Welcome to Shop Talk! While we love providing you with jam-packed, actionable posts, we also wanted to share quick, thought-provoking snippets here and there -- from our brains to yours.
Figuring out how to price products and services comes up time and again within our community and with our coaching clients. There are a bunch of great strategies out there that take into account market demand, competitors’ prices, and more. But today, we’re talking about a strategy that takes into account your mindset -- we call it “High/Low.”
Let’s say that you’re launching a 20-page workbook. If you were our coaching client, here’s what we would ask you:
“If we told you to charge $1 for your workbook, would you?” (Most of the time, they’ll say, “No way! It’s worth way more than that.”)
So we ask: “Okay, if we told you to charge $300 for your workbook, would you?” (Normally we’ll get an, “Um, no. I wouldn’t feel comfortable with that amount.”)
You now know that your workbook will be between $2 and $300. This doesn’t sound super helpful until you slowly hone in on both sides (hence the “high/low” moniker) to whittle down your ideal price to a realistic range.
The high/low exercise is meant to get you started. Now, let’s take it one step further. Perhaps you’ve gotten to a point where you know you will not charge less than $25, but you’re not comfortable charging more than $49. You can then use this range to conduct beta testing and surveying within your target market.
As you test it, you might get feedback that none of the prices in your range will work. In that case, it might be time to reassess -- perhaps you need to reevaluate your target market, cut down what you’re offering (so you can lower your price without feeling like you’re giving away the farm), add more (so your potential purchasers see more value and are willing to pay more), or even rewrite your copy.
Pricing isn’t easy -- but remember this: It doesn't have to be set in stone. The high/low technique can get you started with a range you’re comfortable with, then we highly suggest you test and iterate from there.