Less equals more. We hear that phrase quite often, but what does it really mean? It certainly doesn’t mean that I get richer when my bank account gets closer to zero.
I recently performed an experiment which proves that less can indeed equal more.
For years, I’ve sold a self-development course based on the Keys To Power system for $49 (http://www.KeysToPower.com). Over that time, I have sold about 250 copies of that course and made over $10,000. Imagine my surprise to find out that most authors never make any money from their first book, or even their fifth!
Anyways, the sales letter on the site had been converting about 1.25% of all visitors to purchasers, which is a fairly decent average, especially in the metaphysical field. With an average traffic flow of about 1400 visitors per month, that website put a fair amount of money into my back account.
Over the past few weeks, I’ve been looking into the publishing industry and thinking about getting a book published in the ‘real world’ and placed into bookstores.
In normal publishing, authors generally get only about $2 per book sold or less. Even in ‘traditional’ e-publishing (ebooks sold by established publishing houses), authors don’t make much per book sold since the ebooks are generally sold for something between $3 and $12.
It was after looking at Amazon.com and seeing how easy it would be to have my books sold there that I decided to do a test. What would happen if my core product were priced at only $10 instead of the reasonable $49?
So I quick edited my website, wrote up an announcement, and broadcast it to my mailing list of 1997 subscribers.
Within hours, the sales started pouring in! What really made me sit up and take notice was that the previous 2 weeks had been almost dead – no sales at all! Now the sales were sprouting like magic mushrooms in the faery forest.
A few days into the test, one of my affiliates announced the sale to his list of subscribers. This created a bit of a problem, since the test wasn’t set up on the affiliate sales page. But a quick edit later, and his subscribers were able to get in on the deal and he was able to earn commissions from the referrals.
At this point, I felt like I had just performed a magic rain dance and created the storm of all time. It was like riding a roller coaster – very fast and way cool.
One week after starting the test, and I’ve made more money than I usually made in a month! The sales page that had been converting only 1.25% was now converting at least 17% for my affiliates and about 26% for my list.
Now, for the numbers. Don’t worry, I’m just going to hit the highlights.
Let’s say that I set the ‘regular’ price of the ebook to $15, only $5 more than the sale price but $34 less than the old price. Conversions shouldn’t drop off too much. But for the sake of argument, less say that they drop by half. So instead of 17% of visitors deciding to purchase, only 8.5% purchase.
At the old price of $49, my affiliates earned about $26.50 per sale. Since the website converted about 1.25% of visitors to sales, that means that the average visitor was worth about $0.33 to my affiliates.
At the new price of $15, my affiliates earn about $7.40 per sale. At a conversion rate of 8.5%, the average visitor is worth about $0.63, or almost twice as much!
So, a lower price equals more commissions earned. LESS = MORE.
That will make my affiliates very happy. Me too, since I also earn more per visitor than I used to.
The lesson here is to not be afraid of selling low cost products. They could easily earn you more money for your efforts.
Editor’s Note: The above article reported results within the first month or so into the low-price test. Since that time, sales dropped to a point where it made more sense to raise the price again. The lesson learned here was that low prices make good sense for short periods of time, but not as a permanent strategy.