“Oh, I’d charge ten or fifteen dollars for it.”
That statement started me on a three-part soapbox rant. It happened in a Q&A call for some of our Opening the Moneyflow participants. The client in question was intending to have a low-cost ebook on her site in order to generate revenue and to have people lead in to hiring her for higher-priced coaching.
The theory is, in general, sound. People often buy tasters or products before hiring a coach or other service provider, if the products are available. But her pricing scheme was way off. And that wasn’t all.
So here is my three-part rant.
Part One: Don’t Rush Into Making a Product
In some circles it’s become all the rage to create an information product, and there are a lot of good reasons for it. However, if you’re brand new, it may be really hard to create an info product that you can stand behind strongly.
Plus, it can take a lot of time to create a quality infoproduct, especially if you aren’t so grounded in what you do. If you’re new and your business doesn’t have any momentum, you need four things: a solid website that helps build up a list of fans, a clear message with the heart-centered answer to what you do, the ability to have effective, heart-centered conversations with potential clients. And then you need to get out there.
Spending days or weeks behind your computer trying to come up with an information product that has an impact will keep you from doing those four things first. So wait until you’ve got those four things happening, and you’ve got some experience with clients, before you spend the time creating an information product.
Part Two: Low Pricing Doesn’t Qualify Potential Clients
It’s fairly obvious that if someone doesn’t pay anything, it’s hard to tell if that someone will pay the prices for your services until they do.
A fairly common strategy is to make available lower-priced entry-level offers for people to both see what you’re about more deeply, and for you to know who might be serious about spending money with you.
The trouble is that if you are offering individual services, like coaching or holistic healing, then a client or patient will end up spending hundreds of dollars with you.
A ten or fifteen dollar purchase is not significant enough to tell what someone’s commitment level is. At that price, it’s much more of an impulse purchase than a considered investment.
Part Three: You’ll Starve
Some of the biggest and most popular bloggers and online personalities have made a name for themselves selling very low-priced ebooks. What gets missed is that they have the numbers to make it work financially.
If you have ten thousand, fifty thousand or one hundred thousand readers, then having a 2% conversion selling a ten dollar ebook will still bring in between $2000 and $20,000.
If you have 50 or 100 readers, a 2% conversion will bring in $20-$40.
Quite a difference. A painful difference. You may wonder what you’re doing wrong when people you respect are succeeding and you’re not. And the difference is they’ve spent a few years building up a massive following and you don’t have that.
What I Recommend
As I wrote above, don’t rush into making an information product. You don’t have to wait for years, just get some experience with clients first, and have a clear understanding of the intention and usefulness of what you’ll be creating.
Then, once you do, price it to be significant for your business. I recommend starting at $50 and working upwards. (Trouble pricing? Try this: The Wackiness of Resonant Pricing. Of course, for that price, put your heart into it. Spend a little bit to have it designed. Include audio and/or video extras. Make it beautiful and useful.
But then, if you sell ten or twenty of them, the people who purchased have actually contributed to supporting you in a significant way. And they are more likely to become clients for you afterwards.
Your opinion and experience? I’m curious.
p.s. Need some heart-centered help getting your business going?
Our two practitioners, Yollana Shore and Jason Stein, have each had a few openings recently. If you’re wanting hands-on, individual, one-to-one support for your business development, then may I recommend the Organic Business Development Program with either of them?
Heart-centered, spiritual, practical, nitty-gritty. Click below to read and then schedule a no-cost conversation with either Jason or Yollana: The Organic Business Development Program: Heart-centered.
41 Responses
Hi Mark
Thanks for highlighting this – it’s a really helpful perspective to ponder (and not just ponder!)
It offers a wise and thought-provoking alternative to the prevailing idea that an info product is what you create as a freebie to get people onto your list in the first place!
List-building, list-building, list-building – the holy or unholy mantra of list-building 🙂
What do you recommend as a means of attracting fans to your site / facebook page etc? Would you say it’s all about the “getting out there” in person or have you found other ways?
I’d love to hear your thoughts and experience.
all best Annie x
Annie- you’re welcome! list building is definitely the mantra, eh? 🙂 Two things for building your list- fantastic content, and building relationships, whether in person or online. Of course, there are details- but those two are the keys.
List building – oh yeah – well if not the mantra then maybe the 11th Commandment!
