My Risky Price Changes

I made a breakthrough in organizational workflow for my speech and debate publishing company, Monument Publishing. At first it appears risky and hazardous (how on earth will I make money?), but I think it’s going to be successful. At least I hope so.

People are going to think this is a typo. I'm dropping the price of my bestselling sourcebook by 50 bucks.

People are going to think this is a typo. I’m dropping the price of my bestselling sourcebook by 50 bucks.

This is a long post that sorts out my thinking a bit. I’m sorry if it bores you, but if you’re an entrepreneur like me, you’ll find it a bit interesting. Besides, I’m a little anxious about the big change because it could flop, so I’d appreciate your feedback.

In short, I abandoned my traditional packaging for a more flexible options system for my brands. I’ve streamlined all my sourcebooks to $30—a drop in price for all of them—but I don’t think I’ll lose money in the end.

Let me explain things real quick in case you’re not familiar with Monument Publishing. I have five brands for all the speech and debate events: Blue (team-policy debate), Red (Lincoln-Douglas debate), Gold (extemp, parli, impromptu), Silver (apologetics), Bronze (interps and platforms). Each of these brands has various products, the main being a sourcebook written or edited by a leader in the speech or debate category. Students may own products under each of the brands, but the sourcebooks were the staples serious competitors would buy. Here’s a chart:

Brand Sourcebook Price
Blue $79.95
Red $49.95
Gold $39.95
Silver $39.95
Bronze $39.95

Let me explain what I traditionally did with these assets, what I’m going to do differently, and why I think—despite my fears and doubts—it’s going to work.

1. Sourcebooks and Packages

My sourcebooks go out to a niche market of homeschool speakers and debaters participating in Stoa and NCFCA leagues. Needless to say, they are niche markets, so I don’t sell millions of books. After paying all my authors and coaches, printers, and a stack of others involved in my little gig, I fair pretty well every year. I’d like to think it is because of the price of our sourcebooks ($40-$80) and the package deals we offer with them that bring out even more money.

The sourcebooks are pricy, but speakers and debaters have grown to very much appreciate their value. They’re written by top coaches and competitors in the country (I seek them out and build a team every year). The quality of the material is incredible, the competitors know it, and they are willing to pay top dollar for them.

I have quite a number of other materials, too, like flowsheets, textbooks and timepieces. Things that speakers and debaters enjoy. I traditionally put a group of these together for a slightly-more-expense package that encouraged an upsell. Everyone paid the basic prices (noted in the sourcebook price), but the packages encouraged other additions that kept cash-flow coming in. If I averaged $80-$100 per customer during the year, I would have a sustainable year of sales.

Brand Sourcebook Price Package Price
Blue $79.95 $120
Red $49.95 $99
Gold $39.95 $99
Silver $39.95 $99
Bronze $39.95 $79

2. My Changes

Over the years this system has worked pretty well. However, these past few years some problems have surfaced.

  1. The economy stinks. Yeah, I guess that’s the new normal. I’m resolved to stop using this as an excuse for bad sales. Sure, people are looking to pinch their pennies, but that means I need to increase my value. I’ll show in a minute how I’m nailing that in the bud.
  2. Customers already owned the package items. For instance, one year they bought the package that included the textbook, so why buy the next year’s with the same textbook? Besides, customers didn’t want all the package items. If I included a pack of flowsheets with the package, not all the customers cared for the flowsheets. But, they may have appreciated the textbook. So they would have to reconsider getting the package with unwanted items just to save money.
  3. My margins were being eaten up. My brand managers (I have a few other people helping me with this) wanted to add products. My Bronze Brand Manager, Scott, for instance, wanted to add Michael Hyatt’s Platform to the Bronze Package, but even ordering a bulk quantity cut into the package upsell price. In the end, these outside sources—though they added value for the customer—brought very little back to the company.
  4. I’z gots my competitors. Sure, this is a niche market—and I’m the leader in it—but because of the high price of my sourcebooks, I have had several entrepreneurially-bent competitors rise up and attempt to make their own sourcebooks. (Most of these competitors were alumni of my camps…isn’t that ironic?) We’ve developed a pretty slick oiled machine over the years, so quality is tough to compete with, but they nail me on price. Needless to say, I fear I’ve lost customers just because my competitors low-ball me.
  5. Customers felt manipulated. My pricing strategy felt like one big gimmick. I didn’t feel guilty about it (hey, I need to run a business here), but customers didn’t appreciate the manipulation to spend more. Though many of them would upgrade the larger packages, those that didn’t felt they were missing out on something they may have wanted. All of them felt played with, which wasn’t good.

So I made a change. On the surface it appears to be incredibly risky, perhaps stupid. Maybe it is, the verdict is in the future, but I decided to go for it. Customers are going to love it because I’m practically giving the sourcebooks away. Here are the new prices:

Brand Sourcebook Price Package Price
Blue $30 No package
Red $30 No package
Gold $30 No package
Silver $30 No package
Bronze $30 No package

So, I dropped the prices significantly, and I gave no incentive to upgrade to a more expensive package of products.

Customers are thinking, “Yeahhhh!”

Business friends (and my wife) are thinking, “Yeeeash! How are you going to make any money?”

It’s risky, but I’ve got my reasons why I think this will work.

