You’ll notice it has a free training video. Plus I give away a free report. There are email followups.
I also do interviews and/or teleconferences with others when they want to offer it to their audience. So often it’s not just a straight sell except for when my customers from the first two categories buy this as one of their backend items.
I know some of my readers probably think $500 is high ticket. It is at the very beginning of that. You’ll see many products in the $1,000 to $2,000 range. I’ve worked with some information producers who have products and seminars in the $5,000 to $10,000 range.
Once you move up to that level, now you’re moving into real high ticket products. Imagine what a $5,000 sale does to your business math. You only need 200 of those to produce a million dollar income (instead of 10,000 $100 products). Instantly you’re able to afford more on your advertising across the board.
The closest I have currently to a higher ticket in this business are my coaching services at $500 and $1,000 a month. I have clients who have been with me for 2 years straight now (although they came in at a little lower prices since I never raise the price on active clients).
Continuity
We try to put some type of continuity income in every business I work with. In this business, this is the paid monthly newsletter. You could also use a monthly membership site or even a CD/DVD of the month club.
The concept is you always have a strong income source that’s residual every single month. You know you have ______ coming in next month even before you make a single sale of one of your other products.
That is your base income in your business.
What is your price point strategy?
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15 Responses to “Price Point Strategy”
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Terry, what do you call people who take your free offer? Subscribers?
My product funnel also starts with a free offer. I’m looking forward to creating medium and high-ticket products.
Btw, your URLs that start with www are not formatted correctly.
Hi Hendry,
Yes, I call people who just subscribe to the free offer as free subscribers. That’s a starting point for other elements just as you mentioned.
Thanks on the heads up for the links. They’ve been fixed.
Wow,
This post is an excellent formula for a marketing funnel. Someone can enter at the low priced/Lead generation products and go through to the continuity products. Of course nothing is preventing them from entering at any step along the way. It really shows how to build the lifetime value of your customers.
Thanks for this post… great stuff.
Nice breakdown of the different price points Terry. I definitely agree that you need to have different prices for different products in order to maximize your profit potential.
Some people just can’t afford $1000, while there are a small number of people who are willing to spend thousands of dollars.
Looking forward to your next post!
Great post Terry.
I notice you offer a money back guarantee for that $10 product which is sold by affiliates using the $7 report script.
To protect your reputation, do you give a refund to any requests which are sent to you rather than to the affiliate?
This is why I subscribe to this blog!
Most Internet Marketers would never let you see inside their business strategy, much less post it on their blog for free. Terry’s not just telling us what to do, he’s showing us what he does.
Terry, regarding continuity, could you have a Fixed Term Membership and a newsletter to the same market?
Peter: We would ask the affiliate to refund first. If they didn’t, we’d cancel them and we refund ourselves.
Dr. Michael: You could most definitely have both as long as the subject is different (even though they go to the same market).
[...] a great post about price point strategy over at terrydean.org. I recommend that you check it out: Price Point Strategy. Leave a [...]
Up until now, all this info that Terry has written is absaloutly great.
Dr Michael, I totally agree with you on what you said about Terry giving us free and valueble info. All this is worth a lot of money.
Tal
I’ve thought about High Ticket products and continuity programs… but it really makes sense to combine the two – as long as the value is greater than the price charged… Thanks Terry!
Seth Daley
[...] dean presents Price Point Strategy posted at Integrity Business Blog by Terry [...]
[...] dean presents Price Point Strategy posted at Integrity Business Blog by Terry [...]
[...] Dean presents Price Point Strategy posted at Integrity Business Blog by Terry Dean. Terry asks what your price point strategy is. Many [...]
Terry, your answer to Peter is spot on. I suppose that is why you can call it the Integrity Business Blog.
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