|The Market Value of Information|
By Robert Smith -- May 8, 2000
It has become really difficult to determine how much any information product is worth based only on its price. The perceived value for information is subjective . . .
It’s the value of the information to your potential customer.
Often sales hype takes the form of adjectives used to describe the products benefits. In reality, the marketplace determines the actual value of information.
In real estate, auto sales, and information, the correct market value for a product is defined as: “The price a willing seller and a willing buyer can agree on” The buyer chooses the amount he is willing to pay based on market conditions and the seller determines the asking price.
In reality, the marketplace determines the value of any product. Just as location helps determine the value of real estate, the market determines the value of information. That’s why a nice house sells for less in a poor neighborhood and why the best value in real estate is often a fixer-upper in a nice neighborhood.
The Right Price
The best price for any product is the most it will actually sell it for in your targeted market.
If you are not having success selling your product you can do one of three things.
You may change the price of the product
Change the market targeted
Change the product to meet the desire in the marketplace
Notice I didn’t suggest lowering the price of the product, that is your last resort, and reserved for situations where the product is incorrectly priced in the first place.
There is almost always a market willing to pay more for your product. The most profitable approach is usually to re-identify your ideal market.
Narrow Your Target Market
Your most important consideration in developing your information product is to do the best job you can identifying and understanding the needs and desires within your target market. It’s so much easier and more profitable to sell something in demand to a willing buyer than to try an appeal to everyone.
You want to target to the narrowest most specific market that is qualified to buy your product. If you can communicate your most important benefits, you won’t need to use hype. So the key in product development is to identify the most qualified market that will pay the highest price for your information.
Market Value Pricing
You can use all the right words to try and create a higher “perceived value” for your product, but products are actually purchased according to their true market value; what a willing buyer will pay. If a product is priced too high there will likely be unhappy customers and possible returns resulting in a loss of credibility. If products are priced too low the uniqueness of the product may come into question.
Unearned profit is lost profit. It’s easier to slightly overprice your product as you can always reduce the price later, but it’s more difficult to raise the price if you start out too low to begin with.
Rare Information is More Valuable
The information business is not a traditional high volume business. Quantity of your sales is not nearly as important as the QUALITY of the information for sale.
The information business is the most profitable when you target a higher end market with rare information that is already in high demand.
If your information product is not selling, it’s probably because you are not reaching your ideal market. Often a product won’t sell because the price is so low it looses credibility in its marketplace, lowering the price just exposes you to more competition and lowers your sales even more.
The more original your product is, the less competition you will have and the higher your product’s market value will be. If you can establish a higher market value you can charge more and earn more profit per sale.
In a nutshell, it’s better to strive to sell to a higher percentage of a smaller target market than to sell more for less and try to make profit on higher volume.
After you identify your target market’s desires, you want to develop a marketing strategy and a plan on how to reach them. Often the market that is willing to pay more for your product is more costly or difficult to reach.
For a product to sell it must be capable of covering the marketing costs required to reach its ideal market and these costs must be reflected in the price.
There are two kings of people, trailblazers and trail followers. Trailblazers fail more often, because they lack a roadmap - yet they often become more successful in the end, because they discover new territory. If you follow others and do what they do, at best you will get what they got.
Your niche wants rare and specific information. If it were already available they wouldn’t be looking for it in the first place. Identifying the information MISSING in your niche is the key to owning your niche market.
The key to selling more of your products is identifying and communicating precisely what your information can do that existing products can’t.
Most marketers start with a product and try to find a market. This is backwards. The key to marketing anything successfully is to identify a desire within an existing market that’s qualified to buy your product, and then design your product to fill that desire.
When you develop your product to fill an existing desire, you’ll find it much easier to reach your market. In some cases you can even get free advertising and publicity from the media if your product is unusually unique or in demand.
Unique products command higher prices with less competition, and earn a lot more profit.
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|Robert Smith helps thousands successfully market their Internet based home business. You'll find tons of free marketing tools & resources on his Internet Marketing web site at: http://www.smithfam.com/.|