Product Pricing as a Product Feature
A staggering 72 percent of new product innovations fail to reach their revenue goals.
As Kapeesh Saraf discussed in his presentation, the pricing model and packaging or bundling of a product have a profound impact on the success of a product. Simply put, pricing is an important lever to help achieve your product goals.
For many product teams, the mistake they make is not asking the willingness to pay question from the getgo. The approach for many is to figure out what people want, build the product, determine the price, and then test and optimize. In his experience at Coursera, Saraf has succeeded with another approach. A better way to do it is to first ask what price are people willing to pay for the things they want. Then, they should identify target users and determine the price. Finally, the last step is to build the product.
Product teams should think about how pricing affects user psychology. They should ask themselves these three questions:
- What action do you want to drive?
- What are the behavioral or psychological heuristics that correspond with the usage metric that you want to drive?
- Is there a way that changing the pricing model could drive behavior that you want?
About the speaker
About the host
Neha is the Senior Director of Product at Macmillan Learning leading a set of start-up products under the institutional group aimed to address challenges in higher education such as affordability of educational materials, retention and student success. She has been bu.ilding, growing and scaling products in the ed-tech space for the past decade with her experience ranging from course-ware solutions, student facing applications, to analytics and insights tools for decision makers. She loves to travel and lives in South San Francisco to stay close to the airport