When you're setting the price for physical goods, particularly commodity goods, you may not have a great deal of flexibility.
However, if you are selling something less tangible—like a service, a subscription, a seminar or downloadable report or book—the range of prices you can charge is very broad, and often surprising.
One management consultant might charge $200 an hour, while another might charge $100 an hour. Is the first one twice as good as the second? Not necessarily. But he or she is probably a lot better at setting prices.
Is a 68-page e-book worth five times as much a 200-page book by a more established author on the same subject? Probably not. But we have all seen e-books flying off their virtual shelves at prices that seem astonishing compared with those of printed books.
And how about online subscription services? Is the value you offer behind your subscription wall worth $9.95 a month? $34.95 a month? Or maybe even over $100 a month?
The only way to determine your best price is to test
When you test by offering a variety of different price points, you will get objective data to work with. You'll be able to see what people actually do, as opposed to what you think they will do.
In other words, testing takes a lot of subjectivity out of the equation.