If McDonald’s started offering caviar, would you buy it?
How about a “premium” Big Mac that sets you back, oh say, $22?
This fictional fare sounds downright ridiculous, I know.
That said, the reason why we’d never give such ludicrous items the time of day serves as some serious food for thought for marketers.
In an era where society is collectively worried about keeping more money in their pockets, you can’t afford to ignore the implications of your price tag.
And it doesn’t matter if you’re looking to grow an online business or selling assembly-line hamburgers:
If you screw up the pricing of your products and services, you’re going to struggle with your bottom line.
Fortunately, figuring out the formula for perfect pricing is pretty simple.
That is, if you can create the right conditions for your prospects.
The preconceptions of pricing
Before we get into the nitty gritty, let’s talk about the importance of price conditioning.
Pricing conditioning is one of the most overlooked elements of marketing that can ultimately make or break your ability to consistently score sales.
In short, people have a defined set of expectations and presumptions when it comes time to pay for…well, anything.
Think about what happens when you pull up to a gas station without checking out the signage beforehand.
Before you put your card into the reader to fuel up, you likely have a rough dollar amount in your head of how much you’re going to pay to fill your tank.
You might be off by a buck or two either way, but you’ll likely be in the right ballpark.
These some sort of presumptions also apply to whatever you might be selling.
eBooks. Educational courses. You name it.
Consider how price conditioning relates to selling info-products…
When you look up a book on Amazon or step into your local Barnes & Noble, you can safely assume that any given piece of literature is going to cost somewhere around $15 or $20.
Most of us would probably be uneasy to pay much more than that for a book unless, you know, the pages were made of gold, right?
And so you can imagine what happens when you ask the average person to pay for a $500 eBook.
They’d likely be confused.
Perhaps they’d even be horrified!
They’re certainly not going to cough up that much cash for a “book,” because it’s not what they’ve been conditioned to pay.
However, as you’ve probably noticed, that doesn’t stop certain marketers from selling eBooks and courses at premium prices time and time again.
So what’s the secret to making your offers seem top-shelf, driving buyers to pull out their pocketbooks without hesitation?
Well, it’s all about creating the right conditions.
How to properly position your products and prices to grow an online business
Listen: there’s a lot of elasticity when it comes to pricing information.
As marketers trying to sell education to an audience, we know this all too well.
There are courses in marketing that don’t cost much more than a cup of coffee; then again, there are also masterclasses that cost as much as a new car.
So the question remains: how do YOU become the person selling pâté de foie gras, beluga caviar, or frogs’ legs amandine?
Ultimately, it boils down to positioning.
The key to effective selling is making your premium offer appear more affordable on the surface.
And whatever you’re selling needs to come off as a steal, rather than a bargain bin discount.
Below, we’re going to break down three techniques for positioning the perfect offer.
Once you understand these concepts, your prospects won’t be tempted to second guess the value of what you’re selling when it comes time to seal the deal.
The best way to frame a strong sense of value for your offer is by comparing its price tag to something else.
Ideally, something (significantly) more expensive than what you’re selling.
When you think about the majority of the education available online, it’s insanely cheap.
Compared to traditional education, it’s not a fair fight by a long shot.
I’m not necessarily talking about marketing, either.
For example, let’s say you want to learn how to play guitar.
Twenty years ago, you’d be expected to shell out $25+ a pop for 30-minute lessons for months on end, playing the opening riff from “Iron Man” or “Smoke on the Water” until your fingers bled, and hopefully learning something in the process.
Now you can learn to shred the solo from “Stairway to Heaven” in the comfort of your living room via YouTube, while paying absolutely nothing.
There are also play-along programs out there you can purchase which are a fraction of the price of traditional guitar classes.
And sure, the in-person lessons might have their merits; however, compared to virtual lessons, the latter seems like a no-brainer for someone who wants to make the most of their time and budget.
Here’s a quick story:
I recently looked up the price tag of an intro marketing class at a local community college.
It was around $500.
And while I’m sure the teacher is a great person and the experience is worthwhile, that’s honestly a little pricy when you think about it, no?
The takeaway here?
When we compare the price tag of traditional schooling versus that of what we can get online, virtual education is going to triumph just about every time.
How to make your own offers winners by comparison
Alright, so let’s quickly cover how you can frame your own offer by comparing it to something else.
Let’s say your prospects are looking at an eBook you’re selling that sits around $100.
I can guarantee that the conversation playing out in their minds would sound something like this:
“$100? For a book? What makes this so damn special, anyhow? I can get four books off of Amazon for less!”
Based on what we know about price conditioning, that sort of resistance would be totally normal.
That’s because the framing for this particular product is all wrong.
Now, if you compare the cost of your $100 eBook to that of an MBA ($60,000+) or a class at the local community college ($500+), your offer seems much more enticing.
If you can teach your prospects what they need to know for one-fifth or one-tenth the price, it’s doesn’t seem like a bad deal, does it?
