You need a new pricing model.

You need a new pricing model.

Insight from Paddle

Your pricing model probably sucks.

Methods like cost-plus and competitor-based pricing usually leave money on the table.

Prioritize a value-based pricing model — a strategy that focuses on the customer’s perceived value of your product. 

Here’s why it matters: a mere 1% improvement in price optimization can boost profits by an average of 11.1%.

So, how do you start building a value-based pricing strategy? 

It’s all about customer research.

Start gathering data on how much value your customers place on different aspects of your product.

Conduct surveys, interviews, and analyze customer behavior to understand their willingness to pay. Ask specific questions about ROI and business impact.

This customer-centric approach: 

• Highlights your product’s strengths (your product team thanks you)

• Outlines areas of improvement (your product team thanks you, again)

• Helps you set a profit-maximizing price (the board loves you)

TL;DR: Focus on the customers, and get the money.

Learn more: The Winning Pricing Strategy for Earliest Stage Startups