Pricing Your Product Properly Matters

Before you sell your products or market your services you must first identify the cost. Understanding the price will give you a better perspective of your potential revenue, competitors  and target customers. Pricing your product is a defining mark for your company and should not be taken lightly. Follow this five-part series to understand the complexity, trickery, and science behind pricing.

Originally published on Control. March 12, 2015

Part One: Cost-plus Pricing or Value-based Pricing

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There are two general principles to pricing your products and services. You can rather implement the cost-plus or the value-based pricing method. Whichever one you choose, it will not only define your product but your company as a whole.

So what’s the difference?

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Part Two: 7 Free Tricks To Pricing Your Product

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The Good, The Bad, And The Ugly

Shoppers are inherently programmed to compare prices. If you place a $20 T-shirt next to one that costs $50, it is instantly clear which one is more affordable. However, if the $20 one is made to be far less desirable and—for what you are getting—is still quite pricy. That’s because the intention is not to sell the $20 product, but to get people to opt for the more expensive deal for the reason that it’s actually worth it.

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Part Three: Tiered Pricing Can Take Your Product To The Next Level

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Tiered pricing gives people choices—and we all know that people love choices. When it comes to payment, choices may bring more value to your customers. Why not let them choose how much they want and how much to pay for it? After all, when you go to the coffee shop you want the freedom to pick Small, Medium, or Large. This ideology can work for your product or services too.

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Part Four: 6 Ways To Conduct An Effective Discount Promotional Campaign

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After the free samples and 14-days trial period, you may be pressed to earn more leads and gain more revenue. Without adjusting your standard price, you’ve decided that implementing a discount or promotional campaign is the best avenue to take. However, there are no fixed rules when applying discounts or generating coupons. You can hand out flyers on the street, but all that effort may be wasted time. Here are six tips to conducting a successful discount promotional campaign.

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Odds are at one point or another you’ll want to increase the price of your product. Investors, competitors, your internal team, and even the public may be urging you to do so. You yourself know that the current price is under valuing your product and this path is no longer sustainable. There are many reasons why raising the price makes sense, but the question is not why you should hike prices, but how to do it effectively without losing customers and decreasing your conversion rate.

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No Tinder for old men (and women)

Image via Thinkstock

Call it a bad tiered-pricing strategy, friendo

By Elliot Chan, Opinions Editor
Formerly published by The Other Press. March 16, 2015

For Tinder users who are over 30 years old, the premium version of the hook-up app will soon cost double the price for those under 30. It’s a tiered-pricing strategy that movie theatres, airlines, and restaurants have used for decades, but why are people upset about it?

Perhaps we think that Tinder is trying to eliminate the older demographic completely. After all, the majority of Tinder’s user-base is below 30, generally between the ages of 18 and 24. But why would that benefit the company? Would having a dominant younger user-base really help? I don’t think so. I believe Tinder has made a big mistake, and if not for being a subsidiary of InterActiveCorp, which owns Match.com, OkCupid, etc., the app is committing usability suicide.

Tinder’s appeal is the large 30-million-registered-user gallery and the quick-on-boarding capability. Upping the price changes all that. The strategy will not only hurt the older demographic, but it’ll also hinder the younger people too. Sorry if you are paying $9.99 for the service, but I’m really sorry if you are paying $19.99 per month to swipe left and right.

It’s true that paying a premium for the service may help users achieve their goal on the app, doing whatever they are doing, but with so many free social-connection services out there, including Hinge and Coffee Meets Bagel, Tinder appears to be merely poking holes in its monopoly.

Returning to the idea of age discrimination, a company has every right to present this form of pricing. It doesn’t have anything to do with discrimination; it’s more of just how the brand wants to represent itself. Think of all the fashion companies that only sell products to young, good-looking people. But then think of all the fashion dedicated to older folks or people of all ages. Tinder is clearly placing itself on the far side of any Venn diagram drawn. There are hundreds of dating/hookup services out in the market that will accommodate those forlorn users. Tinder is not openly stating it, but it’s clear that it does not want to focus on them.

It’s hard to say that Tinder, so widely successful doing whatever it is it does, has made a grave mistake. They claim to have done the research and all signs point to the strategy being successful. But I believe Tinder did not have to take this route to be successful. We live in a time where age has nothing to do with love, passion, or intimate connections. We live in a time where we claim 30 is the new 20. We live in a progressive time. The fact that one of the pioneering companies leading this progression decided to implement this type of fee to keep certain users on the fringe is a big step backward and a rather surprising discouragement.