SSK #17: How to price your first online course, group program or a new service. A comprehensive guide.
Read time: 7 minutes.
- Sell your beta launch at a premium-price level instead of low-price launch, following the Beta Tesla Pricing Maximizer framework
- Get your clients amazing results
- Leverage the case studies and testimonials in your marketing and sales for future launches
- Use the profits from the premium-launch to grow your business
I will be building my next program "in public" sharing all steps - from ideation to creation to selling. Stay tuned and follow me to create yours!
Understanding Beta Launches
What is a Beta Launch?
A beta launch is a preliminary release of a new service (such as a group coaching program) to a select group of people before a full-scale public launch. It's a strategic phase in the development of a service where the offering is tested in a real-world scenario but within a controlled environment. This phase is critical for gathering insights, fine-tuning the service, and making adjustments based on actual user experience.
Purpose of a Beta Launch
- Feedback Collection: Direct feedback from initial users helps identify strengths and areas for improvement.
- Value Validation: It tests whether the service or program delivers value to the customers and lives up to its promises.
- Market Testing: The beta launch acts as a litmus test for the service’s market viability and appeal.
Conducting a Beta Launch for Services and Coaching
- Select Your Beta Group: Choose participants who represent your target market and are likely to provide constructive feedback.
- Set Expectations: Clearly communicate that the service is in its beta phase and that participants will play a role in its refinement.
- Offer Incentives: Beta testers are often given discounted rates or additional perks in exchange for their participation and feedback. More on it - and why discounting your beta release is a mistake - below
The Role of Pricing in a Beta Launch
Pricing during a beta launch is not merely about making a profit; it's about placing a value on the service and validating its worth in the eyes of consumers. The price set during the beta phase can influence the perceived value of the service and set the stage for post-launch pricing.
After the beta phase, service providers analyze the data and feedback to make necessary adjustments. These can include changes to the service content, delivery format, support structures, and, importantly, the pricing model based on the perceived value and the cost of delivery.
Traditional Beta Pricing: A Mistake
Traditionally, companies have relied on low-cost beta pricing to attract early adopters. This approach is designed to minimize barriers, gather feedback, and generate initial buzz around your product.
- Value Perception: A price too low might lead consumers to question the quality.
- Impact: when customers pay a low price they don't put the effort into execution, and -as a result - your service, online course or group program will not have the impact you're hoping for. No impact = no results = your clients won't spread the word about you
- Profit Margins: Initial profitability can be slim, making it hard to fund future development, as well as growth of your business. Let's say you price your beta at $150 and sell 10 spots of a program that lasts 6 weeks. 6 weeks of work, for $900 total. That doesn't sound like a good deal and doesn't leave much cash to invest in growth of your business.
- Mindset: When you charge a low price, you might resent your clients when they start asking you questions or "asking for more" attention.
The Premium Beta Pricing Model: The Way To Go.
I have an alternative approach to low-priced launches, that has worked wonders for my and my clients' launches: starting with a premium price. This strategy isn't just about exclusivity; it's about positioning your product as a high-value proposition from the get-go. I follow a strategy I came up with the "Beta Tesla Pricing Maximizer"
- Brand Positioning: It establishes your product as a premium offering.
- Impact: You charge high price, your customers are more motivated to implement what you suggest and get results. This automatically translates into how impactful your service is and - in result - your client will spread the word about you, increasing your future profits
- Profit Margins: Higher prices translate to better margins and more money for reinvestment and growth. Now let's say you priced your beta at $1,500 or $5,000 (which is something I often do) and you sold 10 spots. This time - in comparison to low-priced beta, you made between $15,000 and $50,000. Not a bad payout for 6 weeks of work and lots of money to invest in growth.
- Quality Feedback: Premium customers are often more engaged and provide richer insights.
- Mindset: You made money, you're excited and feel like you can conquer the world.
Reasons and Price Justification:
- Depth of work: During beta, you will work closely with your clients, giving them a lot of attention and hands-on support
- Intimacy: You will work with a small fraction of your audience, ensuring they get the results they're after. This level of intimacy is rarely seen outside of the beta.
