Bob Bly 22 E. Quackenbush Ave.
Copywriter/consultant Dumont, NJ 07628
Rwbly@bly.com phone 201-385-1220
www.bly.com fax 201-385-1138
How to overcome price resistance when selling high-priced information products
by Robert W. Bly
When selling specialized information products --
newsletters, conferences, online services -- we are often asking prices that
are many multiples of what trade publishers charge for books and magazines. The
higher the price, the more the prospect is likely to experience “sticker shock”
-- a resistance to paying that much money for information, no matter how much
he wants it.
Fortunately, there are a number of promotional
techniques that can help us overcome sticker shock and get people to pay the
hefty prices we are asking for our print, fax, or Internet information
services:
1) Make the reader relieved to hear how little you are
charging. Do this by stating higher prices for other services or products
first, then giving your price, which is less. For instance, if you are selling
reading specs, mention that laser eye surgery is $1,000, new eyeglasses can run
$300 at an optician’s, but your buy-by-mail reading specs are just $19.95. If
you are selling an options trading course on video, first mention your $1
million minimum private managed accounts ... your $5,000 seminars ... by the time
you get to the videos, the prospect will actually be relieved that they are only
$299.
2)
Make an apples-to-oranges
comparison. Don’t
compare your newsletter to another newsletter; compare it to another
information resource, such as private consultation or expensive training.
Promotions for Georgetown’s American Speaker compare the $297 price to the
$5,000 a top speechwriter would charge to write just one speech. Leeb’s Index
Options Alert notes that the $2,950 it charges for its options trading fax
service is like paying a 2.95% fee on a $100,000 managed options account -- and
that it’s actually lower than the total fee such a managed account would
charge.
3)
Spread out the payments. Rodale and Franklin Mint are
well aware of the sales-closing benefits of offering several smaller payments
vs. one large lump sum. One publisher of financial fax advisory services
costing thousands of dollars found offering subscriptions on a quarterly basis
reduced sticker shock and increased sales. If yours is an Internet service,
consider offering it for so much a month with credit card payment on a till
forbid basis. After all, which sounds better -- “$19.95 a month” or “$240 for
one year of service”?
4)
State the price in terms
that make it seem smallest. Even if you want full payment up front, state the
price in your promotion in terms that make it seem smaller. A $197 annual
subscription, for instance, gives the buyer access to vital information for
just 54 cents a day. Warning: Divide the price by length of service or
subscription, but avoid a price per
book or price per page comparison. Reason: Specialized information products
always have a higher price per page than the trade books or periodicals with
which the buyer will invariably make a comparison.
5)
Value the component parts. If you are selling an
options trading course for $200, list the individual elements and show that the
retail prices of each (videos, workbook, telephone hotline, Web site access)
add up to much more than $200 -- therefore the course buyer is getting a great
deal. Even better: Position one or two of the product elements as premiums the
buyer can keep even if he returns the product or cancels the subscription.
Offering “keeper” premiums usually increases response. Example: Instead of selling
your 8-cassette audio album for $69, say it is a 6-cassette album for $69, then
position the other two cassettes as premiums.
6)
Add an element that cannot easily be priced by the
buyer. Loose-leaf services, for instance, face
a built-in resistance from the buyer: “Why is it X dollars if it’s just a
book?” Supplements help differentiate from regular books, but publishers have
found it even more effective to include a CD-ROM with the notebook. The CD-ROM
is perceived as a high-value item with indeterminate retail price (software on
CD-ROM can cost anywhere from $19 to $499), so it destroys the “book to book”
comparison between loose-leafs and ordinary books.
7)
Show the value or return in
comparison to the price. Demonstrate that the fee you charge is a drop in the bucket compared
to the value your product adds or the returns it generates. If your service
helps buyers pass regulatory audits, talk about the cost of failing such an
audit -- fines, penalties, even facilities shutdowns. If your manual on energy
efficiency in buildings cuts heating and cooling costs 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.
8) Find a solution with your pocket calculator. With intelligent
manipulation, you can almost always make the numbers come out in support of
your selling proposition. Example: A high-priced trading advisory specializes
in aggressive trades with profits of around 20 to 30% with average holding
periods of less than a month. The challenge: Overcome resistance to paying a
big price for modest-sounding returns. Solution: Dramatize the profits the
subscriber can make with numerous quick trades. Copy reminds readers: “If you could earn 5% each month for the next 10 years, a
mere $10,000 investment would compound to a whopping $3.4 million. At 10%, it
would be an almost unimaginable $912 million!”
9) Pre-empt the price objection. Most mailings
for expensive products build desire and perceived value, then reveal price once
the customer is sold. An opposite approach is to state price up front and use
the exclusivity of a big number to weed out non-prospects. Example: “This
service is for serious investors only. It costs $2,500 a year. If that price
scares you, this is not for you.” An element of exclusivity and snob appeal is
at work here. Also, the more you tell someone they do not qualify, the more
they will insist they do and want your offer. The classic example is Hank
Burnett’s famous letter for the Admiral Bird Society’s fund-raising expedition.
The second paragraph states: “It will cost you $10,000 and about 26 days of
your time. Frankly, you will endure some discomfort, and may even face some
danger.”
10) Do a false close. Bring the prospect to the point of
asking for the order, then instead of doing so, say “But wait, there’s more...”
and then present another irresistible benefit. THEN ask for the order.
11) Add a sweetener. Add an extra incentive -- a special
premium, extended warranty or guarantee, free service or support, two for the
price of one, or other special offer to close the deal.
12) Establish yourself as the leading expert in your field. Price resistance
diminishes in direct proportion to the prospect’s belief that you are the
unchallenged expert in your field or niche. Reason: They perceive you offer
solutions unavailable from other sources, and that your solutions work as
promised. Note: My forthcoming book, Become
a Recognized Authority in Your Field --
in 60 Days or Less (Alpha Books), is packed with strategies on how to
establish yourself as a guru.
ABOUT THE AUTHOR:
Robert W. Bly is a freelance copywriter specializing in conventional and Internet direct mail. He can be reached by phone at 201-385-1220 or via e-mail at rwbly@bly.com. His latest book, Internet Direct Mail: The Complete Guide to Successful e-mail Marketing Campaigns (coauthored with Steve Roberts and Michelle Feit), will be published in October, 2000 by NTC Business Books.
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