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O__________O parent
(a) >> Adjusting price is the single most effective lever a business can use to achieve product/market fit,

(b) >> and there's a strong correlation price nimbleness and market success.

Would it be possible to expand on and/or provide additional sources for each of these claims, since while I get that given all other aspects being equal that price is frequently a defining factor, but my understanding is that even then loss aversion [1] means it’s economically a bad strategy to a market.

- [1] https://wikipedia.org/wiki/Loss_aversion

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(c) >> https://priceops.org/

Might be wrong, but brief review of this appears to show the “thesis” of PriceOps is yield-based metered feature pricing, but again not seeing any research to backup this approach and/or measure of fitness of this approach to a given situation. Do you have an related research to link to?


IsaacSchlueter
> Might be wrong, but brief review of this appears to show the “thesis” of PriceOps is yield-based metered feature pricing

The "thesis" of PriceOps is less "you must have metered feature pricing", and more "you should design your infrastructure so that you can learn from and adjust pricing in the future". In other words, expect that your product, customers, and landscape will change, and understand that the pricing scheme (ie, what you charge for, how much you charge, and how you bundle prices into a packaged plan) will almost certainly need to change as well.

> Do you have an related research to link to?

Here's a selection of links to check out if you're interested in learning more about this subject. I haven't carefully reviewed each one of these to make sure they're 100% what you're asking for, but they're all things I've read and found helpful studying this topic, and many have links to more research and primary sources. Hope you find it helpful :)

On unlocking growth with pricing:

https://techcrunch.com/2022/07/11/turn-your-startups-pricing...

https://www.nfx.com/post/the-hidden-world-of-pricing

https://www.lennysnewsletter.com/p/saas-pricing-strategy

https://www.bvp.com/atlas/why-pricing-deserves-as-much-itera...

More from BVP, this pricing course is amazing btw, I highly recommend checking it out:

https://www.bvp.com/pricing-course

https://www.bvp.com/assets/media/the-startup-pricing-journey...

https://www.bvp.com/atlas/five-pros-and-four-cons-of-usage-b...

(They led npm's series A, I saw first hand the Bessemer brain trust is really impressive.)

"How to price" resources:

https://databox.com/how-to-price-saas-product

https://www2.deloitte.com/xe/en/insights/focus/industry-4-0/...

https://a16z.com/2021/03/11/bottom-up-pricing-packaging-let-...

On benefits/pitfalls of usage-based pricing specifically:

https://review.firstround.com/dont-let-growth-hurt-your-marg...

https://openviewpartners.com/blog/usage-based-pricing-playbo...

https://www.scalevp.com/blog/the-opportunity-in-usage-based-...

https://openviewpartners.com/blog/saas-pricing-and-packaging...

https://adilaijaz.medium.com/6-questions-to-ask-before-adopt...

Some more lessons and case studies:

https://zimtik.com/en/posts/lessons-learned-on-saas-pricing

https://twitter.com/Suhail/status/1418457605437943811

https://arnon.dk/5-things-i-learned-developing-billing-syste...

O__________O OP
Thanks, appreciate links, clearly spent time researching topic, curious what you found of use, and will check out all the links.

That said, to me feels like you’re making claims, then when confronted about them not actually addressing them.

Yes, there are situations systems like this work, for example, when there’s finite volume of inventory and market is willing to pay more to gain access to that inventory as the availability of that inventory shrinks; hotels, taxis, tickets, AD inventory, etc.

On flip side, long list of businesses that adding your code would provide provide no significant value, but instead just add technically debt.

In my experience, even in situations where yield management makes sense, it’s rarely a defining path to product market fit, but an opportunity to optimization revenue.

IsaacSchlueter
Ah, I somewhat misunderstood your previous comment, my apologies. This could certainly be clearer in documentation and the priceops.org presentation, I'll take the note on that and think about how to make it more clear.

When we say "change prices", we're not necessarily suggesting "change prices for each customer/transaction, based on demand/time/demographics/etc" in an aggressive yield management approach. In fact, doing this too aggressively in SaaS products (even being too blatant or careless with A/B testing prices and plans) can lead to customer backlash. See for example common reactions to online games selling virtual goods for different prices in different locales. I'm not saying it's never a viable tactic, but it is not a silver bullet, as you point out.

However, it is the case that:

1. Your product will change over time (you keep adding features, decide to focus on some or abandon others, etc.)

2. Your target market may change (features formerly thought of as "pro" become expected at the "basic" level, for example.)

3. Your competitors will change (new entrants to the space, existing players changing their offerings, thus changing customer expectations of your product.)

4. Thus, you're very unlikely to pick the "correct" price and packaging on day 1, and it's virtually impossible to predict what will be "correct" in the future.

So, being able to adjust prices without refactoring your entire application and company is really essential, as many SaaS companies learn the hard way, and as is shown in the resources I shared in my previous comment. Eventually, your prices and packaging will most likely have to change (or at least, changing them will be beneficial, even if not existentially necessary), and making that easy is very valuable.

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