An excellent summary -- thank you for posting this. I like a lot of point you make here. The biggest challenge, at least in my experience, both in my corporate past and now, as someone who's building his own content business is perceived value versus perceived price. It's especially tough one when you are new player (or an established one, but going into a new space). In these case it's all about changing perception.
Thanks and, yes, this is very challenging in new product categories. However, getting it right can make a big difference in your financial metrics. I mentioned "anchoring" in this article. Just like anchoring in a negotiation, if you create a category and set the price wrong (typically lower than the customers really value it) you will set yourself and the entire category up for weaker profits in the long-run. It is hard to ever get out of that. Early on you need to listen to prospect response to fine-tune your price points. Further, if someone new enters the category and prices lower, don't automatically follow suit.
Thank you for the great series, it was insightful to read all the articles. A suggestion would be if you also cater to an article of what factors should a PM look at when pricing a new feature. For example, how shall a PM at an airline aggregator price a "refund on cancellation" policy. Again, thanks for covering pricing in this detail.
RE: True, I guess this model wld be B2B2C. I realize now this example may not be totally valid here since the series have covered B2B and I am talking about B2C.
However, if you plan to write one in future on a B2C feature pricing strategy for a PM, maybe this could be one of the little idea. In such a case , let's take B2C. This would hence become a refund direct to consumer. Let's just say a customer is planning to travel at a certain date but is not sure. Hence while booking the ticket, he also adds a cancellation policy which costs him little extra but guarantees him majority of ticket booking fees in case he opts out at last moment. As a PM who would want to add this new refund feature on a travel aggregator website, let's say expedia, what strategy and factors wld come in play while they make this decision . Again this is a just an example, there cld be many instances.
I learnt a lot in this series, thank you for writing these. Looking forward to many other brilliant posts from your side.
An excellent summary -- thank you for posting this. I like a lot of point you make here. The biggest challenge, at least in my experience, both in my corporate past and now, as someone who's building his own content business is perceived value versus perceived price. It's especially tough one when you are new player (or an established one, but going into a new space). In these case it's all about changing perception.
Thanks and, yes, this is very challenging in new product categories. However, getting it right can make a big difference in your financial metrics. I mentioned "anchoring" in this article. Just like anchoring in a negotiation, if you create a category and set the price wrong (typically lower than the customers really value it) you will set yourself and the entire category up for weaker profits in the long-run. It is hard to ever get out of that. Early on you need to listen to prospect response to fine-tune your price points. Further, if someone new enters the category and prices lower, don't automatically follow suit.
Thank you for the great series, it was insightful to read all the articles. A suggestion would be if you also cater to an article of what factors should a PM look at when pricing a new feature. For example, how shall a PM at an airline aggregator price a "refund on cancellation" policy. Again, thanks for covering pricing in this detail.
Thanks. RE: Your example, is this a refund to the airline or direct to the consumer? I am guessing your business model is set up as B2B2C?
RE: True, I guess this model wld be B2B2C. I realize now this example may not be totally valid here since the series have covered B2B and I am talking about B2C.
However, if you plan to write one in future on a B2C feature pricing strategy for a PM, maybe this could be one of the little idea. In such a case , let's take B2C. This would hence become a refund direct to consumer. Let's just say a customer is planning to travel at a certain date but is not sure. Hence while booking the ticket, he also adds a cancellation policy which costs him little extra but guarantees him majority of ticket booking fees in case he opts out at last moment. As a PM who would want to add this new refund feature on a travel aggregator website, let's say expedia, what strategy and factors wld come in play while they make this decision . Again this is a just an example, there cld be many instances.
I learnt a lot in this series, thank you for writing these. Looking forward to many other brilliant posts from your side.