Sales

Using Art and Science to Price Your Products and Services

I was at dinner with a friend the other night and we started talking about her new business. She was asking a lot of questions about marketing when the topic of pricing came up.  She has a very premium product and is trying to find the best way to price it out.

I’ve always said that pricing is part are and part science, because you need to do research to see what people are willing to pay for your product/service and then place your stake in the ground and decide on what it is. Over time you’ll be able to adjust the price as you collect more data, but until that point, it’s based on your decision.

Pricing can be scary. If you price it too high, you’ll lose opportunities. If you price it too low, you could strain your operations by increasing work load without enough margin to cover the cost.

One way to price your product is with the tried and true “three option comparison”. You have three versions of your product (low feature set, medium feature set, high feature set) and each version has an increasing price point. If you’ve ever signed up for a web-based subscription you’ll know what I’m talking about. More often than not, people will select the middle option — looking for the best value.

But this may not always work for you. If not, there are other options to consider. Check out this great post by Kissmetrics called “5 Psychological Studies on Pricing you absolutely MUST read.” I love their examples, tips and tricks. It really makes me wonder about my own pricing strategies and if I need to reevaluate them.

Why are case studies important?

One of my favorite marketing books is Crossing the Chasm, by Geoffrey Moore. If you haven’t read it, buy a copy right now and read it. It will change your view on how to market your products and services to consumers. One of his key points is to generate client stories. Hearing a peer speak highly of your product is one of the best ways to convince a prospect to purchase.

There are many different ways to create case studies. Some people claim that they should be short (500 words) others claim they should be long. It really depends on how you plan on using them. If your goal is to drive greater traffic to your site, you will need something with adequate keywords in it, so longer may be what you need. If your sales force is just looking for something to share with prospects, you could go with a shorter, scannable version of a case study.  I don’t think there is a “one-size-fits-all” formula for them. In my experience of writing dozens and dozens of case studies, there are a few things that should be included:

  1. About the Client
  2. The Challenge
  3. The Solution
  4. The Results
  5. Call-to-Action

Everything else is just filler because most prospects are going to skim it looking for relevant information and results. Here are some case study examples and resources to help you out.

Case Study Template (HubSpot)

How to write a Case Study (Zapier)

Ultimate Marketing Case Study Template (Curata) [NOTE: Be sure to scroll down on this one to see the Bitly example. Or just click here.]

A Friendly Wager

Someone has been trying to get a sales call with me for a while and, due to time constraints, I haven’t had time to reply. (I also get a truckload of emails from people trying to make a living and so I’m very selective…like most people.)

But today was different. This person sent me a thoughtful email. It was obviously not spam because he’d read at least one post on this blog, and he did some basic research on where I went to school. His message was as follows:

Hi Matt – After reading the “Cool Marketing Idea (Weekly Winner)” story on your blog I felt inspired to get creative in my reach out. I’m sure you’ve seen your fair share of classic “cold” emails, but I was hoping to mix it up and have a little fun with it. I saw that you went to Utah for both undergrad and grad school and I wanted to make a friendly wager with you on the Utah vs. Stanford game this weekend.
 
If the Cardinals win, will you entertain an informal chat to learn a little about what we do, and how we help similar retailers increase repeat purchases and customer lifetime value? And if the Utes pull off a win, we well send you some Utah shirts for the whole family.
 
I hope this is something you’re willing to entertain. Please let me know if we have a wager.
 
Looking forward to the game!
Attention grabbing? [CHECK]
Thought provoking? [CHECK]
Personalized? [CHECK]
By putting in a little more effort into his email, he got me to respond. Nice job!
So, I took him up on the wager. After all, Stanford is 2-2, Utah is 4-0 and ranked in the top 20.
I’ll let you know who wins the bet. Go Utes!
_________
10/8 UPDATE: Last night the Utes lost 23-20. I guess I’ll be sitting through a sales call now.