How to Price Digital Services for Maximum Profit

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Are you attempting to create a pricing plan for your digital goods? Well thought out. This is crucial for creating a profitable internet business.

In this article we’ll provide some methods for effectively pricing digital products. Whether you’re launching your first online business, or growing on your eCommerce site, pricing your digital items or services will play a big influence in your success.

There is no one-size-fits-all price or marketing answer. But you can investigate similar products. Your price plan won’t look the same for graphic templates or dog scarf knitting designs or online courses for basket weaving. There are key elements to consider.

Since you’re still in the startup stage, it’s possible that you haven’t given price any thought at all or that you just aren’t sure which approach to take. If so, this article can assist you by outlining the top five pricing techniques for digital products sold online.

Since many businesses have used these five tactics, it is clear that they are effective for your online products.

Give your online product a high price

The price of a physical product is often defined by the costs from development to delivery. But the price of a digital product is often defined by the value it brings to the buyer; this is the main difference. Pricing them should be done correctly, but how to do you translate good pricing into good value for your potential customers?

To price your products high can be a very wise thing to do since it gives your product much value. Which option is perceived as more valuable by potential buyers, the online course on marketing that costs $50 or the course that costs $1,350? That’s correct, the latter — simply because most people value a product by its price if there’s nothing else that can be used to compare.

Use value-based pricing on a digital product

Since you can’t base your price on the cost of production and delivery, you need to base the price on the value your product delivers.

Value-based pricing is a good way of creating the correct value for your online product. It works like this:

Imagine how much value your product is bringing to the buyer. It can be a course on how to make money writing blog posts or a course on how to save $100 every month. These products bring a lot of value to the lives of the buyers. This kind of online product is seen by many as a high-value product, which you can price accordingly.

A friends sells an online course on how to start your own e-commerce business. His course brings tremendous value to the buyer, and therefore my friend can ask a high price for his course.

The more value your product gives to the buyer, the higher the price can be.

‘Try my online product before you buy’

Once you’ve gained the trust of the reader, it’s time to make them confident with the product itself. A way to gain even more trust is by offering them a free tryout of your product, to take away any other obstacle they might have.

Most people would not even consider sending the product back after they’ve experienced the product firsthand. Some of them would even feel guilty at sending the product back and having the money returned to them. Less than 5% of products are returned, so you don’t have to feel anxious about using this tactic.

Letting them try it before they buy it is the best way to get past that initial hang-up.

People who buy online are well-informed about the latest trends and possibilities. They research before they buy, so offering them a free sample, trial, or a money-back guarantee will help to take away that last hurdle for them to buy from you.

Psychological pricing of online products

When all else fails, there is some basic psychology you can rely on. These basic methods are used by almost every major retailer on earth.

Did ever notice that in a high-end store, they have a price that ends in a zero? The stores that focus more on low prices, on the other hand, have prices that end with a 9 or a 7. Do you know why they do this?

It just sounds much better to sell a product for $29.97 than for $30. Since you want to focus on making buyers feel as if they’re getting a great deal they must snap up before it’s sold out (even with an online product people feel this way), every trick in the book is useful.

‘Added bonus, for free’

I like free things, who doesn’t? We all like to receive free things. This is true for both online products and physical products.

We all like to know that we’re getting a bargain. Use this knowledge to your advantage and include a free bonus with your online product. A guide on how to use your product with other related products can be an interesting free bonus. Or you can include an invoice template when your audience consists of freelancers.

No matter how small the free bonus might look to you, for a potential buyer, this can be the difference between buying from you or looking further.

4 Things to Remember When It Comes to Digital Pricing

You found out how much impact good pricing has on your buyer, you, and your business. You now know how crucial it is to price your online product correctly.

Below you’ll find a few pointers on what to think of when pricing your online product:

Create different options

Potential buyers will always compare your product with the products your competitors are selling. There is no way around this. People pay even more attention to the price.

You cannot control the prices of your competition, but what you can control is the way potential buyers compare. Let’s imagine you want to learn how to start your own freelance translating business. And when you look online, there is this one seller who has these three options:

Option 1. is a book of 408 pages for $38, delivered within a week.
Option 2. is a book of 575 pages with a free guide on invoicing, delivered within ten working days, now for only $79.
Option 3. is the same book of 575 pages with the free guide on invoicing, but included in the price of $289 are four one-hour free phone calls with the author of the book, at any time, to ask him anything you want.

The author of the book gives the buyer the choice to receive only the book, get the guide as well, or go all-in and jumpstart their new business. The seller has an option for each budget, which increases the chance of selling more.

You can offer a few different options to suit different needs and budgets since you cannot know what people can pay. But whatever you do, never try to trick people into paying more than they can afford. But this is just my personal opinion.

Price your online products even higher than the competitors do

Buying a more expensive product does not always mean that the product itself is better than the cheaper option, but the association is strong among many customers online. Don’t feel ashamed when you price a product higher than your competitors. If you feel that the price is right for your product, then that’s the price you’ll put on it.

Remember that people will still buy your product as long as you clearly establish the product’s value in terms of your customers’ needs.

It’s all the same profit

Let’s imagine that you sell a single online product for $25. One person buys it, so you’ll get $25. But if you price your product lower — let’s say $5 — then you need to sell five products to have an income of $25. You still get $25, but there is one major difference.

If you price your products as described in the second option, you need to work five times as much compared to the first option. Especially for digital products, the first option works best since you don’t need to sell that many products to make a good income. A seller of physical products needs to sell many more products than a person who only sells online products. Something to think about when you want to have a source of passive income.

Always test

Testing can be time-consuming and very difficult, but it gives you the kind of data that you need to set the perfect price for each product. This makes testing a pretty worthy investment. Testing allows you to see each outcome with each strategy you apply, which will help you choose the best pricing approach.

Conclusion

Remember that when you sell digital products, there is almost no limit to your profit. You’ll be successful as long as you know how to price your products correctly and present them to the market in a way that convinces people to buy them.