Pricing Strategy Insights

Most founders are terrified of their own worth. The traditional business advice says: "Start low and build up." But after working with hundreds of entrepreneurs, I've learned something counterintuitive: Undercharging by 300% isn't just bad for your wallet, it's bad for your clients. Last year, I watched a brilliant consultant struggle with this exact problem. She was charging what felt "safe" instead of what she was worth. When she finally made the shift to premium pricing, something beautiful happened, and it changed how I think about creating fair value exchanges. Here's what I learned about honoring your worth while believing in mutual success: 1. Commitment Over Comfort When people invest appropriately, they're committed to their transformation. Fair pricing attracts founders ready to do the work, not just observers. I've seen consultants charge too little and watch clients disengage, then price fairly and see those same clients implement everything with dedication. 2. Partnership Filter System Fair pricing attracts the right founding partners for mutual growth. You're not just serving clients, you're choosing who you grow with. This creates beautiful partnerships where both parties are invested in extraordinary outcomes. 3. Excellence Creation Mechanism Appropriate pricing gives you resources to create exceptional experiences and deliver transformation at the highest level. When compensated fairly, you can focus entirely on results instead of worrying about covering costs. 4. Positioning Clarity Tool Your pricing positions the value of the outcome, not just the service. Fair pricing communicates the level of transformation you're committed to delivering and signals your belief in what's possible. 5. Abundance Building Practice Every time you price fairly, you're practicing abundance thinking. You're believing there's enough success for everyone and modeling the mindset your clients need for their own growth. 6. Sustainable Impact Engine Fair pricing creates the foundation needed to truly serve at your highest level. This sustainability allows you to show up fully and build long-term relationships based on mutual respect and shared success. This isn't just about charging more, it's about creating systemized, beautiful partnerships where transformation becomes inevitable. When you price your work fairly, you're not being greedy. You're being generous with your belief in what's possible for the founders you serve. The question isn't "Will people pay?" The question is: "Do you believe enough in the transformation you deliver to price it fairly?" The future belongs to those confident enough to value their impact appropriately. It starts with one conversation where you honor both your worth and theirs. __ Enjoy this? ♻️ Repost it to your network and follow Matt Gray for more. Want help applying this in your business? Send me 'Blueprint' and let's chat. Only for founders ready to scale.

While competitors sold mattresses at ₹10,000, we launched at ₹29,900. Amazon and Flipkart said it wouldn't work, because our price was 3X what sells on their platforms. Today, The Sleep Company is the fastest-growing mattress brand in India. People ask how we convinced customers to pay a premium for a mattress. The answer isn't about pricing. It's about understanding value. Indian customers are willing to pay ₹1 lakh for an iPhone, and ₹2 lakh for a Royal Enfield. It’s not because they're "affordable”, but because the value is clear. So, the real question isn't "Can they afford it?" It's "Do they believe it's worth it?" Most brands price like this:  Cost + Margin = Price But, we flipped it to Value-Based Pricing:  What's the transformation worth to the customer? = Price Our product wasn't just 3x the price, it also delivered 5x the outcome. And every touchpoint communicated that. But most of the brands end up making these mistakes: 📍Underpricing to "get traction"  📍Overpricing without differentiation  📍Changing prices too often Here’s what worked for us instead: 📌 The sweet spot wasn't the lowest. 📌 Focused on value perception - packaging, unboxing, communication reinforced "premium." 📌 Invested in experience - website, stores, after-sales. Premium pricing demands premium delivery. As a result: 📍₹60,000 became our best-selling price point 📍Customers didn't ask "Why is it so expensive?" They asked, "When's the next collection?" Premium isn't about charging more. It's about being worth more. And if you deliver on that, the market will pay.

Pricing shouldn’t feel like a fight. It should feel like a fair conversation between adults who both want the relationship to last. When costs keep rising and margins start to feel thin, the worst thing we can do is spring a surprise increase and hope customers accept it. The better path is to make small, evidence-based adjustments that people can understand, and to do it with enough notice that trust grows rather than erodes. Here’s how I guide teams through it... We set a simple rule first: price reviews happen on a predictable cadence, anchored to a sensible index, and capped so there are no surprises. Then we give customers a choice. A clear Good / Better / Best set of tiers lets people pick the value that fits, and it means we stop discounting just to “make it work.” For loyal customers, we start with a grace period and then move in small, scheduled steps. It’s respectful, and it smooths cash flow for everyone. We also swap blanket discounts for an early-pay credit that protects the list price while bringing cash forward. We add a few fair boundaries so small, urgent, or high-touch work is priced to match the effort. Where costs have increased in one part of the service, we re-bundle so value is obvious and buyers are never misled. And when it’s time to talk, we keep the message short and human: here’s what changed in our input costs, here’s the adjustment we’re making, and here’s what stays the same in terms of quality and scope. If you track a few signals for 30 days, you’ll see better results like: most eligible accounts receive the scheduled uplift, the overall discount rate falls, more invoices are paid early, average revenue per customer increases, and churn and NPS hold steady. The goal is pricing that is predictable, and defensible. Think caliper, not hammer, with measured moves that protect margin and maintain customer goodwill. How do you explain price changes to customers without losing trust? ------- ➕ Follow Jonathan Maharaj FCPA for finance‑leadership clarity. 🔄 Share this insight with a decision‑maker. 📰 Get deeper breakdowns in Financial Freedom, my free newsletter: https://lnkd.in/gYHdNYzj 📆 Ready to work together? Book your Clarity Session: https://lnkd.in/gyiqCWV2

