Is ‘Reverse Price Anchoring’ Crippling Your Income?
Back when I was still writing and selling ebooks for programmers, I had this mental hangup that cost me a LOT of money:
I was convinced that NO ONE would pay $50 or more for a book or course in my niche.
Because the software I was teaching developers to use cost $50.
And I could not bring myself to believe that anyone would pay more to LEARN about Sublime Text than to actually BUY Sublime Text.
Yup, “price anchoring” can happen in reverse.
I think that’s what’s afflicting a subscriber named Zubin.
Zubin sells an online course to help engineers land job interviews.
And when I urged him to consider a higher-priced offer, he balked a bit:
I feel the biggest challenge I have is that the majority of people on my list are students in college, thus $49 is a price point they are comfortable with.
OK, time to dish some tough love.
Zubin, it sounds to me like you’re making a BIG assumption here about your audience.
It’s true that students complain and gripe about textbook prices all day long, so it seems logical that they’d never plunk down $100 or $500 for a video course…
Thing is, you’re not selling a textbook. Or a video course, for that matter.
What you’re selling is HOPE.
Hope and FREEDOM.
Students these days are looking at a pretty grim picture when they graduate.
They’re wise to the fact that a college degree doesn’t guarantee them anything these days (well except maybe the $100K in debt they’ve racked up).
I imagine even engineering students have a good deal of angst about waking up 3 years from now on Mom and Dad’s pullout couch and dragging themselves down to Starbucks to whip lattes for the next 9 hours.
I know computer science students are feeling that pressure.
I’ll bet you even have some pretty hair-raising stories about engineers who wound up doing just that.
(I have a great story about a software developer who found himself driving a taxi…)
You’re offering them an escape hatch—
A launch pad to a lucrative and fulfilling career, not to mention relief from the nail-biting, clock-is-ticking “will I have a job when I graduate?” anxiety that many students suffer through in their senior year.
How much is THAT worth?
Dontcha think that even broke college students can scrape together $99 or even $199 to solve their #1 biggest worry about their future?
I know how hard it can be to put something out there with a big price tag on it—really scary.
One way to overcome this fear is to ease into it slowly.
Put together an offer that doesn’t involve a lot of advance work on your part, slap a price tag on it that makes you squirm…
Then just throw it out there and see if anyone bites.
For example, you could try to sell a 1-hour “mock interview” coaching session for $99.
Just make ONE slot available.
With your list of 1,000+ people, I guarantee that you can sell an hour of your time for $99.
Then do it again, but charge $199.
Now take your new-found confidence and raise the price on your course from $49 to $99.
Rinse, lather, repeat.
Stair-stepping up this way is a great way to boost your confidence, while also elevating your worth in the eyes of your audience.
The reality of your situation is that you’re in a small, niche market—that’s a good thing, but it also makes it more important to get maximum revenue from your existing leads.
Your universe of possible customers is smaller than many other markets.
Maximize your earnings from each new subscriber, and eventually you’ll dominate your niche.