What's your go-to pricing strategy for new products or services? What makes this approach effective in your experience?

Question

Creating an effective pricing strategy is crucial for business success. This article presents key insights from industry experts on developing a pricing model that aligns with customer perception and boosts client retention. From value-tiered transparency to competitive matching with superior features, discover practical approaches to establish and communicate your product's worth.

Daniel Harman · Answer

Having built multiple businesses, including Growth Friday, my go-to pricing strategy is what I call "value-tiered transparency." This means creating distinct pricing tiers ($995/month for our SEO services, for instance) with crystal-clear deliverables that demonstrate ROI potential at each level.
For my digital marketing agency, we found that small businesses respond best to pricing that includes performance guarantees. Our 90-day performance promise dramatically increased conversion rates during sales calls because it shifts the risk equation. When clients know we'll work for free if we don't deliver results in 90 days, price resistance melts away.
Testing revealed that startups and small businesses value predictability over discounts. When we moved from hourly consulting to fixed monthly packages for PR and SEO services, our retention improved by nearly 40%. Clients appreciate knowing exactly what they're getting and when they'll see results.
The most effective approach I've seen is coupling transparent pricing with educational content about value delivery. Our strategy calls with me (the founder) are deliberately non-salesy because education builds trust first, which makes price sensitivity a secondary concern when clients understand the potential ROI.

Charles Kickham · Answer

When it comes to pricing new products or services, I've found the most effective strategy is to intentionally avoid pricing in your initial business plan and investor conversations. This approach might sound counterintuitive, but it's saved countless entrepreneurs I've worked with from the classic trap: either pricing too high (investors dismiss your plan) or too low (investors take advantage).
Instead, focus on establishing compelling value first. At Cayenne Consulting, we advise clients to tell their story persuasively through market analysis, competitive advantages, and clear problem-solution dynamics before revealing specific price points. This sequencing gives you negotiating leverage once investors are already emotionally invested in your concept.
For early-stage ventures specifically, I recommend a soft-launch approach with limited pricing tests. One SaaS client we worked with introduced three different price points to separate customer segments, gathered response data for 60 days, then adjusted based on conversion metrics before finalizing their pricing model for investor presentations. This "evidence-based" approach resonated strongly with VCs who appreciated seeing real market validation.
Timing matters tremendously. The 500+ hours most management teams invest in business planning should include building a flexible pricing framework rather than rigid price points. When you eventually do reveal pricing (typically during due diligence), support it with clear unit economics and margin analysis rather than arbitrary figures or simple competitor benchmarking.

Shantanu Pandey · Answer

For new services, I use a value-anchored pilot pricing model. We start with a short-term engagement at a lower, fixed rate that ties directly to a clear outcome. For instance, a three-week UX sprint priced at one-third of our full project cost. This lowers the barrier for new clients while letting us prove value quickly. After the pilot, 70 percent of clients upgrade to longer retainers. This model works because it reduces risk for the client and gives us a chance to demonstrate expertise without heavy upfront negotiation.

Jack Perkins · Answer

When launching a new product or service, I often lean towards value-based pricing. The idea is simple: price your offering based on the perceived value to the customer rather than just costs or competitor prices.
Why does this work? It aligns the price with what your customer is willing to pay, which can maximize revenue and profitability. In my experience, it forces you to deeply understand your customer, refine your value proposition, and differentiate your product effectively.
This approach also gives you flexibility. You can start with a premium price if your product offers significant advantages or go lower if you're aiming for mass adoption. It's not a one-size-fits-all strategy, but when done right, it can significantly boost your bottom line. Just remember, the key is understanding your customer's perception and willingness to pay.

Eugene Lebedev · Answer

I personally use competitive strategy. I analyze my closest competitors and see how much they charge. I then try to match my pricing to theirs but offer many more features.
For example, recently we developed our own Power BI connectors for QuickBooks Online. Our closest competitor was cData, who charge $1,200 per year. We decided to charge the same but also offer a more convenient data format and a free Power BI dashboard analyzing the data from QuickBooks Online.
This approach helps us to compete on quality rather than price and brands us as the highest quality solution.

How To Create a New Pricing Strategy

Table of Contents

How To Create a New Pricing Strategy

Value-Tiered Transparency Boosts Client Retention

Establish Value Before Revealing Price Points

Pilot Pricing Model Proves Value Quickly

Value-Based Pricing Aligns With Customer Perception

Match Competitors While Offering Superior Features

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