Pricing Your Products: Aim a Little Higher

By Justin Reyes

I recently read a book called Double your Freelancing Rate by Brennan Dunn.  While the the book’s primary audience is freelancers, the reasons and strategies provided by Dunn apply to setting a price point for a product.

Dunn discusses two types of pricing models:

1. One based on features: where a fee is charged for a fixed feature that you offer.
2. One based on value: where you set a price point based on the value of results that your customer is receiving.

Most startups do #1 , set their prices to match their competitors, or worse yet don’t even price their product for fear no one will buy it!  They’re too afraid to charge a higher price or raise their prices for fear that it will deter customers from buying their product.

What is often the case, as Dunn mentions, is that most customers are curious about the high price point rather than being put off by it.  Many will actually wonder, “Why is this product higher than the others?  Is the service better?”

It does take people longer to make a decision to buy if a product is priced higher.  However, the  benefit to having a product that is priced higher than others, or raising the price of it is that you are signaling to potential customers that you have a quality product.  You’ve created a product that you are confident will deliver results.  If they are serious about getting results then they should try it out!

Pricing is never set in stone.  You will of course iterate on it based on the feedback you receive from customers.  But if you believe you can deliver a quality solution then set the price point high even for initial customers.

Did you enjoy this post? If so, and you want more strategies for pricing your product, then check out our Lean Product Development Course Learn more!

Justin Reyes is an web marketer noob, blogger, startup fanatic, coder (when need be) and obsessed with the Silicion Valley tech community.

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