- Benjamin
๐ฃ๐ฟ๐ถ๐ฐ๐ถ๐ป๐ด ๐ง๐ถ๐ฝ๐
In the legend of Icarus, his father creates wings to escape and warns him to not fly too high or too low. Sadly, he plunges from the sky.*
In the reality of startup sales, if you price too high then customers wonโt buy, but price too low and the business wonโt grow.
๐๐ฐ๐ธ ๐ฅ๐ฐ ๐ง๐ฐ๐ถ๐ฏ๐ฅ๐ฆ๐ณ๐ด ๐ข๐ท๐ฐ๐ช๐ฅ ๐ง๐ข๐ญ๐ญ๐ช๐ฏ๐จ ๐ต๐ฐ ๐ต๐ฉ๐ฆ ๐จ๐ณ๐ฐ๐ถ๐ฏ๐ฅ?
๐๐ผ๐๐๐ โ Calculate the COGS, salaries, R&D, overhead, and debt servicing to know what you need. Use this to set minimums.
๐ฉ๐ฎ๐น๐๐ฒ โ Define price in terms of value and how customers can better operate and grow business. Use this to set maximums.
๐ง๐ถ๐ฒ๐ฟ๐ โ Set tiers of prices (e.g. basis, plus, and premium options) to attract both price and value-driven clients.
๐๐ต๐ผ๐ถ๐ฐ๐ฒ โ Offer a selection of different products, features, and/or services at different prices allows customers to confidently decide.
๐ข๐ฑ๐ฑ ๐ก๐๐บ๐ฏ๐ฒ๐ฟ๐ โ Recognize that while $9.99 is essentially $10, research shows that lowering price just a little has a huge impact.**
Pricing is both science and art. Avoid the fate of Icarus by soaring at the perfect height.
๐๐ฉ๐ช๐ด ๐ช๐ด ๐ต๐ฉ๐ฆ ๐ง๐ช๐ณ๐ด๐ต ๐ฐ๐ง ๐ข ๐ต๐ธ๐ฐ-๐ฑ๐ข๐ณ๐ต ๐ด๐ฆ๐ณ๐ช๐ฆ๐ด ๐ฅ๐ช๐ด๐ค๐ถ๐ด๐ด๐ช๐ฏ๐จ ๐ช๐ฅ๐ฆ๐ข๐ด ๐ฐ๐ฏ ๐ฑ๐ณ๐ช๐ค๐ช๐ฏ๐จ. ๐๐ฆ๐ฆ ๐๐ณ๐ช๐ค๐ช๐ฏ๐จ ๐๐ฏ๐ฏ๐ฐ๐ท๐ข๐ต๐ช๐ฐ๐ฏ ๐ฑ๐ฐ๐ด๐ต ๐ง๐ฐ๐ณ ๐ต๐ฉ๐ฆ ๐ฐ๐ต๐ฉ๐ฆ๐ณ ๐ฑ๐ข๐ณ๐ต.
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* In Greek mythology, Icarus and Daedalus attempt to escape from Crete with wings that Daedalus constructed from feathers and wax. Daedalus warns Icarus to not fly too low, lest the sea's dampness clog his wings, nor too high, lest the sun's heat melt the wax. But Icarus flies too close to the sun and he tumbles from the sky. https://en.wikipedia.org/wiki/Icarus
** According to a study conducted by Kenneth J. Wisniewski from the University of Chicago, when the price of margarine dropped from 71 cents at a local grocery chain to 69 cents, sales jumped by an astounding 222%! Two pennies are worth a lot. http://bit.ly/2OGoAcs
Photo by Fabio Brocceri who can be found here: https://www.facebook.com/fabiobrocceri.it