Lean Pricing: Pricing Strategies for Startups (Hors collection)

freemium model is less of a business model and more of a marketing tactic

It should go without saying that the price must be greater than the cost.

shift service and support from being a cost center to a profit center.

The first school of thought believes that you should never ask the customer for a price point. Rather the focus is on the cost of the problem or the need of the customer. The second school of thought believes that only the customer is uniquely placed to provide you with an answer on pricing.

Present the price increase as a percentage not an absolute number. It will be perceived as a lower increase compared to an absolute number. Weber’s law gives us a clue on how big the percentage should be; Weber’s law is the principle that a change is being perceived in proportion of how big the initial amounts were.

A pricing strategy that takes into account the cost of sales helps overcome this problem. A cost of sales based method is an attractive start and a good basis for a pricing strategy.

You should determine your ideal ratio of free vs. paid customers,

The easiest way to implement price anchoring is to create a tiered pricing strategy providing different versions of a core product at different prices.

reasonable notice of two to three months.