Simple Pricing Strategies For Startups To Consider


Pricing a product or a service is the most important thing that you need to decide before you announce it. It’s the pricing that should be perfect and it is also important, as it is directly going to affect the amount of revenue you can generate further. It’s the price of your product that seems to be having direct impact on the volume and revenue. However, the price factor can even affect different other aspects like how your product will be perceived in the market and how your customers are going to evaluate as well as buy your product.

Pricing models:

Well, it’s the pricing that can remain really simple when you calculate how much it’s going to cost while developing a product. On the basis of it, you can decide the margin and can charge that amount to your customers. There are different pricing models you can avail now online. There are also mobile apps that can be monitored in different ways. As there are different models, they can also work for different products in different ways. Well, there are pluses as well as minuses for every model. Pay-per download like model works in the best way for some platforms. This model is mostly designed to address the users demographic as well as it also address the billing like elements. With comparison to Android, IOS and Amazon work in the best way. When you are targeting a particular audience base, you need to go for the advertising based monitoring method. You may also need to opt for a big volume to get the profit. When you have the virtual goods on sale, in-app payments can work better. Freemium models are there that can work in a better way when you have customers who wish to try your product first. After this they may want to buy that product. When you want it to work in a better way, the free version you have should be loaded with the features that users desperately want to have. Otherwise, your users will remain satisfied with your free version. You also need to decide about the price upgrades.

Pricing strategies:

Once you have taken the decision about the model that needs a pricing, you also need to decide the pricing strategy for it. As far as the pricing strategies are concerned, they can be simple to really complex ones. Pricing strategies can be best elaborated with the help of some examples. It’s the Google Apps announced for businesses come with easy pricing strategy. With just five dollar per month you can use it. It’s always easy and simple to understand. Customers can easily assume the cost that they need to pay for Google App while getting this for their companies. Such pricing strategy can work great for the self-served type of products. And this can even drive more customers for the website. These customers can register with the site and start using the products instantly. These customers hardly want to interact with the sales team appointed at your end. Such pricing strategy appears to be perfect for the small businesses. You need to put in extra efforts while going after those direct sales.

You need to compare it with the pricing strategy followed by Microsoft when it announces products for enterprises. Have you ever thought that how much you need to pay while trying to use SQL server for your business? There are really many elements involved in taking right decision about the price you need to pay for this. Before you buy this product, you need to call the sales team of Microsoft. And when you do this, it will offer them a great chance to come up with cross sell and up sell for different other products announced by them. This pricing strategy can work fine when you have a wide range of products which you cannot bundle with others.

It’s the third pricing strategy which is used by the Amazon like big player. It’s the AWS pricing method, which appears as the most complicated one as well as reserved the instance, data transfer, pricing-per instance, CDN like support service, Plus, etc. the databases can also be priced separately. There is also a tad that is really tough to understand. However, AWS has really made things simpler for the onboard consumers. It’s the pricing strategy adopted by this method is what making things easier for the end users to try and use the related product. As per this, they say that come and try it, and once you are satisfied with the cost and use, then continue with it. This pricing strategy also supplies more provisions for the customers. This is also helping leading player like Amazon to make their customers feel the ease and also allowing them to keep coming in.

Beware of the caveats:

There are many products that fail all due to the wrong pricing. All you need to think about gotchas related to the pricing when you decide to adopt a particular pricing strategy for your products. It’s the freemium pricing that carries serious risks. For example, if you have announced a free version and sixty percent of the free version has satisfied your customers, then there is always a chance for them to stick with that sixty percent and they will not buy the complete product from you. When you are using freemium pricing strategy, you shouldn’t have any free version. Only add the paid version for it!

It is also better to start with the higher pricing and then come towards the lower margin while allowing customers to get discounts as well as offers. When you do this in the other way, it can become too dangerous for the sale of your product. Going from a lower price to upper price range can create enough challenges for the sale of the product.

Pick the right thing that suits your product:

There is hardly any particular model or pricing strategy that works perfectly for all the products. With that being said, you have to think about the pricing strategy that can work in the best possible manner for your product. You also need to determine the risks associated with the model and strategy that you have decided for product.