"What Should I Price My Products?"
The speaker advises testing product prices iteratively rather than overthinking initial pricing. They suggest customization makes testing easier, and recommend gradually raising prices until customers push back. Emotional detachment and long testing periods are emphasized.
Summary
In this brief segment, the speaker responds to the question of how to price products by offering what they describe as a 'terrible and also true' answer: you simply test. They argue that changing prices does not cause significant harm and that the ability to customize offerings for different customers makes price testing especially straightforward — different customers with different needs can receive different offers, making variation natural and justifiable.
The speaker addresses the concern of pricing too high by noting that it's easily correctable: simply lower the price and, if customers reach out, offer a refund of the difference or a bonus product to compensate. They share that they have personally tested many price points — both higher and lower — and found the process to be largely fine with minimal negative consequences.
The core strategic advice given is to keep raising prices incrementally until customers express that it's too expensive ('say ouch'). The speaker cautions, however, that testing should be done over long periods of time and approached without emotional attachment to any particular price point.
Key Insights
- The speaker argues that product pricing should be determined through active testing rather than pre-set strategy, calling this a 'terrible and also true' answer to the pricing question.
- The speaker claims that offering customized products or services to different customers makes price testing significantly easier, since price variation can be attributed to differing customer needs.
- The speaker asserts that overpricing is not a serious problem — if prices are set too high, sellers can simply lower them and compensate affected customers with a refund or a bonus product.
- The speaker's personal pricing philosophy is to keep raising prices incrementally until customers explicitly react negatively ('say ouch'), using customer resistance as the true ceiling signal.
- The speaker warns that price testing must be conducted over long periods of time and without emotional attachment, implying that short-term reactions and feelings can distort pricing decisions.
Topics
Full transcript available for MurmurCast members
Sign Up to Access