Newsletter #1: Importance of Pricing Strategy, Pay-as-you-wish strategy & PriceOps update

Welcome to the first edition of the PriceOps newsletter. I write about Pricing stories, strategies, operations and actionable pricing insights.

It is common for companies to have a Corporate strategy, a Business strategy, a Product strategy, a Sales strategy, and a HR strategy. Manufacturing companies might also have a procurement strategy to reduce costs and leverage their buying power.

However, many companies are just now realizing the importance of having a Pricing strategy.

Studies have shown that an increase of 1% in price can increase profitability by 11%. A reduction in cost or an increase in volume does not have the same impact on profitability. As a result of this significant impact of price, it is imperative for every company to develop a Pricing strategy.

In order to achieve this, pricing leaders and analysts must understand business strategy, product strategy, and sales strategy. By doing so, they will be able to build the most effective Pricing Strategy that ensures maximum value capture.

A few years back, we visited a beautiful lake called Lake Trubsee, on Mt.Titlis in Switzerland. This was one of the stops on the way up the Mountain in a cable ride. Looking at the beauty of the lake from the cable car window, we decided to take a pit stop at the lake. There were hammocks and row boats all available free of cost. Rowing across the lake and back along a fantastic backdrop of the mountain was one of the best experiences of our trip. Even though renting the row boats was free, the experience was so pleasant and joyful that we couldn’t resist and dropped a $20 in the tip box and wondered along our way back if we should have paid more.

Whenever I think of “Pay-As-You-Wish”, I think of the wonderful experience I had at the lake and how that prompted me to pay for it even though that was free. This approach usually lets the customer set the price for the value they perceive of the product or service being used. Of course, this is not viable for all business models and there is a risk of losing revenue as a result of customers not paying anything at all.

Another successful example of “Pay-As-You-Wish” pricing model is when Radiohead released the album “In Rainbows”. They experimented with “Pay-As-You-Wish” pricing and ended up making more digital income than their entire albums put together even though just a percentage of fans ended up paying for the album. This success can also be attributed to the already established brand value of the band as well as the loyal fans who were willing to pay something as they saw the value in the product being offered.

We often see NGO’s and Public Radios have fundraising events and donations that is essentially their revenue model. All of these are based on “Pay-As-You-Wish” model. Another important tactic or factor in this type of model is Price Anchoring. Whether online or via mail there are some options present to donate, which essential act as price anchors.

2023 was a year of great progress at PriceOps.

🎉 We launched our Beta program!

🥁 2024 is going to be even better as we get ready to do a public launch by the end of this month!

Here's what you can do with PriceOps

🚀 Design and launch pricing pages in minutes
🚀 No-code Payment gateway integration for your pricing plans
🚀 Update pricing pages and packaging within minutes instead of months
🚀 Price Modelling engine to figure out price levels

A few ways I can help you with:

1. Price Consulting: Book a time here to discuss your pricing needs and challenges. Specializing in SaaS and Manufacturing pricing.

2. Simplify your Pricing and Packaging Process: If you are a SaaS companies and you want to figure out your pricing and launch pricing pages in minutes.