February 10, 2011 125 Comments

Pricing Digital Content

I sell digital content. I’m selling lots and lots more of it in 2011. For instance, at Kitchen Table Companies, we sell an ebook for $97. It’s amazing how many times I hear, “I’m not paying a hundred bucks for a hundred pages. Regular books only cost around twenty bucks and they’re made of PAPER!”

Er, um, what the book is made of isn’t usually what makes a price point. (Best book on pricing right now is this one, by the way.) Books are priced by what the market will consider, plus they’re priced by the perceived delivered value of the contents within. One part of pricing is always kind of random, unless you’re a stats and research freak, and I am not.

Be VERY wary of pricing your digital content really low. I just read a bit in USA Today about an author in the young adult format who’s moved 450,000 books, but she’s charging between 99 cents and $3.99 per book. If she’d even done the typical $9.97 that lots of Kindle ebooks cost, she’d have made 100% more money. You might argue that her sales would have declined, but there’s a curve (as there is in all math), and I just don’t know that she’s getting the best price.

Digital Doesn’t Equal Cheaper

Yes, you can make a digital copy. However, the CONTENT is what you’re buying, not the format. For whatever reason, people have made this change reasonably cleanly with digital videos and with audio downloads at the iTunes store, but books seem to evoke a weird spot in our heads. We seem to have a righteous sense of what a book “should” cost.

I’ve paid $147 for a really good ebook on affiliate marketing, and then paid another $97 (I think it was) on a book about blogging, to see if I’d pick up some neato tidbits. Yes to book A and no to book B, but the yield of money I got back from what I learned on A paid for A, B, and a month of my mortgage, because I used what I read in the book.

I just bought this book by David Bullock (the title is ridiculously long) – List Blueprint: Paint By Numbers Exact Steps To Build A Huge Mailing List; 5 Strategies For Building Massive Traffic; The Main Mistakes Almost Everyone … A Road Map For You To Follow! Mission-Surf (amazon affiliate link) for a few bucks. It has some good stuff in there, and it made me start looking around for some more materials, because it was low-priced, but another thing happened, and I’ll talk about that next.

Low Price Triggers Worries of Perceived Low Value

Yep, because I paid less than three bucks for that information, I found myself worrying that maybe it wasn’t the best resource. There was another book about list building that had a $31 price tag, and I almost bought that ONLY because it cost more, so naturally, I’d presume that they put more meat in it.

I’ll tell you, as an author, if I’m going to charge you $100 for a book, I am going to make sure you can reasonably stand to make $500 or more back from buying it, *IF YOU EXECUTE WHAT YOU READ.* (Books on fitness don’t give you six pack abs. Look at me for a case study in that.)

Never Ask Your Community For Pricing Advice

Hint: no one really jumps up and down and demands to pay the actual potential value of a product. That said, price in a way that signifies something to your community. Let them know what they can expect based on your pricing, and make damned sure you deliver.

How are you doing it?

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http://www.ivanwalsh.com Ivan Walsh

Price is (sometimes) determined by Value.

Value is (sometimes) determined by demand.

The catch is we have different values, different demands…

http://chrisbrogan.com Chris Brogan

Really well said.
http://chrisbrogan.com Chris Brogan

Really well said.

http://www.danielrose.com.au Daniel Rose

I don’t necessarily agree that you pay for content. The vast majority of cost in any published book goes to printing and distribution, there’s no denying that. Similar costs are simply not present in the digital market. If you look at the “content price” as a portion of the total book cost, a digital book can sell for much less, whilst the content price remains the same.

http://pulse.yahoo.com/_WB4PSZSDE6XMPMXZNRQMMHR6ZU Marla Hughes

Daniel, it’s true that ‘the vast majority of cost in any published book goes to printing and distribution’ if you put no or almost no value on your time, effort, expertise, etc… I understand your deeper point and agree with it. However, I think it misses Chris’s point on the value of the content.
http://chrisbrogan.com Chris Brogan

The exact point I was making is that people aren’t buying the production method. They’re buying the yield on the information. I’m speaking mostly about nonfiction, mind you, but I feel the same about all digital media.

John Bardos

I think people are also buying the strict editorial process of a physical book. The vast majority of ebooks don’t come close to the quality of a professionally published book.
http://www.a-startup-guy.com darrindickey

Chris is right. I don’t know a single person who went to the bookstore to buy ink on paper. They went to buy a story that interests them or content to educate themselves. We’re willing to shell out $7.99 for a paperback of that story because past experience has led us to believe that paperbacks are worth that much, if the story inside sounds interesting. (Most of the other paperbacks on that shelf have the same price, so it’s a fair price, right?)

The people who balk at “a hundred bucks for a hundred pages” simply haven’t found the value in the content yet. That’s Chris’s challenge; to show them the value. To get them to understand that the content they will receive for their hundred dollars is worth more than anything else for which they could spend that money. (I can buy ebooks on iBooks all day long for $9.99. What makes yours worth 10X?)

http://chrisbrogan.com Chris Brogan

The exact point I was making is that people aren’t buying the production method. They’re buying the yield on the information. I’m speaking mostly about nonfiction, mind you, but I feel the same about all digital media.

http://www.danielrose.com.au Daniel Rose

I don’t necessarily agree that you pay for content. The vast majority of cost in any published book goes to printing and distribution, there’s no denying that. Similar costs are simply not present in the digital market. If you look at the “content price” as a portion of the total book cost, a digital book can sell for much less, whilst the content price remains the same.
http://www.kherize5.com Suzanne Vara

Chris

When we create something and make the determination to sell rather than give it away for free, we are saying or trying to convey that it is worth something. Some may see it as worth while whereas others may not. For some it will be so invaluable that they will rave where others are left wanting for more. We have seen this with books – we were expecting more where others are almost overwhelmed with what they have learned. That is the risk we take with producing and selling.

