We are new to the industry and our competitors are charging 3x of our amount. So should we raise our pricing or continue with less pricing to accquire more customers?
I feel less is good, but feeling that are we loosing some amount where the customers are already ready to pay.
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I think initially more customers paying less is okay but once your customer gets hooked with your products you can slightly increase the pricing
What type of industry are you in?
You could try raising your prices to a certain threshold (for you to determine) so you can have more customers paying more
Do whatever brings the most profit.
Two different companies. Both are valid strategies. Two reads: https://hbr.org/1993/01/customer-intimacy-and-other-value-disciplines to understand how the concepts relate to each other and https://www.amazon.com/Blue-Ocean-Strategy-Expanded-Uncontested-ebook/dp/B00O4CRR7Y/ to understand when either may be better for your target industry.
what is the reason behind your existing customer is using your product ? is it pricing or something else?
is your product equal or better than your competitor ? because when you close the price gap then customers will have one less factor to consider which is pricing between yours and their product.
Per my understanding Yes it is pricing. Our customers want more in less amount
then may be you can reasonably increase pricing if it’s required, or may be do A/B testing.
But since you seem to be in the startup phase, if I were in your place (even though I don’t know what your product is), I would focus on acquiring more lower-paying customers. You can always ask them to pay more at any time. Once my product has a reputation on par with my competitors and achieves feature parity with them, then I would think about increasing pricing.
What is your plan.
Both are viable.
You can first grow bigger then sell more expensive Options later to that bigger audience.
Or you can just charge more for less customers but probably will also have less cost to manage and get them.
The best answer to this is: IT DEPENDS
You gotta do the calculations and add the 5y and 10y strategy to it.
If you’re a software startup, it is a good idea to compete with your competitors on price, because the marginal cost of selling software is near zero.
But there are diminishing returns on cheaper pricing.
Like, let’s say you doubled your prices, so you cost 66% of your competitors’ price instead of the 33% now. 66% still leaves you significantly cheaper than your competitors. Who is going to pick your product at 33% price but not 66% price? Are there people out there who will be like “I will buy OP’s product at $33, but if OP’s product costs $66, I’d rather buy OP’s competitor’s product for $100 instead”?
(That’s not a rhetorical question - if your competitors have a better product, or if they have more brand recognition than you, then maybe 33% price will get you a lot more customers than 66% price. But if you’re on relatively even footing with your competitors in terms of brand and features, then you’ll probably lose very few sales if you bump up from 33% to 66%)
Rabid price slashing is everybody’s ‘growth hack.’ And most announce they’re going to slash prices to get something they want to call ‘traction.’ This happens so much the most popular price is zero.
One guy posted he made one million dollars in revenue. His question was, at what point could he tell his parents they no longer needed to pay his rent. He did not like my answer at all.
High price or low, profit is your guiding star. It’s just that low pricing – one third of industry average would qualify – requires massive buying power and logistics efficiency to profit. Most small business has neither. So, we’re back to not enough to pay rent.
The real question is, having locked yourself into low price hell, can you ever do anything else? People find bottom-feeding is a trap. The instant you try to raise prices, the only reason people are buying vanishes. Because we do not live in an era of excellence in business.
You want to give the Price knob a couple of cranks? Sure, why not? Report what happens.
Depends on the product. Usually premium products have less customers but high prices and low quality products have more customers but less prices.