Price your product using value-based pricing: charge based on customer value received, not just costs. Steps: (1) Calculate costs (must be profitable), (2) Research competitor pricing, (3) Understand customer willingness to pay through interviews, (4) Price 30-50% below premium alternatives initially, (5) Test different price points with A/B testing. Common mistake: pricing too low. Proper pricing can 3x your revenue vs cost-plus pricing. Validate pricing through customer interviews and market analysis.
Key Product Pricing Takeaways
- Value-based pricing: Price on customer value, not just costs
- Cover costs + profit margin (minimum 40-60% for SaaS, 50-70% for products)
- Research competitors: Price 10-30% below premium alternatives initially
- Test willingness to pay: Ask customers in validation interviews
- A/B test pricing: Try different price points with different customer segments
- Don't price too low: Increases sales difficulty and reduces perceived value
Expert Tips
Start higher than you think
It's easier to lower prices than raise them. Most founders underprice by 2-3x. Test high first
Use anchoring in your pricing page
Show your most expensive plan first. It makes other plans look affordable by comparison
Price on value metrics
Charge based on seats, usage, or outcomes—not flat rates. This aligns your success with customer success
Run the Van Westendorp survey
Ask: at what price is this too expensive, a bargain, too cheap to trust, expensive but acceptable? The overlap is your range
Review and raise prices annually
Inflation alone justifies 3-5% annual increases. Most SaaS companies raise prices 10-20% yearly
Recommended Tools & Resources
ProfitWell
Pricing optimization and analytics
Typeform
Run willingness-to-pay surveys
Stripe Pricing Table
A/B test pricing on your site
PriceIntelligently
Data-driven pricing consulting