As Ivan said price is sometimes determined by value. The value has to be demonstrated in the marketplace. If CB sold an ebook with all his secrets of success for $97, it would be deemed undervalued by some due to the value you have demonstrated in the marketplace however if SV did that, the overvalue on the surface would possibly overshadow the actual content. It could be word for word what you have written but the value in the marketplace has not been demonstrated and proven by SV.

It is an elevator ride when pricing in the digital space. We create to extend and expand and part of the expansion is to profit. Without profit, we cannot not sustain and create more. The ability to sell and sell successfully is knowing how to attach a price to it. Advertising is the laws of attraction whereas marketing is the art of selling. Blogs are the attraction where the content contained within the blog is the art of selling – selling an actual product/service or the value of coming back each day to walk away with something useful.

Sure there is demand as well as need but demand almost always exists (except an ice scraper in Las Vegas) but when we are able to see or even create/establish the demand we are placing a value on the need. The value of the need is scalable depending upon the immediate need or if it is something we see in the long term. Pricing is the tell all of what is worth minus or plus what we are willing to sell it for.

http://chrisbrogan.com Chris Brogan

Great perspectives. Thanks for your thinking.

Oddly, I’ve already run into that “undervalue” one. People think blog topics is inexpensive at $9.97 a month.

http://rickmanelius.com Rick Manelius

It’s probably more accurate to say you’re pricing at the extremes… tons of free content on the blogs, social networks, etc to get out there, build your platform, etc… which gives you the credibility, etc to do premium content.

The example of the 0.99-3.99 seems to be someone caught in the middle. Not willing to give some out for free, but also not willing to ask for the true value at the high end. So what I’m hearing internally is ‘push the extreme endpoints of freemium versus get obliterated in the middle.’

http://chrisbrogan.com Chris Brogan

Well yes, blogs and stuff are free. But compiled information meant to dictate a course of action still tends to have a price tag on it. Meaning, more than a 5 point how-to blog post or a list of the 100 best whatevers. Right?

http://rickmanelius.com Rick Manelius

I totally agree. I see blogs as getting out tidbits of the story/entire picture. But it’s the premium books/content which put it together into a cohesive package and thus should command a premium price.

Could someone get the entire story reading yours and other blogs? Perhaps… but the serious people want the quickest/fastest/best roadmap. And that’s when someone like me shell out $200 on a program that I could eventually learn spending 3 months online piecing it together myself (don’t have the luxury to waste that much time!)

http://www.itinerantentrepreneur.com/journal/traffic-conversion-swipe-file/ Robert Dempsey

The timing could not have been better with your post Chris as I am in the process of outlining a series of products, each that will show how to set up a system for an online business. Enough pitch though.

I’ve been pricing mainly on what I find in the market, and the return that people will get once implemented, as you say. That typically take the price up higher than I expect, but then I remind myself that while I (and my family) need money to survive, I want to put my products and services at a certain price point and charge what I’m worth, and what the information is worth to *those that will actually use it.* This also helps to ensure that people will actually do what they’re taught. If I pay $100 for something I’m going to be testing it out.

http://chrisbrogan.com Chris Brogan

We agree on this.
http://chrisbrogan.com Chris Brogan

We agree on this.
http://chrisbrogan.com Chris Brogan

We agree on this.
http://chrisbrogan.com Chris Brogan

We agree on this.

http://www.info2dw.com Menisa Lindra

I think digital content is almost free for all. you can easily access it through internet anytime anywhere. It doesn’t cost you much in comparison to paper print.
http://www.conorneill.com Conor

I remember doing a class on negotiation. We all paired up and went out to conduct a negotiation. Each pair had read one half of a story and were to negotiate the price for a car.

When everybody returned to the class, the professor asked “Is everybody happy with their deal?” The whole class said “yes. we are happy we the agreement that we have reached.”

The professor then proceeded to ask who had paid less than $100, then less than $500, then less than $1000… We discovered that the range of prices for this purchase ranged from $0 to $10,000.

The professor then asked again “Are you now still happy with your agreement?” The majority of the class were now not happy and felt cheated. I was amongst this group.

I remember that I went into the class feeling like I was a “good negotiator”. However I learnt that I had a major flaw – I focused on what value meant to me, and I did not explore what value meant to the person sitting across from me. I had an idea of a “fair” or “unfair” price… but again from my own perspective. If the other person has no other option and is out of pocket by $20,000 if they don’t do this deal… the fact that I think my value is worth $500 is dangerous. It might be a fair price, but it is not the price that the other would happily pay and feel that they had benefitted from the deal.

There are several areas where I have a real challenge with pricing – digital content is one, giving people access to my network, deciding at what point friendly help becomes consulting work…

Great post to stimulate my thinking over this morning’s 3rd coffee ;-) I hope you did get actual toast today and not just warm bread.

http://chrisbrogan.com Chris Brogan

This was fascinating. Thanks for sharing your perspective, and I am now thinking of finding that book on negotiating that Julien Smith made me buy a while back (great book).

As for toast, Room Service comes in about 10 minutes, so you’ll know. : )
http://chrisbrogan.com Chris Brogan

This was fascinating. Thanks for sharing your perspective, and I am now thinking of finding that book on negotiating that Julien Smith made me buy a while back (great book).

