Digital pricing strategies


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  • You make a profit on a project when your income is greater than your expenses. The trick is finding a way to ensure that will be the case for a specific project. STORY: How I was forced into the pre-pub program.
  • How it WorksPropose a project, market it as if it is complete, with early discountTake pre-orders with credit cardsRaise the price as you approach cost recoveryStart production when costs are coveredShip product, process orders, raise the price
  • Price starts at significant discount.
  • Price goes up once initial “loyal user” orders are in and first email promotion goes out.
  • The last purchasers, and those who purchase after we commit to the project, pay a price just slightly below retail.After we actually ship we move up to retail price.DetailsOnly early investment is in product design/marketingRoughly 30-40% discount at start, discount goes down over timeUsers are conditioned over time to place orders earlyUsed on projects from $6.50 - $999.95
  • Figures of SpeechUsers aren’t rational; many don’t place orders until production is assured, even though the price is higher during that period.This title sold well long after it shipped.
  • Greatest Book Video SeriesThis title had two email pushes, and then a final push when it went into production. After is shipped sales flat-lined.We have learned that almost all titles will pick up sales once in production, so we skip ahead on some of those if they’re over 75% and we want to do the project.
  • UrgencyDiscount for loyal customersGives users a feel for what’s comingLets users set priorities for developmentOutlet for user pressure to do unprofitable projectsTransparency
  • This is a 1790 proposal from the Thomas Jefferson papers. The conditions state the expected page count and format and indicate that “Whenever names are obtained for two hundred copies, the work shall be put to press.”
  • Project is worth doing for $10,000 revenue.We only care about covering costs and making money, and may not even know how to price some of these projects.Let the users set the price based on their interest.
  • Actual curve for a large commentary project. Explain curve and how, once it is broken, users have remainder of week to push it higher and make sure they get in, while also lowering the price. Note: Many users don’t participate, and we raise the price afterwards. We tend to sell another 20-30% of orders (at a higher cost) after establishing the best price, and continue to sell afterwards.
  • Handout has more details; would love to talk pricing and e-book strategy. Shameless plug for book.
  • Digital pricing strategies

    1. 1. Digital Pricing Strategies & Lessons Learned Bob Pritchett Logos Bible Software
    2. 2. Income > ExpensesSecret of Profitability
    3. 3.  The best price makes a profit and brings the customer back. The value should be real, and you should be proud of it. Don‟t devalue your product.Deliver Real Value
    4. 4.  Different messages: ◦ Limited Time ◦ Exclusive ◦ Best Price ◦ Auction Different channels: ◦ Academic Discount ◦ Twitter / Facebook Specials ◦ Email ListsMultiple Pricing Options
    5. 5.  Have multiple price points ◦ Users know which bear they are  Let people choose a size ◦ Always have a way for a user to spend more  At each size, offer add-ons Ask “Do you want fries with that?”Allow Users to Self Select
    6. 6.  Good for the user (better value) Good for the vendor (fewer transactions) Spreads costs of narrow products Monetizes low-volume productsBundle
    7. 7.  Differentiate your product Make a new product if necessary Turn old products into new productsDon’t Sell a Commodity
    8. 8.  If you don‟t have a product so expensive no one has ever bought it, you are leaving money on the table.Sell Something No One Buys
    9. 9.  Control Pricing Control Access Control MarginGo Direct
    10. 10.  Offer old sales terms to new customers Bundle poor sellers Give away product instead of moneyPick Up the Crumbs
    11. 11.  A „best price‟ should be Customers have perfect informationRespect Your Customers
    12. 12. Launch Product Take Orders - Cover Costs - Start Production Ship and ChargeProcess
    13. 13. Dollars 0% 20% 40% 60% 80% 100%Gathering Interest
    14. 14. Dollars 0% 20% 40% 60% 80% 100%Gathering Interest
    15. 15. Dollars 0% 20% 40% 60% 80% 100%Under Development
    16. 16. Shipped Email ProductionReference Book
    17. 17. Shipped Email ProductionCoffee Table Book
    18. 18. Buy Now!Benefits
    19. 19. An OldBusinessModel
    20. 20. 1,000 x $10 = $10,000 250 x $40 = $10,000 100 x $100 = $10,000 10 x $1,000 = $10,000Community Pricing
    21. 21. $140,000 Highest Revenue$120,000$100,000 $80,000 Best Price $60,000 $40,000 No Cost Recovery $20,000 $-Community Pricing
    22. 22.  Bob Pritchett bob@logos.comLinks & Contact