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Pricing strategy

From Venture Connection - Workshop 8 at SFU

Speaker: Steven Forth form Net solutions.


  • Pricing is a part of the innovation & the product!
  • Understanding value provided to customer
  • Segmenting the market, and the value added to each segment

You discount your Beta version only and only when you have a very compelling reason! Otherwise it even has to be 3 time more priced than regular pricing.


Features >> Functions >> Benefits >> Value Drivers >> Quantified Value Drivers.


Pricing process:

  • define the customer
  • create the value
  • define the product
  • price it
  • and apply the cost to build it

Cost has nothing do to with pricing!

What do we mean by VALUE ?

  • for customer: has nothing to do with pricing
  • Value is always relative to an alternatives, even if it is 'doing nothing'
  • Price of next best competitive alternative
  • we segment our market, when those segments received different values >> pricing

pushing the pricing power:

  • Perceived risks
  • switching costs

 We can patten the pricing model & the product / feature !

 Add values with bundling.


  • find where the values are
  • Then do the fencing and separate customer groups (fencing is a potential pricing metric)
  • The relation between the segmentation size, cost for that segment, and the value delivered for that segment.


 Fence by / Price by : support, bandwidth, upgrades, messages, storage,


Give credit back for lake of usage in Cloud structure usage

read this as best pricing article :

check this strategy:

 All B2B software required some consulting services. --> SAS & IBM

SAP makes the implementation and installation hard, to create a huge amount of value with customizing services through service providers in the market.


4 basic style of freemium:

  1. free trial --> to drive conversions
  2. Free users add value to your market size . Create community .
  3. double sided market (Try to create a 2 sided market. Like Credit Card companies. / Nannies & Families (
  4. people how they did not have to idea why they doing it for FREE!


Use the 'early stage pricing model check list ' you just start pricing.


Key themes for today:

  • Pricing is the core of your offer.
  • Pricing is a place to innovate
  • price is how you frame the value you provide.
  • It begins with understanding value to the customer (relative to their alternatives)
  • Pricing is more than picking a number

 Some resources:

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