As for toast, Room Service comes in about 10 minutes, so you’ll know. : )
http://chrisbrogan.com Chris Brogan

This was fascinating. Thanks for sharing your perspective, and I am now thinking of finding that book on negotiating that Julien Smith made me buy a while back (great book).

As for toast, Room Service comes in about 10 minutes, so you’ll know. : )
http://chrisbrogan.com Chris Brogan

This was fascinating. Thanks for sharing your perspective, and I am now thinking of finding that book on negotiating that Julien Smith made me buy a while back (great book).

As for toast, Room Service comes in about 10 minutes, so you’ll know. : )

http://www.margieclayman.com Marjorie Clayman

This part of the online world is such a mystery to me.

As a buyer, I guess one book at $97 could be something I’d consider. But the problem is that it’s not just 1 book. It seems like everyone is offering an e-book these days, ranging from $20-$97 or more. Or less. So scaling it is one problem. And by the way, there are a lot of in-print books that I want to read too. It’s a lot to try to filter and weigh.

One thing that might help is if folks offered a peek into their e-books like Amazon does with books you buy there. Give me a hint of what is going on in there. Whet my whistle, as it were.

The other thing I worry about is that if you price a book based on how those action items performed for you, you’re making the huge assumption that your readers will do things the exact way you say, that they will be patient and follow all of the steps, and that their community is exactly like yours. If I was selling, that would be a huge question for me. Sure, I got myself in good shape because I did this, this, and this. What if someone follows my words step by step and doesn’t get anywhere? What if they tick everyone off because of my book?

Maybe these are all chicken questions. If you get enough people to buy, that 1 person who doesn’t get the value doesn’t matter. I guess I’d just like there to be some regulation. It seems to me that people went from selling a lot of e-books for around $20 to $40 or $50. Now a lot of e-books are going for around $100. As the market becomes more competitive, will people say, “Well, this will totally lift you up so I’m going to charge $1,500 for this e-book? Is content in Social Media environments going to become something only people who already have money can gain access to?

Those are some of my concerns – in a giant nutshell :)

http://chrisbrogan.com Chris Brogan

Your point about whether it’s valuable based on how the efforts performed for the author is a good one. As for the free peak inside, I’m not seeing much of that happening yet, but you’re right that it’d help. What Nick Reese did for his ebook was give away a free chapter. I see that a bit.

Great thoughts.
http://chrisbrogan.com Chris Brogan

Your point about whether it’s valuable based on how the efforts performed for the author is a good one. As for the free peak inside, I’m not seeing much of that happening yet, but you’re right that it’d help. What Nick Reese did for his ebook was give away a free chapter. I see that a bit.

Great thoughts.

http://linkedin.com/in/joesorge Joe Sorge

Additionally the value from products like that comes from the thinking that they prompt in you. Thinking that you likely wouldn’t have done without the ideas provided. While I agree that the “efforts performed” value consideration is there, I’m not sure I’ve ever followed a set of “instructions” from the greatest content out there. It’s more likely that the content helped me find my direction with a spark of thinking. That’s where I’ve found value.
http://www.facebook.com/profile.php?id=1134202412 Morag Gaherty

I’ve noticed an increased trend in printed fiction novels for the first chapter of the next book to be contained in the book you’ve bought. I always read it, and often go on to get the book. It’s very good marketing.

I like the point of being able to see a sample section online, but then there would be the dilemma of which part to show. If you protect all your ideas by not revealing them online, the reader might decide this ebook is not worth buying. On the other hand, if you include one of your wonderful ideas that is valuable to your readers, a significant proportion of them might simply take and use that free idea, and also not buy the book! So it’s a difficult one for non-fiction, I’d say, though I think the idea is great.

http://chrisbrogan.com Chris Brogan

Your point about whether it’s valuable based on how the efforts performed for the author is a good one. As for the free peak inside, I’m not seeing much of that happening yet, but you’re right that it’d help. What Nick Reese did for his ebook was give away a free chapter. I see that a bit.

Great thoughts.
http://chrisbrogan.com Chris Brogan

Your point about whether it’s valuable based on how the efforts performed for the author is a good one. As for the free peak inside, I’m not seeing much of that happening yet, but you’re right that it’d help. What Nick Reese did for his ebook was give away a free chapter. I see that a bit.

Great thoughts.

http://pulse.yahoo.com/_WB4PSZSDE6XMPMXZNRQMMHR6ZU Marla Hughes

Marjorie, how many physical books do you come across for under $5? Over a $100? The same will hold true for e-books. Yes, the price is up for now, but the glut of the market is on. Soon, like housing, either the bottom will drop out for awhile or everything will slowly get back down to normal. As someone said earlier, Chris’s content is valuable because of what he’s done before. Just like any other profession, first you have to prove yourself, then you’re entitled to the big bucks (if you want to charge them).
http://twitter.com/VelChain Dave Lutz

It really boils down to an investment decision. Yes there is tons of free content and yes there are lots of books at lower price…but, if someone smart is going to take the initiative to put a bunch of great advice in one place and filter it down into one power-packed cliff not version, that’s usually a smart investment. It takes lots of time to search and apply your own filters. When making the decision to purchase, one needs to think about their costs of acquiring information and add the benefit of applying the information. It doesn’t take much of either to justify a $97 purchase.

http://chrisbrogan.com Chris Brogan

Like conferences, n’est pas?
http://chrisbrogan.com Chris Brogan

Like conferences, n’est pas?
http://twitter.com/ThingsBright Elizabeth Drouillard

So, so true. You’re not only paying for expertise, but convenience.

http://www.GreatEntrepreneurship.com Business Growth

Forget the market thinking…I agree Chris.