3. Why I Think (and Hope!) This Is Going to Be Awesome

First of all, I can count on increase in volume. Happy customers = more sales. Since the sourcebooks are so inexpensive compared to previous years, I’ll sell more of them and make more on the margins inherent to the sourcebooks themselves.

But this isn’t reason enough to be so risky. I’m going from $80-$100 surity to $30. That’s a huge cut.

But the freedom will win people over. I’ve gotta believe that.

I believe our products are good and my customers want them, but the packages and pricing strategies of old limited the customers’ freedom to choose what they wanted. I overhauled my entire sourcebook strategy to allow customers to add products, but also the freedom not to. No forcing, no manipulation, no packaging gimmicks. Add them to your sourcebook order, or not. No worries…we’re getting the book(s) out to you either which way. For a base price of $30.

I think customers will appreciate this. And for starters, I’m giving them a financial incentive. When they order the sourcebook, all other items in the brand comes 20% off. This is a little incentive to buy those extra items, but not a manipulative one. Essentially, the customers get to build their own package. I’m not dictating it.

Download my 2013 Conference Form. It shows it pretty clearly:

Screen Shot 2013-05-11 at 5.18.14 AM

Do You Think It’ll Work?

I released this last week with a couple of brands (Silver and Blue), the rest rolling out next week. So far, about 3/4 of my customers have voluntarily added resources to their sourcebook preorder. I guess this is working.

Long post. If you stuck with me to the end, you’re a good friend. It’s helpful for me to write this out. Sometimes running a home business gets complicated, but I suspect this will simplify things for my customers. They are who I should be focused on anyway.

What do you think? Do you think this will work? I’d appreciate your feedback below.

Please note: I reserve the right to delete comments that are offensive or off-topic.

  • Johnny Dasher

    Chris, good thoughts on “empowering” (I despise buzz words) your customers and their ability to choose. Makes sense to me, will be fascinating to see how it plays out in the market!

    • Thanks Johnny. I value your feedback. You’re one of the “old guys,” and you probably remember back in the day when the Blue Book packages were more like $200. Them’s was the “glory days,” but things have changed. I’ll keep you posted, my friend.

  • Hey Chris it sounds like a good idea, and you’ve obviously thought long and hard about it 🙂 and it’s a concept that in this economic climate needs to be utilized a bit more, thinking volume (selling more with a slightly lower profit margin, but by selling more still making a good profit overall) compared to trying to make as much profit as possible on every sale, but losing possible customers because of higher price. To some people that may seem like a backward way of selling but it does work, but also depends also on the demand of what your selling. There still definitely needs to be a profit, otherwise it’s not worth it and your losing money, and there will also still be price adjustments as you figure out what works and what doesn’t, I will be glad to see how well it works for ya 🙂
    God Bless,
    Aaron Stevens 🙂

    • Good thoughts, Aaron. My hope is that the lost profit will be made up in volume. In a niche market that’s a risky thing to do, but I’m making moves to try to grow that market.

      If this doesn’t work, I may sell everything and move my family to New Zealand. Start a horse show or something. I know some folks out there.

      • Aaron Stevens

        If you’re ever in my part of the world come on over 🙂 whole family welcome we have plenty of space 😀

  • Rick Heggem

    More and more things are are going to the free or freemium model (ad supported). This makes sense for something as dynamic as a source book especially since your consuming public wants fresh content throughout the year, not just once or twice. Not sure that will happen soon – could be years away – but when someone figures out that recipe, they will capture the market. It’s hard to beat free.

    • Interesting.
      I had thought about modeling high school yearbooks. I was the advisor to the yearbook for Wahpeton High School back in my teaching days. Solicit ads to pay for the content, then sell it for much cheaper than the cost to print. I’d need to totally redirect my efforts, but it would bring the cost down for the customer. It might be in the future, you’re right.

      • Rick Heggem

        For better or worse for the marketplace, it would virtually guarantee that former student competitors couldn’t compete with you any longer because they wouldn’t be able to replicate the necessary advertising infrastructure quickly and cheaply. Right now they publish on paper or electronically so you are not really differentiated from that perspective. If they were strong student competitors (e.g., last year’s champion), they may have a stronger short-term brand, but they still can’t compete with free.

        If it were free, your circulation would be 100% of the league, which I dare say is much larger than your current market share. I don’t know what your current market share is, but if 10%, then a 10x increase is likely and your revenue need per subscriber drops to only $3 instead of $30. Looks plausible if you can attract the right advertisers (e.g., colleges, college debate teams, travel agencies [for booking tournaments], etc.)

        Good luck, Chris!

  • RickStevens

    I like the concept of reducing the pricing to an a la carte idea. Pricing is one of the most difficult things to determine, especially with all the economic factors that come into play. Now giving the customers the option to purchase exactly what they want will likely have the same effect as the dollar menu at McDonalds. People can pick and choose the items that best suit their needs/wants/budget and, in the end, I think you’ll come out ahead. You might consider adding some sort of a package deal (think value meal) as well. That way, if the customer wants several pieces, they also feel like they’re getting a bargain. Just some thoughts.

  • Chris, this pricing will make it easier for us to ease our novice families into the Speech & Debate world, thus increasing your future market size. 🙂 Many families hesitate at investing in the pricing sourcebook at the beginning of their journey. Once they see the value in speech & debate, they are willing to purchase more products.

    • Good point. Yet another angle at this. In the long run, I think it will work out.