Customers will compare apples and oranges”.ĭid you catch that last point? You may need to find pricing parallels with products that are tangentially related to your market because you can’t control what you might be compared to. You can use it to surface what’s unique about your product and lean into it when determining the overall value your product offers compared to everyone else.Īgain, the iA team throws a bit of a curveball based on its recent experience: “Whether a price is low, high, or right depends on what compare it to. Does your product do something that the others don’t? Is it so much easier to use than the rest that the user experience is where the value comes from?Īdd those things to the spreadsheet! The spreadsheet becomes more of a matrix than a competitor list. Perhaps the most important lesson from my own pricing research is that finding parallels in the market will also provide a clearer picture of what value your product provides. Competing on price alone always feels like a risky call just ask any company that’s had to play along with Walmart’s aggressive tactics to be a low-price leader. Outliers can exist, and they might actually be on the low end of the spectrum. Google and PowerPoint come as part of a suite.”Īh! There’s always a story lurking in the details. As you already know, they can do that because they have venture capital or run on an ad-based model (Google). Some of them offer a free model for individuals or low-usage cases. IA says it extremely well in a blog post that’s incredibly transparent with their findings: “As you can see, the pricing ranges from $5 to $25 per user. The purpose of finding parallels is to prevent sticker shock by setting a price that is far outlier from what the rest of the market has already set. Or perhaps it’s more of an opportunity to differentiate your product, offering a pricing model that might appeal to an overlooked segment of the market. If everyone else is selling subscriptions, then maybe that’s clear enough for you to do the same. The key is to find parallels between what others are doing and what aligns with what you’re doing. There’s more to pricing than meets the eye. Some required a credit card upfront, and others allowed you to jump right into the app. Some offered free trials, while others relied on a generous return policy. Some were one-time purchases, but many were recurring subscriptions. There were plenty of competitors in that particular market, and mapping them out in a spreadsheet was a nice way to compare the similarities and differences - not only in the prices themselves but the pricing models as well. I know that’s what I did when getting into the pricing of a SaaS-based app. Chances are that you are not the only player in the market, and you can certainly learn by observing what others are doing. The first step to pricing might be looking at what others are doing. Plus, the iA team was generous enough to share a bunch of the research and work that went into their pricing for iA Presenter. Its status as a brand-new product that sits alongside an existing product with an established history makes iA Presenter an interesting case study on pricing. Let’s use iA Presenter to study the considerations that go into product pricing. How does a new offering like iA Presenter fit into the picture? ( Large preview) iA Writer is already a mature offering, having been available for many years and having undergone several significant iterations since its initial release. iA already had a hit product on its hands, the popular iA Writer app, with its claim to fame being a minimal, distraction-free writing interface. That’s where the team at Information Architects - commonly known as iA - found itself when tasked with pricing a new product called iA Presenter. Pricing is an inexact science, and chances are you will not get it right the first time. The truth is that pricing a product or service is one of the more challenging aspects of product development. I mean, slap a price on the tin, and that’s it, right? It’s time to put it on the market!īut wait… how much money are you going to charge for this thing? That’s often a way more difficult question to answer than it might seem. You had a brilliant idea and took the initiative to make it happen. That thing could be anything, say a product the world never knew it needed or maybe a stellar SaaS app that makes everyone way more productive. This article has been kindly supported by our dear friends at iA who create beautiful, human-centric experiences with their iA Writer and Presenter products.
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