I remember Jay Abraham selling a book called stealth Marketing for $1,000.00 – made of paper and in softcover (I have it so I know.)

Was it worth a thousand bucks?

Yup…one idea in that book made me 35 times my investment back.

You won’t find that in some crappy Amazon trade paperback for ten bucks.

Peple who think $97 bucks is a lot of money shouldn’t be in business (but I’ll bet they blow $400 – $500 a month on some car payment.)

Patrick
http://linkedin.com/in/joesorge Joe Sorge

This is my favorite type of Chris’ posts, because it has application across such a huge scope of business. As much as we’re talking Ebooks and digital content here, these same rules apply to pretty much any business that producing something where pricing and value intersect. And I totally agree that low pricing triggers concern of low value.

One of our biggest challenge in the restaurant business is in proving the value of a menu item priced differently than our competitor. But once the customer has the experience of one of our restaurants the value becomes considerably more clear.

I’m seeing the perception of value in pricing as a perception of trust as well. The more our customers know our restaurant company’s reputation, the less they are concerned about the price that they might pay. This is precisely the reason why I jumped into 3rd Tribe so fast, I trusted the content that Chris and the partners he’d chosen would provide and have not been disappointed.

What a great post to prompt some real thinking this morning, thank you Sir.
http://www.ugetme.ca ugetme jeremy

We can use it through this internet.. And also its free for all..
University Canada
http://www.avenue3re.com Lois Ardito

Chris, I love talking “value” ! as a Realtor, I have asked clients and customers to think about “value” and what it means and feels like to them many times. To sellers, cost demands value. If they spent $5,000 re-habing a bathroom they think that it adds $5,000 to the price of their property…but that’s only so if Buyers agree. On other other hand, a Buyer may pay more for a property than other potential Buyers were willing to pay, because the value was there for them ( could be a good friend lived in the neighborhood or there in something in this particular home that suits a particular need, etc).
What most of us are willing to spend on something, I think follows that formula.. “What’s the value to me?” In the case of the ebook, the value is in the author. The author would determine for me whether or not to make the investment for the information I wanted, not the cost of the material, or the catchy title ( like the new bath) but the reputation and credibility of the author.

Lois

http://chrisbrogan.com Chris Brogan

I totally agree. Great point about homes and value. I love that. I’ve heard it a million times from people. We put $20K into this new deck, so our house is now $20K more valuable. I’m not a Realtor and I *know* that’s not so.
http://chrisbrogan.com Chris Brogan

I totally agree. Great point about homes and value. I love that. I’ve heard it a million times from people. We put $20K into this new deck, so our house is now $20K more valuable. I’m not a Realtor and I *know* that’s not so.

http://www.avenue3re.com Lois Ardito

Chris, I love talking “value” ! as a Realtor, I have asked clients and customers to think about “value” and what it means and feels like to them many times. To sellers, cost demands value. If they spent $5,000 re-habing a bathroom they think that it adds $5,000 to the price of their property…but that’s only so if Buyers agree. On other other hand, a Buyer may pay more for a property than other potential Buyers were willing to pay, because the value was there for them ( could be a good friend lived in the neighborhood or there in something in this particular home that suits a particular need, etc).
What most of us are willing to spend on something, I think follows that formula.. “What’s the value to me?” In the case of the ebook, the value is in the author. The author would determine for me whether or not to make the investment for the information I wanted, not the cost of the material, or the catchy title ( like the new bath) but the reputation and credibility of the author.

Lois
http://www.experiate.net Paul Flanigan

Stellar comments, hard to add on, but one thing sticks in my head: The cost of “close enough.” While you may charge $x for what people get out of it (the value), there are others who will charge much less for just a little less value. Kind of like: $100 book and you get $500 value, OR $10 book and you get $100 value.

The subjectivity of this is the absolute conundrum here. Every single person will get a different amount of value out of it. Does that make that book worth more or less? Hardly, it’s the law of averages.

I would love to read some comments soon on the value people got out of the book – was it worth it? If so, that’s when I pull the trigger. I know that “results may vary,” but I also know my own work ethic and whether or not I can make that happen. The value will come to me based on how I perceive the value others got out of it.

I believe I have never written the word “value” so many times in one comment.

http://chrisbrogan.com Chris Brogan

Now that’s a great point. Something like this is probably in the realm of testimonials. Super good point.
http://chrisbrogan.com Chris Brogan

Now that’s a great point. Something like this is probably in the realm of testimonials. Super good point.

Resumesteve

Chris, Again your lucidness and candor are showing…up very, very well. Color me glowing that I am on this planet at the same time you are. Your gift to me. Over the top? Nope. From the heart. sQs Delray Beach FL
http://www.IntegrityVASolutions.com Katie Simmons

Excellent post, Chris! It is true when people look at the price they think about the value they will receive. Cheap is not always better.
http://matthewm.org Matt Medeiros

I run a site that I created for a digital product. During 2010 I was not selling it, but I had people finding me and contacting asking me if it was for sale. I surveyed about 200 or so folks who had left me their e-mail address and found the average price they were willing to pay.

So far it’s working out well – I’m now trying to find a market to expand via affiliates. That’s my next hurdle.
http://matthewm.org Matt Medeiros

I run a site that I created for a digital product. During 2010 I was not selling it, but I had people finding me and contacting asking me if it was for sale. I surveyed about 200 or so folks who had left me their e-mail address and found the average price they were willing to pay.

