Pricing fuck ups. Lessons on taking the wrong approach to pricing. Ep03. Nobody is buying, I have to lower my prices. A travel startup (in a pre-pandemic world).
2017. Startup Weekend for the Travel industry.
A new product for local experiences and learnings for travelers — almost at the same time as airbnb experiences, yet very niched down. Great potential. Advantage of the first mover. Very specialized. Initial feedback from beta clients, outstanding. Price point: $20/person. Launched.
And crickets beget panic.
What’s the first instinct? Nobody is buying. We need to lower our prices!
We need to lower our prices. That will get customers to buy!
Too good to be true.
Your price is not the problem. (Maybe) not even your value proposition. It’s finding the right customers AND getting the price right.
If your offering is premium, highly specialized and with high quality, having a low price says “This is too good to be true. Where’s the catch? Am I being scammed?”
Doubled the price to $40/person. (I still think it could have been up to 70–80, but that’s a story for another day).
What did happen
Got fully booked. FOR THE MONTH. No price objections or trying to get discounts. Customers paid and were happy after it. It was worth their while. And they. loved. it.
Would’ve done different
Kept raising the price till they started to say No. That’s where the price limit might have been — and from there, start thinking of new ways to make this new price worth it for the customers.
What didn’t happen
Prospects didn’t run for the hills. Now they felt the price and offering was leveled. The new price built trust.
If your offering is not getting traction, price is not necessarily the problem. It can be the market you’re focusing on, the type of buyer, the cognitive dissonance between price and benefits/outcomes…
Stop everything. Think of new ways. See the unseen.
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