How Pricing Determines Your Business

SmartBear see it is often said that you should not talk about price during customer development interviews. The usual justification is that your goal is to uncover the details of your potential customers’ lives and pain-points, whereas a mention of price turns attention away from that topic, diverting the discussion to budgets and comparative value. However, price is as important as any other feature to determine product/market 'fit'. 

Price is inextricably allied to brand, product, and purchasing decisions — by whom, why, how, and when. Price is not an exercise in maximizing some micro-economic supply/demand curve, slapped post-facto onto the product. Rather, it fundamentally determines the nature of the product and the structure of the business that produces it. 

The best thing, of course, is to realize that price is linked to everything, and bring it into your customer interview process Talk about their expectations of cost, and why, who would write the check, who would need to approve it, whether an ROI argument would be welcomed or scoffed at, or what would need to be changed to justify doubling your price (at which point, maybe you should do that an in fact double your price!) In fact, discussions of price in particular was the key to invalidating one business idea and then validating WP Engine, which now (2014) employs 200 people. Price is not an afterthought, it is essential business design.

Read more at: http://blog.asmartbear.com/pricing-business-model.html

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