If you’re reading this post, you’ve likely finished creating your digital product and you’ve moved on to researching how you should price your digital product.
First of all, CONGRATULATIONS!!! You did it! You created your first digital product! Pat yourself on the back and pour yourself a nice, big glass of wine. You’ve earned it, girlfriend!
You made it through the hardest part! Most people who set out to create a digital product fail simply because they couldn’t finish the darn thing. But, look at you! You did it! High five!
Ok, so now what? Well, now you sell it, but here comes the tricky part – How much do you sell it for?
Should You Go Low or Fly High?
We like to categorize the pricing of a digital product into two main categories, low and high.
Ok, that’s great Kristen, but which one is right for me and my product?
Many factors will play into this decision but here are a few factors that you should weigh before slapping a price tag on your brand new creation.
1. Do you have an audience?
Whether or not you have an active audience is the first factor you should consider when pricing your item. And when we’re talking about an active audience, I’m not talking about the total number of email subscribers you have or the number of people in your Facebook Group.
Your active audience is the subset of your full audience that is actually listening to you and interacting with what you’re saying. These are the people who regularly open your emails, comment on your posts, and show up in your lives or your webinars.
You can have thousands of subscribers on your email list, but if only two people are opening your emails regularly, you are working with a small audience. Alternatively, you can have 500 subscribers on your email list and if 450 of them are engaged with your content, you have a large audience.
The presence of an active and engaged audience will boost your credibility and thus the credibility of your product. If you have a rapport and a relationship built with your subscribers, you can consider pricing your digital items on the high side because high priced items will do better with a warm audience.
2. How are you marketing your digital product?
If you are lacking an audience and you intend to market your product using ads, low priced items are the way to go.
Relationship and rapport are extremely important when you’re selling anything. You have to build the trifecta of know/like/trust. Does the consumer know you?
If they know you, do they like you? If they like you, do they trust you?
Most of the consumers who see your ad won’t know who you are. Because they don’t know you and you’re lacking that rapport and relationship with them, they will be far less likely to risk dropping the cash on a high priced item where they might be a little looser with the purse strings on a lower priced item.
This isn’t a bad thing. And I’ll give you a handful of reasons why it’s a GREAT thing. If a consumer takes a chance on your low priced item and is absolutely floored by the value they received for the price they paid, you have just jumped the barrier from know to like.
Now they like you! Because they like you, they might be more interested in other items that you have to offer and they might purchase a few other low-priced items. Once they see the value you’ve offered them from the additional items they’ve purchased, you’ve just bridged the gap between like and trust.
Now they trust you! They’ve seen your products, experienced the value, they’re engaged in your audience. Now is the perfect time to open the door to them on a high priced item.
If you’re discouraged on pricing your item low right out of the gate, don’t be! This is a perfect opportunity to show off your products and groom your customers to be first in line for your big-ticket item that’s coming down the pipeline.
Another option available to you if you really want to price your item high is to develop a nurture sequence for your audience. Host a webinar or a workshop where you provide them with some free content and advice to warm them up to you. Once you have a warmer audience, you will have better success with dropping a higher-priced item.
3. What value does your digital product offer?
You might think that you’ve created the next best most amazing thing on the market that ever existed and everyone should pay you approximately $300 to even get a glimpse into how awesome it is.
Spoiler alert: Value is subjective and your digital product is only worth what the consumer thinks it is.
It’s a hard pill to swallow sometimes when you poured a lot of time and effort into creating something that you think is great. The trick is making sure the consumer understands how great it is and what problems it will solve for them.
Be sure to price your item based upon the perceived value of the consumer, not your emotional attachment.
Consider offering your product at a discounted rate and running ads. Grab their attention with the Ad copy and images right away. Let them know that this is a product that they need and that it’s available at a discounted price for a limited time.
This type of approach will elicit an action from most consumers. Causing them to get the ‘bee in their bonnet’, so to speak. Encourage immediate decisions with a low ticket item. They’re more likely to spend a lesser amount for an immediate return on investment. Something that offers a “quick-win” like a workbook, guide or planner.
Once you have an audience of believers that have purchased your product at a discounted rate, you can consider reverting back to the regular sale price now that your product has gained traction and your audience is warming up.
When struggling with the idea of pricing your digital products low or high, the key points mentioned here are a great place to start. The most important thing you can do is to build your audience and to create opportunities for them to be active and engaged in your community.
Once you’ve built your know/like/trust factor with your audience, you will be floored at the rate your clients convert from low priced items to high priced items.
Invest in yourself, invest in your audience, and don’t be afraid to price your products low to build an outstanding rapport with your consumers.