So far it’s working out well – I’m now trying to find a market to expand via affiliates. That’s my next hurdle.
Cara Lumen

If you perceive the value as high you have to find the words to make the potential readers see the value. Being certain to explain what my product will deliver in terms of concrete results will help me craft a better landing page. I also appreciate the low price-low value idea. Thank you for these insights..
Cara Lumen

If you perceive the value as high you have to find the words to make the potential readers see the value. Being certain to explain what my product will deliver in terms of concrete results will help me craft a better landing page. I also appreciate the low price-low value idea. Thank you for these insights..
http://wpprobusiness.com Adam W. Warner

Chris,

It’s like you’re my personal guidance counselor sometimes:) This post couldn’t have been more timely for me as I am about to release a video course and just yesterday I spent most of the day agonizing over how I should price this course.

I feel I’m offering real value to an under-served market and I have received great feedback from my first video course (which is free). I’ve also spent a lot of time preparing the content for this second video course and making sure it meets my quality standards and again, offers REAL VALUE to those interested in my subject matter.

I toyed with the idea of underpricing it (in my opinion) with the thought that it might help to garner a larger community around my brand and that I could price additional courses higher if needed. I was on the fence, but I think you’ve convinced me that my knowledge IS worth paying for and that I AM offering valid content that will help people learn, move forward, and accomplish their online business goals.

Thanks for the boost Chris, it’s most appreciated.
http://www.wordpl.net Salma Jafri

H iChris,

I host a training course that helps people get started on a particular site with their first freelance project. I priced it at $50 and my reason for doing so is that the lowest amount they can potentially win a project for is $50, so they get their investment back usually within the first month of the first project, whichever comes first. It’s a physical course for now, but it’ll be priced double when I convert it into an online course because it’ll be richer/longer and contain instant resources. I look at the price as a combination of the perceived worth of the course and my time/effort in putting it all together.
http://www.dogwalkblog.com/ Rufus Dogg

There is no reason software boxes need to be as big as they are or with that extra “features” flap. There is no reason for blister packaging. Oh, yes there is: it sells more crap to more people. Smarter people than me spend years on this stuff (Paco Underhill, Carol Spieckerman @retailexpert, David Rich iccds[dot]com @davidjrich, Jerry O’Brien at the Retail institute UWisconsin and entire industries are set up for this — POP Institute, NARMS[dot]com @narms, etc.. )

I think e-books take away the packaging experience for most people. There is no box to read, no spine to run your finger along, no flap to read. People expect to be taken on the Internet (blame spam and squeeze pages for this.) After having gone to many, many workshops and conferences and bought and downloaded hundreds of e-books, I EXPECT TO BE TAKEN by an incomplete, typo-ridden, slapped together piece of crap. I expect the motivational speaker on stage will tell me nothing new about the human condition that I probably don’t already know. Sometimes I am surprised he/she does, but it happens so very rarely and almost always from someone nobody has every heard of (which is why you should always seek out new voices and quit being a groupie. No offense, Chris to you or your gro… er, I mean fans.) One gets tired of handing over money for stuff you already knew.

That could say more about me than the speaker or the author, but I doubt it. I think most people are “me-too” marketers and creators which is why there is so much sameness out there. It is why HP is making a tablet and why everyone wants to be the next iPod instead of a new thing entirely.

And why everyone in the Social Media world wants to be the next Chris Brogan.

There is much more going on here than just the value of content or pricing to cost vs market value. Most people think they are pricing experts, but most aren’t. Most approach price with their head but the purchase with their hearts. The trick is finding a way to their heart before their head intervenes. If the content is good, the connections will follow and buyer’s remorse nonexistent.

Oh, yeah, how am I doing it? Price the software, stick to the price, never discount, always deliver, keep the quality high…. really, the basics you got here for free. Unless anyone wants to send me $97.00 for reading that last sentence… I’ll take a check…
http://www.dogwalkblog.com/ Rufus Dogg

There is no reason software boxes need to be as big as they are or with that extra “features” flap. There is no reason for blister packaging. Oh, yes there is: it sells more crap to more people. Smarter people than me spend years on this stuff (Paco Underhill, Carol Spieckerman @retailexpert, David Rich iccds[dot]com @davidjrich, Jerry O’Brien at the Retail institute UWisconsin and entire industries are set up for this — POP Institute, NARMS[dot]com @narms, etc.. )

I think e-books take away the packaging experience for most people. There is no box to read, no spine to run your finger along, no flap to read. People expect to be taken on the Internet (blame spam and squeeze pages for this.) After having gone to many, many workshops and conferences and bought and downloaded hundreds of e-books, I EXPECT TO BE TAKEN by an incomplete, typo-ridden, slapped together piece of crap. I expect the motivational speaker on stage will tell me nothing new about the human condition that I probably don’t already know. Sometimes I am surprised he/she does, but it happens so very rarely and almost always from someone nobody has every heard of (which is why you should always seek out new voices and quit being a groupie. No offense, Chris to you or your gro… er, I mean fans.) One gets tired of handing over money for stuff you already knew.

That could say more about me than the speaker or the author, but I doubt it. I think most people are “me-too” marketers and creators which is why there is so much sameness out there. It is why HP is making a tablet and why everyone wants to be the next iPod instead of a new thing entirely.

And why everyone in the Social Media world wants to be the next Chris Brogan.

