11 Reasons Why You Need to Charge More for Your Product
We are big believers in charging a healthy price for your product. It’s difficult to thrive in this business charging $7 or $27 here and there. Many experts are told to have an “entry-price” product and gradually increase the price with each new offer but this is not necessary. You can – and should – charge a higher price for your product from the start.
What’s stopping you pricing your product properly?
- You think a high price will put customers off/no one would pay that price. Guess what? You’re right. A high price will put off some customers but those people were never likely to buy from you anyway. The prospects who are willing to pay a high, fair price are the ones you want as customers. They’re the serious, committed ones. The ones who take action; who do the work and who get the results. They become your best social proof. They’re the ones you want in your tribe.
- People won’t pay for this. You don’t think what you’ve created is worth the money. Typically this is because the information contained in your product came easy to you so you think it will be easy for others too. This is absolutely not the case. Changing a carburettor is simple for some people; we couldn’t do it without burning down the house. Raising bees is child’s play for some experts; we wouldn’t even know where to buy bees from… (just kidding, we know bees apply for the job). Just because it’s easy for you, don’t think it’s easy for others.
- “Who am I to tell others how to do X?” Well, you’re the one who’s doing X or who knows something about X – who are you not to tell others? Here’s a popular misconception: you have to be “the best” in your industry to create products or charge high prices. Wrong. You just have to be better than the person you’re helping; you just have to be good enough to reach back and help others up to where you are. “In the land of the blind, the one-eyed man is king“. You don’t have to be the best, you just need to be better than the people you’re helping.
How to get over your doubts and start charging more for your products
We’re assuming your product is targeted at a niche that has the money and it’s only your mindset that is holding you back. If you find yourself hesitating to charge high prices here are some things to consider:
- You are solving an important problem for your customer. How much pain is your product removing for your prospect? What would be a fair price for that solution? If you were experiencing that problem, what would you pay to resolve it?
- How many hours have you invested in learning your subject? You are saving your target audience a lot of time, trial and error, effort and money. How much is a shortcut to success worth to your prospect? What is the correct price for a roadmap to a better life? Probably more than $97, right? Ask yourself, how much will it cost someone to hire you on an hourly basis to teach them everything you cover in your product? (There are experts on Clarity.fm who charge $120-240+/hr for customers to pick their brain. Bear that in mind when pricing your product).
- You are saving your prospects time, effort and money. How many years and money would your prospect need to invest to acquire your level of knowledge? How many books have you read? How many late nights have you worked? How many hours of hands-on experience have you clocked up? You are taking your hard-won knowledge from years of graft and delivering it to your target audience in an easy-to-follow, organised format. You are giving your target audience member a skill for life. (And if it’s a money-making skill, it’s worth even more). Remember, your prospect is reaping the benefits of your hard-won knowledge indefinitely.
- Selling a high-end product is not noticeably harder than selling a low-end product. This seems counter-intuitive but your prospect needs a similar amount of persuasion to part with $97 as they do to part with $497. If they believe your product will solve their problem or deliver the results they want, price is secondary; conversely, if they do not believe, a low price will not change their mind. When it comes to securing a higher price, the determining factor is whether your product delivers the results your prospect is looking for.
- Higher prices filter out low-quality clients. Often your biggest headache are cheap customers. They complain the most; they are the unhappiest; they are the least committed; they want results without putting in the work; they’ll confuse their inaction with a failure in your product; they are unlikely to be repeat customers. The solution? Use a higher price to filter out time-wasters. Those who are willing to pay more to invest in themselves are more likely to do the work; they’re more committed; they’re more engaged; they’re more enthusiastic; they’re more reasonable. If your product delivers on its promise (as it should), these higher-end customers are more likely to tell others about you; they’ll help you spread your message and will be your greatest fans.
- It’s difficult to become wealthy selling low-value products. You can make money selling low-value products but it’s unlikely to be a life-changing amount. Six-figures seems to a common, worthwhile goal and the best way to get there is to create higher priced products. You could make $100K by selling just 200 products at $500 each. (And there’s no deadline – you just need to sell 200 units over time. Could you find 200 people in the world to pay you $500 to solve their problem over the course of your product’s lifetime? Of course. And what if you created several products in this price range?)
