How confident are you that your pricing is right? After this master class, you’ll never need to wonder again.
[2 min. read]
Back Story
Several years ago, I was the CMO of a SaaS startup wrestling with pricing decisions.
We needed an effective pricing policy, so I went on a deep dive trying to get smart about pricing and to parse fact from fiction.
These ten pricing principles are what I learned.
—Chad Jardine
Author
Founding Partner, CMO Zen
Introduction
Pricing can be tough.
Pricing policy decisions are often made by intuition more than data or science.
Despite the reliance on intuition, it seems like everyone’s heard of a counterintuitive pricing strategy that made all the difference. Like the classic sale of ugly cats for $100 in Denver (Beckwith, 2000) or one shop’s accidental doubling of the price of turquoise jewelry (Cialdini, 1984/2021), both of which caused an uptick in sales.
I set out to understand objective pricing principles. Given a particular set of circumstances, what works every time?
What I learned is that pricing is understandable.
Getting smart about pricing is do-able, and it’s probably easier than you think.
Of course I can’t tell you what your particular pricing should be in a guide. I can, however, show you how to find it.
This master class will equip you with the tools to discover the right pricing strategy for your business and execute it.
The chapters are organized as follows:
- Chapters 1-2 will orient you around pricing concepts.
- Chapters 3-6 are the core pricing policy components.
- Chapters 7-10 contain factors to optimize and influence those core components.
By understanding these principles you’ll know how to find what your customer truly values and that you aren’t leaving money on the table.
And you’ll never enter a pricing conversation naïvely again.
Contents
- Pricing Objectives
Alternate Objectives | Revenue Growth Levers - Pricing Components
Strategy | Method | Structure | Positioning
Components
- Pricing Strategy
Value | Demand Curves | Skimming | Penetration | Value Maximization - Pricing Method
Cost-Based: Asset, Market, or Income | Value-Based: WTP | Markup v. Margin | Surveys: Van Westendorp, Gabor-Granger, Conjoint Analysis - Pricing Structure
Linear | Partial Tariff | Tiers, Bundling, & Discounts - Price Positioning
STP | Unit of Sale/Value | Marketing Mix
Optimizations
- Pricing Psychology
Customer Type: B2B/B2C | Buyer’s Journey (GTM): Sales-Led v. Self-Directed | Psychology Effects & Cognitive Biases - Pricing Optimization
Split Testing | Dynamic Pricing - Pricing in Practice
Unit Economics | Price Waterfall | Price Leaks | LTV:CAC - Price Changes
Deciding | Communication Strategies | Execution: Add Value, Timing, & Grandfathering