In the world of marketing strategies, pricing is an easy metric for gauging the progress of your business, especially when your business deals in digital products such as SaaS (software as a service). The better your pricing is, the more you can attract customers to the business, and the more revenue you can generate.
However, pricing products carry an entire set of questions along with it, and for many business owners, they do not know the metrics they should be examining. It may have occurred to you, and your only recourse was to guess some prices and slap them on the products, yet you find it difficult to do a breakdown explaining why you landed at that price.
If this sounds like your case, you do not need to worry too much. The good news is that it is easy to adjust the prices since the products are digital. There are many guides that help you deal with the issue, such as answerfirst.com, and we will be looking at some strategies you can use to price your products in this article.
Be familiar with the market and place competitive prices
Before slapping the prices on your services or products, it is good to do a comparative assessment, especially of those who offer similar products within your industry. Once you know their price range, you can then price yours competitively.
For instance, if the product has a form of exclusive benefit that other competitors do not offer, you can consider pricing you are higher than theirs, or continue advertising the value you are adding to your target market. If the competitors are giving similar products, then you might consider offering a discount when people buy your products, or incentivize on the price while avoiding sacrificing the target profit margin.
Consider tier price structure
In the world of SaaS, it is very common to find tier pricing. Many customers are already familiar with these structures, so you can give them some variations in the service, specific features at varying price points (such as offering regular clients access to certain products that are limited edition) or extra information to access.
Show the customers the differences and why they are worth it
When you examine certain companies, they will always show the customers the differences between their low and high-end product packages, especially if they give the client’s tier pricing. They will also do this is a way that is easy for the customer to understand, such as through the use of comparison charts or grid charts.
When using this, it allows the customer to clearly see the value of the product, and it convinces them why they should buy it. Therefore, it is a good idea to think about the methods you can incorporate the graphs to show the added value of the product, and the tier price strategy is a good way of doing that.
Allow the customer to try before they buy
Something you will quickly notice when you observe companies that offer SaaS to their customers, you will see they all offer their products on a trial basis, then the customer gets to decide whether they want to buy – such as the 7-day trial or 30-day trial.
When you are using this method, you cannot respond to all your customers when their trial period is ending or when they have decided to buy, so it is important to have an autoresponder in your place. It becomes even better if you have a special offer for those who renew before their trial period ends, which encourages more people to buy your product or service and get the full benefits.
And that point brings us to:
Offering the customer additional bonuses
We are sure you love free gifts, and that is human nature – everyone loves getting free stuff when they buy something. If you have something free, such as a worksheet that can help your customers organize their days, or an eBook that they can gain useful knowledge from, you can add it when they decide to buy your product.
This will do two things for your benefit. One is that more people are encouraged to sign up for your service and purchase your product. Two, it will add a perceived value that boosts your original offering, and that is something that will increase your loyal customer base.
Consider implementing the psychological pricing ways
This might seem difficult, but it is surprisingly simpler than you may realize. The art of psychological pricing is all about ricing the product, but making it seem like an inexpensive offer. All the high end stores you can think of have their prices ending in ‘0’, while the discount stores have their product prices ending in ‘9’; or ‘7’.
A consumer will always look at the ‘psychological value’ of the item, even if it is less by a dollar or three. Therefore, instead of seeming like a high-end store when targeting a larger audience, consider pricing your products like a discount store and see if it makes a difference.
Give the customer a money-back guarantee
The money-back guarantee comes in handy when you want to convince the customer to purchase the product or service because it eliminates the last objection they may have when purchasing digital products or physical ones. A customer will always be wary of buying from a provider they do not know or trust, so giving them a money back guarantee reduces your risk significantly, because they are convinced you will offer them something of value.
If the product or service you are offering is of high quality, the customers will not return it anyway. If you are unsure, on the other hand, you are always free to go back to the modification steps and change it until it becomes satisfactory.
Final thoughts
Whether you are creating a digital or physical product strategy, it is very important to consider the pricing element. These tips will hopefully give you the knowledge you need to develop better strategies and gain more profits in the future.