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You’re confusing cost plus pricing with value based pricing. Answer this question, “How much is it worth to you the customer to be able to...” and that’s proba

You’re confusing cost plus pricing with value based pricing. Answer this question, “How much is it worth to you the customer to be able to...” and that’s probably how they got to $20/month.

013a 9y ago
I really don't think its that simple. There's a pricing problem with SaaS products like Tinder which suggests that more people will pay if it is cheaper. And with Tinder Plus, they offer literally nothing different that would cost Tinder much more money; it just allows users to use the app more. The problem with $20/mo is that its entering exploitation territory. Like a porn site subscription, it exploits chemical and physical addictions intrinsic to humans to derive revenue. You can say the same thing about, say, any addictive service (like Netflix) and you wouldn't be wrong. But at least Netflix prices at cost, not "value", and Tinder is literally playing with a biological drive and interpersonal relationships, not a simple dopamine addiction.
- paulcole 9y ago
  >But at least Netflix prices at cost This must explain their terrible earnings and stock performance over the past decade or so.
- a_cactus 9y ago
  Netflix does not price at cost.
- astura 9y ago
  What makes you think Netflix prices at cost?
  - 013a 9y ago
    They definitely price below cost right now, given their financial performance. But they're raising prices literally right now; they're working on averaging up the amount customers pay without shocking customers to better reflect the cost of their services. In other words; a business fundamentally cannot price all of their customers below cost indefinitely, and Netflix is working in the right direction. On the other hand, you can price customers above cost if demand is there, and demand for Tinder is there because their business model relies on exploiting biological addictions in our brains.

You’re confusing cost plus pricing with value based pricing. Answer this question, “How much is it worth to you the customer to be able to...” and that’s probably how they got to $20/month.

013a 9y ago

I really don't think its that simple. There's a pricing problem with SaaS products like Tinder which suggests that more people will pay if it is cheaper. And with Tinder Plus, they offer literally nothing different that would cost Tinder much more money; it just allows users to use the app more. The problem with $20/mo is that its entering exploitation territory. Like a porn site subscription, it exploits chemical and physical addictions intrinsic to humans to derive revenue. You can say the same thing about, say, any addictive service (like Netflix) and you wouldn't be wrong. But at least Netflix prices at cost, not "value", and Tinder is literally playing with a biological drive and interpersonal relationships, not a simple dopamine addiction.

paulcole 9y ago
>But at least Netflix prices at cost This must explain their terrible earnings and stock performance over the past decade or so.
a_cactus 9y ago
Netflix does not price at cost.
astura 9y ago
What makes you think Netflix prices at cost?
- 013a 9y ago
  They definitely price below cost right now, given their financial performance. But they're raising prices literally right now; they're working on averaging up the amount customers pay without shocking customers to better reflect the cost of their services. In other words; a business fundamentally cannot price all of their customers below cost indefinitely, and Netflix is working in the right direction. On the other hand, you can price customers above cost if demand is there, and demand for Tinder is there because their business model relies on exploiting biological addictions in our brains.