How To Value Your Product

How To Value Your Product


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One of the questions that I have been getting a lot lately is from people that want to know how it is that you value your online or your digital products and/or courses. Now this is a really good question, and the reason why this question sort of came about is that I was talking to a few people about the price drop.

Now maybe you guys have seen these before, they are really famous on infomercials, you see them on a lot of sales pages, and you see them on a lot of webinars. Now what most people associate the price drop with are phrasing like this right - but wait, don't do it now, I'm still not done, I can do even better.

You may have heard all of these phrases and a lot of people it rubs the wrong way. But a funny thing happens, is that some people it makes them get very- very excited.

I'm not here to tell you whether or not the price drop is good or bad or wrong or right, what I am here to tell you is why it's a necessity inside of your marketing. And let me tell you what I mean ... in order to first of all value your product or value your packages, it's absolutely necessary that you show people what they are actually getting inside of your course. When I say that this is the actual listing of what each module is or CD is or each video is.

Wouldn't you agree that when you're purchasing something you want to know what it all is, but then you want a clear concise view of everything that you're actually getting.

For a person to sell a product online, it's very-very important that they list all of those out. Now along with listing everything out, you have to put a price value associated with each particular piece of your product. Now remember, you're trying to justify what the value of your product is, you are trying to explain it to somebody. How do you go about deciding what each of your modules or each of your videos or what your report is worth?

What I like to do is there is a couple of things, first of all I look at what the market place in that particular niche, what it is selling products for and I try to get an idea of what they're delivering for that. Now when I say what they're delivering, I don't mean that they are delivering 10 videos and charging $997 that you need to make a course with 10 videos. But what I am talking about is the result that people will get if they follow your training or buy your product. So it's different to say here's 10 hours of video on list-building and that cost $997 versus I'm going to show you how to get 10,000 new subscribers on your list.

There's a big difference. Once you are starting to list out what is actually in your product and your comparing it with what the market place has, it becomes really easy to evaluate the result that people are going to get from you versus what they are already buying in the market place.

The second thing that I do when I am trying to value my products is I think about ... well, when I used to work in corporate America what my salary was, and basically what I got paid by the hour, and then I thought about how long it took me to learn some of the things that I can now teach. Literally there are systems that Robert and I have that when I got started would take me one or two full weeks in order to implement something, and now I can do that with my new system in 10/15 minutes.

Is it different information, it's the same result but the way that you get there is different. And so for me, when I value my products it's when I was looking for it what would I have paid in order to get that result and I base that on what, again what I had paid other people previously.

What I am looking at is I want to provide the best value for the price in the entire market space. Now, I told you at the beginning that the price drop becomes inevitable - now why is that? Well what we have just done is we have gone through our products or our reports or our courses and we've listed out what the value on each component of it is. But now how do you add all of those numbers up and come up with a number that's not the price that you want to sell your product for.

Well you want to deliver what - more value than what the price of your product is. That means by necessity that's why you see all of these price drops. It happens because there is no way to go from look I have proven to you that all of my stuff is worth this, it's worth $997 but it's yours today for $97, you need to make a justification about why you're bringing down the price ... otherwise what - well it looks suspicious to everybody.

If you think about the entire sales process, and don't isolate the parts that you may or may not like. For example, some people don't like when people do the introduction of their products, some people don't like the way that certain people talk about who they are and the great results they've gotten with their products, some people don't like the price stack, showing what's inside of the offer. And some people don't like the price drop, but if you take all of those together in one entire system, well then all of it makes sense.

Now there is a lot of psychology that goes on behind the scenes of why that helps people to go through the buying process, but if you look at it as I am showing you what my product is, I am explaining the results that you're going to get, here are the components of it listed out, and now here is the price that it makes sense as to why you have the price drop. And hopefully, now you can see why it is so effective and why you need to use it in your own marketing.

What I want you to do right now is at the bottom of this video, there is a place for you to leave a comment. Let me know how you value your products and what you think about the different components of the sales and marketing process.

Thank you very much and have a great day!

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Comments (11)

  • Fripp Reply

    Well explained and useful for me. But I´m a beginner offering website design service, could this principal be applicable to services too?

    THANKS! 🙂

    May 11, 2012 at 9:29 am
    • Lance Tamashiro Reply

      Hey Fripp,

      This is the same for products or services.
      So many people view them as different , but the delivery is all that is different.

