How did you come up with the price of your product? (Some great answers here!)

Since I just launched my product, I honestly made it all up :P

For us, it's a bit different. We are productized video production service, so not a Saas.

But we've controlled the quality of leads so much through our pricing. We started by offering video production for super cheap with very little margins.

Since the last time we posted about our story here, we've actually increased the pricing one more time.

Here's how our pricing works:

Once a client is onboarded (we have visual assets, tone of voice, set design) our clear production processes enable us to produce videos at scale.

That means that we want to prioritize customers that want to produce multiple videos. We control this from the pricing.

You can buy just one video for $2000, or you can order 10 of them for $1000 each. On top of getting 50% off for each video, we also offer free thumbnails, shorts, and branded props.

One thing I've learned is that pricing is something you constantly work on and there is no clear formula. For service providers, you will be able to get better clients by not positioning yourself as a super cheap product.

This is us btw: videodeck.co

In general my pricing was based off:

• 33% based off competition
• 33% feedback from customers
• 33% My gut feeling

Curious if that jives with others' approaches or if I'm out of wack? haha

Decide how much your product or service is worth and then double it. Anyone have success following this advice? I keep hearing it. And it feels like an odd way to go about pricing to me. But maybe there's something to it?

While reading through the IH founder interviews, I've noticed an interesting pattern: For B2B products, the more they increased the price, the better it was for them. They attracted more serious clients who didn't need as much tech support and the whole experience with dealing with them was far better vs. when the pricing was cheap.

Anyone else experienced this?

I came up with the idea by watching how Product Hunt engaged their users via Twitter. They would often ask them for recommendations or their thoughts and then the comments would lead to engagement and tagging other folks on Twitter. A lightbulb went off saying "hey, it would be cool to embed this on a website to help foster community".

So I built Zigpoll (https://www.zigpoll.com) with that idea in mind. After getting some actual customers though, almost no one used it as intended. Customers instead used it to get structured data directly from their customers right at certain points in their funnel (add to cart, post purchase, first visit, etc...). So I leaned into this use-case instead and built a Shopify app to make it a no-code process. The product is now growing nicely since it has product-market fit.

Imo the TLDR moral is: just start on something that you think is a good idea but don't be afraid to adjust it after VIGOROUSLY observing your users. Also it helps if the product you build is a little bit pliable (ex. allow for your user's data entries to be open-ended with WYSIWYG inputs). People are amazing at finding tools that fit their use-case, even if it wasn't what you originally intended.

I don't have any actual competitors, so I picked a price I would pay, and one I'd be happy to sell it for.

It's been working out great so far, slow but consistent sales, just need to increase awareness!

I've started a few services (hands-on, so it's not SAAS), and usually, I do this.
I start from really low - a 1/3 or 1/4 of what I'd like to charge originally.
I limit the discount to 2-5 packages. If I can sell them with minimal marketing, then I'll increase the price by 50-100%. And then repeat the process, until I can't sell anymore, or selling is really tough.
If I can't sell anymore, I reverse to the previous pricing - that's it. That's what my pricing will be for the next few months.
I'm doing exactly this for https://Forever.so and it seems to be working well.

To start - We went through a couple of thought exercises - looking at products with a similar business model and looking at their price level, also calculating the expected value we will save to the customer and of course in the end you would discount to whatever level you are expecting first clients will be willing to pay (most of the founders tend to undervalue their product at this point). This made us have initial pricing at 20 USD/user/month.

But here we were sensible enough not to run to everybody with the price, but we pushed for further validation of the idea and MVP with an open question at the end of an interview, asking "How much you would be willing/like to pay for such product?" Answers ranged between 20 and 200 USD per user per month. That's why we moved to 40 USD/user/month. The expected typical client has a team of 3-5 people.

As we are preparing for launch and still have some challenges with actually collecting money automatically, we just decided to switch to a special price for the launch at 100 USD/company/month to simplify everything and have a sort of special offer. Unlimited users. That should help drive engagement and the amount of feedback.

The interesting point around pricing:

We have two typical clients: a) in-house marketing teams, b) digital marketing agencies (slightly unexpectedly for us, but feedback is good).

In my eyes, our revenue should grow with the success of the client, also not be the first service they will cut off in the case of recession. Therefore we came to the conclusion, that there will be two pricing lists - for companies (x USD/user/month), and for agencies (x USD/company/month). As if a company is hiring more people to the team, they are growing and have more revenue themselves. But more people working on the project does not mean more revenue for the agency, they increase revenue per client/company they serve. Therefore they will be willing to pay rather for new clients to onboard.

This possibly can create tension between both price lists, so to differentiate enough, agencies are buying an initial package for 5 companies, putting it much higher than the offer for SMBs and after that, they can increase their count per 1 company.

So it was a process for us and I'm really not expecting that we are finished with changing things and looking for improvements. But in general, I would always recommend checking with real potential customers what their expectations are, and every now and then after gaining a significant amount of customers trying to raise the price for new ones to look for where the ceiling is. Or come up with an up-sell solution.

I always base the pricing of our products on fixed costs involved - how much server load would be needed by an average customer and how much it costs to have one onboard. After this analysis, you can add some premium based on your competitors - and if you are still cheaper it is a good start :)

Didn't see anyone post one of his videos but Patrick Campbell from Profitwell has a ton of keynotes about how to price your product. He goes way more in-depth than other advice I've seen. There's a really good one about how he spent 1k to validate his mom's hypothetical knitting company but I couldn't find it so here are some results from YT.

https://www.youtube.com/results?search_query=patrick+campbell+pricing+knitting

Looked at my competitors who aren’t niched. Took their average price. Multiplied it by 2

The main response I see to go 20-50% cheaper than the competition (and avoid competing with big companies).

Totally disagree. Build a killer product for the right niche, choose a price that would feel good for you, then add another 50% (obviously takin into account what the market is dictating).

That advice won't work for everyone, but I've heard it said time and time again, and I believe it's true: Charge more.

It's important to be accessible (consider pricing parity), but being the cheapest option is not a favorable position to be in IMO.

We created alongside our first early adopters (to tailor our products to their needs) and then let them use the software for free for the first year. After a few months in, we asked them what they would be willing to pay for it in the future. This has given us a good idea of how much value we are providing, and how much we can provide to similar customers.

For me - I studied my competitors to decide on my pricing plan. Then I decided to create a pricing poll on my website to ask if my potential customers would pay at this price - kind of a price to value validation.

In my case, I have studied all my competitors before deciding on my pricing plans.

You start off with what "feels" right, and then you can go from there. I've watched several videos by successful SaaS founders where they remind you to not be afraid to experiment with pricing over time. That's what we've done. In two years, we've changed our pricing three times, but we never force our existing customers to adopt the new pricing — the new pricing only applies to new customers. We're still figuring it out to be honest, but the main point is to just keep experimenting until it's right.

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