How to Figure Out Your Customer Segment and Price Your Product
By Poornima Vijayashanker Our customers don’t always turn out to be the people we initially think will benefit from our product. Too often prospective …
By Poornima Vijayashanker
Our customers don’t always turn out to be the people we initially think will benefit from our product. Too often prospective customers either think they don’t need the product, don’t want to pay for it, or are just happy with a competitor’s solution and unwilling to switch!
Dig a little deeper…
It’s important to classify needs of prospective customers into the the following groups:
- Latent need: have a problem and know they have a problem.
- Active need: they are actively searching for a solution.
- Vision: they have an idea for a solution and might have cobbled one together, but are prepared for a better one.
The people who have a vision are the ones who will most likely become our early adopters, and you can figure that out by conducting customer interviews.
Price sends a signal
How you price your product sends a signal to prospective customers, and can attract a particular type of customer.
And it’s important to price your product in order to determine if there is and isn’t a willingness to pay.
In addition to the particular price point, you want to think about the pricing model e.g. one-time fee, transaction fee, monthly or yearly subscription, etc.
In the following video segment, Ben and I talk share the experiments we ran to identify paying customers for our startups BizeeBee and Olark.
After you’ve watched the video, tell me who you’ve identified as your customer segment, and if you’ve been able to successfully convert them to paying customers, in the comments below! I’ll be happy to provide some additional feedback.
Missed the first three videos in this series? Check them out here.
