Most startups eventually face the key question: How much should we charge?
There’s no one true answer but, Des Traynor shares four great principles on pricing.
One principle resonated particularly well with me from having built a social media platform inside an enterprise environment.
Customers who don’t pay for software, or who want big discount codes on a $9 per month plan, are the wrong ones to take feedback from. As a rule of thumb, feedback from non-paying users tends to focus on additions to the product. Feedback from paying customers focuses on improvements to the product.
Even though in our case no end user was ‘paying’, active users incurred real [opportunity] cost from any friction we introduced into their workflow.
We classified users into four personas for our content collaboration platform:
Consumers
– grazers
– explorers
Creators
– seeders
– syndicators
Typically grazers asked for more features to enhance the spoon-feeding they relied on. There was no cost to them to use the system.
All other persona types asked for improved features.
Not exactly what Des had in mind, but the principle is valid for me and I’ve only just realised what was going on.
Very practical, usable advice.
