This Is Why Pricing Your Services Is So Critically Important!
You know a lot of your initial front or long term back end gross profits. Will ultimately be determined by “how” effectively you or your major competitors go about strategically pricing your services or products. Correct?
And this part of your long term marketing or promotional strategy definitely depends on whether or not you currently have any type of reliable back end profit producing component to your business or service. Agreed?
Because clearly, if you or your major competitors have a reliable back end component to your business or service. It definitely makes sense for you to promote, advertise or market your products or services in a far more proactive way. As you’re about to discover.
Have a much closer look at the long term, potentially untapped marketing or promotional opportunities. And you be the ultimate judge. Fair enough?
So How Do You Price A Service?
Well first of all. (If nothing else.)You or your major competitors. You can definitely use standard conventional methods. And simply calculate all of your relevant hard costs. (Reasonable estimates will definitely work here.)
And multiply this figure by your current or future desired gross front or back end gross profit margins. And after determining this figure. Add this gross amount to your current or future costs. And you’re probably at least in the general ball park.
On the other hand. Sadly far too many aspiring entrepreneurs seem. To either neglect or totally ignore altogether. This exact same marketing dynamic. When it comes to deciding on which particular services to invest your extremely hard money in. Huh?
Don’t Forget Or Neglect How Or Why Companies Or Services Providers Need To Charge Premium Prices For Their Excellent Products Or Services!
Case in point. For just a moment. Stop and consider the sort of common pricing practices. Of at least 60-85% of the top. Reputable, paid email service providers.
Here is a general look at the sort of standard pricing structure. Quite a few of the most reputable, paid email service providers currently use. Including Aweber, my current paid email service provider of choice.
(Important note: You have to fully take into account. All of your current and future paid email service providers needs. And decide on whichever paid email service provider. You or your organization needs the most. Obviously the more complex your current and future needs. Especially as your business or service constantly evolves and grows.
The more you can expect to pay.) This being said. Typically most of the reputable paid email service providers. Who’ve been on the scene for while. And developed some serious marketing and reliability cred.
Here’s how the vast majority of them. (Certainly not all by any stretch of your marketing imagination.) Tend to price their services. You and I pay X per month, quarter or per year. Up to your first 500 or X number of opt in subscribers.
Then once your subscriber base exceeds 2,500 they raise it again to X.
Don’t Forget Or Neglect the Fact There’s All Types Of Built In Profit Centers In Your Pricing Structure! (And Specific Reasons For Being So!)
There’s a very successful entrepreneur who readily comes to mind. With regards to providing paid email services and products. Ever hear of trafficwave.net? It was originally co founded by Brian Rooney and Stephen Hambright in the year 2000. (Not an affiliate link BTW.)
Trafficwave’s current price structure is an initial, (flat rate) fixed cost of just $17.95 per month. No matter how large your subscriber base grows. Say what?
The primary reason being. Brian earns the vast majority of the companies long term gross profits on the strategically built back end of their service. Huh?
So Brian, (along with other extremely savvy marketers in other industries.) Is more than content to extend fixed pricing on the initial front end of his service-s businesses price structure. And bank on converting a certain percentage of his paid subscribers into active affiliate marketers. And earn a whole lot more than $17.95 per month per subscriber.
In fact. Anytime you can leverage your initial front end costs. And net a ton of additional gross profit on the long term back end of your sales funnel. You or your top JV (Joint Venture) partner or cross promotional partners.
Should at least test doing so. (BTW, do you see a potentially profitable JV arrangement staring you in the face? If not, you will coming very shortly in part two. So please stay tuned.)
There’s Definitely More To Your Long Term Pricing Structure Than Is Readily Obvious!
Case in point. Aweber and other comparable email service providers generally increases their initial monthly, quarterly or annual rate. The moment your/our subscriber base exceeds 500. And while other services may not. It may not seem obvious.
The long term benefits you continually receive. As a direct result of them doing so. Say what? Case in point.
First of all. As a paid subscriber. You and I can call their toll free number. Anytime during the typical business week. Meaning M-Fri. From 8 am to 8 pm EST (Eastern Standard Time.)
Or what’s sometimes referred to as New York time. The point being. Both the available customer care expert representatives and the toll free number costs money. Correct? Absolutely.
And each time you or I call. These highly trained and extremely knowledgeable reps. Do not place any time limits on “how” long you or I can remain on the call. (Think about that far too often overlooked or totally ignored benefit for just a moment.)
For just a moment. Think about paying the $2,000 dollar an hour. One incredibly successful and fairly high profile online marketing expert currently receives for an hours worth of their, extremely valuable one on one consulting time.
Be Darn Sure You Keep Things In Their Proper Perspective!
At that rate. Or even half of that rate. How many times a week, month, quarter or year. Could you afford to access their proven expertise? Bingo. Even if an expert charges half that rate. And provided you were consistently doubling your money based on their expert advice.
If it cost you half or $1,000 dollars per hour. How often would you be willing to invest so much to access them? On the other hand. Aweber doesn’t charge you or I a nickel more for accessing, all of their current software functionality.
Like unrestricted access to than landing page builder software. Granted it’s nowhere near robust as say OptimizePress. But you can call their tool free number. As often as you like.
And one of their highly trained customer care experts. Will gladly walk you through each step of using it effectively. At no additional cost.
And when you and Aweber-s other 120,000 plus paid subscribers call their toll free number. You’ll quickly have your call professionally answered. Or if all of their associates are currently in some sort of company meeting. Which may be the case less than one percent of the time. You can simply leave your message and return number.
Top Flight Customer Service Is A Proven Marketing Tool And Bank Account Filling Strategy!
And they’ll quickly get back to you. Once their meeting or whatever is over. The point being. Rarely if ever.
Will you or your major competitors call their toll free number. M-F, 8 am – 8 pm EST. And not get an actual live. Professionally trained customer care service expert rep to speak with.
Even though Aweber currently states they have in excess of 120,000 paid subscribers worldwide. They are able to successfully manage and further grow their customer base.
And part of the obvious reason why is. Because they gradually increase their paid subscribers rates. As their subscribers steadily grow their subscriber base.
Otherwise. Aweber along with the other reputable, paid email service providers. Are constantly able to add new and dramatically improved products and services. So -please- don’t let anyone kid you about “why” pricing your services or products isn’t an important marketing consideration. Because it most certainly is.
Sometimes You Can Price Yourself Right Out Of Some Long Term Gross Front Or Back End Profits!
P.S. Now as is customary during this part of our show. Please share your extremely valuable comments (in the comments section below)
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