There was a CNN.com article just published that reports that the average price of a car is now over $30,000. (I realise that?s $US but on a like basis it?s about the same here in Australia) That is amazing. I remember when most new cars were around the $5-10,000 range. Times have really changed?
But other prices have dramatically increased as well ? from consumer products to even real estate values. Things just flat-out cost a lot more than they did just 10 years ago. And average salaries are much higher also ? so people are cashing bigger paychecks?
BUT WHY ARE SOME BUSINESSES USING ?OUTDATED? PRICES?
It?s in my opinion, (especially if you are selling info-products) that you don?t sell a front-end product that?s less than about $50. Ideally, I think you should position a front-end product that will be more in the $70 to $100 range.
There are other major advantages to having a higher priced front-end product online. It changes the entire marketing equation when buying traffic to your web site or buying customers to your business (and that is what advertising really is .. buying customers into your business). (Especially if you have NO BACKEND like many entrepreneurs that are starting a new venture.) Average lead prices (i.e. average per visitor prices) have been steadily on the RISE as more and more companies are turning to the Internet to drive prospects to their sites and businesses. As a result of this rise, it?s now harder and harder to turn a profit?
SO HOW DO YOU IMPROVE YOUR PROFITABILITY?
Well, there are only two ways to do it based on that front-end product you are trying to sell?
1. You increase your sales conversion ratio.
2. You increase your product price.
I can tell you from experience (over 14 years marketing) that it?s much EASIER to increase your visitor value by raising your product price and working to PILE ON MORE VALUE for the prospect. Such as adding more bonus items and improving the offer itself so you can get more people to buy it at a higher price. It?s a lot harder to make the same net profit results by simply tweaking your site and improving your headline or other basic elements of your site.
So the next time you launch a new product, or try to improve your profits, I strongly suggest you consider RAISING YOUR PRICES and improving the PERCEIVED VALUE of your offer rather than trying to get your sales conversion ratio up to 10% with a lower priced product.