- It’s extremely difficult to succeed in a volume-based business. If you don’t have a highly responsive list (and even if you do), having to sell a high number of products per day is a difficult business model to succeed in. You’re far better off having a much higher price and fewer customers.
Let’s assume you want to make 100K per annum. If you price your course at, say, $27 you will need to sell 3,703 products in a year. That’s just over 10 products per day, every day. We don’t know many niches where that volume is sustainable. Now, imagine pricing your product at $395. To make $100K, you will need to sell 253 products per year. From having to sell 10 products a day, you now just need one sale every 36 hours. If you have built a highly responsive list (as we teach you on this site), one sale every 36 hours is realistic.
- You will be motivated to do the work. Are you more motivated to grow and work in a business that generates you a six or seven-figure income or one that generates you, say, $30K? By charging higher prices you can realistically make a meaningful, life-changing amount of money. By pricing at the highest end of your market you can generate an income that allows you the freedom and means to live the life you want. Remember, it’s not noticeably easier to sell lower-priced products so you may as well target a higher price point.
- Premium pricing builds authority. Higher prices build authority, credibility and respect. Luxury brands understand this and charge accordingly. Psychology plays a part: if something is too cheap we lose trust in it and expect low-quality. Would you choose a plumber who charges $70/hr or one that charges $5/hr? Would you trust a dentist who charged $27 for root canal treatment or one who charged $500? (And for those who say $27, realise you would have to find about 19 patients compared to just one if you’re charging $500).
- Joint venture partners will not promote low-value products. As you become successful in this business you will inevitably partner with other product creators and affiliates to promote your products to their list of customers. Partners will not risk their list or reputation promoting products that have little financial reward. To make it financially worthwhile for all parties, you need to charge high prices. (Remember, you also need to pay out any commissions from your share. Unless you start with a large pie, there won’t be anything left after costs).
- You deserve to make money for your efforts. If your product delivers the results you promise, you deserve to be paid. If your product is packed with quality and value, you deserve to make money. If you pour your heart and soul into creating a product that solves problems for your target market, you deserve to be rewarded. Think of all the care and hard work you’re putting in to create something of value, not to mention the efforts and money required to market your product. You are good enough and you deserve to make money.
- Charge near the high-end of your industry. It will make life a lot easier. Be BMW, not Toyota.
- For once and for all, accept that you are good enough to create a product, charge a high price and sell it to your target audience. Accept it as fact.
- It’s takes similar effort to sell a high-value product as a low-value product. You have to do the work anyway so make sure the reward is worth the effort.
- Do some calculations. How much do you want to make each year? Divide that amount by the price of your product to see how many units you need to sell. Next, divide the number of units by 365 to see how many units you need to sell per day. You want to aim for a figure around one, preferably lower. For example:
– You want to make $100,000 per annum
– You charge $350 for your product
– You need to sell 286 units per annum ($100,000/$350)
– That’s 286/365 = 0.8, i.e. you need to sell about one product a day, every day.
Discouraged? Don’t be. Bear in the mind the following: (a) you can charge more, (b) you can have multiple products, and (c) you don’t have to do this in a year – it’s an arbitrary time period we used in this example – you could look at the income a product will generate over its lifetime. Put this way, you could sell a thousand units at $350 each. And if you have several products selling like this? Not bad at all.
- Calculate how long it would take to coach someone to achieve the result promised in your product. How many hours would someone need to hire you for? What would that cost? Alternatively, go through your course and assign a monetary value to each module, each result you produce or each problem you solve. Total up the amount. When you see the massive value you’re delivering, does this put your “high” price in perspective?
- Not every product you launch will be successful. That’s just business. You can minimise the chances of creating a dud but there are no guarantees. But this isn’t your only chance – don’t put unnecessary pressure on yourself. You can (and will) create more products. Try to enjoy the process – this is a fun business and if you don’t enjoy it you’re probably doing something wrong!