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Estd 4.22.2023
Based on the principles described in our pricing strategy book, Price to Scale, the recommended approach is to decouple the cost of compliance or security features from your base offering by using a modular pricing strategy. This method allows you to provide a robust, secure baseline product while offering advanced compliance features as separate, add-on modules. Here’s how you can achieve this:
• Separate Out Core Value from Enhanced Security: Establish a baseline price that reflects the standard functionality of your product. Then, price additional compliance or security features independently as add-ons. This ensures that customers who are naturally security-conscious can choose to invest in enhanced measures without increasing costs for those who do not need them.
• Modular Pricing Benefits: By adopting a modular pricing approach—one of the key frameworks discussed in Price to Scale—you actually create tiers of capability. This means that while your core product remains accessible, additional security and compliance enhancements are available for customers under regulated or high-security requirements.
• Avoiding Penalization: By keeping compliance-related costs isolated, you avoid a scenario where all customers bear the cost of high-level security. Customers who require robust measures pay for exactly what they need, ensuring that security-conscious customers aren’t subsidizing those who don’t benefit directly from these investments.
In summary, modular pricing enables you to address unique compliance and security needs by offering them as distinct components. This strategy aligns the price directly with the value delivered to each customer segment while preventing undue cost burdens on customers who do not require high-end security features.