Would you refuse me if I handed you $1000?
You’d probably be wondering, what’s the catch, right? Well, that’s a bit of the reaction I got to my recent article on micro-pricing. Readers and commenters said sounds good, but…you’d have to have a ton of traffic to make it work and most small businesses or entrepreneurs don’t have that. I appreciate the comments. I love a good debate. Here’s what I’m thinking.
Micro-pricing is NOT a loss leader
You know, initially, I agreed with the folks who said micro-pricing doesn’t work for small businesses. It just seemed impractical. However, the idea was like gum stuck to my shoe. I couldn’t shake it. So, I did what I always do- I did some research.
What I call micro-pricing you might know as the technique of a ‘loss leader’, where a featured product starts at an extremely low price with the hopes the customer will buy more expensive products later. Loss lead campaigns depend on volume to be successful.
My strategy with micro-pricing differs from a loss leader. It doesn’t depend on you selling at a loss. Because you’re selling a digital product or service, your cost is pretty low, sometimes nothing. That means you can price at a lower number that’s compelling to a prospective customer. And, they impulse buy. Just like I impulse buy Snickers bars at the checkout.
I envision micro-pricing as a drip strategy. Your income dribbles in over the weeks and months, offering a cushion for your cash flow. A little drip over time can be very powerful thing. Ask anyone whose been to the Grand Canyon. If you had a 4.99 product, sold 3 per month (which probably means you’re not promoting it at all or picked the wrong topic) that’s $14.97.
Not earth-shattering but wait. That’s $179.64 for the year. That could pay for a course, a small ad, hosting or something else that allows you to grow your business. Rinse and repeat with 5 products and that’s $898.20, nearly a thousand dollars!
Besides the cash, mini-products allow you to grab more insight about your audience’s interests and pains. You can use them as test labs for new ideas. Definitely don’t spend weeks working on your mini-product.
I recommend creating a mini-product that you can finish in one day. That way it didn’t take too much time to create and you’re more likely to finish. And, the micro-price feels better. Of course, you have to offer real useful information and true value. (Personally, I like to over-deliver to make the next sale easier. ) I bet you have articles, audios, checklists, processes you could share today as mini-products with micro-pricing.
These guys did it
Carrie Wilkerson, one of my favorite coaches, wrote a terrific article on what type of creator each of us is as an entrepreneur. You gotta read it; it almost made me cry she was so lovely. Anyway, turns out I’m a creator who like to have a pattern. I take an idea and put my spin on it. Just to make sure my idea wasn’t totally off in left field I looked for those who also tried micro-pricing.
I found some great articles. Like this one that talks about the $5 sweet spot. Who knew that taking away the $ in front of a number could positively impact sales? Or, that a Harvard prof believes that the trend towards micro-pricing will increase. Because of things like iTunes and Kindle we are being trained to accept this new price concept as normal. Don’t you want to play in that field?
Usually the universe gives me a heads up when I’m on to a good idea. So, I wasn’t surprised this morning when cruising for my Buffer adds I found a spot-on article. Sasha Greif guest posted on a smart bear blog to share his experience with micro-pricing. Do read the article, please. It’s a very thoughtful discussion on how Sasha figured out his perfect price and earned $1500 in two days. Bet that got your attention. Imagine doing that just once a month…sweet!
Micro-pricing is not for everyone
Micro-pricing may not be for you. Doing something different than the norm takes courage. Along with Vision. Grit. Hope. If you started your own business, I think you already have those qualities. They might be dusty. Or misplaced. But you’ve got them. Keep looking…in the mirror. (Did I mention you’re a superhero in my book?)
Meanwhile, I’m fast working on my mini-product, SurveySherpa. You know how I take the ass out of being assertive? Well, this takes the icky out of writing a really killer survey that gets you feedback and noticed! And, yes, I’m micro-pricing it.
So, what’s your thought? Would you try a mini-product with a micro-price? If you did already, what happened? Spill, we all wanna know.