- Results: With all the help and attention you're providing your clients, they will get the results you promised, thanks to your hand-holding approach in the beta phase
- Shaping the program: One of the perks customers get when joining the beta launch is having an impact on what scope of the service they get. They get a change to shape how the program looks like - what's included, how deep it goes, tools and exercises they receive.
The Dynamic Pricing Twist: From Premium to Penetration
After cementing your product's premium status, you might decide to strategically lower the price. This isn't a discount—it's a calculated move to penetrate the market more deeply.
With your first premium-priced launch you created a massive impact -- what I call a Ripple Effect. Your customers got amazing results that you can share with your wider audience. And they will refer you new clients, since they were happy with what they got.
You can leverage the testimonials, case studies from your previous premium launch to sell more units of the newly priced program
Expanding Your Reach
- Broader Market Appeal: A premium start doesn't preclude mass-market success. A later price reduction can open up your product to a wider audience.
- Volume vs. Value: Lower prices can lead to higher volumes, potentially offsetting the lower per-unit revenue.
- Preserved Perceived Value: The initial premium price helps retain a high-value image, even at a lower price point.
Incremental Increases: Scaling Up Before Scaling Out
Another tactic is to begin with a price that's below your ultimate goal but still within the premium range. Then, incrementally increase it through successive beta rounds as you refine the product and build its reputation.
The Mechanics of Price Adjustment
- Assess Market Saturation: Look for signs of saturation within the initial target market.
- Analyze Competitor Movements: Keep an eye on competitors and industry pricing trends.
- Evaluate Product Evolution: Ensure your product has evolved to appeal to a broader audience.
- Set a Foundation Price: Start with a price that's somewhat higher than the average market price but still accessible to early adopters.
- Monitor and Adjust: As your product evolves and improves, increase the price incrementally. This can be done in stages, each justified by additional features or enhanced service.
- Evaluate Customer Response: At each price point, assess customer reception and willingness to pay. This data will guide your pricing trajectory.
When to Implement
- Market Readiness: Is your audience primed for a premium offering?
- Product Maturity: Does your product's current stage warrant a higher investment from your customers?
- Competitive Landscape: How does your pricing compare to similar offerings in the market?
- Justify Your Price: Use quality, features, and unique selling points to justify the initial high price and any subsequent increases.
- Highlight Improvements: When prices are increased, emphasize enhancements to the product to validate the new pricing.
- Maintain Value Perception: If you decide to lower the price after starting high, ensure that the messaging focuses on increasing customer benefit rather than on reducing quality.
Long-Term Price Positioning
Sustaining High Value: Maintain a balance between affordability and the high-value perception as the product matures. Ensure that any price adjustments are not drastic enough to dilute the brand's premium positioning.
A/B Testing for Price Sensitivity: Regularly test different price points to understand how price changes affect demand. Use this data to find the optimal balance between volume and margin.
Leveraging Urgency and Scarcity
Limited-Time Offers: Use limited-time offers at the current price before an increase to create urgency. This tactic can accelerate decision-making and drive sales.
Exclusivity: Maintain the allure of exclusivity by offering certain features or versions of your product only at specific price points.
The Psychological Play: Confidence and Perception
Pricing at a premium can improve the confidence of both the seller - you - and the buyer - your customer. It's a psychological endorsement of the product's value, which is crucial in the early stages of a product's lifecycle.
Price is as much a psychological signal as it is an economic one. A higher price point not only underscores the value of the product but also instills a sense of ownership and pride among early adopters.
- Seller Confidence: A higher price can signify belief in the product's worth.
- Buyer Perception: Customers often perceive higher-priced items as superior in quality.
- Exclusivity: Premium pricing can create a sense of exclusivity and status.
During beta your customers will receive an outstanding service and support, justifying the premium price. They will get the results their after, allowing you to leverage that in your marketing and sales tactic to get more customers in your future launches.
Beta pricing is an intricate dance between value perception, market strategy, and financial pragmatism.
The goal is to use pricing not just as a number but as a strategic tool that communicates the product's value, attracts the right customers, and lays a foundation for sustainable growth.
Want to launch your course, program or service "the right way" - let me know and let's do this together!
p.s are we connected on LinkedIn or Twitter?
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