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A Guide to Pricing Plans

capitalandgrowth.org

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Re: A Guide to Pricing Plans

#61

Post by gridlockd »

tptacek wrote: post #33
gridlockd wrote: post #15

Earlier quoted context omitted.

Why would you design a price for "value provided"? That's highly subjective to the user. Users also generally only pay for what they expect to pay, not the value they're getting. For instance, some utility might save hundreds of hours and thousands of dollars over the course of its usage, which is tremendous value . Yet if the average user expects that it should cost no more than, say, twenty dollars, that's what the…

I'm not Greg Kogan, of course, but... It is indeed highly subjective to the user. So, part of the job of marketing is, segment your market, decide which one is most lucrative, target them with pricing that optimizes the outcome for that segment, and then adjust the product packaging to give yourself the most flexibility to attempt to repeat the process with the next segment of customers. You learn the value your user…

I don't disagree with you at all. Segment your market. Focus on the most lucrative group first. When you have done all that, apply the usual tricks.

That all implies that there is such a lucrative group that has the expectation to pay a handsome sum for your product. It implies that there is no competition that has already driven the price into the ground.

If your product is truly novel and there is no competition, better set a higher price. You can always go lower and see how much more revenue you can get. Over time however, competition will show up and put the price closer to cost, or even below cost. Users will no longer expect to pay the older prices, so they won't - no matter how much value they get.

Re: A Guide to Pricing Plans

#62

Post by fouc »

davidajackson wrote: post #5

> Yes, Product C is slightly cheaper than the most expensive option, but it offers less storage than any of the options. Why would a business want wrong looking pricing on their pricing page, "decoy"s aside? Seems that would deter people more. Makes the business seem like it doesn't have its stuff together. Would you trust a company that seems like it can't do simple math? I think the author may be getting at somethi…

There's a known cognitive bias that kicks in with 3 items, realtors for example will exploit this. They'll show 2 similar houses and 1 different house, people will end up comparing the two similar houses more, and choose the one that's more of a bargain.

Re: A Guide to Pricing Plans

#64

Post by lotsofpulp »

turkeywelder wrote: post #13

As a consumer I'm really not a fan of these techniques. I'm biased but our SaaS just has one price, no annual discount, no messing. It seems to be working out. I think people appreciate the straightforward approach when everything these days seems to have a pricing table.

It is proven that a very large portion of the population gets a thrill or some type of desirable chemical reaction in their brain when they purchase something for a “reduced” price. People like to feel that they’re special and got something that maybe someone else didn’t, or that “they” beat the system.

Most obvious recent example is to search online for JC Penney’s pricing strategy fail, where a prominent Apple executive had the same exact thought you did, and completely alienated the JC Penney shoppers who actually like seeing a price tag say $100 and then get surprised with various discounts at the cash register and see it be $20.

Re: A Guide to Pricing Plans

#65

Post by AnonC »

The key points and references were good, but the examples failed to make an impact for me. Some of the examples look meaningless, like the one for decoy pricing.

Re: A Guide to Pricing Plans

#66

Post by aurbano »

jkuria wrote: post #18
wackget wrote: post #9

That website looks (and reads) like one of those single-page secret ebook sales web pages from the 90s.

We are working on the look and feel but there is lots of great content. What do you think of these mockups: https://theconversionwizards-my.sharepoint.com/:i:/p/jasper/... https://theconversionwizards-my.sharepoint.com/:i:/p/jasper/...

I'll try to give some subjective constructive criticisim.

Honestly, it feels "clickbaity". I guess it's due to the topics typically being found in content aggregating websites, or the question format.

Take for example the top post right now on HN: "It's Time to Build" by Marc Andreessen - it would've been a completely different vibe if he called it "What are the Top Countries in the World Not Doing Right?" or something like that.

Re: A Guide to Pricing Plans

#67

Post by listenallyall »

csa wrote: post #56
listenallyall wrote: post #51

Earlier quoted context omitted.

you have no evidence for that claim... the '9' effect has been studied extensively

I think you missed my point. Whether it was 30 or 29, the idea still holds, and the idea was not optimizing to the single dollar level.

No, I didn't. If you're going to optimize the article's example, why stop halfway?

Re: A Guide to Pricing Plans

#68

Post by listenallyall »

goliatone wrote: post #55
listenallyall wrote: post #51

Earlier quoted context omitted.

you have no evidence for that claim... the '9' effect has been studied extensively

So, $39 would work better than $28?

Was this comment really worth exposing the fact that you don't understand why nearly every store in America prices with 9's?

But since you asked... lowering the price by $11 will require 28% more unit sales to cover the difference. Normally 28% more units would increase COGS, resulting in less profit on equivalent sales, requiring even larger unit growth, but we're talking about software here so let's ignore that. Regardless, I couldn't tell you which works better without some more data.

I will bet you, however, that $39 will outperform $40 in total revenue and profit.

Re: A Guide to Pricing Plans

#69

Post by sarfrazarshad »

bmn__ wrote: post #57
elgfare wrote: post #54

Having a price crossed out to give the impression of a sale is just straight up lying. It's illegal here in Norway at least. The product must have been sold a certain number of times for the crossed out price in order for it to be legally presented as a "before" price. https://www.forbrukertilsynet.no/lov-og-rett/veiledninger-og...

All the mind manipulation traps presented in the article are deceptive and fraudulent. They all should be made illegal if they are not already.

I wont agree to it. I would call them hacks, are hacks fraudulent?

Re: A Guide to Pricing Plans

#70

Post by sarfrazarshad »

Great read. Pricing products was always not clear to me. I think the article makes a lot of sense for Saas products. But, the only thing I am not so clear about is how can there be such a huge difference between 3 price options and 4 options.
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