Product Pricing Properties

David Cummings on Startups

Continuing with yesterday’s post titled Pardot’s Pricing Progression Through the Years, I think it’s important to add a few more comments on the topic of pricing. Too often, entrepreneurs labor to set the perfect price before they’ve even launched the product. The best thing to do is to get out and talk to prospects to get a better understanding of the value provided. While they won’t necessarily be explicit, they will provide feedback and information to make a better decision.

Here are a few thoughts on properties of product pricing:

  • Product pricing has nothing to do with a cost plus formula (e.g. it cost me $10 to make it, and I want to make $3 on each sale, so I’ll charge $13 for it) and everything to do with value provided
  • Product pricing should scale with value provided to the customer (e.g. as the number of seats/transactions/usage grows, so too…

View original post 133 more words

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