One of the best ways to increase your conversion rates on your products is to test different prices.
After all, some people may not think your product is as valuable as you do, OR they may think it sounds more valuable than the price you're charging, so surely something must be wrong with it. You have to strike that careful balance.
So here are 5 different ways to price your product...
1) One-time price
This is the most common way business owners price their products.
It's a pretty popular price for the customers, as just the one payment will give access to the product or service for life.
2) Recurring price
Most often associated with a membership (or "continuity") program, the customer purchases the product knowing they're entering a subscription, which usually bills them the same amount on a monthly basis. They can cancel at any time by contacting your support desk or customer support email address.
Because of the ongoing price, it's best to use this type of pricing strategy with a product that provides ongoing value.
For example, Netflix is always updating their archive of movies and TV shows, so they charge a monthly fee for that ongoing value.
So if you're selling a members area where content is being added to it regularly, along with a community or support group of some kind, it's probably best you use a recurring price which matches the amount of value you're providing to people.
3) Split payment
Another less-known pricing strategy to use is the split payment plan. This is essentially two payments of the same amount, usually one month apart.
The main benefits of using this are that your customers can access the product straight away at half the price to begin with, making it more affordable for people.
However, I've sometimes found that just simply adding the same price you'd charge for the one-time payment to another payment next month increases the total profit - without affecting the initial conversion rates too much.
So for example, if you usually charge a one-time price of $97 for your video course, try turning the price into two payments of $97, one month apart. You may be able to massively increase your profit without any extra effort.
Or, for more expensive products or services, I'd recommend adding a split payment option to the sales page. We do this for our Done For You Prosperity sales funnel set-up service, and have increased the profit on that offer massively because of it.
4) Payment plan
For more premium ("mid-ticket" and "high-ticket") offers, it's always worth offering a payment plan.
However, this strategy is at its most powerful when offered as a downsell to the original price.
So in other words, you should only offer the payment plan when people say they are interested in buying the product but can't physically afford the full price upfront.
By asking them what monthly amount would be comfortable for them, you can create a monthly payment plan that suits them - which is going to be tough for them to turn down as they helped you to create the deal.
Just be sure that when you're creating a payment plan, you don't end up with customers still owing you money after the program has finished or the service has been delivered, otherwise they lose the incentive to continue their payments.
5) Trial period
Sometimes you'll have a great product or service, but it seems like a big commitment upfront and people are a little timid about it.
For example, entering into a monthly subscription for a monthly membership program can be a little daunting, as they imagine themselves being stuck into the contract forever (even though they can cancel at any time). This is why conversion rates are typically lower for ongoing membership programs.
So to overcome this resistance, you can offer a free or $1 trial before the main subscription begins.
In our business, we offer a 30-day free trial for our Digital Prosperity Insiders program, which allows people to go through the initial content and see what the program is all about before committing to anything long-term.
Although, this strategy only works when you're delivering immense value upfront, so it'll make people feel like it's a no-brainer to continue receiving this kind of content for the relatively small monthly price they'll be paying.
Another place to use this strategy is within your upsell sequence, after your customers purchase your front-end product.
As they haven't yet had time to go through the main product, it's going to be difficult to get them to buy another information-based product at that point.
So we overcome this by offering a free 3-day trial for our Facebook Ads workshop, then they pay one payment of $97 if they decide to keep it. This gives them 3 days to check out everything before committing to anything, which lowers their resistance to saying "yes!" to the unexpected offer within the upsell sequence.
Using all these pricing strategies in your online business is sure to make a huge impact on your sales, as it's often just a small tweak that creates the biggest wins.
However, if you're unsure which pricing strategy to use, I'd recommend setting up a split test to see which works best for each product. This will tell you which resonates best with your audience, and therefore which makes you the most overall profit.
Have a great day!
- James Francis.
P.S. Which of these pricing strategies have you tried for YOUR products? Let me know in the comments section below!