There is much more going on here than just the value of content or pricing to cost vs market value. Most people think they are pricing experts, but most aren’t. Most approach price with their head but the purchase with their hearts. The trick is finding a way to their heart before their head intervenes. If the content is good, the connections will follow and buyer’s remorse nonexistent.

Oh, yeah, how am I doing it? Price the software, stick to the price, never discount, always deliver, keep the quality high…. really, the basics you got here for free. Unless anyone wants to send me $97.00 for reading that last sentence… I’ll take a check…
http://www.dogwalkblog.com/ Rufus Dogg

There is no reason software boxes need to be as big as they are or with that extra “features” flap. There is no reason for blister packaging. Oh, yes there is: it sells more crap to more people. Smarter people than me spend years on this stuff (Paco Underhill, Carol Spieckerman @retailexpert, David Rich iccds[dot]com @davidjrich, Jerry O’Brien at the Retail institute UWisconsin and entire industries are set up for this — POP Institute, NARMS[dot]com @narms, etc.. )

I think e-books take away the packaging experience for most people. There is no box to read, no spine to run your finger along, no flap to read. People expect to be taken on the Internet (blame spam and squeeze pages for this.) After having gone to many, many workshops and conferences and bought and downloaded hundreds of e-books, I EXPECT TO BE TAKEN by an incomplete, typo-ridden, slapped together piece of crap. I expect the motivational speaker on stage will tell me nothing new about the human condition that I probably don’t already know. Sometimes I am surprised he/she does, but it happens so very rarely and almost always from someone nobody has every heard of (which is why you should always seek out new voices and quit being a groupie. No offense, Chris to you or your gro… er, I mean fans.) One gets tired of handing over money for stuff you already knew.

That could say more about me than the speaker or the author, but I doubt it. I think most people are “me-too” marketers and creators which is why there is so much sameness out there. It is why HP is making a tablet and why everyone wants to be the next iPod instead of a new thing entirely.

And why everyone in the Social Media world wants to be the next Chris Brogan.

There is much more going on here than just the value of content or pricing to cost vs market value. Most people think they are pricing experts, but most aren’t. Most approach price with their head but the purchase with their hearts. The trick is finding a way to their heart before their head intervenes. If the content is good, the connections will follow and buyer’s remorse nonexistent.

Oh, yeah, how am I doing it? Price the software, stick to the price, never discount, always deliver, keep the quality high…. really, the basics you got here for free. Unless anyone wants to send me $97.00 for reading that last sentence… I’ll take a check…
http://bit.ly/nv_sites Nick Venturella

For the most part I agree with your post and I certainly like the idea that the created ebook has enough potential value with regard to what it’s content teaches a reader to outweigh the perceived higher cost.

However, in reference to your iTunes example, one reason I think that transition was easier for the public to grasp and wrap their head around is that iTunes took whole albums that typically cost between $10 and $15 and offered each individual song for only $0.99.

At first glance purchasing each individual song, or only the songs you really want from an album at $0.99, is cheaper than the original price of the whole album, which contains some songs you may not even want.

My point is the perceived price was lower than what the public was used to, and that decline in price perception had a positive psychological impact on consumers. What’s going on with the transition of traditional print book pricing to digital ebooks, like the ones you mention, goes a bit against the consumer psychology that now exists because of iTunes.

That’s not to say you shouldn’t go for the higher price, especially if the value the consumer gets surpasses the cost, and good on ya if folks are buying – that means your pricing gamble paid off and there’s a market for it.

http://twitter.com/ThingsBright Elizabeth Drouillard

I wonder if resource, non-fiction books could be priced this way? Where you pay for exactly the chapter you want? It seems like a lot of business, personal growth, and financial books could be priced this way. Does anyone do this yet?

http://bit.ly/nv_sites Nick Venturella

That’s a great comment…I was actually thinking of that when writing my comment. I’m working on such a project right now as a eWorkbook to my recently published book, ‘The Local Music Journey.’ Each section of the eWorkbook can stand alone and be purchased by itself, or the whole collection could be purchased with some added value at a bundled higher price than simply collecting all sections at their individual price.

Anonymous

Price versus perceived value is an odd thing. Many people still consider value solely based on price. Then of course they bitch when the product sucks. They’ve heard the phrase “you get what you pay for” but they never really think about it.
I took months to convince a client not to sell their tent for $35. They could, but it would be perceived as cheap, when it is actually an award winning product. We got them to raise the price to $85 (with a $20 credit at the store) and it worked marvels.
As far as books go: I try not to buy printed books any longer. My iPad is WAY to convenient and my wife has put her foot down on my collecting anymore books (I have a vast and space hogging collection of 50s-60s sci-fi and vampire novels). As far as digital books however, I’ve been surprised by the quality of lesser known authors (Charlie Huston’s Already Dead), but have no problem paying full price for a digital book. However, while you are paying for the content, few are naive enough to not realize that the cost of a paper book includes the overhead of printing, shipping, storing, and store markups. Digital books SHOULD be less expensive, at least by a few dollars, because of the cheaper cost in production. Or, to position it differently: paper books should be more to account for printing, shipping, etc. Besides the fact that digital books save space, paper, time and money, reducing their costs is likely to drive digital book saturation. Just among people I know I’m seeing an uptick in reading because digital books make it so much easier.
As far as asking your community about pricing, I agree: don’t do that. However, ANYONE selling ANYTHING should be doing a competitive analysis to discover what the “going rate” or costs for products in their sector are. At least then, whether you stick to those guidelines or not, at least you’re pricing based on knowledge not guesswork.
http://dannybrown.me Danny Brown

Perhaps the price point of the lower cost books are derived from market research. Can you say that the author that sold 450,000 books didn’t carry out research that showed her market were unwilling to pay more than $4 (at her top end pricing model)? So research and selling to the market are key, much more so than taking the “get what you can” mindset.

