Looking for an expert to help find the fit pricing model for our eCommerce platform. We have a model live in beta, but want to challenge it with a deeper knowledge base.
https://www.youtube.com/watch?v=jwXlo9gy_k4
https://www.youtube.com/watch?v=T9ikpoF2GH0
Basic idea is: You can think of pricing intuitively with 3 variables: Price, Cost, and Value.
difference between "Price" and "cost" is your profit margin. The higher your margin, the more value your product must produce for the customer. The customer will not buy if the Price = the Value of the the product, because then there is no incentive to buy. So the greater the incentive you give them to buy, the more customers you will have, but the less money you will make and the less incentive you will have to improve the "Value".
You easily predict your "Costs", Price is a variable you control, so the independent variable is "Value". In a platform like yours, my absolute top priority is to find a way by any and all means to identify what value my product is producing to the end customer, and find ways increase this value as much as possible because then I'll have more profit. In a sense your incentives are aligned with the customer, in order to make more profit, you need to produce more value for the customer. Gustaf Alstromer video on metrics, including PMF is really important to study here. Run many little experiments and set up A|B tests, but you have to read about some statistics to make sure your structuring your experiments and interpreting your results correctly.
I wouldn't count on hiring someone to do this because to hire someone that could produce trustworthy results is really really expensive (Not to mention hard to find and retain), and getting someone cheap might be an even bigger mistake.
Really appreciate this reply. I'll dig a little bit deeper into this now. H