Many founders treat pricing as a revenue optimization problem. Figure out the product first, scale usage, then monetize. That's backwards. Pricing isn't about extracting money. It's about discovering whether you built something people actually value. At Gamma, we used pricing as a proxy for value and kept it pretty much the same for over 2 years. Free usage will lie to you (especially for B2B and prosumer products). Usage spikes feel like PMF. They're not. Usage without payment tests your onboarding, not your value. If you come out with too generous of a free plan, you'll never know what true willingness to pay looks like. Here's how to use pricing as a proxy for value: 1. Pick your value metric Choose the thing customers actually hire you for. Documents generated. API calls. Minutes transcribed. At Gamma, we gated by AI credits as the primary value metric, with business levers like custom branding. 2. Draw a hard boundary between free and paid Let people experience the "aha," then stop them at a generous but bounded gate. We gave users plenty of AI credits up front. Once they hit the limit: upgrade for access to more AI. 3. Research your range, then let behavior decide We used Van Westendorp to find our starting range. Ask users four price points: too cheap to trust, good value, getting expensive, too expensive to consider. Plot where these intersect to bracket your range. Then test a few prices within it. Research shows what people say they'll pay - conversion shows what they actually do. We watched free-to-paid conversion and early churn signals, picked the winner, and moved on. 4. Instrument retention and talk to customers Track whether paid users keep crossing your value threshold each week. Stay close to customers through power-user communities or direct outreach. Ask questions like: "What job were you hiring us for?" and "What would justify a higher price?" 5. Treat pricing changes like product pivots Once you've validated pricing, the only reason to change it is if you've fundamentally changed what you're selling. We haven't changed ours in two years because the value metric (AI usage) hasn't changed. Constantly repricing means you're still searching for product-market fit. Why this matters: Pricing early clarifies who values you, which channels convert, and which segments to double down on. You're better off launching pricing way earlier so you can see who's actually willing to pay for it.

We made 5 pricing decisions that turned out to be costly mistakes. 💸 1. We didn't put usage limits on our 14-day free trial.  Having no usage limits made it compelling for people to take advantage of our trial by signing up multiple times and using it as much as they want. Once, we lost $8k in 10 days because we weren't aware of streaming costs and a user pumped 160k attendees into their webinars. 2. We didn't offer annual plans because it was extra dev work. Not having annual plans meant that we couldn't collect cash up front even when customers wanted to pay. It also meant that we couldn't offer bigger commissions with partners and affiliates. We only have time to revisit this 2.5 years after launch. 3. We wanted to be fair and offer prorated credits when users move to lower tier plans. We copied Slack's fair use policy because we loved how customer friendly it was. But offering monthly credits made annual plans more complicated, so we kept putting it off. We created a situation that encourages customers to downgrade so they can get credits back instead of staying at a higher tier. 4. We grandfathered existing customers when we doubled pricing. Before raising our prices, multiple founders advised me to increase pricing for existing customers as well if our product is offering more value. There would be some churn but the revenue increase would be net positive, and it'd get us to profitability faster. I thought grandfathering would be the honorable thing to do. As a result, we missed out on $30k/month of revenue which we could've invested towards growing platform costs and hiring. 5. We didn't limit the one thing that costs us the most on all plans. When we lost $8000 on a trial user, we finally figured out the true cost of a webinar attendee on our platform. Turns out, our streaming costs are signficant especially when people use ads to drive registrants to their eWebinars. The more people attend webinars, the higher our cost per account. We should've had clarity on our costs and applied limits to avoid losing money on supporting high use customers. These decisions were hard to reverse because they required significant dev work and/or delicate customer communications. 🎙️On ProfitLed S2E24, I dove into each one of these pricing mistakes in detail, what we learned, and what we should've done differently. Find this episode on your favorite podcast app. PS. Season Two of ProfitLed is about "Our Journey to $1M ARR", bootstrapping eWebinar. ___ 🔔 I'm Melissa Kwan, 3x bootstrapper with 1 exit. Cofounder of eWebinar, Host of ProfitLed, and author of 'your founder next door', my newsletter on building a company without an abundance of resources or friends in high places.

