With the power of social media, anyone can be a rock-star entrepreneur. And get paid like one if you’re willing to try the-pay-what-you-want model. Would you try letting your customers pay what THEY think you’re worth?
An Internet Gutenberg
When Gutenberg invented the printing press he set the written word free. One of my favorite authors, Stephen King, became one of the first self-published authors on the internet. King did something similar. He set authors free.
How? King published each chapter of his book for just $1? Definitely not the traditional publishing model that takes years before you see fame or fortune. He removed his publisher as the middleman and went straight to his adoring fans who were eager to consume more of his content. (Note: King’s books are like literary crack. Once you turn the first page you don’t stop til it’s done. 800 pages-boom. Then, you’re jonesing for more. What genius!) .
First day yielded over 41K downloads. Do the math, people. That’s $41,000 in one day. I’ll have some of that. You can be a published author and make money from your talents, too.
Build Your Own Money Machine
A little dramatic? Heck ya, but true. You can turn a part of your expertise into a mini-product and sell it at a micro price like Stephen did.
True, he’s Stephen King, a famous, popular author blah, blah. But the same principles can be put to good use in your small biz, too. I’m especially liking this ‘tiny is powerful’ pricing now for two reasons.
1. Micro-price your product/service and grab more attention and sales. Entrepreneurs are always counting pennies, especially now in these recessionary times. That sounds like bad news unless you realize that some problems just don’t go away. They MUST be fixed or the business dies. If your solution is essential, easy and well priced, small business owners will buy. Not Stephen King sales. But steady I-can-pay-for-a-VA sales. Yes, this thinking goes against conventional wisdom that encourages you to price for positioning in the market, i.e. be the BMW, not the Hyundai. I’m zigging- this is what works now.
Case in point: Guy Kawasaki self-published his latest book, What the Plus? on iTunes for $2.99. I bought it (easy download) to learn what Google+ (new biz essential?) is about and I bet I’m not the only one. Find, create, revise a product that you can micro-price today. What’s a good price? Play around. Typically, I’d buy anything that seemed relatively useful if it were under $100. Now, it’s more like under $40. If it’s under $10 it’s an immediate sale. You can start where you’re comfy and test higher price points with each new version.
2. Entrepreneurs are incredibly loyal to solutions that work. I love when something works like it said it would, don’t you? Easy and reliable are two words every entrepreneur or small biz owner wants to hear. It’s a simple formula. Customers purchase & love your bite-sized, mini-priced solution + You provide more & better solutions they purchase= A very satisfied pair. Viola, a profitable business built on micro-pricing.
Worried this won’t work? Think this is basically a volume play? I understand but don’t agree. Here’s a study and article that helped convince me. Basically, consumers won’t stiff you if they like what you’ve offered. They’ll pay because they are satisfied, they have the cash and they feel compelled to respond to ‘getting a deal’. It’s only fair.
Here’s a goofy example. I just purchased some airplants for my guest bath. Wonderful, sculptural things they live on a little water and air. However, I’m not sure how best to care for them. Oh, they came with instructions- just not good ones. I’d pay up to $10 for a audio or written guide on how to care for and propagate these beauties.
Where can you use this concept in your business?
Putting my two cents where my mouth is
I really like this idea so I’m running a test. I’m creating a solution for a very specific business need- how to price higher. Just the beginning step, though, how to write an effective survey that gathers data and promotes you. I plan to micro-price and see what the reader reaction is (that’s you).
If you want in, sign up for my ezine on the sidebar. You’ll get insider news and my mini-course, Let Yourself Price What you Deserve, to keep you busy in the meanwhile. I’ll report my findings here on the blog.
This is pretty controversial stuff. I’m up for a little debate. Would micro-pricing work for your business? Why or why not?