Pricing Your Product

Pricing is hard. In the early days, you may be tempted to give your product away for free or to charge less than the value of your time or the raw materials you used. Don’t. In order to stay alive, you need to make money.

Too often, however, greed gets confused with positioning thinking. Charging high prices is not the way to get rich. Being the first to (1) establish the high-price position (2) with a valid product story (3) in a category where consumers are receptive to a high-priced brand is the secret of success. Otherwise, your high price just drives prospectiv

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If your product delivered more value than you thought customers were expecting, raise your price. But do it carefully, and in several steps. We've seen this happen many times. In the 1970s, Mercedes introduced a new SL car. The model sold out in a few months, and would-be customers were put on a waiting list of two years! Mercedes learned its mista

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When thinking about pricing, the best advice is to charge more than you think you should.