The Price of Pricing Products
“My win comes from having a positive client experience and developing a product I am proud of, not from extracting the largest profit margin.”
Pricing is one of the scariest parts about developing and pitching a product for me. The part where I say “you should give me money for this”. So when I began my journey as an entrepreneur in college, pricing was taught as a game of getting people to say yes to the number you wanted, and that was daunting to me. But everything about starting a business was daunting to me so I didn’t pay that particular portion any attention. Being an introvert, networking was my first pilgrimage; I’ve learned how to take those things in stride and it turns out, I’m a pretty good socialite in bursts. But pricing…still a precarious thing for me. Whenever I’m developing a pitch, the ghosts past mentors and speakers come to me “Price on value, not costs!” “Anchor them high and settle on what you really want!” “Make them feel like they’re getting a deal!”. I heeded these teachings because I feel like I didn’t know enough to have my own opinion.
“This is how we’ve always crossed son…”
A big problem with blindly following advice is that you don’t understand the why, the underlying principles that created that piece of understanding. I’m a scientist, I have to know why. I’m an artist, I have to act from why. Unfortunately, I’ve been spending all of my time building the what, “Here is my widget and it does things!”, and the only comfort I’ve attained when I drop the price is the familiarity of repetition. But I haven’t felt really good about it; I really just want to get to work and be happy with what I’m getting paid. Just let me off the [legal/political/social] leash so I can go attack problems.
I think that the tactics I’ve been taught to use have a different goal in mind: Get as much money for your product as you can. I’m just not that guy though. Money to me is only a way to obtain the things I truly want, not a goal in and of itself.
“While everyone is trying to get the price right, ol’ girl with the $1 bid is trying to win. Be like her.”
So my new hypothesis is that I can minimize the perception of pricing as a barrier by focusing on the relationship and making the product development process more collaborative. My win comes from having a positive client experience and developing a product I am proud of, not from extracting the largest profit margin. I realize that many have probably come to the same conclusion but there is merit to reinventing the wheel when you seek truth.
The Price of Happiness
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