I am the List your List … Thou shalt have no other Lists before Me … (so, “in the style of” the 1st Commandment then …)
Ah “a List, a List, my Kingdom (Queendom?) for List
Need to build a List – Must have a List, They do Insist …
I haven’t even set up an email capture form on my blog yet … I have an account with Mailchimp but haven’t started to use it – not quite sure how. Actually I hit a stumbling block with concerns about putting my full mailing address out as I didnt’ want my landlord to spot it … but I have to move within next couple of weeks anyway so when I find a new home I’ll take steps to be more brave.
Those kind of logistics aside, I wonder do you feels it’s essential to have a free report/free give-away “something” to attract (bribe?) people to subscribe or if the blog content truly speaks to them, is that sufficient on its own?
Annie- it’s a great question. Try this one: Do You Really Need to Offer a Free Download?
And this one: Is Opt-In an Evil Gimmick?
See if those don’t help.
Hi Mark,
once again, your thoughts are perfectly timed. Feet on the ground.
Maybe head in the clouds, but feet on the ground.
Sometimes it is very painful to have one’s feet on the ground. It seems painful to build a list, and the steps that lead up to it. But the necessity of doing this is incredibly useful to hear again (and again, and again). Thank you. Your rant is well-timed and appreciated. Soapbox all you want, I’ll be in the crowd.
Chandler
Chandler- I love how tall you are. 🙂
Hi Mark,
The first thought that comes to mind when I think about pricing of an e-product, as I read this today, is…how much value am I giving to the buyer? And that’s the thing with a higher price, I would feel more committed to providing even more value in the product.
And with that value, there IS much potential for that customer to become a repeat customer (in whatever ways that is offered).
It’s good stuff for me to think about, as I’ve been thinking about creating an offering on my site.
Lance- value is such a funny thing. I think “value” is overused as a word and people don’t really get it. In fact, I wonder if value really makes sense at all…
HI Marc and Everyone!
I loved the article. I love how you don’t push people to go, go, go!! I watched everyone write books, create products, etc. while I felt like a snail and often felt bad about working at my own pace, building my business, and facilitating groups one year after another.
Then…this spring, the universe brought me some assistance in getting my first product (an e-course) packaged and on my web site.
I already had the course designed and was offering it for years as a tele-class so I just had to tweak it some. The I put audio on it of seven women taking the tele-class with their permission.
I’m launcing my first product next week and at the same time one of my wake up call in midlife personal stories is in an ebook called Women’s Wisdom in Midlife at the same time!
It is always so comforting to hear your recommendations that feel so different from most out there.
I always end up feeling good about myself instead of beating up on myself for not moving faster!!!!!
Enchanted Blessings, Dinah ~ Midlife Fairy Godmother
Dinah- so wonderful to see you here! Yes- definitely don’t want to push it- and glad you took your time. And that you end up feeling good about yourself here. I love that you’re in the world.
I encourage people to think of products similar to adopting a puppy. Adopting a puppy is a nearly year long engagement.
You don’t just get a puppy and say, “Welcome to our home, see ya later.” If you want a loving, well-behaved member in your household, you need to train, and train, and train with consistency, firmness, and love.
It’s a commitment.
Same with information products. Not the training part 😉 but it’s easy to misjudge the amount of time and thought that goes into thinking through how the product fits into your business and helps your customers…not to mention the time and effort that goes into crafting a promotion.
I imagine if most folks began their product journey with “What do I really want this product to do for my business and what will it take to have such a product?” Most wouldn’t jump into the low-priced camp. Until, as you wrote, their business was ready to support this type of product.
Peace,
Judy
This arrived in my inbox this morning and I’m so glad it did. I’ve read so much about pricing fiction ebooks I think I might actually go a little crazy with it.
I’m reading “Your Right Price” now to see if that helps. As I’m only just starting out, and am riddled with insecurities about the whole thing, taking a slow, step-by-step approach seems wise.
Hi Joely- I’m interested to hear if you think Your Right Price lands with you. And glad you’re okay to take it slow…
Good advice. One thing I would add is that a 2% conversion rate is optimistic (which underscores your point about needing a large amount of traffic to make money from a product).
Hi Barbra- I agree- 2% is way optimistic- unless you have a great relationship with your list, but still…
Mark,
This is brilliant. It feels like the voice of reason among many circus hawkers.
I especially appreciate your point about not comparing your business to someone who is supernova. When people say, well, Seth Godin is doing it, I cringe. It’s great to watch him, but to compare a fledgling business to his, is lunacy.
I also like what you say about the difference between someone who will pop for a $10 e-book and someone who will spend $2,000 or more for one-one coaching. I consider those people in my audience to be in two different markets. Over the years I’ve created a line of offers that reaches all the members of my audience. I now have a balanced income from several streams – e-books, courses and coaching. But that was built over twelve years. It takes time to grow a business, and that’s what many people overlook.