One thing I push early-stage B2B founders to do (and it’s harder than it sounds) is to really understand — and quantify — the value you deliver to customers. Very few can put a dollar number on it.💡 Try to estimate the value your product creates for a customer in real dollars ($Z) 💰 Once you do that, , you can ask a few important questions to qualify how robust and urgent the value proposition really is: ▪️ Is $Z actually meaningful in the context of the customer’s business? (If it’s a rounding error for them, say <2% of top line, selling will be painful 😬) ▪️ Can you show or prove $Z quickly, or are you asking the customer to take a leap of faith? Quantifying value proposition also helps with 💵 pricing and 📐market size, which many founders struggle with early on. Example 1: cost / time savings ⏱️ - Say you’re selling software that saves a RevOps team ~5 hours per week. - Fully loaded cost is ~$80/hour → ~$20k/year in savings. That’s your $Z. - If you’re saving time or money, customers will often pay ~10–20% of that value. So a ~$2–4k ACV is a reasonable first pricing hypothesis 🎯 Example 2: revenue generation 📈 - Now say your product helps a sales team close 2 extra deals per quarter. - Each deal is worth ~$50k → ~$400k/year in incremental revenue. That’s $Z. - When you’re directly helping customers generate revenue, they’re often willing to pay more — say ~20–30% of the value. That points to an $80–120k ACV range (assuming you can prove the value). More importantly you can use $Z to estimate market size.  📐 Start bottoms up. Market = X customers × $Y ACV = market size Where: ▪️ $Y ≈ 10–20% × $Z (for cost/time savings) ▪️ $Y ≈ 20–30% × $Z (for revenue generation) Finally, pressure-test the assumptions: ▪️ Are we being precise about who “X customers” actually are? Do I need to sell a story where I start with a small #X and then expand? ▪️ Does $Y line up with real budgets and comparable spend? ▪️ Can we acquire customers for less than ~$Y/3? ▪️ Do we need more product to credibly charge $Y? You don’t need perfect answers early but a strawman that allows YOU to understand why you are willing to spend the next 10 years of your life working on something. 🚩

Discounting kills more deals than it saves. How I helped a sales team reduce price-cutting by 62% and increase margins by $2.3M last quarter. Your salespeople are slashing prices unnecessarily. Right now. Every time they do, they're telling the customer: "Our solution isn't worth what we're charging." The problem isn't your pricing strategy. It's your team's price conviction. After working with thousands of salespeople, I've discovered something shocking: The difference between your top and middle performers isn't product knowledge. It's their unshakeable belief in your solution's value. When a prospect says, "That's too expensive," most sellers: • Immediately offer discounts • Start justifying the price  • Lose control of the conversation But your top performers? They lean in. They've mastered what I call "the confidence pause" – that critical moment between hearing an objection and responding. This tiny gap separates: - Profit-protecting closers - Discount-dependent sellers The million-dollar question isn't "How do we close more deals?" It's "How do we close more deals at full price?" Because confidence isn't just about feeling better. It's about selling better. And your revenue results will prove it.

Inflation often forces businesses into a dilemma—raise prices and risk losing customers, or keep prices stable and shrink margins. But what if data could help strike the perfect balance? 🚀 Challenge: Flipkart, one of India’s largest e-commerce platforms, noticed fluctuating customer retention rates and declining repeat purchases, especially during inflationary periods. Traditional deep-discount campaigns led to short-term sales spikes but failed to build long-term customer loyalty. 🔎 Solution: Data-Driven Discounting Strategy Flipkart’s analytics team uncovered a key insight: Small, frequent discounts (e.g., 5-10% on repeat purchases) led to higher engagement. Personalized offers based on purchase history encouraged repeat buys. A/B testing revealed that customers preferred consistency over occasional deep discounts. 💡 Implementation: Using AI-driven dynamic pricing, Flipkart rolled out: ✅ Tiered discounts for loyal customers. ✅ AI-powered coupon recommendations. ✅ Targeted email campaigns promoting small, time-sensitive discounts. 📈 Results: After three months of testing, Flipkart saw: ✔️ 17% increase in repeat purchases ✔️ 12% uplift in customer retention ✔️ Higher profit margins vs. deep discounting 🎯 Key Takeaway: In an inflationary environment, data-driven pricing isn't just about maximizing revenue—it’s about customer psychology. Businesses that personalize their offers and optimize discounts intelligently can boost retention while protecting margins. 𝑾𝒉𝒂𝒕 𝒑𝒓𝒊𝒄𝒊𝒏𝒈 𝒔𝒕𝒓𝒂𝒕𝒆𝒈𝒊𝒆𝒔 𝒉𝒂𝒗𝒆 𝒘𝒐𝒓𝒌𝒆𝒅 𝒇𝒐𝒓 𝒚𝒐𝒖𝒓 𝒃𝒖𝒔𝒊𝒏𝒆𝒔𝒔 𝒊𝒏 𝒄𝒉𝒂𝒍𝒍𝒆𝒏𝒈𝒊𝒏𝒈 𝒕𝒊𝒎𝒆𝒔? #datadrivendecisionmaking #DataAnalytics #DiscountStrategy #BusinessStrategies

