Pricing Strategies and Tips
They made it to your site...
You've won them over with your website's ad copy...
They are pulling out their credit card...
But they stop short of ordering.
The most likely cause is that they are having "sticker shock" and can't justify spending that kind of money.
It is not necessarily because they don't think your product or service is worth it. In fact they want it pretty badly and they can see the value in it.
It's just that price seems pretty hard to justify in their mind.
Overcoming Price Resistance
This is absolutely one of the best ways to get people to make the purchase:
Offer them a payment plan.
A Case Study
I am sure a majority of you had probably seen or heard about Mark "Joyner's Farewell Package". This collection of 20 CD's was priced at $997.
It was doing pretty well through the affiliate channels. After all, Mark was offering 50% ($500) commissions for affiliates to sell it for him.
So the big affiliate push went out. Big name sites did their best to entice people to buy it. And many did.
The people who bought it at first were "the low hanging fruit" on the tree. These were people who were the easier target audience. A lot of these people may have bought it at twice the price without hesitation.
At some point however, sales would reach a resistance level. Sales would slow down. This wasn't necessarily because everyone who wanted to buy had bought.
In fact there were still people who wanted to buy but could not justify having to pay $997 for the package.
Adjusting The Price Without Making Any Adjustments
Mark Joyner (and company) then made a smart move.
They offered payment plans for the package. These payment plans allowed people to have the CD's for $220 up front and then 4 more payments of $197.
How did potential buyers view this in their minds?
"I can have this for only $220 and then a few more payments spread over the next few months. Wow! Only $220!".
Did Mark Joyner get the same money? Yes.
Did he sell more products?
Judging from the emails he was sending out, he took a few months to get to the 1,000 units sold level. That is, half way to his target of 2,000 units. Within a few weeks of offering the payment plan, he reached his goal and sold out.
Payment Plans Made Easy
If you have a merchant account, you may already have the ability to offer payment plans. It may take some programming with your shopping cart software or through other methods.
Luckily there is now a very easy way to setup purchases on a payment plan. You can do it by using Paypal.
It is pretty easy to set up. You can be up and running with payment plans via paypal pretty quickly. You can download Paypals guide to subscription and recurring payments here. (Note you will need to have adobe's free acrobat reader installed. You can download the adobe reader here.
Offering payment plans are definitely worth looking at if you are offering a higher priced item on your web site. It is a highly recommended option to look at. You may find yourself converting many more people who were on the verge of buying, but were hesitating at putting all of the money up front.