The Smart Way of Pricing Your Products

"There are two stupid men on the market: one prices his product too low, the other too high."

~ an old Russian proverb

Don't be one of those two guys. How? For many, the best way to price a digital product is to use a 'value-based approach' with a little smart market research on the side. Let's empathize with the customer a little and ask, 'How valuable is my product to them?' If this sounds like lots of unclear questions, let's try and pin down the elusive sweet spot that is your new price point.

#1 Begin With a Little Sneaky Research

Unless your product is totally innovative, there is probably something comparable out there. Does your product offer a huge advantage over your competition? If yes, you can confidently price it higher to reflect this. If your product is fairly similar, why not price it a little lower than the competition to sway customers your way? The rule of thumb is: know what your competitors' prices are and know why you are going above or below. Don't just match their pricing - that's a little boring, right? You can also utilize your social network and conduct a mini focus group. Ask your Blender friends what they think a fair price for your product would be to get a solid starting point.

#2 Think About the Message You Want to Send

Let's be real: what you really want is to maximize your profit. At the same time, you want your customer to walk away happy and feeling like they got a fair deal. So where is the magical middle ground?

Here are a few guiding questions to ask yourself:

#1 How often will my customers use my product? Is it a one-off 3D model that they plop in a scene, or is it a time-saving add-on they will be utilizing in their workflow regularly?

#2 What benefits does it bring my customer: an ability to improve their workflow? A more realistic look to their textures? A fun rig to practice animation on and learn new skills? 

#3 If a customer worked without my product, what would it take them to achieve the same results? In other words, what level of skill would they need and how long would it take them? 

These questions (all interconnected) will help you understand the value that your product has for your customers. They don't care how long it took you to create it or how unique a certain feature is. All that matters is what benefits it will bring to them: faster outcomes, better results, or simply more fun along the way.

#3 Don't Fear a Higher Price Point

Marketers know that Price is one of the 4 P's which constitute your Marketing Mix, together with Product, Place, and Promotion. Yes, your price sends a powerful signal to the customer: how highly do you value your own product? If everything checks out, don't be afraid to offer a product that is premium-priced. After all, a higher price implies a higher quality: everybody would rather stay in a $250/night hotel over a $49/night one.

One of the most successful Blender Market creators, Jim Morren, offers his Shader Pack at $65, which might seem like a hefty price tag; however, Jim has a reputation for delivering high-end shaders and providing excellent service. To top it off, his Blender Market shop showcases high quality products and attention to detail, inspiring confidence in potential customers. The result? His shaders are selling like hot buns.

#4 Offer Different Price Points

One downfall of value-based pricing is that different people find different values in products. How on earth can you make everyone happy? There might be a way. sskp_fi

 Take Kilvio's Studio Scene Kit Pro. This is a fantastic pack of lighting setups to use in Blender and is on the higher end of products on the Blender Market at $39. So how did Kilvio appeal to customers who like the product, but don't need it badly enough to pay the full price? He created Studio Scene Kit Lite: genius! The lite version offers customers 10 lighting setups for only $14.99. This allowed Kilvio to hit two price points with the same product and appeal to two different customer groups. Similarly, Jim Morren also offers his most popular shaders individually for those who don't want to buy the full shader pack. Note: pricing a product at 1 or 2 cents below a round number, e.g. $8.99 or $2.98 is the oldest trick in the book, but it works. Studies consistently show that consumers perceive these prices as more favorable.

#5 Keep Testing and Researching

There’s no reason to think you got it right the first time and there are a few things you can tweak. Haven't landed any sales yet? Try lowering your price by 10-15% to see if it attracts more customers. If you have sold copies of your product already and want to reduce the price, keep your previous customers in mind; nobody likes the feeling of having spent $50 on a product and seeing it go on sale for $25 a few days later. Start with smaller reductions to avoid angry customer emails. If you add more value to your product by expanding it or improving its function, by all means, charge more for it! You can always go back later and reduce the price again.

Just Do It Already!

Once you've gone through the above steps, you will have to decide on a price and test the waters. In the end, a lot of it comes down to experience and a little talent; after all, pricing is a bit of black magic combined with business savviness and the best way to learn is to get your feet wet and send your product into the world.

How do you decide which price is right? Let us know in the comments and remember - the Blender Market team is here to help with determining a fair price for your products.