I recently had the privilege of moderating a discussion with Dr. Mark Stiving on pricing. The webinar was sponsored by Renewd, which is a great organinization for companies in the subscription or event space.
Here are a few key takeaways.
Sometimes the problem is your product portfolio, not your pricing. You should be thinking about the market segments you serve, and what they’re willing to pay. Then consider how you can tweak your product offering to maximize profitability.
“Good, better, best” pricing is a great way to maximize value. People typically choose “better” because they don’t want to be cheap, on the one hand, or extravagant, on the other.
It’s not always true that you should sell benefits. Experts buy features while non-experts buy benefits.
Here are four things to do when you raise prices.
- Blame costs
- Mention that you haven’t raised prices in X years
- Explain how you’ve delivered much more value since the customer signed up
- Offer your customers a nice gift along with the price increase
When you raise prices on current customers, they will hate you. If you justify the price increase, they will hate you a little less.
If you can train your customers to expect an annual price increase, that’s gold.
Look at your customer base carefully and charge different prices to different customers based on their willingness to pay.
If you can, raise prices based on usage.
Only raise prices on people who are likely to accept the higher price.
