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Monetization

June 29, 2023

Don’t Lower Your Price By Default

Kevon Cheung

Founder & Head Teacher

Every time I set a price for launching something new and customers start coming in, I’d go “Ahh! Should have set a higher price point!”

Does this happen to you?

It doesn’t just happen in the creator economy. My wife is a part-time tutor and she always struggles with whether she should increase her hourly rate.

Let’s just say …

Pricing is one of the hardest things in entrepreneurship.

You tend to question if your potential customers would pay the price you set. And you also wonder if you can bring in more sales by having a lower price point.

Quite often, you end up pricing at a pretty comfortable level. And total sales suffer!

Ooops!

I recently rolled out a new course called Email Course Engine to help you draw in superfans on autopilot via a free email course. From the start, I wanted it to be a $99 course.

This time, instead of debating whether I should lower the price (maybe $59?), I decided to take a stand and figured out how to offer a product packed with value so that it matches up to the price point I want to charge.

This whole new way of looking at pricing is a game-changer for the business.

Before I go on, I should let you know that this is more applicable to creators who are already generating revenue. If you are an aspiring one just starting out, I have something for you at the very bottom!

How I priced Email Course Engine

I have been a big fan of tiered pricing because it gives people incentives to get in early. This way, I am building the course knowing how many people I’m delivering it to. It makes me feel good and motivates me to get it done sooner.

But you know, previously, I wasn’t confident that I could sell a self-paced course above $50.

“Who would buy it?” “What if there aren’t enough people interested at this price?” Impostor syndrome always kicks in!

This time around, I was determined to sell at $79 and then $99. Where did I get my confidence?

It was mainly from a few truths I learned along the way about pricing.

The difference in willpower is marginal

You might think that it is a lot easier to sell a $39 course than a $79 course. It sort of makes sense because everyone is trying to compare value vs cost, right?

It is correct to a certain degree.

What I’ve learned is that when customers need it or even WANT it, they will find ways to justify paying the price themselves. There’s literally no work on your side.

E.g. one would say “I’ll eat at home this weekend so that I can buy and learn from this course”

For Email Course Engine, if someone already has the plan to create an email course, my course becomes super relevant to them and they’ll buy no matter if it is at $39 or $79.

So the key is not to change the pricing but how to get them to realize they “need it or want it”.

It is all about convincing them that they truly have this pain point and I have the solution. I believe having great copywriting on the landing page can get more buyers at $79 than lowering the price to $39.

People need more than information

If you’re selling a course, it is easy to think that you can only sell video lessons. After all, it is the most common form of a course.

But what I’ve learned is that everyone wants different things. It is a huge missed opportunity if you don’t expand your offering a little.

This is why most shops don’t just have one product. Like that shop selling crêpe, they always have 10 different flavors to cater to different customers.

So on top of selling a course, I find that you can also sell live calls, feedback service, or basically anything that can help them go further.

Not everyone would take up your offer, but some will.

Let’s take Email Course Engine as an example, 5% of students signed up for the 30-min consulting call I offered to them at the point of purchase. For that enrollment, my revenue doubled from $79 to $159!

It is worth me mentioning a book I recently read - $100M Offers by Alex Hormozi. He has this Value Equation that sums this up really well.

$100M Offer is a must read book for all entrepreneurs.

Instead of fixing your mind to the default way to build a course (e.g. a self-paced course means a bunch of video lessons), you can think of an offer differently.

A one-hour call is a higher value than a book because the customer can get instant value! Or a full package to build a course for you is a higher value than a course teaching you how to build a course because customers have to do NOTHING.

What can you add on top of the video lessons? I’m not telling you. It is your creative time!

Now you can confidently charge that desired price you want.

Spend your time on a brighter future

I’m thinking about 2 scenarios:

  1. You want to lower your price because you’re afraid people won't pay $79
  2. You are designing a better offer so that you can sell the course at $79

Which one is worth spending your time on?

Here’s how I think about it:

In the 1st scenario, you’re actively thinking about what price point you can go down to. It means that you are actively decreasing your revenue.

In the 2nd scenario, you’re actively thinking about how to increase the value of your offer. It means that you are actively increasing your revenue.

But … you’re spending the same amount of time in each scenario.

So, why not get more returns by focusing on a brighter future?

Is this all true though?

It sounds like the advice here is “increase your price!”

Well, not exactly.

I know there is a ton of advice out there telling you to increase your price. The intention is great, but the true application depends on your situation. It doesn’t mean keeping your product and offering the same and just changing the price.

What I’m suggesting to you is to actively redesign your offer to match that higher price point.

Also, if you’ve followed me for a while, you know that I actually recommend anyone starting out to charge a lower price point. In this interview with Passionfroot, I talked about why.

The reason is you want to optimize the volume of feedback you can get, then you can shape a super high-quality product people want. This will scale your growth much more than if you start with a high price point that limits your customer base.

All in all, don’t worry. We all struggle with pricing because we are battling with our limiting beliefs.

If you’re thinking you don’t deserve to sell at a price point, you’re not alone in this. My recommendation is that you can consider it, but never make it a default choice when you’re setting a price.

You can create a better offer. You can do it.

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What does it take to teach & EARN online?

Here's a case study of how I built a $100K education business.

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What does it take to teach & EARN online?

Here's a case study of how I built a $100K education business.

Read for free