It's an important question that every entrepreneur asks himself throughout the life of his business: " At what price should I sell my product? "
" If I sell for too much, I lose customers and therefore potentially money (unless price compensates for volume). If I don't sell at a high enough price, I lose money and potentially customers (unless volume offsets price). What image does the price I set give to and of my product? How does my price compare with prices for similar products? Does my price allow me to stand out from the crowd?
There are 4 main pricing models.
The single fixed-price model, à la carte pricing, volume pricing and tiered pricing.
Many mix different models to create a solution that best suits their product(s) but also their objective (for example: do I want to sell a lot or sell for more?).
The single, fixed-price model is useful if you have a single product, with no ancillary functionality.
A la carte pricing lets your customers choose what they need, and only what they need.
With tiered pricing, you set several tiers generally defined by features and/or functionality. Once a tier is reached, you move on to the next tier and charge according to the number of purchases made in each tier.
Volume pricing, on the other hand, implies that each unit sold falls within the price range defined by the pre-established volume.
These pricing models are not set in stone; they are often mixed and matched... Each has its advantages, disadvantages and limitations. That's why defining your strategy requires time to analyze your own business and the competitive environment.
Whatever the model you're considering, you also need to think about the basis on which to set your prices: quantity, usage, feature set, your customers' perception of the product, or a mix of several elements.
Fortunately, however, any strategy, including pricing strategy, is designed to evolve and adapt. Many SaaS companies have modified their model over time in response to changes in the market.
Kafinea adapts to your pricing model to facilitate your management.