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Estd 4.22.2023
Our book, Price to Scale, emphasizes that while keeping an eye on competitors is important, focusing solely on small price point differences—like $49 versus $50 or $59—is often less critical than aligning your pricing with the value you deliver and your overall growth strategy.
Key points include:
• Reference, Not Dictation: Competitor pricing provides useful context, but it should serve as a guideline rather than the primary directive. Minor tweaks (a dollar less or more) are often just noise unless they clearly reflect a different value proposition.
• Anchoring on Value: As discussed throughout Price to Scale, anchoring your pricing to the specific benefits, cost-to-serve, and customer pain points is more impactful. Customers tend to make purchasing decisions based on perceived value—not just numbers.
• Strategic Experimentation: Instead of simply matching or micro-adjusting competitor prices, our book advises testing your price points. Through customer interviews, trials, and surveys, you can determine if a slight premium or discount makes a real difference in buyer perception and sales conversion.
• Market Positioning Considerations: If you position your product as a premium offering, a slightly higher price can reinforce that perception. Conversely, a lower price might lower expectations of quality if not supported by other value drivers.
In summary, while competitor pricing is a useful benchmark, your pricing strategy should prioritize customer value and market positioning over minor adjustments. Testing your price sensitivity ensures that your chosen price aligns with both the market and your business objectives.