Review: Make Your Price Sell!

Ralph Wilson is the dean of Web marketers. He and his excellent site, www.wilsonweb.com, have been cited and lauded in such media as Business Week, PC Magazine, the Wall Street Journal, MSNBC and Inc. Online. Yahoo! even has an entire section reserved for wilsonweb.com articles!

Mr. Wilson's e-commerce product reviews are renowned for their objectivity and accuracy. As they say in baseball, "he calls 'em as he sees 'em."

He has kindly permitted us to reprint his review of MYPS! here.

Review: Make Your Price Sell!
by Dr. Ralph F. Wilson, E-Commerce Consultant
Web Marketing Today, May 9, 2000
http://www.wilsonweb.com/wmt5/issue80.htm

Ken Evoy, MYPS! Creator

Make Your Price Sell!
by Ken Evoy and Carol Ann Dorn
SiteSell.com

I'm thinking about producing some information products to sell on the Web. But how should I price them? I wonder. I can look at something similar and price them like that. Nightingale-Conant Corp. sells self-help information products. Then I look at something at my local Border's bookstore and wonder if I'm pricing too high. What is the right price? What is the best price for my information products? Now I know how to find the answer.

I'm very excited about Ken Evoy's new Make Your Price Sell! online service. The system consists of an online survey you can customize and cut and paste onto your website. After describing your product or service as clearly and compellingly as you are able, you have your customers fill out a short survey. The answers are recorded and analyzed in the MYPS! server, and offer you powerful insights into how to price your products.

Six Key Questions

The survey consists of three pairs of questions that deal with:

Product impact -- how unique and important your respondent considers it.
Net buying habits -- how often your respondent buys this type of product and how much he usually spends.
Price points -- what your respondent considers a "fair" price for the product and where the "Teeter Point" is.

The "Teeter Point" is a key piece of information (and Evoy has trademarked the term). Half your respondents are asked, "What price is almost too high to buy this product?" The other half are asked, "What price is just a bit too high to buy this product?" In other words, where is the point that respondents really have to struggle to decide whether they should buy the product or not?

Bar Charts

The beauty of MYPS! is in the graphs it produces. Here are some examples. Click on the links to see the graphs:

The "How important is the product to you?" question results in a bar graph.

The "How much do you usually spend for this kind of product?" question shows another bar graph.

Who much do you usually spend for this kind of product?

The "What is a fair price for this product?" question graph shows a scattering of answers from low to high. But the graph enables you to see the clustering.

Composite Graph

The real genius of Make Your Price Sell!, however, is found in the Composite graph.

It takes a bit of work to understand it, but an effort very much worth the time. The program plots smoothed data obtained from respondents into single curves. In the example shown in the manual, the red line displays the drop off in units purchased as the price increases. The blue line looks like a dome with its top arching over right at $57, which is the price point at which the program has determined you will make your greatest total sales dollars -- that is, you will sell the product to the greatest number of people. The green line is a more shallow dome that peaks right about $90, the price point at which you will make the greatest gross profit. You sell fewer products at this higher price, but the higher margin means you make a higher profit. After $90 the maximum profit point passes -- though slowly. The graph indicates that you could price substantially higher than $90 for a price "skimming" strategy, and still make a tidy profit.

So where should you price the product shown in this example? If you have a penetration price strategy the price should be around $57. For a high profit strategy you would price around $90. Your final price depends upon the pricing strategy you've set as part of your overall marketing plan.

The 122-page manual provides a lucid explanation of pricing theory, and then describes exactly how to use MYPS! to determine price. It includes twelve ways marketers can find the right people to fill out the online survey, and notes that price consultants may want to administer the survey in paper form, and later input the answers into the MYPS! online interface. Considering the quality of information the graphs offer, this will expand the toolset of many consultants.

Weaknesses

Make Your Price Sell! isn't perfect. The graph indicating price peaks shows jagged stairstep "peaks" off to the right side of the graph. The uninitiated might mistake them for meaningful price points, while in actuality they are graphing artifacts resulting from sparse data on that edge of the graph. The plotting program should have smoothed them out. The text interpreting the graph can be improved, too, explaining the price points the graph is showing you. I would have liked the ability to isolate out the responses of those who were the most frequent purchasers of the product type, since this would tell me what those who actually purchased such products thought of them, rather than diluting their insights with the opinions of respondents who didn't purchase this type of product often at all. MYPS! offers a way to look at the answers of your "best prospects" but doesn't really explain how this is determined. Like any first generation software product, MYPS! has a few rough edges that will need to be smoothed, and features that need to be expanded in later versions.

The Bottom Line

But MYPS! succeeds wonderfully at its chief goal: to provide marketers with a scientific tool that will help them set their product's "Perfect Price." And for the first time it makes available to mere mortals on the Web the sophisticated analytical tools once only high-priced consultants were privy to.