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Pricing is def a dark art but this seems like the exact opposite of what to do. Asking people who are not your target customers what the price should be should
by asanwal 14y ago
Pricing is def a dark art but this seems like the exact opposite of what to do.
Asking people who are not your target customers what the price should be should get you an answer to price it to be free. These people will not think it is worth more or less than you're thinking as they dont need it. If they offer a price, they're guessing since what you have is not something that solves a pain for them.
Instead, talk to customers early and saying "we are doing x to solve y pain and are thinking of charging $z. What do you think?". If they vomit all over the price, then you know you're too high. If they don't get into price cuz they don't get the product, then you got different problems to solve before pricing.
In general, for these convos, I think going higher with this initial pricing is better as it has price anchoring benefits and it's much easier to go down then up in subsequent convos.
- Swizec 14y agoThe point is, you should ask someone how much they'd be willing to pay. Even nontarget customers will give you some sort of ballpark value that's better than guessing in a vacuum. But of course, target customers are better. I have a feeling most people when starting out, don't even ask those, but just take the "expenses plus a bit of margin = price" formula.
- asanwal 14y agoI agree with second part being a pitfall, but re: ask someone/anyone, let me illustrate why this is problematic. A friend of mine was starting a subscription ecommerce site targeted at women (clothing & makeup primarily). She asked me about pricing (I'm a guy) I used all my "knowledge" to offer up my thoughts on price and then she asked "would your wife or sister use it at that price?" and I couldn't say. At that moment, it became apparent to both of us that although my pricing logic seemed ok in a theoretical, consulting-esque way, I was actually a pretty useless windbag in this circumstance. I fear asking non-customers just risks getting at very wrong pricing - garbage in, garbage out. And also risks you missing out on great product feedback as well.