Cynthia- “Brilliant”- thank you! That touches me. Glad it landed with you.
At first, I felt skeptical about reading your article when I saw the word ‘rant’… but the words ‘ebook pricing’ caught my attention so I read on.
I am glad I read it because you’ve very valid points: how you’ll starve, how a low-price doesn’t truly qualify a customer… (subconsciously, I do tend to lose respect for a guide/mentor who lowers his/her prices or gives a discount), and I appreciate your advice on not rushing into creating an info-product.
Still, I think and feel that there needs to be clarity about procrastinating on creating your first product and just allowing it to be good-enough. And ultimately, I think it runs back to your message of listening to your heart… you will feel it. And you’ll know when the timing is right. But one needs to practice connecting with your heart first.
Hi Rachel- I know, sorry. I rarely use the word rant, or rant. I don’t remember the last time I ranted- and I’ve been writing for years. It just kinda spilled out.
You make a great point about procrastination. It’s a balance. I just hate to see people pushing themselves to do something because they “should” when there is such a thing as truly not being ready. And yes- it does come back to the heart- that clears it all up. 🙂
Mark, thank you for this. It’s tipped the balance on some prioritization choices I’ve been struggling with and made me decide to wait longer on delving into the land of e-books. It really will require a larger investment of time than I’d budgeted for to create the kind of value that would work with the higher price point I now see makes sense, and I’m not ready to dedicate that kind of time (quite) yet. Super helpful!
Hey Mark,
Thanks for this.
I’ve found my business model to evolve quite different from some of the ‘big names’ out there.
I’ve stuck close to the high-end, in-person services (1-1 coaching, group programmes) for bringing in solid revenue, and the information offerings – blogs, teleclasses – have been free, as ways of people sampling my approach.
It’s actually really worked for me despite various doubts along the way that I *should* be moving to a more leveraged framework with lots of passive streams.
NOW I’m turning some of my attention to completing a book, possibly alongside a home-study or audio programme. That’s evolved naturally out of wanting to make my group programme content available to more people, rather than as a way of earning a quick buck. It feels good – and as ever I have you and your fabulous team to thank for so much of my success.
With love,
Corrina
Corrina- that rocks. We’ve been watching your growth and success with extreme happiness. And, I must admit, what you’re doing is what I did. It took me five years before I published my first ebook/product. It took me that long to deeply integrate the Sufi teachings I received over the first three years, and then to get more experience and depth in providing them.
Hey Mark,
A few months ago, you and I had a Twitter exchange about what happens when people rush into group programs. Suffice it to say that we both used the word OUCH prominently ..
Thanks for your wise words about not rushing into info products. Like you, I think the vast majority of heart based business folks should take a good look at the model Corrina is talking about. Use free ebooks/recordings/videos/etc to build your business and monetize with individual and small group services.
When you’ve done quite a bit of the of the above, THEN info products can be great. By having LOTS of sessions under your belt, you can speak with authority about the themes that repeat themselves over and over in your niche. And your marketing is likely to be much more effective because you’ll know the turf so well.
Thanks for another great post!
Paul! Yes- thank you for taking the time to be another voice for sanity on this topic. You rock!
Mark- Doing a product to do a product seems to be a “join the band wagon” thing lately with marketing gurus, and yet sometimes there is this compelling need to fill a void.
Having spent quite some time in your “oasis”, I love using Remembrance to access who’s need, or void, I’m being compelled to fill. There are a couple products on my shelf at this moment waiting for the right timing and price.
It seems that as I approach a new intersection, you write an article about it! Thanks!
Mary- Waiting… Waiting… 🙂 Looking forward to when it’s the right time for those to emerge.
Mark, I’ve been struggling with e-book pricing, so this is timely for me.
There seem to be two whole different worlds, and I’m having trouble reconciling them.
One is the publishing world, which is including e-books more and more. In that world, a 250-page nonfiction paperback book might list at $20.00. My 350-page self-published text on indexing is selling steadily in its small niche at $35.00. E-books, which don’t have printing costs, are less.
Then in the…I’m not sure what to call it…blogging/coaching/information product world, a much shorter e-book might sell for $47.00, or $60.00, or more.
This feels like a disconnect to me. The e-book I’m working on this year is going to provide great value. But I’m not sure I can justify charging so very much more for it than if I was selling it as a regular printed book.
I’d love to hear your thoughts on this!
