It’s Dee Kumar here again with the third installment in my series on pricing your products. In the first article I talked about how to find the right price for your product. I gave you three of my preferred techniques, which received very good feedback from you, the readers. The second article focused on discounting strategies and explained why discounting is not always confined to a dying product, but can actually be used to reinvigorate a product too.
Make sure you check out parts one and two before continuing to read this article:
- Part 1: What Is The Perfect Price Point To Maximize Profits?
- Part 2: 3 Discounting Strategies To Maximize Your Profits
This last article in the series will discuss ways to offer your product for free, yet still increase business.
This article, unlike many of mine before it, will be brief! This is for two main reasons, firstly you may have noticed that Internet related traffic has dropped massively since the second week of July, meaning the audience for this article is heavily depleted. If you have been experiencing the same issue, do not worry, many Internet Marketers are experiencing the same trend. It is a combination of the end of exams, and the warmer weather encouraging people outdoors, that contributes to this traditional seasonal reduction in web based traffic.
The second reason this article is brief is because ‘free’ strategies are relatively easy to understand. I will present some improvements to existing strategies, but they should be easily understood. That is good because they should also be very easy to implement straight away.
Why Use Free Pricing Strategies?
If you have been online for some time you will know that everyone is trying to sell something. There are people pretending to be things they are clearly not, all in an attempt to entice people into parting with their cash. Well, this same hesitation you feel when being asked to buy ‘this and that’ online, is exactly the same feeling that your potential customers feel too.
Money back guarantees of course help a little, however they are also losing their impact as they become increasingly common. The potential customer comes to your site, perhaps having being burnt in a number of previous purchases, and now has to decide if they really want to take the risk with your product offering. Let us not forget that the current economic climate makes this decision even more difficult.
It is very easy to see how this predicament can occur and why it is becoming increasingly common. Interestingly, the very easy way to overcome this problem is simply to offer a free (or very low cost) trial.
This free trial helps eliminate the problematic questioning that is preventing your customer from buying, as they can now sample your value before parting with their hard earned cash. The simple act of offering a free trial also reflects the confidence you have in your own product, which is also positively acknowledged by customers.
Here are my favored methods of using ‘free’ or ‘low cost’ trials to aid your business income.
Ways To Use ‘Free’ And ‘Low Cost’ Trials
1. To Gain Subscriptions to a ‘Free’ List
This is now of the most popular methods to build a list. It is where you give away a ‘free’ product or report in return for the potential customers opt-in. The free product can be used to pre-sell other products in your range or simply to help build trust and loyalty for future ventures.
This method does work, however it’s effectiveness is decreasing as more and more marketers use the same method. The key is therefore not to give away something which is unrelated to your main product, but to give away something DIRECTLY related to a main product. Perhaps a first chapter or a short clip of an audio or video product. Something which directly encourages a bigger purchase.
This makes the opt-in more meaningful and implies you are not simply trying to create a list. Your list will be focused with customers who have the intention to buy at some point, and that is a much more valuable list then people who just want free information.
I used to build a list by giving away free reports, however I found that they would rarely take action. When I changed tactic to focusing on my main product and giving away a report relating to my main product, my conversion rate rocketed. Even on sites where I did not have a product, I gave away a report directly relating to the product I wanted to promote, thus encouraging them to purchase the affiliated product.
If you have ever wondered how to build a list for your business, then this method is by far the most efficient.
2. To Increase Conversions to a Membership Site
This works very similarly to the example above. You offer a ‘free’ or ‘low cost trial’ to your membership site to allow the potential member to evaluate your product, before becoming a fully paying member.
It works for some of the same reasons above. The customer can take a no risk (or very low risk) peak at your product and does not have to worry too much about being burnt.
There is, however, a second very important reason why this works particularly well with membership sites. To explain I will digress briefly:
In sales, there is a concept known as the ‘Yes Ladder’. It is a theory whereby you can convince a customer to agree to almost anything by only asking them to agree to small steps at a time. You gain the answer ‘yes’ to very small commitments first and slowly you build on them until you ask the ultimate question.
The exact same theory works with membership sites. By asking them to commit to only a ‘free’ or ‘low cost’ trial we are only asking for a small commitment. This is much more effective then asking them to commit completely to a monthly recurring fee at once.
Make it easier for your customers to say ‘yes’ and you will see an increase in your sales.
3. To Actually Sell Products
To be honest, I never understood why this still works! All I know is that it does, and rather well at that.
The concept is that you offer a product for ‘free’, but you charge the user postage and packaging (usually covering all your costs). I’m sure you have seen this in use on many websites.
During the last year it has been increasingly deployed by savvy Internet Marketers who have been sending out courses on a DVD in exchange for your physical address. (Usually a course they are about to make obsolete, so really they are not losing anything by trying this.)
From my discussions with such marketers it brings a surprising rise in loyalty. The fact that you receive a physical product and that you store it on your shelf, rather then lost on a hard drive really helps make the product memorable. This rise in trust and loyalty can only pay dividends in years to come, especially if your product is really of high value.
If you know the science behind why this works, be sure to mention it in the comments below. Although I know plenty of people using it successfully, I have never used it personally. I do, however, hope to use it very soon.
In Your Consulting Business
Anyone like myself, who has been involved in the consultant business, will know about the standard ’15 min’ or ’30 min’ free consultation session. It is where you give up part of your time in order to convince a client to part with large sums of cash.
This at times is quite frustrating as the client is often not prepared or not quite ready to make use of your service. You instead, put the time down to experience and networking, but realistically you know many of those ‘free’ sessions will be dead ends.
After many months frustrated with this never ending waste of my time, I was introduced to a method which changed the way I convinced client to use my services.
I dropped the individual ‘free session’ and changed it to a free group session, where I gave an introductory talk on a topic related to my business or perhaps even about my service itself. I was then able to answer questions effectively and encouraged them all to use my services (I usually offered a discount if they signed immediately, and when one person signs, the others feel the peer pressure to sign too).
When I had conducted a few of these, I dropped the sessions completely and replaced it with a downloadable copy, which had been prerecorded from the live sessions.
I saved a lot of time as any clients who now contact me, have watched the introduction video and thus have a very high potential to actually buy.
It took me a long time to realize that my time had a high cost. By giving it away endlessly for ‘free’ I was getting nowhere and reaching the limit of my time. When I switched to a ‘free’ downloadable Introduction session, I reduced my time expense and found myself being contacted by only seriously interested parties.
‘Free’ marketing strategies work when you learn to use them the right way. Often just the smallest of changes can bring big results.
That concludes the third part in this series where we have discussed how to price your product, how and when to discount your product and, of course, the value of ‘free’ pricing.
As always, if you have anything to add to this discussion, please use the comment section below to share your views.