Secrets of a Master:
How to Overcome Price Resistance when Selling High-Priced Information Products
When selling specialized information products like newsletters, conferences, online services, we're oftenasking prices many times the cost of books and magazines. The higher theprice, the more the prospect is likely to experience "sticker shock" – resistance to paying that much moneyfor information, no matter how much he wants it.
Fortunately, you can use a number of promotional techniquesto overcome sticker shock and get people topay the hefty prices we ask for these specializedprint, fax, or Internet information services. These techniques can be adapted for any product that might carry a higher than expected price.
- Make an "apples-to-oranges" comparison.
Don't compare your newsletter to another newsletter; compare it to anotherinformation resource, such as private consultation orexpensive training. For example, promotions for Georgetown's AmericanSpeaker compare the $297 price to the $5,000 a topspeechwriter would charge to write just one speech.
Spread out payments.
Rodale and Franklin Mint arewell aware of the sales-closing benefits of offeringseveral smaller payments vs. one large lump sum. Onepublisher of financial fax advisory services costingthousands of dollars found offering subscriptions on aquarterly basis reduced sticker shock and increased sales.After all, which sounds better – "$19.95 a month"or "$240 for one year of service"?
Even if you want full payment up front, state the price inyour promotion in terms that make it seem smaller.
A $197annual subscription, for instance, gives the buyer accessto vital information for just 54 cents a day. Warning:Divide the price by length of service, butavoid a price-per-book or price-per-page comparison.Specialized information products always have ahigher price-per-page than trade books or periodicals.
Value the component parts.
If you're selling an options trading course for $200, list the individual elements andshow that the retail prices of each (videos, workbook,telephone hotline, website access) add up to $458. Therefore, the course buyer is getting a great deal. Even better: Position one or two of the productelements as premiums the buyer can keep even if he returnsthe product or cancels the subscription. Example: Instead ofselling your 8-cassette audio album for $69, say it is a6-cassette album for $69, and then position the other twocassettes as premiums.
Show the return on investment in comparison to price.
Demonstrate that the fee you charge is a drop in the bucket compared to the value your product adds or the returns itgenerates. If your service helps buyers pass regulatoryaudits, talk about the cost of failing an audit. If your manual on energy efficiency in buildings cuts heating and coolingcosts 10% to 20% a year, the reader with a $10,000 fuel bill for his commercial facility will save $1,000 to $2,000 this year and every year – more than justifying the $99 you are asking for the book.
Find a solution with your pocket calculator.
You can almost always make thenumbers come out in support of your selling proposition.Example: A high-priced trading advisory specializes inaggressive trades with profits of 20% to 30% withaverage holding periods of less than a month. Overcome resistance to paying a big price formodest-sounding returns by dramatizing the profitsthe subscriber can make with numerous quick trades: "If you earn just 5% each month for thenext 10 years, a mere $10,000 investment compounds toa whopping $3.4 million. At a modest 10%, it becomes an almostunimaginable $912 million!"
Pre-empt the price objection.
Most mailings forexpensive products build desire and perceived value, and thenreveal price once the customer is sold. An oppositeapproach is to state price up front and use the exclusivity of a big number to weed out non-prospects. Example: "Thisservice is for serious investors only. It costs $2,500 ayear. If that price scares you, this is not for you." An element of exclusivity and snob appeal is at work here.