It's been consistently shown that what people say they'll do regarding pricing and what they actually do are not correlated.
Rather than asking people, if you can, try just changing the prices and see how customer acquisition changes.
I sell a program online to consumers, so for a while I tried several experiments in pricing, including a "pay what you want". Structure. Eventually I settled on a price that's about half what the highest accepted price was ($10) and the typically "pay what you want" price ($1). Right now I sell for $4 (perpetually listed as 50% off of $8), which brings in about as much revenue as the $10 price. The advantage, though, is that it gets in the hands of more people, so there's a higher potential for word-of-mouth advertising.
So, I would say, if you're in the position to do so, experiment with the prices in the real world and look at how purchasing behavior changes.
>it gets in the hands of more people, so there's a higher potential for word-of-mouth advertising
This is a very good point and something I haven't considered.
On the flip side, depending on your type of product, I think more customers could lead to an increase in support burden to the point where it is costing you more than the amount of extra dollars you get from the additional amount of customers.
Isn't that quite dishonest? I'm fairly sure this is illegal in at least the UK, so I'd assume in plenty other EU countries too. Are you in the US? Is this practice legal there?
>Isn't that quite dishonest? I'm fairly sure this is illegal in at least the UK, so I'd assume in plenty other EU countries too. Are you in the US? Is this practice legal there?
That's weird, are people in the UK not able to see through marketing gimmicks?
Apparently most of us can't, or it wouldn't be worth using them. ;)
Really you could consider it a subset of truth in advertising law though. How can it be a 50% discount if it's never been sold at full price for a significant amount of time?
Basically what happened is that I did sell it for $8, then I did a 50% sale and saw an increase in sales. I did the sale on and off a few times then just got lazy and didn't get around to removing the sale flag from the website for a while and eventually I just decided that most people only buy it once, so from their perspective it's on sale now. It also saved the effort of remembering to switch the pricing back and forth every few weeks.
and yet we dont care when Manning tech books always have a discount someway somehow. there's almost always a deal of the day. just have patience. I know it's not technically perpetual but it has the same effect.
Joseph A Bank was sued for perpetual sales [1]. The case was dismissed for defects in the plaintiff's case unrelated to the legal theory (they couldn't produce receipts of their supposed purchases), but of course even an unsuccessful lawsuit of this nature could bankrupt a startup.
Of course, without deep pockets, a startup is also unlikely to be targeted for this.
> Rather than asking people, if you can, try just changing the prices and see how customer acquisition changes.
This is essentially the best advice you can get.
IF you have to be safe because you're e.g. in Germany and you can't just change other peoples contracts after they signed up. Just keep the old contract/subscription types and then offer them a migration path sometime in the future.
> IF you have to be safe because you're e.g. in Germany and you can't just change other peoples contracts after they signed up.
Isn't it the very nature of contracts that you cannot change them unilaterally? I'd be very surprised if there are places where you can legally do that, and I wouldn't call such a thing "contract".
You can change prices for new customers while keeping the old price for existing customers. Though if it's a price drop, you might want to lower for the existing ones too.
Eh? So if I told you I had two products A and B and I showed them to potential customers who on average said they would pay $100 for A and $10,000 for B, you wouldn't be willing to bet that when I actually take them to market B would end up retailing for more?
You just compared two (purely hypothetical) things someone said they'd do, you didn't address what @Osiris was talking about, which is the discrepancy between talk and action. The comment is correct, there is a lot of evidence out there that people do not pay what they say, that actions and talk do not correlate very well. So it would be interesting if you had some counter evidence to back your rebuttal, because theories based on logic alone rarely survive contact with actual human behavior.
Rather than asking people, if you can, try just changing the prices and see how customer acquisition changes.
I sell a program online to consumers, so for a while I tried several experiments in pricing, including a "pay what you want". Structure. Eventually I settled on a price that's about half what the highest accepted price was ($10) and the typically "pay what you want" price ($1). Right now I sell for $4 (perpetually listed as 50% off of $8), which brings in about as much revenue as the $10 price. The advantage, though, is that it gets in the hands of more people, so there's a higher potential for word-of-mouth advertising.
So, I would say, if you're in the position to do so, experiment with the prices in the real world and look at how purchasing behavior changes.