Product Collective - 💲Get the price right for your product

How to set the pricing model for your product

You build products to help customers solve their problems and add value to your business. A key factor in how much value you add to your business is how much money you make from selling your product. Setting a good price is a balancing act between setting a price that customers will pay and that will properly compensate your business. Here are some suggestions on popular pricing models and how to pick the right one for your product.

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Demystifying Product Management’s role in pricing strategy. Technology pricing can be tricky, particularly for software and services. When there’s no traditional cost of goods sold (COGS) to recoup, the pricing strategy for a SaaS product can go in a lot of different directions. Even after you’ve chosen a lane, there are still myriad details to consider. Packaging, bundling, and discounting have plenty of nuances. The ProductPlan team dives into this complex conundrum while taking a product management lens to the pricing strategy problem.
(via @ProductPlan)

Complete guide to 8 SaaS pricing models to grow subscriptions (with examples). With the growing adoption of subscription or SaaS pricing models, figuring out how to price and bill for software has become an intricate process requiring data and insight into your customers’ mindsets. Deciding on the right subscription pricing strategy takes time. You need to make sure products and services are profitable and set recurring billing up to make it easier to predict revenue, handle revenue recognition, and scale with your customers as they grow. The BinaryStream team explores the pros and cons of each pricing model and discusses some examples of each of them in action.
(via @BinaryStream)

Continues below...

Is it me, or is everything AI now?
There was this point a little over a year ago were, all of a sudden – in what seemed all at once – the narrative of the tech world flipped to Web3. Everything was about Web3. Brand new startups were pivoting hard into Web3. Venture Capital firms had a new focus on Web3 (but would try to convince you they’d been focusing on it for years). If you didn’t have some sort of Web3 strategy – then obviously you didn’t know what you were doing.

Of course, the Web3 craze has seemed to wane in recent months. Not that Web3 is gone, but that fervor seems to have subsided. Instead, in the past few weeks – there’s a new kid in town… AI. 

Everything AI. 

Just in the past week alone, I’ve read how AI will replace salespeople, I’ve seen a podcast purely produced by AI that has Joe Rogan interviewing Steve Jobs (not actually… you know… AI-produced versions), and I’ve seen companies literally pivot right into AI (probably the same ones who pivoted into Web3). 

So, this is 2022… it’s now become the year of AI. 

Don’t get me wrong – the actual implications for artificial intelligence are pretty mind-numbing. And it does seem like the technology is in its infancy stages, which means that it's ripe for new products and businesses to develop over the next several years. But if you’re now being asked by your executive team what your AI strategy is for the company… take a deep breath. Perhaps you need one… but perhaps you don’t. First, ask yourself what problems you’re actually trying to solve. If AI is a part of solving that problem, then so be it. But don’t let AI be the solution you’re attaching yourself to in search of an actual problem. 

Of course, the real question is – who is AI-Joe Rogan going to interview next? I’m not going to lie – I’m actually interested and will stay tuned to find out.

Netflix Inc. added 2.4 million new subscribers in the September quarter, after having forecast a net gain of 1 million customers. This growth followed two quarters of decreases in subscriber numbers. This increase in subscribers could be an early result of two major strategic shifts aimed at bolstering its revenue and subscriber base.

The Competition and Markets Authority (CMA), A UK regulator, ordered Meta to sell Giphy to guarantee all social media sites equal access to gifs. This is one of the few instances where Meta (formerly Facebook) did not hold on to a company it purchased to reduce competition.

Google announced that it will offer a free virtual private network (VPN) service to all owners of its new Pixel 7 and Pixel 7 Pro phones—a first for the company, which has previously bundled VPNs with paid subscriptions. It remains to be seen if the free VPN is worth the price or if Google will add catches for people using it.

Security teams are losing trust in the term ‘zero trust’, a key framework for how to secure against modern cyberattacks. The idea of zero trust has seen surging interest from business leaders — and has been prone to misuse by many vendors.

Software pricing models: choice and intelligent implementation. Working out your pricing model is an important stage in a product’s development. These decisions will often determine whether your product generates revenue and achieves success. Kristina Spiridonova explains choosing a software pricing model is so important, what pricing models exist and which may be the most advantageous for your product.
(via @purrweb)

Pricing best practices for software firms. As the software sector becomes more crowded, it becomes even more important to optimize your pricing practices regularly to improve your overall profit margins. Your pricing strategy depends on several factors such as your product offering, your company growth stage and your target market (small customer vs. enterprise). Brandon Pfeffer discusses several aspects that will help you optimize your pricing practices.
(via brandonpfeffer)

How to choose the right software pricing model for your business.  Subscription pricing is a key aspiration for virtually all software companies not already using it. But moving to subscription pricing requires executives to manage service costs, change revenue gradually and manage customer expectations during the transition. Overcoming these challenges can be well worth it: companies become less reliant on upgrades for growth, and the enterprise value of recurring revenue companies is several multiples higher. Lisa Thompson and Charlie Pope discuss the ifs, hows, and whys (and why not), for companies looking to migrate to subscription pricing.
(via @SpiceworksNews)

Scratch to Exit: Product Lessons Learned from Failure and Success

Wednesday, November 2nd @ 1:00 PM EST

John Knific has been involved with two early stage technology startups as a founder and product person – from the very beginning all the way to exit. In this discussion, we'll dive into the lessons learned along the way. This conversation will be especially helpful for those navigating challenges with early stage products – and you'll have a chance to ask questions of your own as well!

The Product Collective community is growing every day, now with over 40,000 members. Are your friends and colleagues enjoying it too? If you have yet to spread the word, perhaps this will help -- you can now win prizes (see below) based on how many people you refer.

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