Perceived value and the price that’s right

I have recently released my first online course “Javascript the beginners guide” on Udemy and the initial flurry of students taking my course was encouraging. However, to be strictly honest a reasonable proportion of the pupils are as a result of issuing a discount coupon and in the very early stages this was a completely free offer.

It is part of the common sales practice to offer something for free or heavily discounted to get the initial momentum and raise the profile of a new entry in the marketplace. This also acts as a reward for the early adopters of any product and this phase of the sales process is most definitely the easier phase, after all, why wouldn’t you want something for nothing?

The trickier subsequent phase is tweaking the price to both maintain custom and perceived value. If an item is pitched too low then early engagement activity is likely to be higher at least to the point of signing up for the course, however the lower the perceived value of a course the higher the risk a student won’t even start let alone complete the course. With a low value item there is a higher risk “exercise bike syndrome” might take hold. If on the other hand I priced my course too high then the traditional value judgement factors tend to kick-in, the individual’s budget constraints will take precedence and purchase interest is lost.

Interestingly this higher price cut-off does not always apply. Often a premium priced item has to be pitched at extortionate levels in order to remain part of the perceived premier league products. In fact part of the reason customers make the purchase is because it is so highly priced. If and when questioned as to why they bought said item, the victim of such marketing psychology will vigorously defend their decision to buy, in order to not loose face and even convince themselves it was a good decision, which just perpetuates the sales process.

Sales if most definitely a balance of art and science, it is not a simple affair by any means and requires a lot of experimentation and insight. Something I am hopefully getting to grips with and it will no doubt become a much larger part of my life if I am to succeed.

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