When entering an established market, use competitor data to set a premium price point. This lets you test the market's tolerance. If conversion is low, you can test lower prices, but it's much harder to raise prices after launching too low.
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When selling high-ticket services, don't raise prices incrementally. Instead, make a significant jump (e.g., from $3,800 to $8,000). If it doesn't sell, you've gained valuable market data and can simply re-price the next cohort. The upside of finding a new price ceiling far outweighs the risk of a single failed launch.
Treating pricing as a "set it and forget it" task is equivalent to ignoring user feedback on a core feature. It must be continuously monitored and iterated upon based on feature adoption, delivered value, and market changes, just like any other part of the product.
For luxury goods or services, pricing is a key signal of quality. A price point that is incongruent with luxury branding can make potential buyers skeptical and actually reduce close rates. Raising prices can increase desire and conversions by aligning perception with promise.
To sell more of a $300 package instead of a $200 one, introduce a $500 option. Most won't buy the decoy, but its presence shifts the customer's reference point, making the $300 package appear more reasonable and valuable by comparison.
Instead of arbitrarily changing your price, run A/B tests by framing them as timed promotions (e.g., "New Year Sale"). This allows you to measure the impact of different price points on conversion rate and average order value (AOV) without alienating customers, helping you optimize for overall return on ad spend (ROAS).
A low price can signal a low-quality or immature product, repelling enterprise or mid-market customers. Raising prices can make your product appear more robust and suitable for their needs, thus increasing demand from a more desirable—and previously inaccessible—market segment.
Selling a small, cheap "land" deal to an enterprise customer is dangerous. When you try to expand, they will question the 10x price jump, making it nearly indefensible. Start with a price ($75k-$150k) that reflects enterprise value to avoid being trapped by a low initial anchor.
Benchmarking against competitors is dangerous because they may have already made pricing mistakes. Furthermore, you might offer superior value under the same service name, meaning you'd be severely underpricing your more comprehensive offering.
A very high sales close rate (80% or more) is a clear indicator that your product or service is significantly underpriced. Instead of celebrating the rate, view it as a signal to raise prices by 3-4x to maximize revenue, even if the close rate drops.
In a true luxury market, pricing that is too low is incongruent with the brand promise and can actively harm your close rate. A wealthy buyer expects a high price as a signal of quality. If your 'luxury' wedding entertainment costs $30k when flowers cost $500k, the price signals that it's not a premium service, creating distrust.