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May 10, 2023

Mastering the Art of Customer Pricing

Mastering the Art of Customer Pricing

Today we’re talking about starting to charge your customers money.

1. A common pitfall for most founders is undercharging over fear of rejection. Trust me, you’re going to get plenty of noes anyway, so it’s best not to price as a budget service.

2. Don’t worry about setting too high a price. The “wince” test solves your problem. Where if a customer balks at your price, you simply negotiate down. It works surprisingly well.

3. I recommend segmenting your first customers into 5 groups. For enterprise tools, a group might be just 1 customer. For consumer apps, it might be 100 customers. Let the first customer group use the product for free, we just want feedback. For Group 2, set a nominal fee, say $1, to test the purchasing process. Then for the remaining groups, 3 through 5, escalate the price significantly each time and use the wince test when a customer pushes back.

Best of luck out there.

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Ash Rust

Ash Rust

Managing Partner, Sterling Road
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