Shoplazza, Shopify, and other e-commerce platforms make it simple to sell online. The majority of entrepreneurs sell physical products, while others sell digital ones.
It is easy to set a price for physical products because you know the costs involved in producing the product. Hence, you set the price according to the profit you wish to make. However, in the case of digital products, you need to follow an entirely different strategy.
1. Keeping Prices High
While setting the price of the physical product, you include every small cost. The real challenge with the digital product is how to put value to all the efforts involved.
Well, never ever lower your prices for digital products. Only then would the customer think it is worth spending money on. Usually, the customer compares the digital product with a similar physical product. If you have kept the value of digital products low, people would think that the product is of low quality and hence would not invest in it.
2. Value-Based Pricing
Businesses should do value-based pricing since the cost part is not possible to determine in the case of digital products.
It is calculated on the basis of the amount of value you are adding to the customer through your product. For example, if you are teaching them a rate skill, the value of your product is high. You should see the return on investment by customers to set the price of your product.
3. Use Tiered Pricing for Various Customers
In the digital space, we see various kinds of customers. Some of them look for the best deal, so your product should fall into the low price category. Some of them are willing to pay a high price because they believe quality comes with the price. So you can customize your digital product for different tiers of customers and charge accordingly.
4. Provide a Free Trial
Before a customer shells out money for your digital product, it is important to give him a chance to trust it. The free trial option is the best way to earn that trust.
Now that customers have become smarter, they want to be assured of the utility of the product in their lives by trying it before investing. A free trial option allows users to confirm the product before making a purchase.
5. Free Gifts
The free gift option is another way to help customers get attracted to your product. Even when you give them a free voucher, you get the chance to generate more business along with the loyalty of the customer.
Even small freebies can have a high impact. For example, if you give free templates with a subscription to software, it allows the freelancer to create a good product for the client, hence making good money. All of these increase the chance of retaining the customer.
6. Psychological Pricing
You can sense the effect of psychological pricing if you slightly change the price of your product. For example, change the price from $100 to $99 and see the impact. Though the difference in price is not too much, customers are most likely to buy the $99 product.
Psychological pricing will help you gain more customers without investing too much. Hence, while setting up the price of the digital product, do consider the advantages of psychological pricing.
An eCommerce tutorial that’s $250 or one that’s $100? The customer would think that the 250-dollar one has more value. The most important strategy to avoid is underselling your product.
(Contributed by Krati Bacharwar & Hermes Fang)