Hi Do Mi- It’s a great question. If you have truly useful advice, a unique perspective, something that can’t be found anywhere else, and it’s for a niche audience, then your audience is generally willing to pay more for things.
I think it’s also important when creating an ebook that you want to charge a significant amount for, that you put great thought into what is the experience of the person spending $60? You may want to include audio/video, or other resources that really help the person. If the ebook walks them through something extraordinary, they won’t have any regrets about spending the money.
Does that help?
Well…sort of! I’ll think about it some more. Maybe the issue is that we’re talking more about niche audiences here. And what people are willing to pay, which will be different in different contexts.
Thanks, Mark.
Do Mi- check this article out. The Wackiness of Resonant Pricing.
Great post, Mark! I love the insights.
Of course, what I’d love to say is that it depends. :p
If the goal is to warm up a prospective client, a low-priced e-book rarely does the trick. There’s an apples-to-orange comparison that happens when you jump from product to service, and, as much as we’d like a product to capture what it’s like to work with us, it rarely does. However, if you’re building a product-based business engine, it could be good move.
It also depends on how much you want to turn on the marketing train. All things being equal, the higher the price point, the more either marketing or marketing gravity you need. Beware the penny gap, though, as the amount of work it takes to get someone to give a penny may be as much as it takes to get them to give $20.
And, though cashflow is a reason to create and launch an ebook, it’s not the only one. Sometimes it makes sense to create an ebook that you don’t expect to generate significant cashflow, although many people secretly hope they will even when they do it for other reasons.
Lastly, it depends on the market. A business marketing to non-business oriented consumers will face different price anchors and sensitives than a business that serves other businesses. Many people fail because they’ll see the prices in the b2b world and try to apply them to the b2c world, or, even worse, they’ll undercharge because they’ll look at the b2c world when they should be playing in the b2b world.
Getting the price right is one of the hardest parts of entrepreneurship and business – at least, for me. I think it’s a good bizdev question to ask “what would I need to include in this for it to be a $50 ebook?” and work from there, as at least it gets you thinking about customer-centric value-prop. It may also get you to assess whether a Free ebook is better than a $19 one, given the amount of work it takes to sell the $19 one.
I’ll continue to mull this over, as your post reminded me that I have a lot to clear about when it comes to this stuff. Thank you for opening the gap, brother.
As usual, Charlie, you make excellent points and nuances. There is a difference between business to business and business to customer. I specifically mentioned $50 in this article because whether you are b2c or b2b $50 is significant, and you can reach people at that price.
Thanks for the clarity and mulling- a valuable contribution!
Thanks Marks for the links (see above) … I love that your responses point me to other posts you’ve written that I can either revisit or come to for the first time … and learn from – and hopefully that other people might get drawn to them too!
Thanks also for the email about page 36 of “Getting to the Core”. Yes I do have the e-book and it was great to go back into it and find the “Spiritual Secret” on said page …
Yeah i’ve been wanting to do some polishing for a while now! Doesn’t work for me so much doing it on my own though – so I prob need a willing accomplice … so if anyone on here fancies a bit of reciprocal jewelescing do let me know! Thanks Mark and have a wonderful heartful heartfilled day xx
Hi Annie- So glad the resources are helpful- and good to hear that the follow-up email about the ebook helped, too. If you’re on Twitter, you can ping me there, and I can retweet your request for a partner to do the Jewel exercise. You can also try sending me a message on Facebook and I can share it.
Hi Mark, yes I am on twitter @sparkletta
I tried sending you a message but twas a no-go as apparently you can only send messages to people who are your followers
Now I’m gonna show my ignorance – oooh a little red-faced here – I don’t know what it means to ping someone! Do I just write to you @MarkHeartofBiz and it will reach you even if you’re not following me?
Ooof so much to learn! Yes I can send you a message via facebook – and I’d love to be able to ping-a-ling a-twitter too 🙂
Thanks! Annie
Hi Annie- yes, if you just send a message- not a private direct message, but a regular @MarkHeartofBiz – I’ll see it and respond to you. And then once I see it, I’ll follow you- so no worries. And by “ping” I just mean let me know- twitter, facebook, email- however you like. 🙂
Mark, I’m really not convinced on anything other than the financial argument and that’s not why I’m in coaching.
I have a guest post running on Remarkablogger tomorrow (Monday 9th) and I talk about this in detail.
But here are a couple of points.
1. If you are pitching a product at $50, you immediately rule out 75% of the population that simply do not have that money. Please don’t give me the ‘investment in themselves’ argument because how do they know which product to invest in that will make the difference in their lives when there are so many out there?
