Your first pricing page
Last week's newsletter showed you how to think through initial price points. Your next step is figuring out how to arrange those numbers on a pricing page.
We recommend starting simple. Things like discounts, big feature comparisons, and other stuff can factor into your presentation. But in the beginning, those add unnecessary complexity. Complexity makes it hard to know what's working. Worse, it scares away sales. 😱
Instead, focus on helping your customer. Be clear and concise with your 1️⃣Pricing, 2️⃣Packaging, and 3️⃣Positioning. These are your three opportunities to stay streamlined on your first pricing page.
See last week's newsletter for pricing guidance. Packaging and positioning are below! 👇
Find your customer value metric (packaging)
Packaging refers to how you arrange value at each price point. The heart of packaging is a customer value metric (CVM). This is the main thing the customer receives for their cash.
- It describes what customers receive
- Customers immediately know what it is. (Exciting but confusing terms like "12 beta ninjas" don't help anyone. 😬)
- Customers can estimate how much of it they need
- It scales as your customers' needs grow 📈
Identify customer segments (positioning)
Positioning, in this context, refers to groups of customers you're targeting. For example, Individual, Small Business, and Enterprise -
For your first pricing page, keep things simple with 1-3 customer segments. Survey or interview data could tell you what these are. Or, competitors, market experience and personas may give you starting points. Other tips:
- Each segment adds complexity to marketing, sales, and support. If you don't have the bandwidth to service several segments, start with one.
- If you have more than one segment, be clear and concise about why. What's different? Help customers easily determine which plan is best for them.
- Find out, through surveys or persona research, what each customer segment calls themselves. Specific labels help customers orient and see themselves on your pricing page. 🗺
- Unless your market size is in the millions, be wary of freemium.
Give your future self a hand
As your business grows, your pricing will too. You should revisit it every 6 months - in fact, go ahead and put a recurring meeting on your calendar. 📅 Add these four questions to the meeting description:
- Is my pricing based on the most valuable thing I offer?
- Do my prices align with perceived value and willingness-to-pay?
- Am I targeting the right customer segments?
- And, for when you have more data: How do my Customer Acquisition Costs compare to Customer Lifetime Value?
Answer these questions every pricing meeting. Of course, you'll need customer feedback to do that. That's where your current self can give your future self a hand. 👋Below are some ways to gather customer feedback, year round:
- Send out periodic surveys that assess willingness-to-pay
- Institute a "contact us" button at the highest pricing tier. Talk with these customers.
- Circulate feature preference surveys
- Follow up purchases with post-purchase questionnaires
- Add an on-page chat to monitor recurring questions on your pricing page
- Use a simple exit-intent poll that asks, "what kept you from purchasing today?"
- Send out annual questionnaires to paying customers. Questions like, "if our product suddenly ceased to exist, what would you miss the most?" can help you define your CVM.
- Ask customers questions like, "how do you plan to use this?" in a welcome email series
- Involve the rest of your team. What insight does the sales team have? Is customer support getting a lot of requests for certain features?
There are many other options as well. Be creative! And to get the clearest picture, gather multiple types of feedback.
Beyond pricing, packaging, and positioning, there are a lot of things you can micro-test. You can end prices in a 9, set up decoys, offer incentives, vary billing frequency, and tweak many other things.
Those can make a difference later on, but they're distractions until you've set the basics. For your first pricing page, make sure you're pitching the right value, to the right groups of people, at price points they're willing to pay. 💯
Once you nail that, revisit and optimize often. Remember, pricing is your biggest growth lever!
"If you picked your price once and never changed it, it’s probably wrong."- Phil Libin, co-founder of Evernote
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