When (and When NOT) to Charge for Your Info ProductsOne of my clients recently asked me whether she should charge for a series of tip sheets she created for families traveling with young children. Great question.
There's quite a bit of confusion around whether you should sell or give away your information products. About half the advice I hear favors giving information away for free. The other half favors charging.
The truth is, sometimes you should give information and resources away and sometimes you should sell them. The real question is WHEN to charge and when not to.
In this article, I'll give you some guidelines around when to charge and when to give information away.
Asking where your business is at and what you need to be successful is a great place to begin.
Every business needs customers, right? So let's look at how strangers become customers. They go through three stages:
~ Stage One: Visibility (V)
To become a customer a person first needs to know your product exists. You become visible by getting your product and marketing message in front of people who fit your ideal customer description.
~ Stage Two: Credibility (C)
Knowing that your product exists is usually not enough to get someone to pay cold hard cash for it. Nope, they're thinking "well, that sounds good but how do I know it will really work?"
During the Credibility stage you need to give them information that demonstrates your product will deliver as promised.
~ Stage Three: Profitability (P)
Once your prospect is convinced that your product will, indeed, deliver the promised value, they will pay you and become a customer.
Picture a funnel with lots of people coming in the widest part (visibility), a percentage sticking around to learn more (credibility), and a percentage of those who stick around becoming customers (profitability).
At any given time in the life of your business, there are people at different stages of becoming customers. Some are learning about you for the first time, some are checking you out to decide whether they will buy, and some are deciding to buy and paying you.
Ideally, you have a steady stream of people constantly entering and moving through the funnel. If they don't enter or don't continue through, you have a problem and it shows up in your bottom line: You don't have enough paying customers.
To decide whether or not to charge for an information product, I suggest you take a look at how many people are at each of the three stages.
Your goal is to use information products as an incentive for prospects and customers to take the next step.
~ When You Need More Visibility
If you're just starting your business or you want to enter a new market, you probably need more visibility. You need people to know your product exists.
When visibility is your goal, I recommend you give something away that provides value and introduces people to your product or service.
Why? The goal for visibility is to answer the following questions:
1. What is it ("it" being your product or service)
2. Does it help someone like me?
You want to give something away that will answer these questions while asking for something minimal from the prospect.
A common example is offering a free Ezine subscription or a free report your prospects can download in exchange for their E-mail address or phone number.
~ When You Need More Credibility
Credibility is an issue when you're getting a lot of first time visitors and inquiries but not enough are coming back.
For most products and services, people need repeated demonstrations of what you can do for them. They need to trust you.
When you are building credibility, I suggest you have two information products: one that is free and one that you sell.
1. A free product that allows you to build a relationship with your prospects. Products like Ezines are great because you get a chance to connect with customers once a month or more.
2. Product you charge for which offers a higher level of customer value.
Ideally, this is a "no brainer" purchase. Something for which the value is so obvious for what you're charging that most people don't need to think too long or hard about whether to buy.
Although you will be making some money, the real purpose is to demonstrate credibility and build trust.
Warning: The biggest complaint I hear is when someone offers a free report or one-hour teleclass that turns out to be little more than a sales pitch.
Again, you are creating value and building trust. Doing both will enable you to convert more prospects to paying customers when the opportunity presents itself.
A sneaky sales pitch will undermine the trust you are trying to build.
~ If You Need More Profitability
If you have a large, loyal base of readers, subscribers, or members who have been hanging out with you for several months and like what they're getting, some of them will want to invest some serious time and money for your focused time and attention.
For example, a consultant I know sends out a free monthly Ezine to her mailing list and sells low cost Tip Sheets, Checklists, and so on.
Each month 3-5 of her subscribers contact her to learn more about her workshops and seminars costing $500+. She usually books 6 to 8 engagements this way each year.
She explained it to me like this, "I try to provide something useful that my readers can apply right away. For example, I sell a $5.00 meeting organizer they can use to have more productive meetings. Sometimes this is all they need."
"But sometimes they're in a situation that goes way beyond the DIY stage. They need someone from outside the company to step in and help them set up a new system or to help them hire a new executive."
Allowing your prospects to upgrade (or escalate) and get a higher level of support is not only profitable, it's how you can really serve your clients.
Whether or not to charge for your information products depends on what your business needs in terms of developing customer relationships.
The less known you are to people fitting your ideal customer profile, the more important it is to offer free or low cost information products which provide something of value.
As you build trust and as your prospects learn how you can help them, you can offer more expensive, higher commitment products for those who want (and can afford) them.