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The Price is Right: Essential Tips for Nailing Your Pricing Strategy

First Round Review
First Round Review
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Co-founder and CEO of Price Intelligently Patrick Campbell deconstructs and walks through the elements of a pricing strategy to enable startups to acquire customers more effectively.

Define Your Customers

  • Target 3-5 buyer groups to test and give each buyer cohort a persona.
  • Assign demographic and behavioral descriptions to each persona (e.g., Startup Susan, Mid-Market Malik, Enterprise Ernesto).
  • Establish customer categorization to then tackle value proposition.

Collect Data from Potential Customers

  • Focus surveys to test two elements: features and price sensitivity.
  • For feature preference surveys, list a set of features to evaluate, hone in on the extremes, and ask about what they most prefer to use.
  • For price sensitivity surveys, the two critical elements are value metric (i.e., how you charge) and willingness to pay.
  • For value metric surveys, use the relative preference methodology.
  • For willingness to pay surveys, list a simple set of tasks to figure out price elasticity.

Two Approaches to Launch Surveys

  • Release two surveys every three weeks.
  • Utilize companies for help if the issue is getting large enough sample sizes for each of your customer personas.

Applying Your Findings

  • Plot out price elasticity using the same willingness to pay questions.
  • The pricing page should be instructive, intuitive, and straightforward.
  • Adjust your change in pricing every quarter or two to align with how your product changes and improves.
  • Do your best to get the pricing right as early as possible to avoid bad blood with customers.
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