And we all know very few people will ask for their money back because of the endowment effect and pure embarrassment.
2. To me there has to be a balance of making money, but disseminating information to as many people as possible, by setting high price breaks we start to be exclusive and I’m really not comfortable with that.
I’m a coach because I love to help people, and I’m not a coach that only loves to help people that have loads of money.
Coaches that charge $50k for personal sessions and $20k to attend their seminars are simply on another planet to me. They are in it to make money with helping people a byproduct. I’m in to help people with making money a byproduct.
The whole How To Be Rich and Happy giveaway is to get this information into the hands of millions of people that don’t even know it exists, don’t even know that they can think differently and life doesn’t have to be the same ole same ole.
Maybe we have met so much resistance because we are just seen as weird and I know some people think it’s a clever marketing scam, which considering we’re both out of pocket, is a bit strange.
I was listening to the Danielle La Porte and Jonathan Fields phone in yesterday when DLP who had earned $300k last year turned to some guy whose name I forget and said she needed to up her game cuz girls younger than her were making $1m an up.
Holy crap, is this a competition? I understand we all want to be free from money worries, but when is enough enough?
If I was coaching DLP (who by the way I really, really like, thi sis in NO way a dig at her!) I’d be saying, what’s behind that, what are the values driving the need to make so much money.
Don’t get me wrong I’d be more than happy to earn $1m per year, but not because I feel I need to, but because it would allow me to do things like setting up pro bono coaching academies for people that really need it and just putting food on the table is a struggle.
So that’s my rant over 😉
Nice rant, Tim, and I have to say I’m really very much there with you on many of the points. I should point out, however, that I think you are mixing two different audiences- I didn’t write the blog post for people who are making $300K aiming for $1million, and I didn’t write it for folks who are charging $20K to attend an event. 🙂
I also applaud you for wanting to help people, and letting money be the by-product. I think I need to write a follow-up on this to explain- and yes, it’s not a competition.
I wrote this for the majority of people who read Heart of Business who maybe are just trying to be sustainable, just trying to make their rent payment. And my heart breaks watching people pour a ton of energy into something, and then try to make a living selling it for $9.95, and end up with thirty or fifty bucks at the end of the month.
I’m a big believer in giving a ton away for free- I so love what you’re doing with your book. I encourage people to do that as much as they can, sustainably.
Yet I don’t think it’s a crime for someone who may be charging $75-$125 (or a little more, or a little less) to work one-on-one with their clients to charge $50 for a support information product.
It can be so misleading watching what “successful” people do, and then copying them when your business isn’t set up the same way at all, and doesn’t have the same reach. I just want the people who are making a difference in the world, who are doing the healing work, the good work, the heart-work, to make a living and support their families.
I think you’re right, I think we’re were at cross purposes somewhat. I actually don’t think its wrong to ask for that money, or even unfair if the value is there, so apologies if I gave that impression.
I know you are 100% genuine and there are a lot of other people like you that give loads of free stuff via their blogs and also quality material via other means and I include DLP in that. (I wish I’d not used her as an example now!)
I think I’ll shut up now and wait for your follow up post 😉
Mark,
This is quite interesting, as I did the opposite of your suggestions, and I can affirm, it was a hard road!
Like many of you who share your stories here, I was trying to figure out how to make a living as a writer and teacher – and an accidental entrepreneur.
My business model and information products both evolved by chance, as a response to where my writing was gaining traction – in my case, sugar addiction.
Where I got stuck was that I expected my ebooks (and some lucky key word landing on google) to launch me into instant “I’m making enough to support myself” mode. Then I took it personally when this wasn’t the case.
I hadn’t taken the time to build a fan base, a relationship to my fans, and a heart centered vision of my work. I spent the next few years building this foundation, but because I didn’t do this first, it was much harder – several years of grief, discouragement, frustration, and poverty.
From this experience, I learned the importance of structure, patience, and taking the next step. I also learned that beautiful growth can come out of difficult experiences.
Next time, though, I’d rather take the easier route! Thank you for your grounded, practical advice. I am very leery of get rich (or get reader rich) quick schemes and I appreciate your perspective. There is a mercy and a rightness to gradual, natural growth, in the same way there is a rightness in the slow, gradual growth of my children…. We all need time to unfold. Our dear fans need time to unfold with us.
Best, Karly
Hi Karly- what a beautiful comment! I love this “We all need time to unfold. Our dear fans need time to unfold with us.”