Learning how to price digital products in your creator store is one of the most important growth levers in a creator’s toolbox. Here’s why:
Selling anything online is impressive. You have created something unique through a mix of your knowledge, resourcefulness, experience, hard work, and creativity—that other people are willing to fork over their hard earned dollars to pay for. That’s no small feat.
Now you’re going to exchange the value you’ve created for some monetary amount. And here’s the thing: you get to decide what that price is!
But rather than just slapping the highest (or lowest) price on your item and calling it a day, you can be strategic about your pricing to drive more sales, higher loyalty, and greater long-term fan engagement. It’s an opportunity to really market the unique value that you’re creating for your fans.
Here are the best pricing strategies for creators, with pros and cons to determine which strategy is the right one for you.
Pricing = perception
First things first—why does pricing matter? At a high level, pricing experts say that price lets your customers know whether something is worth their time and effort.
Now, you may be thinking, “it’s just a number, it’s not that deep.” But the data shows how powerful pricing really is: Shopify’s 2022 Future of Commerce Report found that pricing is a key factor influencing 74% of consumers.
The price of your items helps your customers understand how much they should value that item. It can also help shape loyalty and purchasing behavior. For these reasons you should consider pricing an important part of the way your fans perceive your items and your store. It’s not just economics—it’s also marketing!
Choosing the right pricing strategy depends on your goals for your store. These three strategies help creators balance making money, marketing their items, and driving long-term fan engagement:
- Value-based pricing
- Tripwire pricing
- Offering a free product
Let’s break down the pros and cons of each, with real examples of how you can implement these strategies as a creator.
Value-based pricing helps set higher prices
Pricing your items by the value they offer to the buyer, rather than the cost of your own time, materials, and/or labor, is the best way to optimize for your total earnings. Value-based pricing often allows you to set higher prices off the bat, especially for products that don’t take a lot of incremental time or effort.
It’s normal to try to back into your prices by thinking about the total revenue you want to make from your online store, or how much you want to charge for the time you put into creating your product. These are valuable data points, but if you truly want to implement value-based pricing, the following considerations can help you increase your prices for marquee products:
- Scarcity: How easy is it for buyers to find and purchase this product from other source? If you’re offering something that is rare or difficult to find, this allows you to price higher.
- Differentiation: How is the item you’re offering different or better than other options? Finding ways to differentiate your products, and communicating this to buyers, will give you leverage and will increase buyers’ willingness to pay for your product.
- Market prices and competition: How much do others charge for similar products that sell well? Look for creators who sell similar items and see how they price those items. This should give you a sense of the market’s willingness to pay for similar types of products.
For example, creator @DessVictoria offers two digital products for content creators in her Beacons Store, and prices them differently according to the value they offer fans. The Content Creator eBook/Mentorship program is priced higher at $65 because it offers more for buyers, including mentorship from the creator herself. There’s a factor of scarcity (the creator’s time) and differentiation (her unique expertise). The Weekly Video Planner, priced at $12, is less in depth and interactive, so its lower price reflects less differentiated value.
How do you decide if value-based pricing is right for you? Here are the high level pros and cons:
- Pros: Allows you to set higher prices, fully capture the unique value you’re offering with your products to your audience, ensures you’re not leaving any money on the table
- Cons: Takes more time to do research on competition and customer purchasing behavior
Tripwire pricing attracts new customers
We’ve probably all fallen prey to tripwire pricing at some point: you see a deal that just seems too good to be true and quickly checkout, before you’ve really thought through whether you need a certain item.
The strategy behind tripwire pricing, or setting “great deals” that seem crazy to refuse, is to encourage buyers to act quickly and grab a generous deal before it’s gone. Creating a lower-priced alternative to a more expensive product drives sales.
For example, creator @Lauren_Bulloch offers several items in her Beacons Store—and one of them is just $2. The $2 item is a worksheet, which helps fans engage with the ideas she talks about in her content. The fans that use the worksheet and get value from it will be primed to buy some of her more expensive items, like her workbooks and guides.
The setup in this creator’s store also taps into another pricing strategy—anchoring. This is the practice of establishing a price point that customers can refer to when they make purchasing decisions. Because this creator lists her more expensive items ($11) first, by the time a potential buyer scrolls down to the $2 item, it sounds like even more of a deal by comparison.
Tripwire pricing is effective at attracting new customers and driving number of sales. It won’t help you make the most money you can on any one item, but it can help you build a loyal base of users who feel comfortable checking out on your site and convert into buyers of higher-priced items down the road, and become integrated into your marketing funnel to receive follow-up emails, promotions, etc.
This is because your tripwire items acts as a proof-of-concept to your buyers. As long as the value for this item is strong and warrants further purchases, you show buyers that you can deliver on what they want.
Here are the pros and cons of tripwire pricing to help you evaluate if it’s a good strategy for you:
- Pros: Easy to attract new customers and optimize for driving sales, likely to attract buyers who will purchase more in the future
- Cons: Doesn’t optimize for making the most money per item that you possibly can make
Free products provide samples of value
Who doesn’t love a free sample?
Free products should be used to attract buyers to your online store. These are free downloads that might be simpler or in some way less valuable than the products you are charging for. For example, you might sell a bundle of Notion templates, but offer one template as a free sample.
Here’s a great example - creator @ScholarshipGuru does this really effectively by offering a free book preview for her eBook. She sells her eBook through her Beacons Link in Bio page, but includes a free preview to help potential buyers get some value for free and understand what will be included in the eBook if they choose to purchase it.
Telling your fans about the free product is a good way to drive traffic and attention to your store. Additionally, free items allow fans to sample your product, which improves buyer confidence and helps potential buyers ultimately make a decision to purchase. A study on consumer brands found that the brands who offered something for free ultimately had higher purchase rates than those who didn’t.
Would you benefit from offering a free item? Here’s a summary of the pros and cons for this strategy:
- Pros: Drive traffic and awareness to your store, allow fans to “sample” your content before committing to a purchase
- Cons: Doesn’t generate any revenue for certain items, need to have a preview or sample of an item that you are willing to give away for free
Pricing isn’t static—experiment with how to price digital products
The biggest mistake you can make with your pricing is to set prices one time and never change them. You can always edit your prices—especially with a flexible selling platform like the Beacons Store where it’s easy to edit your item details. Don’t be afraid to start with one strategy and change it over time!
You can learn so much from adjusting the price of your items and you learn how to price digital products in your store. Be intentional with how you experiment. Keep your goal in mind and price your items based on your goals for your store, whether that is maximizing revenue, driving number of sales, or boosting awareness.