The Importance of Pricing Goals
Is good Pricing necessarily about “making money”? Not really!
And that’s where most Product Monetization exercises fail… lack of 𝗣𝗿𝗶𝗰𝗶𝗻𝗴 𝗚𝗼𝗮𝗹𝘀!
Many assume a product must “make money”, but this is not always the case.
And by the way, what does “money” mean? revenue? profit?
Some examples:
- Fair enough, Some products are designed to generate profit
- Some are there to generate revenue (≠ profit!)
- Some aim to penetrate the market
- Some support other products and drive upsells
- Some are part of a freemium strategy
- Some are foundational products for other sales (e.g., hardware with subscriptions)
- Some exist for compliance purposes
- Some are meant to… lose money (loss leaders)
Too many teams overlook the importance of defining, sharing, and understanding Pricing Goals, leading to misalignments in pricing strategies and implementations.
Quick check: when you last discussed your product’s price, did you take the time to explicitly state your pricing goals? Where are they documented now?
If you’re (re)defining your prices and need guidance, I’ll add a link to download the free Product Monetization Canvas here
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.