Price Your ClickBank Products for Maximum Profit

Home
>
Pay-Per-Click Advertising
>
Price Your ClickBank Products for Maximum Profit

Price Your ClickBank Products for Maximum Profit

Choosing the right price for your digital products is one of the most critical, yet difficult, aspects of your business strategy.

Most merchants understand that over-valuing a product kills sales. It is also fairly well understood that under-pricing cuts the unit revenue without any guarantee of a significant gain in sales volume. But few people are aware of a third (but equally important) pricing observation; that compromise pricing can be as harmful as either of the other two blunders.

To understand why this is the case, we need to examine the principles that lie behind effective pricing strategy. In general, merchants adopt one of two key philosophies when they price a product. They either set the price at a low level (which produces a low margin but high sales volume), or they choose a high price level (which trades off volume in order to gain margin).

These two approaches are known respectively as "penetration pricing" and "pricing for profit." The former strategy is typically used by new competitors in a market, or by existing retailers that need to quickly establish a position of dominance after a product launch. The latter technique is favored by established businesses with mature products, where the objective is to earn the maximum profit yield from an existing dominant market position.

It is clear that, whether the strategy is to price low or high, going too far in either direction can be self-defeating. But mid-way pricing is equally ineffective, as it compromises both strategies; it unnecessarily discounts the product without doing so sufficiently to generate a significant improvement in volume.

As a vendor of digital merchandise, you are at a distinct advantage over traditional merchants, since there are no marginal costs associated with your business. Regardless of how low you choose to price your product, you are still guaranteed to show a gross profit on every sale. In contrast, a merchant of physical goods has real fulfillment costs (product manufacturing, damaged and unsold inventory, storage, shipping and handling) that impose a fixed lower price limit below which each sale represents a loss. This advantage affords you great flexibility in your pricing, but even if you use this flexibility to pursue a penetration pricing strategy, you should still be aware of the risk of counter-productive price-cutting.

Some ClickBank merchants use an experimental approach to pricing. Their aim is to establish the most profitable price through trial an error. Although this is understandable, even logical, it can be a customer-relations nightmare. You should think carefully before over-pricing a product and subsequently being forced to reduce the price in order to stimulate demand. Nobody likes to return to a website and see that a product they already purchased is now being offered at a lower price.

The opposite approach is to steadily increase prices from a low level, and is usually less of a cause for concern. Some merchants launch their products with a deliberately low introductory price - a benefit that they emphasize in their sales pitch. The time-limited, or volume-limited, nature of this technique can be a powerful incentive to buy, and it also allows the merchant a trial period in which to observe sales behavior before setting a definitive price to meet his longer-term strategic objectives.

About The Author

Tim Coulter is a consultant and software developer who helps netpreneurs to harness marketing technologies.

He is also the author of "ClickBank - The Definitive Guide" The Ultimate ClickBank Tutorial & Reference Manual.

http://www.clickbankrevealed.com/

In The News:

An Introduction To Paid Search Conversion Tracking
Search Engine Land (blog)
Or, if a user is searching on a topic and happen to be drawn to your site, only to buy later, that's a good use of PPC advertising as well. ...

PR-inside.com (press release)
Where Search Meets Social: Integrating Social Media into Organic and Paid ...
B2C Marketing Insider (blog)
Similarly, social media can be utilized to explore special offers to be incorporated into PPC text ads and landing pages. For example, research could ...
What is search engine marketing?Helium
Internet Marketing for the IP SavvyTelecom Reseller (press release)
PromotionWorld Names Medium Blue Search Engine Marketing the Number One SEO ...PR Web (press release)

all 46 news articles »

Impact Media (blog)
Comparing Google Adsense and Google Adwords
Helium
Such advertising is called Pay Per Click, or PPC. Advertising prices are based on the value of the keywords used in a campaign. ...
PPC Management Software Provider Acquisio Joins Google Preferred AdWords API ...PR Web (press release)
Web Marketing Workshop in Sydney Achieves Google AdWords Certified Partner StatusThe Open Press (press release)
PPC Management Software Provider Acquisio Joins Google Preferred AdWords API ...Benzinga

all 19 news articles »

Impact Media (blog)
Affordable Seo Company UK
Business Urls (blog)
WÐµ Ð°rÐµ proficient Ñ–n many forms Î¿f online marketing Ð°nÔ specialize Ñ–n Affordable Search Engine Optimization (SEO), Pay Per Click advertising (PPC), ...
SMX East Super Early Bird Rates Expire Tomorrow July 30 â€“ Register Now!Search Engine Land (blog)

all 32 news articles »

Daydreaming About Paid Search: How About Airtight Ad Groups?
Search Engine Land (blog)
As I wrote in Rich Stokes' new book, â€œUltimate Guide to Pay Per Click Advertisingâ€ you can use negative keywords both to keep search queries from matching ...

TechShout! (blog)
Bing algorithm tests go live in Yahoo! Search
Vertical Leap News (press release)
Search engine optimisation and PPC advertising for Bing will, for the first time, start to have an effect on Yahoo!'s SERPs as the 'Search Alliance' ...
Blueglass LA Session: Marketing Strategy: Don't forget searchSearch Engine Journal

all 143 news articles »

PR Web (press release)
PPC Training - New Customized AdWords Training Courses
PR Web (press release)
How, through ppc advertising, they can reach, engage with, and convert their target markets. "They will learn how to develop the PPC strategy that's just ...
Search Marketing Goes Real-Time with UK Start-upPR Web (press release)

all 5 news articles »

Tricks on how to cash in on Internet marketing quickly
Helium
The website was using PPC (Pay Per click) advertising. By lousy content, he meant content that was written from the search engine spiders only. ...

Online Social Media (blog)
Social Media Marketing Integration Strategies: SEO and PPC
Online Social Media (blog)
... what Kent Lewis is saying on b2cmarketinginsider.com, you need to understand that SEO is Search Engine Optimisation, PPC is pay per click advertising, ...

The Next Web
Trada goes big with $5.75 mm in new funding. Here's where it will be spent.
The Next Web
Trada's entire business relies on knowing the best locations to serve ads, the words to use in them and understanding emerging markets for PPC display ...
Got Google (Ventures)?Enterprise Irregulars (blog)
Google Funds PPC AgencyLost Press Marketing (blog)

all 43 news articles »

Google News

Price Your ClickBank Products for Maximum Profit

Pay-Per-Click Advertising Pay-Per-Click Advertising