Your Pricing Strategy Guide ~ Digital vs Physical Products Value vs Perception

Pricing Strategy Differences between Digital and Physical Products

When you’re offering digital products, the way in which you price them is typically different to how you’d price physical products. You need to consider different factors when setting your pricing to ensure you’re attracting the right customers.

So, how do you know how to price your digital products? Here are some of the key pricing strategy differences between digital and physical products to keep in mind.

Value over Cost

One of the key differences between digital and physical product pricing is that with physical you’re charging by cost, and with digital you’re charging with value.

What does this mean? Well, when you sell a physical product, you need to take into account the cost of investing in the product. With digital products, however, there is no real cost of production so you focus on the value the product will provide.

Think about how much value you are bringing to your customers with the product. Are you offering a money-saving product, or will it teach customers a new skill? If it is an investment, the earning potential is huge, and you should price your product in accordance to how much value it will deliver.

Proof of Value

When you’re selling a physical product, you’ll typically offer a refund and returns policy. However, digital products can often be viewed as risky for customers. Therefore, when you’re setting your pricing strategy, it’s a good idea to offer proof of value.

This can often mean free trials and money back guarantees. If a customer can see there is some level of protection there, it’s going to encourage them to buy. When you add a money back guarantee, it also shows you have high confidence in your product, which again encourages customers to buy it.

Additional Incentives

Another key difference between pricing physical and digital products is the additional incentives. With physical products, the customer simply gets that product in the cost of purchase. With digital products, however, there are often additional incentives thrown in.

These can include free eBooks, worksheets, and toolkits for example. This really increases the selling power of the product. Alternatively, you could charge more for additional incentives. Offering a tiered pricing structure helps to attract a wider variety of customers. They can choose how much of an investment they make, and you’ll benefit from both low- and high-paying customers.

Cheaper Isn’t Always Better

A good thing to remember about pricing digital products is that cheaper isn’t always better. With physical goods, if they are sold at a cheaper rate than your competitors, it’s going to have a positive effect on your business. However, it doesn’t always work the same way around for digital products. In fact, selling digital products too cheaply can actually put customers off. This is because it can cause them to question the quality of the content they’ll be receiving.

These are just a few differences in the way you price physical and digital products. There is a lot to consider when you’re putting together a pricing strategy for your digital goods. Really think about the value your product will be providing and don’t be afraid to price higher than your competitors.

Your Trillionaire Mentor Online ~ “Aspire To Inspire”

The Chameleon

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