Wouldn’t it be great if there was some way to know exactly what to price for your products, so you could make the most money? After all, if you price low you’ll make more sales. Price high and you’ll make fewer sales, but each sale will be worth more.
You could look at your competition for clues. That’s how most marketers do it. You could ask your customers. You could ask your peers. You could even draw random numbers out of a hat…
Do you see where I’m going with this?
NONE of those answers is the right one.
The only way to know for a FACT which price point will make you the most money is to TEST. Yet very few marketers do this. And when you test a price, remember to take into consideration the number of refunds, too.
Here’s a sample of how you can do it.
If what you have is a membership site, keep track of how long members stay at each price point. You test two different price points on your membership site.
$47 a month and $17 a month.
- At $47 per month, you get 2% of prospects to sign up, and on average they stay for 2 months.
- At $17 per month, you get 4% of prospects to sign up, and on average they stay for 6 months.
Out of hundred prospects, the first month you’ll make $94 at $47 apiece, or $68 at $17 apiece. So it looks like $47 is the winner. But when you take into account how long each member stays, it’s an entirely different story – $188 versus $408.
Always, always, always test your prices. You might be shocked to discover you’ve been leaving a heck of a lot of money on the table.