Most businesses struggle with their product pricing strategies. Am I charging too much or too little? What’s the price elasticity like? How can I grow sales with the right pricing?
Here’s one answer that you’re not going to like: there is no one magical pricing strategy. However, you CAN make more money by doing it better and actually having some strategy in your pricing.
Most of you want to sell at maximum profitability, which means: sell as many (units, copies) as possible at as a high a price as possible. Here are 14 articles that give tremendous insight and food for thought to achieve this.
In no particular order:
1. E-book pricing trilogy
Three guys – Sacha Greif, Jarrod Drysdale and Nathan Barry – wrote e-books. Each of them followed a different pricing strategy, and got different results. It’s as close to apples to apples comparison you can get with digital products, but it’s still not clear which strategy was the best – since you can have many different definitions of what ‘best’ looks like.
Read their posts in this order (as they were published):
- How Perfect Pricing got me 1500 Sales in 2 Days
- Perfect Pricing Part Deux — More money from fewer sales
- An eBook pricing model that resulted in $100,000 in sales
- The Pricing Trilogy
This great article lists common mistakes startups make with their pricing and principles they should keep in mind.
You launched a new software product. Congratulations! One of the biggest questions you’re going to be asking now is, “How much should I charge for my software?” Read here Joel Spolsky’s take on it.
In a casino, the term “rake” refers to the commission that the house earns for operating a poker game. If you run a platform and you charge others for using it, you need to read this one.
Are you a freelancer? Do you charge by the hour? Don’t. Here’s how you should do your pricing instead.
Lessons from the biggest increase in revenue Bidsketch ever had. Fantastic read.
A collection of issues to consider when making decisions about the price of software products. Very useful.
This click-attracting headline does actually contain a very valuable point. Make sure you don’t miss it.
Learn about three different strategies you can employ: cost plus pricing, competitive based pricing and value based pricing.
Here’s an article I wrote on this blog, summing up various pricing experiments. It’s the most read and shared article I’ve ever written.
If you read through all of it, you’ll see there are several points that are repeated often.
- There is no perfect pricing. You won’t get your pricing right the first time, so stop stressing about it. Pricing is a process and requires continuous optimization like everything else.
- Higher prices lead to bigger profits. This is confirmed by a study of the Global 1200 that found if companies raised prices by just 1%, their average operating profits would increase by 11%
- Human beings are irrational and don’t know the fair value of anything. Price anchoring and other “tricks” work very well.