Ghost pricing is where your raise the perceived value of your entire product line by creating contrast. Let me show you how you can increase your product pricing and still make more money…
Let’s say that you have a product line. Your most expensive product is $197, and the basic version of your flagship product is $97.
You would like to increase your premium product’s price to $500 – $1000, and you would like to shift more units over the course of a month.
What you need to do is create another, much higher end product – that is based on your flagship product (people don’t actually have to buy it), but with a much higher price. It could be consulting, a workshop, coaching, etc.
Set the price of this new product WAY above your current prices. If your most expensive product is $200, then this new product should be $5,000 or $10,000, $25k, etc. Much, much higher.
You then promote your high end product… and offer the original flagship product at 10% or 20% of your most expensive product.
So in this case, the context is set like this:
Your information is worth $10,000, but if customers are willing to apply the ideas themselves, they can have the “manual” or “software without bells and whistles” for $500.
Or, if they only need basic functionality, they can have the basic version for $197.
How Affiliates Can Use Ghost Pricing
I have done a few affiliate promotions in the last two years with one of my friend, and we nailed it every time because of our bonuses.
People want my bonuses more than the actual product I’m promoting. I position it so that the bonus has more value than the actual product I’m promoting (by setting a higher price first of all). My sales pitch focuses on how the bonus enhances the merchant’s product.
You can increase the value of your bonuses, and your conversion rate on affiliate promotions by using this ghost pricing strategy. Create a high end coaching program, workshop, software program, etc and use that to create context.
Then create a basic version of the most essential information, compiled into a PDF and set the price to double the merchant’s price so that you bonus has a higher value that the thing you are promoting.
You can then offer that as an enhancement to your affiliate offers.
The most powerful offer known to man.
Present your offer this way to the right target market… and those people will find it more difficult to say NO than to say YES.
Imagine you are selling an info product for $77.
First scenario is a basic salesletter.
AdWords –> Salesletter.
Assume that you have a nicely targeted offer with a good salesletter, and you get a 2% conversion rate.
You earn $154 ($77 x 2) for every 100 visitors in this scenario. That is gross revenue before costs – and without considering the backend or lifetime value.
So each visitor is worth $1.54 gross.
Now consider the same product, same price… but with a different offer.
A variation of Gary Halbert’s “Post date your check 30 days” guarantee… where you make it more logical to say ‘YES’ than to say ‘NO’ (by offering)
Your prospects get the chance to experience your product before they buy it.
If you ever need to bargain with an informal street vendor, stick the money you are willing to pay in their hands. They will not want to give it back once they have it in hand. It’s the same concept with this trial offer. Look up Robert Cialdini’s “commitment and consistency” principle for a more detailed explanation of why this works.
Sp let’s imagine instead of charging an upfront fee, you allow people to access your content for $3.95… and then pay $77 seven days later if they want to continue. (Clickbank’s minimum transaction size is $3.95.)
Your numbers would stack up like this if you get a 20% response to your trial offer, and a 10% renewal (90% cancelation).
For every 100 visitors you would get…
1. 20 trials @ $3.95 = $79 revenue
2. 10 trials x 20% renewal = 2 Paying customers. So $77 x 2 = $154
That comes to $233 for every 100 visitors. So each unique visitor is worth $2.33 in this scenario.
Everything is exactly the same, except the way the offer is presented.
There is quite simply NOTHING that works as well as this.
Halbert’s most effective offer + Cialdini’s most underrated “persuasion principle” = Unstoppable money making machine