Pricing Models adapted in the Startups play a crucial role in deciding whether the startups are going to be successful or not in future. Pricing Models have to be quite thought out and tested before implementing them.
The common equation for deciding the pricing is the amount invested in getting the product or service ready along with the profit percentage added to it. But the question here is whether this is the right equation or not, does the price defines the worth of the product or service.
To Decide on the Pricing Model
- Total cost invested in getting the product or service ready
- Get the information from other founders, customers and check the market at what price and how the product or service running
- Have flexible pricing models wherein customer can pick and choose between monthly, quarterly and subscribe accordingly
The current market trends and the revenue estimate are considered while generating the pricing model. At the same time, the pricing model must make the customer feel to have got worth for money paid.
There can be varied pricing models with affordable packages for subscription and on purchase with additional features are provided.
Common errors in Pricing Models
- The resources being misused and without any estimate of scalability
- Lack of optimal usage of time allocated
- Overloading the services they offer to customers
Not finding the growth in leads is an indication of failed pricing model.
Each customer is unique and so are his/her needs. Knowing the purpose for which the product or service is being bought will give you an opportunity to offer the suitable pricing model. This adds value to the service provided and also in building trust amongst the customers.
Various factors contribute to the success of the business. But the pricing model plays a pivotal role in it. At times, the thought out and designed models on paper might not work in real time. The key is to be aware of the current scenario along with the needs of the customers. Ready to adapt and flexible to change the model can result in generating additional revenues.