10 Things I learned about pricing

Lars (@trieloff) at #pcampb14

1. Always price to value

(Not the actual website)

2. Freemium is neither a word nor a pricing strategy

3. Your price list is the bad cop, to your good cop sales

guy

(product manager, don’t be that guy)

4. Start small to get a foot into the door

5. It's better to be the filet mignon than to be the

steak knife

(I know, it’s counter intuitive. At least for Germans)

Every sales guy who likes to quote this movie …

… loves to throw in a set of free steak knives to seal the deal.

Free products don’t get revenue, don’t get

attention & don’t sustain.

6. Good pricing is based on data

“Can you give me all your historical sales data? I want to validate your pricing structure.”

1My brilliant pricing manager

My pricing manager was not actually Gandalf, but still a wizard with Microsoft Excel. He helped us simplify the price list and reduce discounting rate.

7. Cost plus and competition minus are a

rock and a hard place

In perfect competition, the price of goods approaches

the marginal cost of production.

1Econ 101

In software, your marginal cost of production (another copy, another download, another visitor) is zero.

In software, your marginal cost of production (another copy, another download, another visitor) is zero. And so would be your price.

In software, your marginal cost of production (another copy, another download, another visitor) is zero. And so would be your price. And your revenue.

In software, your marginal cost of production (another copy, another download, another visitor) is zero. And so would be your price. And your revenue. And your salary.

In software, your marginal cost of production (another copy, another download, another visitor) is zero. And so would be your price. And your revenue. And your salary. Good luck with that.

8. Customer Pricing is good, segmentation is

better, self-segmentation is best

9. Find the point of diminishing returns — and

price to it

Value generated per optimized product.

Three editions, each with base volume and scalable extra volume results in an easy to understand model that reflects customer value.

10. No pricing without hard choices

Force the customer to make hard choices4 Non-continuous value function

4 Features reserved for higher editions

4 Cojoint analysis

Nice top 10 list …

… do you really need to throw in a #11?

11. Really good pricing is really data driven

What’s your one weird pricing trick?

@trieloff #pcampb14