The right frequency to change your product pricing depends on the element you want to tweak

What’s the ideal frequency for tweaking your product’s pricing and offering? ๐Ÿคทโ€โ™‚๏ธ

Share now

I hear people scared about โ€œplaying too often with pricingโ€, and others who see there an opportunity. Well, youโ€™re all right!

The right frequency largely hinges on the specific elements of pricing you’re looking to adjust. Here’s a breakdown:

โœ” ๐๐ซ๐ข๐œ๐ž ๐๐จ๐ข๐ง๐ญ๐ฌ ๐Ÿ“ˆ: Adjusting your price points, can happen as often as every second, as in Dynamic pricing. It can be a real-time dance with market demand, aligning with short-term market trends, promotions, or even changes in supply and demand. Flexibility is key here.

โœ”๐…๐ž๐ง๐œ๐ž๐ฌ (๐…๐ž๐š๐ญ๐ฎ๐ซ๐ž๐ฌ ๐–๐ข๐ญ๐ก๐ข๐ง ๐๐ฅ๐š๐ง๐ฌ) ๐Ÿงฐ: Fine-tuning features within pricing plans, adding, removing, and shuffling individual features between plans can happen at quarterly to yearly intervals. It allows product and pricing teams to wisely play with customer take rates and avoid cannibalization between plans.

โœ”๐๐ซ๐ข๐œ๐ž ๐Ž๐Ÿ๐Ÿ๐ž๐ซ๐ข๐ง๐  (๐๐ฅ๐š๐ง๐ฌ) ๐Ÿ’ผ: Adjusting your pricing plans, by creating new plans is usually something happening in yearly to multi-year cycles. This is a step that requires deeper consideration and has deep impacts on existing customers, billing, and migrations. Keep these updates more strategic and well-communicated.

โœ”๐๐ซ๐ข๐œ๐ข๐ง๐  ๐•๐š๐ฅ๐ฎ๐ž ๐Œ๐ž๐ญ๐ซ๐ข๐œ ๐Ÿ“Š: Altering the underlying metric that you base your pricing on (e.g., per user to per usage) is a transformational step. This might occur over a span of time ranging from a couple of years to several years. This is a key element of your monetization strategy and can be material to the health of your business. It’s essential to give your customers time to adjust and understand the new value proposition.

โœ”๐๐ซ๐ข๐œ๐ข๐ง๐  ๐’๐ญ๐ซ๐š๐ญ๐ž๐ ๐ฒ ๐ŸŽฏ: Crafting an entirely new pricing strategy, which might involve fundamental shifts in your business model, can span several years. Such changes are monumental and require thorough research, analysis, and a seamless transition plan. Communication becomes paramount during this journey.

There’s no strict formula here. The correct frequency for adjusting pricing elements depends on your industry (does Dynamic Pricing apply?), customer base, competitive landscape, and broader market trends. Most importantly, it depends on the element of your pricing that youโ€™re tweaking (whether itโ€™s pricing points or the full pricing strategy).

If youโ€™re still confused about all these terms and what we mean by pricing strategy of value metric, have a look at my Pricing Resources and Product Monetization canvas (also available as a Miro template).


Share now
Scroll to top