      You still need to be able to show the prospect

      1) Why they need your product
      2) What result they will get
      3) What is IN the product
      4) The price

      Regardless of “product” or “service” the process remains the same

      May 11, 2012 at 9:39 am
  • Paul Irvine Reply

    Tremendous video there Lance.
    This can be a MASSIVE sticking point for me sometimes. I know the value of the products I’m creating should be selling for 5x or even 10x more than the price I have to sell them for (warrior forum anyone?)

    Your video has given me good “food for thought” – Keep it coming mate!

    Paul.

    May 11, 2012 at 9:40 am
    • Lance Tamashiro Reply

      Hi Paul.

      Here is the way that I think of it.

      Did you want to sell Porche’s or Volkswagons.

      Many people get caught in “Value” means lowest price and they build an unsustainable business model. Yes, you need to make sure that you can maintain and even cover your costs to make a business.

      A lot of the offers I see on the WF are completely devalued and self defeating. But, it’s mindset and understanding whether you want to be at the top or the bottom of the market.

      May 11, 2012 at 9:58 am
  • Lauren Reply

    Thanks for putting this information in text as well as video. I have stopped watching videos. They have become so long that I do not want to “invest” one hour of my time watching it, if in the final analysis I do not want to buy the product.
    Writing out the content of the video allowed me to skim through, see if I was interested, and then go back and read in depth if I choose (and I did!)
    Thank-you! 🙂
    Lauren

    May 11, 2012 at 9:57 am
    • Lance Tamashiro Reply

      I think that your response validates the message in this post beautifully.

      Everyone “connects” differently. So why not allow them to do just that.

      The more ways people can connect the better.

      BTW…do make this video:

      1) I recorded just an audio
      2) Made a PPT after the fact
      3) Produced the video in Camtasia
      4) Used our transcription system (http://www.makeaproduct.com) to have it transcribed
      5) Had the video and transcription completed and posted within 30 minutes of the whole post. 🙂

      May 11, 2012 at 10:00 am
  • marian Reply

    I need to know how to make a digital product on my niche, because they are in trouble and still not find that idea to propel me in my own construct the products, I need help for my blog

    May 12, 2012 at 2:52 am
  • David Manning Reply

    Hi Lance,

    Thanks for an excellent post, the video was to your usual superb standard and also having the audio for download and the transcript to read were excellent, like Lauren I sometimes have trouble with watching videos because a lot of the time I’ll miss the odd word or two which can be the crucial part of the explanation so am left scratching my head, this is the main reason I don’t register for webinars (I then hope that they are recorded and a replay link ‘with controls’ becomes available later)

    Your explanation of the reason for the price-drop is really helpful, it is pretty much how I do things but great to see it written down in such a way that makes the process easier to define and follow, as is your tip for pricing a product similar to what has come before that has sold well, although you would need to have examined those products to determine how they stack up to your own otherwise you could be price matching your product to that of vastly inferior ones.

    Anyway, an excellent post that gives insight to novices and clarity to seasoned pros too, keep ’em coming.

    Regards
    David.

    May 12, 2012 at 5:07 am
  • Cararta Skipper Reply

    No product yet, but working on it.

    Very good information, not just on the pricing but how to describe your product so potential Buyer will know what they are paying for.

    So many sales letters and videos overwhelm you with “changing your life” etc. but never say anything at all about the “nuts and bolts” you are getting to effect these marvelous changes in your income, how much time you have to work and on and on!

    Thanks Lance,
    you always have practical, useable suggetions.

    July 20, 2012 at 4:39 am
  • John Deck Reply

    Hey Lance, the video does not play with IE on XP. OK with Chrome. Just shows a message that says undefined.

    John

    August 1, 2012 at 4:57 pm
  • David Bibby Reply

    Hi Lance,

    I just watched the video. I’m glad to know that I’m at least doing the entire sales process as you described on the sales page. Traffic and Conversions are still my main issue.

    I priced my product (membership site) to cost less than the off the shelf systems people could buy in the personal finance niche, thought the VALUE is substantially higher.

    Thanks for all the great information and I look forward to the day I’m no longer a newbie.

    October 13, 2012 at 8:12 pm

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