People might also look at the $9.97 price point and dismiss as more MLM junk, since that’s the common price for most of the crud that floods the market and promises to make you X amount of dollars (with the pre-requite disclaimer that income will be variable).

It all boils down to relevance; often, much more than value, perceived or real.

http://chrisbrogan.com Chris Brogan

I most definitely don’t do proper market research. No idea about young miss. I think she could’ve got more from what I observed as other related works in her genre.
http://www.mattselznick.com Matthew Wayne Selznick

By the same token, people might look at the $99 price point and dismiss it as junk that the author hopes to make the most income from before people catch on. I see an e-book priced at a dollar a page and that, unfortunately, is my first instinct. Blame Clickbank and the ubiquitous “sales page” website, I guess?

http://raulcolon.net Raul Colon

Who can I ask for a refund for the many 6 pack abs books I also came up short on.

So far everytime I have been able to consume your digital content I have received a lot of value out of it tangible and intangible. From meeting great people to making affiliate income.

I guess if we divide the book’s cost with all the content you already give for free then it looks even better.

I was trying to explain that to the owner of a modern more upscale restaurant who was pricing his plates with .95 at the end. The biggest problem is that the cents figure was really not creating value for his plates when people should be there for the experience and the great food.

http://www.dogwalkblog.com/ Rufus Dogg

Pricing for restaurant is also a whole other psychology. Many upscale restaurants publish prices like: Braised Lamb Shank 32 no $, no .95 or even .00. $ and .95 remind people of the price of the experience when it really should always remain priceless.. (I distilled that down badly, but notice it the next time out :-) )

http://raulcolon.net Raul Colon

Exactly.. it is a science… THanks for the comment.

http://blog.trushots.com Trudy

Thank you so so much for this post. I recently produced my first photography eBook and people have started to order it, and review it, which is great. However, within my industry (other photographers) some complained that eBooks that are not free or maybe .99 are a “rip.” Some even sent me DMs on Twitter suggesting that part or all of my eBook be free, when it is only $10.00. Some think that digital content = free, yet will feel utterly disrespected if someone devalues our work as photographers, and expect the work and products to be free.

This utterly surprised me because I would think that an industry that is exploited the way mine is and deal with so much “why isn’t this free” nonsense (and tons of copyright infringment) would be unanimous in the belief that good digital content may come with a price, regardless of the relative “fame” of the photographer (I’m not famous). The fact that some found value enough to not complain about the price (especially since I’ve created free content for a while now) and write fair, constructive or good reviews on it gives me hope that those who argue are only a minority.

God the timing of this post was like a “sermon” I needed to hear. I really appreciate this blog, it’s helpful to so many people. Thank you.
David Siteman Garland

Chris – Great points as always. My experience has been that pricing is extremely relative…on everything.

How much does it cost? Who cares what it is. Let’s pretend the price is $10,000. Similar to Goldilocks and the Three Bears, there will be a subset of people screaming “that is way too high”, a subset that says nothing because it is “just right” and another subset thinking they are ripping YOU off because it is “way too low”

The way I’ve done pricing on my show for sponsors is asking around a bit, doing some research and coming up with a comfortable number (that has been well-received) focusing around a $5,000-a-month sponsorship. There are packages less and more, but that is the core pricing.
http://twitter.com/LeoWid Leon Widrich

Chris, I really don’t regret that last tweet of mine yesterday. It must be magic really. It’s exactly what we are trying to figure out at the moment with our product. Personally, I just have a gut feeling that 2011 is the year that the thought, that not everything can be free online, will finally go viral. Good stuff with your posts, keep ‘em coming :)
http://www.jasonleister.com Jason Leister

Chris,

I think pricing and value are fascinating concepts.

When you’re dealing with a one man/woman operation, pricing really gets personal and is often affected by someone’s own feelings of self worth.

We’re taught to be the last ones who can properly assess our own value. And for some reason, we think that our own “value” has something to do with the value of products and services we create.

We’re taught to look outside for validation about all of that junk.

In the end, I say charge as much as the market will bear.

You don’t find that out without pushing the envelope.

Charge as much as you can get. You have no business putting a value on anything. When you try, you get all caught up in your own head junk about what something is worth or what someone is willing to pay.

The fact is, no one knows.

What people say they’ll buy and what they actually buy don’t always match up.
http://www.jasonleister.com Jason Leister

Chris,

I think pricing and value are fascinating concepts.

When you’re dealing with a one man/woman operation, pricing really gets personal and is often affected by someone’s own feelings of self worth.

We’re taught to be the last ones who can properly assess our own value. And for some reason, we think that our own “value” has something to do with the value of products and services we create.

We’re taught to look outside for validation about all of that junk.

In the end, I say charge as much as the market will bear.

You don’t find that out without pushing the envelope.

Charge as much as you can get. You have no business putting a value on anything. When you try, you get all caught up in your own head junk about what something is worth or what someone is willing to pay.

The fact is, no one knows.

What people say they’ll buy and what they actually buy don’t always match up.
http://joshmuirhead.ca Josh Muirhead

Chris, your last point about “almost buying the other book” is an excellent observation on the human condition.

