Start Up Blog

How to price your product

Posted in entrepreneurship by Steve Sammartino on December 2, 2009

Pricing is a difficult thing to get right in the marketing mix. Often we get all other 3 P’s (product, place promotion) right and that wrong…. and instead of revisiting it, we mess with the product.

There is no hard and fast answer on how to price a product in a startup or a web service, especially as it pertains to pricing models. But there are two simple pieces of advice I can give.

1. If there is an established pricing method which is accepted and liked in the market, go with it.

2. If consumers generally despise how things are priced in the category you are entering, change the model, and let everyone know about it.

In the first example the ethos is this: It’s hard enough gaining cut through with our product without adding unnecessary complexity to the decision making process. Especially when you have a new and untested offer.

In the second example the ethos is this: The pricing model becomes the main feature. It’s the reason for the switch to you, other parts of the marketing mix will then require far less innovation to gain the cut through a startup needs.

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