When to change prices
Most companies treat pricing as a static piece of the puzzle ; once they determine their pricing and discounting structures, they assume they are set to cruise. In fact, nothing about your buyers, their needs, and your markets are static, why should your pricing be? It’s critical to treat pricing as dynamic as your markets' and users’ changing needs and align your pricing with their benefits accordingly.
Here are a few good signals that could warrant a look at your current pricing structure:
When new use cases, benefits, or hacks arise
As your buyers and users increasingly integrate your offering into their lives, they sometimes adapt or hack other workflows to involve your solution. This is a great opportunity to reassess the value they gain from your solution . If they are benefiting from your solution more than they used to, it may be warranted for them to pay accordingly.
When your solution begins serving multiple, distinctly different workflows
Sometimes, as companies implement more of their road maps, they keep adding value with every version that they roll out and without necessarily changing their prices. We see this most frequently during the early stages when firms are just trying to figure out how to grow adoption or keep their customers paying.
It’s important for product owners to differentiate between distinct “value units.” A good example of this phenomenon is when various teams or types of users utilize your product to accomplish distinctly different tasks. Usually, product teams are so close to their products that, to them, all the features and functionality work in unison and make sense altogether. In those cases, it could be helpful to have an outside set of eyes to look into your usage and engagement data. If there are certain patterns in which your buyers benefit from your product differently, you should align your pricing structure with those patterns.
When your solution offers network benefits
Another case for revisiting your pricing structure is when your solution lends itself to network effects. If your buyers benefit from your product increasingly as more people and groups use it, then this may suggest additional pricing or monetization opportunities. It may be worthwhile to visit your pricing structure when your community reaches certain growth milestones or when your users benefit from the shared network effects even more.
When you’re running a platform business
Two-sided platforms also make an interesting case for opportunities to adjust your prices as your value proposition grows and changes by time. Platform businesses rely on two different types of relationships benefiting from the shared ecosystem co-dependently but differently. Some new pricing opportunities may arise for two-sided platforms once they learn which relationships enable more business success on either or both sides of the platform. All of this is to say that it’s critical to take a look at the various conversion metrics of the critical relationships periodically and better yet, create new value metrics around them.
Finally, make it easy for everybody in your team to bring in insights that could impact the way you formulate how a buyer realizes value. Make your buyer/user stories available for everyone to contribute and understand. When everybody in your team knows how what they do helps create, communicate , and maximize value, you’re collectively better off for it.
And in the meantime, we can help. Schedule a free discovery call with us to get started on your own pricing innovation.