I am a very passionate snowboarder/skier, and in Ontario we have a number of private hills (ski clubs that only members have access to)

And, much like you just describe, the price war isn’t to be the cheapest, in fact, it’s to be the most expensive. Why? Because cost = exclusivity, and often people like to think “there in on something that others are not”

Yes the revers is true about getting wicked deals, but that’s for another conversation

Excellent post

Josh
Dukedevil914

Let’s be straight here, ebook publishers occasionally charge exorbitant prices for books simply because they believe that kindle owners can afford it.

I suppose its not a bad concept though, the publishers control all of the output. Its not like the music, movie or television industries had ANY kind of problems when people realized they didn’t want to pay that much for content.

…OH WAIT. And by the way, if you think that books will never fall to the depths of torrenting, think again. There are already several sights delivering any book that was on the NYTimes bestseller list. for free. That’s what happens when content publishers get high-and-mighty believing they are invincible.
http://www.thehappyaccident.net Greg Pincus

Chris – I think that knowing the market you’re selling into matters, too. Selling fiction is not the same as selling products where you can easily define value (like your e-book). “I’m selling you my new novel for $10! That’s a $25 value if you bought it from a traditional publisher!” just doesn’t fly.

Could the author in question (whose story is readily available online) have made more money by selling at a higher price point? So far, the story of fiction and ebooks says no. I’d also note that selling fiction is not always about making money… or rather, about making money right then. By selling her books and creating buzz and fans, she is going to make much more money on her next book deal. A pretty good strategy in what is an incredibly difficult field.

I’d love to see you do some in depth stuff on pricing art (fiction, music, painting, etc) in the digital realm. It’s something the industry and individuals are struggling with – defining value for something that is so purely personal. Very different than products that offer clear value.

Musicman75

People will pay exorbitant amounts for INFORMATION, but prefer their entertainment be free or close to it. Art in the digital realm is going to have to be treated differently than information at this point.

Sell the art cheaply (or give it away) and charge handsomely for information on how to create art. Yes, it is more involved, but ultimately it will bring much more income.

Anonymous

This would be why Seth Godin is going digital as well. I believe it’s a chicken/egg situation for a lot of content creators out there though. Building an audience willing to buy takes reputation and you don’t build reputation without doing something.

I think you’d agree that writing a “traditional book” gives people a lot of klout, for one reason or another.

http://bit.ly/nv_sites Nick Venturella

That’s an interesting point, which hadn’t considered in my earlier comment. I’d enjoy reading various answers…

Does the purpose of your content (your reason for producing it – to build an audience and/or provide a specific niche audience value), and the size of the audience it’s presented to warrant a different pricing model?
http://chrisbrogan.com Chris Brogan

A whole other ball of wax. I wrote about price. Traditional is absolutely about clout.

Anonymous

This would be why Seth Godin is going digital as well. I believe it’s a chicken/egg situation for a lot of content creators out there though. Building an audience willing to buy takes reputation and you don’t build reputation without doing something.

I think you’d agree that writing a “traditional book” gives people a lot of klout, for one reason or another.
http://twitter.com/Drwright1 Dr. Letitia Wright

about asking the community for the price, I felt that way too but you are the only other writer I have seen say this.

Thanks
Dr. Wright
http://Twitter.com/Ed Ed

“Let them know what they can expect based on your pricing, and make damned sure you deliver”
“Let them know what they can expect based on your pricing, and make damned sure you deliver”

Do that a couple times, and you’ll be known as a Trust Agent of your own, and others products.
http://www.theherne.com Herne

Re: Digital doesn’t equal cheaper;

Consider the value of an eBook after it is read compared to a printed book. Once I’ve read an eBook, it has zero value, whereas one I’ve read a printed book I can then resell it (or give it away) and recoup some of my purchase price. I am, in essence, renting an eBook rather than purchasing it. Would I pay the full value of a U-Haul truck so that I could use it for one day to move my house? No, I will only pay a fraction of the value of that truck to use it and then I will return it.

Publishers (and authors) need to stop thinking in terms of either print OR digital and consider offering the public bundles that offer choices. I will always value an eBook much lower than a print book because I don’t own the content, however if a publisher were to offer a printed book bundled with an eBook then it would make the cost of the eBook much more palatable. Rationalizing the price of an eBook by saying, “It costs us just as much to make an eBook as a print book” is not the consumer’s problem, it’s the publisher’s problem.
http://DonnyGamble.com Donny Gamble

I think that digital content should come with higher price point because it is a lot easier to show more examples, link to other sources, and can be obtained immediately after someone orders the content.
Nick Boris

This post applies to more than just digital content. Too often the discussion for pricing goes the route of more sales, versus the value received and price paid. Great topic and writing.
Nick Boris

This post applies to more than just digital content. Too often the discussion for pricing goes the route of more sales, versus the value received and price paid. Great topic and writing.
http://www.suemiley.com Sue

Thanks for this. My marketing guy helped me price my first online products. I was uncomfortable because I know how much books sell for. His point was that the topic and view point is not available anywhere else. This gives me a little validation. Thanks again.
http://twitter.com/ElizNYC3 Elizabeth

Bravo Chris, I’ve always found that polling customers on how much they’d like to pay is a hollow endeavor, yet every brand gets attracted to trying it at some point. No matter what your brand or price point, customers inevitably tell you they want to pay 20-30% less than what you’re already selling (often successfully) for. I’d be interested to hear if anyone has found a way to make that “how much would you be willing to pay?” question work for actionable insights.

Pricing Digital Content

Digital Doesn’t Equal Cheaper

Low Price Triggers Worries of Perceived Low Value

Never Ask Your Community For Pricing Advice

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