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Don't Leave Money on the Table with This Crash Course in Pricing

First Round Review
First Round Review
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Early-stage startups should not be fixated on finding their ideal price, but rather segment customers and sell different products to optimize revenue across the board.

Optimizing Revenue with Multiple Prices

  • A company can present 3 differently priced variants of a very similar item.
  • They are essentially the same product, but they each draw on different consumers

How Can Startups Segment Their Pricing with No Physical Product?

  • Embrace (Limited) Complexity
    • Segmented product offerings, such as tiered memberships, do a great job capturing consumer surplus.
  • Use Transactions Wisely
    • Checkout pages don’t have to just be a point of exit. They can be utilized to retain customers and grow revenue by adding additional options.
  • Think Like a Phone Company
    • Bundle an incentive with a recurring billing product.
    • When you combine your product with another made by someone else, you end up making more while also needing to develop less.

Be Selective About Incentives and Discounts

Three Effective Strategies: 1. Never ask people for a “coupon” code. 2. Contact information has long-term value. It’s worth turning off some users in order to get more data for other customers that can help you segment them going forward. 3. If you don’t have anything to offer as a bonus, find a complementary partner that you can work with to offer something unique.

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