Creating Information Products But Which One? Part 7 – Price

Creating Information Products But Which One? Part 7 – Price

Okay, we’re almost finishewriting your book with technologyd our series on choosing the format when creating information products.

So far we’ve covered the cost of producing different types of information product, we’ve covered the reputation value and we’ve covered the training value.

Today we’re going to discuss a type of value we as internet marketers like to discuss … money. Bucks, dollars, lira, pounds, pesos … $$$$$$$ (got the pic?). A critical element when creating information products, I’m sure you’ll agree.

So how much is a customer willing to pay for a product?

Frankly, that’s a question that has stumped many a marketer. The answer is typically “more than you thought!”. And there are a number of factors involved. Like, how good your sales copy is, did you position your information product as a system or just  a book, are you targetting the affluent or the rest of us  … and so forth. It’s not just creating information products for quality that affects price. There are numerous other factors involved.

Relative pricing and creating information products

However, once you’ve established a price you should get a relative price that looks along these lines from highest to lowest (for comparable amounts of information, well presented and professional in appearance):

  1. Live
  2. Video
  3. Written
  4. Audio

So for example (and these numbers are made up but reasonable),  a multi-DVD set which has been repurposed into a book and into an audio set might sell for:

  1. Live Seminar (1 day) $1500
  2. Video (4 DVDs) $297
  3. Audio (4 CDs)  $97
  4. Book  (200 pgs) $49

Did the relationship surprise you?

It should have … and to be honest it was a bit of a cheat. You see the relationship between live, video and audio is reasonably stable (and in that order). This corresponds to our previous discussion of value in terms of training quality. More precisely, creating information products that support the audience’s learning style.

However, books have an established market. And the price needs to correspond to that price point which your customer has established in their mind. That’s why the ending dollar amount of $7 is not as key. People are used to the $9 ending point.

So if I redo the prices (still being reasonable and still providing the same information) I might get the following:

  1. Live Seminar (2 hrs)  – $250
  2. Video (1 DVD) – $97
  3. Book (60 pages) – $19
  4. Audio (1 CD) – $7

Notice that the relationship between book and audio switch places. Why? Because people expect a book to have a minimum cost which is higher than that of the audio.

Of course, this only applies to printed books which have a social market that sets the price range.

If your decision when creating information products is to create an ebook, then you’ll have a much different result:

  1. Live Seminar (2 hrs)  – $250
  2. Video (1 DVD) – $97
  3. Printed Book (60 pages) – $19
  4. Audio (1 CD) – $7
  5. eBook (Kindle) – $2.99 (or even $0.99)

eBooks do not have the social market that limits the minimum selling price (especially with Amazon Kindle). This effect must be taken into account when creating information products.

Don’t underestimate FREE when creating information products

Now how much is your information product worth?

In real terms you’ll need to estimate that based on your knowledge of the market. And don’t forget that some products will be worth more to you without a dollar figure. HUH???????

Remember that even FREE live seminar can sometimes make you more money than one you charge for! So when you are predicting the price for the purposes of determining what formats to use for your information products, don’t forget to figure in giveaways. For example, by providing a FREE live seminar you may get a large, interested and active audience (you might not but that’s another issue). Just perfect for background to create a DVD set for you to sell at the back of the room.  In this case, the dollar values are all messed up because you traded dollars today for dollars tomorrow.

Similarly, books are often given out as free samples (e.g. opt-in and bonuses) as are MP3s. Once an audio is given out for free, the physical version (a CD) has little if any value. But of course, building a list is often of far more value than the audio.

Despite the difficulty of identifying a price point, the price is a major component of the decision to create an information product in one format or another.

We’ve now finished the discussion of the various elements involved in the decision. It’s now time to discuss the decision itself. Which we’ll do in the next web entry.