Startups are only suitable for three pricing strategies

price. There are any more than the word "price" more than "magic? How did you set the price strategy?" this issue can enhance confidence? Many times, startups will repeat the prices of competitors or to adjust its strategy. What should we do if the other people are charged by the seat?


is this the right thinking process

Madhavan Ramanujam is a pricing expert. He is the famous Simon Gu and management consulting partner, he said startups should choose the pricing strategy of only three: revenue maximization strategies, penetration pricing strategy and pricing strategy of liposuction (high pricing strategy). The focus of these three strategies are revenue growth, market share and profit maximization.

revenue maximization strategy (revenue growth) – maximizing revenue growth in the short term. The willingness to pay for different customers is not particularly clear, the company should use the revenue maximization strategy, ideally, short-term prices and long-term price. The goal of many software companies in the middle market is to maximize revenue, and to sell the highest price in each sale.

penetration pricing strategy (market share) – lower product pricing, to win the absolute market share. This is a bottom-up pricing strategy. Lower prices can allow the market to accept the resistance to a minimum, and rapid growth, when the market has been widely accepted, and then transferred to the high-end market. Penetration pricing strategy will lead to enclosure – expansion of the sales strategy. Expensify, Netsuite, New Relic and Slack are used in this model. Penetration pricing strategy to market share in the first place.

liposuction pricing strategy (profit maximization) – began to take a high price, and then to low to everything in good order and well arranged low consumer groups to sell more products. Liposuction pricing method is in the consumer hardware industry commonly used. Apple’s latest iPhone price is higher, and then recycling the old version of iPhone, sold to different users. Madhavan pointed out that Steve · Jobs is not only a product genius, but also a pricing genius. Because he can combine these two kinds of talent, Apple Corp quarterly sales profits will break the record.

liposuction pricing strategies are not common in the software industry, because some of the company released the product will be accepted the most experienced users (these are willing to pay the user with most of the profits). Of course, there are some exceptions, such as Oracle database, Tanium security products, Workday human resource management software.

startups pricing strategy should be clear. Determine which strategies should be used and work with sales, marketing, products and

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Comments