The Most Effective Price Discovery Question for Your Startup
Pricing is one of the most challenging decisions for any startup. One of the simplest ways of discovering customer willingness to pay is simply to ask them.
At first blush, that might seem a reasonable and effective solution, it is prone to wild inaccuracy. Absolute pricing judgments are hard without reference points. For example:
How much would you be willing to pay for a new iPhone?
It’s a very challenging question to answer in the abstract. It all depends on what the phone can do and what sacrifices I would have to make to be able to afford that phone. That calculus isn’t any different for smart phones, expense management software, or flash storage. Every pricing conversation is a game of trade-offs.