Pricing teams are about to get disrupted. 1 Human around an army of co-pilots. Gone will the days where you could justify more resources just because the workload was very high because of clunky processes. You will just hire a co-pilot's at a lower overall cost of ownership, and get more done and faster. If I was starting to look at pricing in the AI world. Here are some of the points where pricing will get disrupted. 1) Data Analysis Co-pilots: Power BI's/tableau Copilot will help generate insights, create visualizations, and even write formulas based on natural language prompts. In the cloud, so no more system heavy Excel death screens and lost work. No more asking IT for more RAM. 2) Market Intelligence Co-pilot: Intelligence co-pilots that scrap pricing data, or provide intelligence will be easily accessible. Tools like Klue, Competera, Prisync, pricing saas will bring market intelligence to your fingertips with AI wrappers on scraping data. 3) Communication Co-pilots: If presenting and communication wasn't your strongest skill, then co-pilots on PowerPoint, or Prezi AI, Beautiful AI or Canva AI will make it easier to communicate the story. Grammerly AI will fix your emails. 4) Pricing Co-pilots: These are going to be vertical specific AI tools that will provide rule based or intelligence based AI solutions which will be prompt based and provide pricing optimization. Tools like Competera, Luca, Symson or PriceFX, Vendavo, Zilliant etc will bring normalize AI use in price setting. It will only get better from here. 5) Feedback AI Co-pilots: Tools that measure customer sentiment around product, services and pricing will provide feedback loop for your pricing. Insert tools like Brand24, Alphasense, Talkwalker. These are the norm yet in pricing circles, but will be and should be as more work gets automated. 6) Legal Co-pilot: Products like Dropbox, box and docusign now have AI capabilities to search and curate information using LLM. So now you can look up terms across several contracts and look for compliance of terms and identify revenue leaks. Never have to read a contract page to page again. The possibilities are endless ! This is just tip of the iceberg because there are countless sub steps inside that will get automated as well. If I was you, I would start looking at how you could start disrupting your pricing process today !! This is not some 2035 vision, this is as early as next year !! What am I missing ? ———————- Follow for #pricing #discounting #revenuemanagement

Discounts aren’t killing your profit margins. They’re killing your brand. Bold? Maybe! But after working with high level e-commerce clients, I’ve seen this pattern repeat far too often. Here’s why discounting is a trap and what you should do instead: One client of mine was stuck in a "discount or die" cycle Offering 20-30% off constantly. Their sales were decent, but: - Profit margins? Shrinking. - Customers? Loyal only to the discounts, not the brand. So, what did we do? We threw the discounts out the window and Implemented this no-discount blueprint: 1️⃣ Stack the Value →Instead of cutting prices, we built bundles with exclusive perks: Premium products + personalized add-ons. ↳ Result: 45% higher average order value – no discounts needed. 2️⃣ Scarcity That Matters → We launched limited-edition products Based on actual customer demand. No fake urgency, just genuine exclusivity. ↳ Impact: A 167% increase in full-price purchases. 3️⃣ Reward Loyalty, Not Bargain Hunters → We created a loyalty program focused on engagement: Early access, exclusive content, priority service. ↳ Result: 78% higher customer lifetime value. 4️⃣ Premium is a Mindset → Redesigned their brand story to scream exclusivity: - Behind-the-scenes storytelling - Expert-led masterclasses - Premium unboxing experiences ↳ Outcome in 6 months: ✅ Profit margins: +34% ✅ Customer retention: +56% ✅ Brand perception: +89% Discounts train customers to wait for sales. Value trains them to stay for the brand. P.S. - Want to escape the discount spiral? Let’s build a strategy that scales your profits and positions your brand as the premium choice. Drop a “Yes” in my DMs if you’re ready to level up. (And no, this doesn’t include a 20% off strategy.) But you can Follow me to learn more things about SEO. #EcommerceStrategy #MarketingStrategy #BrandPerception