As a concept it takes a bit of understanding. On the face of it, it doesn’t seem to make good business sense at all. But for the sake of sitting down and thinking it through for ten minutes it could make you a lot of money. In fact, this clever little concept could help you double your profits from your information publishing business!
You see, once you have a product successfully up and running – whether it be a book, newsletter, course, membership website, seminar business, anything really, you should seriously think about creating a premium version of it. A version that is not just more expensive, but much more expensive.
More expensive you’re asking? How can that possibly make sense? Okay, so you’ve done pretty well with your product. But maybe it’s been a bit of a struggle to shift it off the shelves. How can I get away with charging more for a premium version of pretty much the same thing?
Well the truth is that you can! With any product you care to name there will always be a proportion of affluent, discerning customers for whom it is too cheap. They will gladly pay a lot more. In fact, these people could be laughing at you right now for selling your product so cheaply!
Experts are divided on this, so don’t quote me. But a good rule of thumb is the one-third rule. In other words, with any given product, a third of your customers will think the price is about right. A third will think it is a bit dear. And a third will think it is too cheap. So put in those terms, can you see what scope there is for turbocharging your profits by producing a premium version of your product at a higher price?
How much higher might the price of your premium version be? Well, again, experts are divided on this but in general terms your premium version could sell for two to three times the cost of your basic version! Lots of successful companies do this: Microsoft have at least five versions of their Windows Vista Software. The ‘Ultimate‘ version is typically more than double the cost of the ‘Home Basic‘ version — for much the same thing. In the motoring world, the Volvo V50 is essentially a premium version of the Ford Focus estate car. But while you can pick up the cheapest Focus for under £13,000 the premium Volvo costs over £25,000!
Clever stuff indeed. And if they can do it, so can you! For a little bit of effort you can make a lot more cash. That’s what I call smart! And the fact is, once you’re established and known as an expert in your subject it’s actually very easy to do. People will know about you and will be happy to pay more for your premium information. In fact they will expect to!