People are more than willing to pay premium prices if they’re conditioned to believe they’re getting a better deal.
Even companies like Apple, who have absolutely no trouble reeling in business, do this.
When the Apple Watch launched recently, there was a $20,000 premium “Edition” released alongside the $400 models.
Compared to the five-figure watch, that $400 watch seems like a steal despite costing a pretty penny itself.
It’s weird how that works, isn’t it?
In short, to grow an online business, don’t neglect people’s expectations when you’re selling to them.
When you create the illusion of a better deal, your prospects are more likely to give your offer some serious thought.
There’s a saying from my friend Ray Higdon that is perhaps truer than ever within our space today:
“Free is often the most expensive thing you can do.”
There’s so much free information floating around the web.
Take sites like Coursera, which allow you to effectively audit any college class under the sun for absolutely nothing.
Want to take a course in music production from Berkley?
What about an introduction to financial markets from Yale?
From physics to philosophy and beyond, you can essentially grab an Ivy Leave course in-a-box and teach yourself whatever your brain desires.
This provides the opportunity for everyone to get an education for the next to nothing versus a traditional in-person degree.
Here at Elite Marketing Pro, we do the same thing.
We give a ton of information for free (including the blog post that you’re currently reading).
Here’s the thing, though: free information always comes at a price.
People spend so much time digging for free information and trying to put the pieces together in order to learn that they lose track of the clock.
Relying solely on free information, it could take you three months, six months or even an entire year to figure out something you could have gotten out of a book or course in one week.
That’s the big question:
At what point does the cost outweigh the price?
This concept is called opportunity cost, which is another important piece of the puzzle to encouraging prospects to buy.
At the heart of opportunity cost is the idea that time is indeed money.
While people may initially be resistant to spend cash on education, in 99% of cases the most cost-effective decision in terms of time is to go ahead and purchase the information sooner rather than later.
So when presenting your offers, always bring up opportunity cost.
Remind your prospects that the clock is ticking: the sooner they buy, they sooner they can get started (and get ahead of the competition).
People are much more driven by turn-key solutions where everything “comes in the box,” so to speak.
In other words, people are looking for the most positive return on investment possible when it comes to time versus money.
And actually, the concept of ROI is the final piece of the puzzle to positioning your offers in order to grow an online business.
Pop quiz: what’s the ROI of a traditional college education?
I promise this isn’t a trick question.
College isn’t cheap in terms of time or money.
You’re spending at the very least four years of your life and tens of thousands of dollars in exchange for a degree.
Although approximately 30% of the adult population in the U.S. has a Bachelor’s degree or higher, you’d be hard pressed to find someone who can give you a straight answer on the pure ROI of a given degree.
Heck, I’m the perfect example of this.
I studied one of the Humanities in college (which, in case you were wondering, isn’t terribly lucrative in and of itself).
And while I certainly don’t regret my degree, it didn’t give me much of a return on my investment in terms of directly making money with what I learned.
When you consider that there are tons of marketers making millions out there without a high school diploma, it really makes you reconsider the concept of an ROI for education.
Marketers always throw around the dropout success stories of guys like Steve Jobs, Mark Zuckerberg and Richard Branson.
There’s a reason for that.
Here’s the good news…
In our space, there’s a massive update in terms of ROI.
We can take well-defined steps to make a significant, leveraged income online.
The ROI for our time and money is practically limitless
Maybe your prospects have been burned by educational “system,” as they say.
Perhaps they simply don’t have the budget for a brick-and-mortar degree or business.
In fact, this brings the whole concept of positioning your offer full circle.
Compared to a traditional degree, whatever you’re selling is the better deal.
When considering opportunity cost, an everything-in-the-box course or jam-packed eBook beats the heck out of sitting in a classroom for years on end.
And whatever you’re selling has a concrete ROI (versus old-school education which can be a potential black hole of time and money).
Again, pricing is all about positioning.
In closing, don’t assume that you need to price yourself into the bargain bin to score sales.
Dare to be the top-shelf offer that looks like a steal on the surface
So whether you’re ready to launch or are still in the planning stages of your offer, marketing through this three-step price positioning strategy is a game-changer.
And speaking of ROI, you’ll definitely want to check out our latest webinar.
You’ll discover how we turned a $10 test campaign into $141,246.30 in sales.
And how you can put together a profitable ad campaign in just 10 minutes a day with as little as $10 in initial ad spend.
(How’s that for positioning?)
It’s all in our 100% FREE online traffic workshop, hosted by none other than Tim Erway, our co-founder and CEO here at Elite Marketing Pro, who’s responsible for generating over 30 million dollars in revenue online (and counting).
Simply pick a time and register right here.
Tim doesn’t hold anything back and reveals our entire advertising process, step-by-step.
So if you haven’t registered yet, what are you waiting for?
Until next time,
Director of Content
Elite Marketing Pro
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