How do you set pricing for international markets — do you simply convert your prices based on exchange rates or actively adjust for local purchasing power in different regions?

Based on the guidance in our pricing strategy book, Price to Scale, you shouldn’t simply convert your prices based on exchange rates. Instead, you should actively adjust for local purchasing power and market dynamics.

Key points include:

• Local Sensitivity: Rather than using a static exchange rate, the book encourages you to understand the price elasticity and willingness-to-pay in each market. This means assessing factors like local income levels, competition, and regional economic conditions.

• Pricing Agility: As explained in Price to Scale, it’s more important to have a pricing structure that can flex and adapt to different market conditions. This agility means testing and adjusting price points to achieve the "local maxima"—that optimized price that resonates with each market's unique conditions.

• Segmented Adjustments: While the book primarily discusses customer segments (such as Commercial, Mid-sized, and Enterprise) with specific discounting guidance, the underlying approach is the same: tailor your pricing to the value perceptions and constraints of different groups. For international markets, think of local purchasing power as another dimension requiring segmentation and contextual adjustments.

In summary, Price to Scale advises that international pricing should be a thoughtful, dynamic process. Rather than a direct currency conversion, it’s more effective to adjust pricing to align with local market conditions and customer behavior, ensuring that your price is both competitive and optimized for local demand.

Get Started with Pricing-as-a-Service

Join companies like Zoom, DocuSign, and Twilio using our systematic pricing approach to increase revenue by 12-40% year-over-year.

Thank you! Your submission has been received!

Oops! Something went wrong while submitting the form.