What do you use to determine pricing for your product?

Competitor analysis and guessing

We're launching Plezi One on Product Hunt in less than a week and we have been working a lot on this topic recently. We looked at: - Competitor prices => we did a massive table and distinguished "all-inclusive tools" vs. "1-feature tools". Since our app is a mix of different tools, we know we can add up the average market price of each feature. And then refer to "all inclusive tools" prices and see if our summed-up price is neither too low or high compared to them - Coherency on plans => Our app will have 4 plans: 1 freemium, then 3 plans with prices going crescendo. We need to make sure that the price difference between each plan won't be too big in order to motivate users to upsell. And that the final price isn't too high ofc. - User research => asking users after beta interviews how much they are willing to pay for the features they have tested. To answer our questions, most users started listing all the tools they were using to make sure that the sum of all their tools didn't exceed a certain price. This made us realize we had to include "complementary" tools (and not only competitors) in the pricing equation - Votes from Stakeholders in the company => we actually did the exercise of estimating prices internally with key stakeholders (Founders, Sales, Marketing, Product, Tech) and we realized were were very aligned with prices! - Fixed vs. Variable price combo + app's usage => We found a usage metric to cost for our users and are following numbers to decide on the right "forks" to cost - Business plan & growth estimates => Of course our pricing must meet our Business Plan in order to land on our feet. We first worked on all the points above and placed them in our BP with low/medium/high estimate scenarios, to see if would allow us to be profitable. ... Now the rest of the story is to stay super flexible in pricing and adjust it as we launch new features & plans. The new question is - is it better to start with very low prices and increase them later? (to boost acquisition - but can be detrimental to market positioning and bring a "cheap product" image) Or start with higher prices, yet do frequent promotions?

Competitor analysis and looking at the market is what we did. We compared our major competitors, big and small, their pricing and considered different pricing strategies that might help us enter the market faster. It can be tough to find the right price but looking at your industry, competitors, and gathering some user data can help.

Sometimes you just choose a number and do it-- prices are meant to be dynamic so they are expected to increase or decrease