What use is marketing if it shows people an ineffective pricing tier?
The world’s best growth marketers and copywriters can’t save a brand from a bad business model.
Getting pricing right is such a big deal, we spent the last month in overdrive, writing a report on how you can find the right pricing model for your business.
Here are three smart examples that have made millions:
- The razor and blade model. Razors are cheap, blades are expensive. Printers are cheap, ink is expensive. But this doesn’t apply to physical products only… SaaS companies, for example, often charge little or no fees for access to their basic product. Then, they charge hefty fees for most of the product’s useful features.
- The pay-upon-results model. One popular job board, Japan-Dev, doesn’t charge companies to post a job. They charge when the company successfully hires a candidate. This pay-upon-results model almost always increases conversion rates and boosts customer confidence.
- The iPod model. The iPod was expensive, but it gave you access to the iTunes Store and the ability to purchase individual songs. This is the opposite of the razor & blade model—you charge a lot upfront for a benefit that’ll pay dividends long-term.
A little change in the price structure can make for a big change in margins.