The Key to Pricing Your Product or Service Online

Dock-4.jpgGuest Post from Chris Garrett:

One area that in-person sales has an advantage over online is you can tailor your marketing to the precise situation and prospect. With online you have to predict or tune every possible question, bias and objection so that you leave to question unanswered and no objection left hanging.

Of course the most common objection we face is that of price. Beginning online marketers often think the magic bullet to the price objection is to discount until the objection goes away. Unfortunately that is not the winning strategy many people think it is. You see, “price” is more than the number you attach to the order button. Much more.

As I write this I have two very different markets that I am involved with in mind. On the one hand I am advising auto dealerships on how to sell more cars (GOSO). The other market that is top of my mind is a niche software market (PDF to Excel Converter Software – Cogniview). The first product is very tangible, the other digital. One has very little price flexibility, the other being ones and zeros could be any price once overheads are covered.

You would think that people would be more price sensitive when it comes to the digital product because as a download it feels less substantial, but actually that is not the case. If anything the car industry has surprised me by how cost-concious the customers are. It should not be much of a shock when we look at our own behaviour though.

Fact is, cars are a commodity. Software, this type of software at least, is laser targeted at one particular, painful business problem. When shopping for a car there are a number of suitable options, all pretty similarly equipped, from numerous outlets. When you have a problem with few solutions but potentially expensive symptoms, you tend to be less concerned about sticker shock.

So we have our answer to the problem of the price objection. Your pre-sales and sales copy needs to describe the exact features and benefits, as we know, but in addition you have to describe them in a context that makes sense to your prospects current, pressing situation. How does what you do take their pain away? Next, do not rest with features and benefits, talk about advantages – why your solution beats any others.

If you can explain how much higher the value is relative to the customers investment, in terms of how the product or service will pay for itself in added value or removal of wasteful cost, then you have an easier time selling to your market. It is about understanding and addressing the exact audience concerns in a way that makes sense to them and their budget.

Stop being a commodity, position yourself as the ideal, unique solution provider. Tell them how what you offer is not just better but in a different league. Forget about price, think about how much value you are delivering, and communicate it well.

Your customers are not cheap, they are confused. You can help them and you if you only think a moment and talk their language.

Chris is an internet marketing consultant, author, web geek and blogger from the UK. He teaches businesses how to grow their audience, brand and trust using compelling content. Learn more about how to attract and engage customers, and get two free ebooks, by subscribing to Chris Garrett’s blog.

About The Author
Grant Griffiths is founder of Blog For Profit and co-founder of Headway, the first Drag and Drop WordPress Theme Framework. You can follow Grant on twitter at @grantgriffiths
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