In pricing, don’t forget to be fair
💵 Pricing fairness and value perception is a topic that too often goes overlooked.
While value-based pricing, dynamic pricing, and personalized pricing models are excellent for capturing the full potential value (and willingness to pay) from each customer, they come with a notable risk – the perception of unfairness and a strong backlash to any brand.
And it’s not only a matter of setting fair prices. The transparency and clarity behind pricing decisions are equally crucial. Without clear communication, even the fairest pricing strategy can be perceived as unjust, particularly if the pricing model is complex or opaque.
I love how Canva is tackling this right. Their pricing model is not only smart and very well thought off (and value-oriented), but also transparent, openly sharing how prices are calculated.
If you’re interested in knowing more, I will talk more about unfairness perception and the importance of communication in pricing during my presentation at the PM Night Product Management Nights next Thursday “Good, better the worst: 5 dangers of casual pricing”
I’d love to hear your thoughts. Have you ever encountered a pricing strategy that felt unfair? How did this affect your decisions?
#pricing#pricingstrategy#productmanagement#pricingtransparency
My name is Salva, I am a product exec and Senior Partner at Reasonable Product, a boutique Product Advisory Firm.
I write about product pricing, e-commerce/marketplaces, subscription models, and modern product organizations. I mainly engage and work in tech products, including SaaS, Marketplaces, and IoT (Hardware + Software).
My superpower is to move between ambiguity (as in creativity, innovation, opportunity, and ‘thinking out of the box’) and structure (as in ‘getting things done’ and getting real impact).
I am firmly convinced that you can help others only if you have lived the same challenges: I have been lucky enough to practice product leadership in companies of different sizes and with different product maturity. Doing product right is hard: I felt the pain myself and developed my methods to get to efficient product teams that produce meaningful work.