Pricing Strategies For Online Products

"All vendors look the same. We're choosing based on price." When prospects say this, most reps panic and start discounting. My client John didn't. Here's exactly how he flipped the dynamic. The real problem… You've been lumped into the "sea of sameness." This happens when your discovery was surface level and you didn't create a big enough gap between current state and future outcome. The isolation strategy… Instead of arguing, John asked: "What if all three vendors had the exact same price and contract terms? How would you decide then?" This forces them to reveal their real decision criteria beyond price. When they still stonewall… John used the mirror technique: "In your consulting practice, are you the cheapest option?" They said no. "What would a competitor have to cut out to offer you 50% less than you charge?" Now THEY'RE explaining why cheap doesn't work. Worse talent, bad service, no expertise. The bridge back… "That's no different than our industry. We all have similar cost structures. If someone's doing it cheaper, they're cutting corners somewhere." "Is that really a risk you want to take when scaling beyond Sweden?" The reframe… "You're not buying our service. You're buying certainty that the project works. Visas get processed, onboarding happens on time, no hidden surprises." Prevention is better than cure… The best way to avoid price wars is killer discovery upfront. Uncover current state pain, cost of inaction, future desired outcomes. When you create a big enough gap, price becomes secondary. Keep in mind, the person who wants the deal most usually loses. Stay detached. Be willing to walk away. You have two choices… compete on price and race to the bottom or compete on value and win TOP deals. — Want to see more of how my client John tackles pricing objections, check out our coaching session here: https://lnkd.in/gbBjgxxS

𝗣𝗩𝗥 𝗠𝗮𝗸𝗲𝘀 𝗠𝗼𝗿𝗲 𝗠𝗼𝗻𝗲𝘆 𝗙𝗿𝗼𝗺 𝗣𝗼𝗽𝗰𝗼𝗿𝗻 𝗧𝗵𝗮𝗻 𝗠𝗼𝘃𝗶𝗲 𝗧𝗶𝗰𝗸𝗲𝘁𝘀. 𝗛𝗲𝗿𝗲'𝘀 𝗪𝗵𝗮𝘁 𝗗𝟮𝗖 𝗙𝗼𝘂𝗻𝗱𝗲𝗿𝘀 𝗖𝗮𝗻 𝗟𝗲𝗮𝗿𝗻. Look at this chart. PVR INOX generates ₹32,582 crore from movie tickets. But food and beverages bring in ₹18,864 crore and it's their fastest-growing revenue stream, up 21% in FY24 while ticket sales grew just 19%. 𝐇𝐞𝐫𝐞'𝐬 𝐭𝐡𝐞 𝐜𝐨𝐮𝐧𝐭𝐞𝐫𝐢𝐧𝐭𝐮𝐢𝐭𝐢𝐯𝐞 𝐩𝐚𝐫𝐭: food and beverage sales generated around ₹1,958.4 crore, up from ₹1,618 crore in the previous year. The margin on that popcorn? Significantly higher than the margin on your ₹250 ticket. 𝐓𝐡𝐞 𝐑𝐞𝐚𝐥 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐌𝐨𝐝𝐞𝐥 PVR isn't in the movie business. They're in the high-margin consumables business with movies as the traffic driver. Tickets get people through the door. Food keeps the business profitable. This is the exact playbook D2C founders miss: your core product doesn't have to be your most profitable product. 𝐖𝐡𝐚𝐭 𝐃2𝐂 𝐁𝐫𝐚𝐧𝐝𝐬 𝐂𝐚𝐧 𝐋𝐞𝐚𝐫𝐧 Think about your "popcorn moment." What's the high-margin add-on that complements your core offering? Skincare brands selling ₹800 serums should bundle ₹200 sheet masks at checkout. Apparel brands selling ₹1,500 shirts should push ₹300 accessories. Fitness brands selling ₹5,000 equipment should offer ₹500 supplement subscriptions. PVR's Food & Beverage spend per head reached an all-time high of ₹148 in Q1 FY25. That's not accidental. It's strategic bundling, strategic positioning, strategic pricing of complementary products that customers are already primed to buy. 𝐓𝐡𝐞 𝐀𝐝𝐝-𝐎𝐧 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜𝐬 PVR's popcorn costs them ₹20-30 to make. They sell it for ₹300+. That's 10X markup. Your D2C brand probably has 2-3X markup on core products because of competition and customer acquisition costs. But add-ons? Accessories, consumables, complementary items – those can carry 5-8X markups because customers aren't price-comparing them. They're already committed to the purchase journey. 𝐀𝐜𝐭𝐢𝐨𝐧 𝐒𝐭𝐞𝐩𝐬 Identify your high-margin add-on that enhances the core product experience. Place it strategically at checkout, not buried in your catalog. Bundle it with your hero product during festive seasons. Track "attach rate" – how many customers buy the add-on with the main product. PVR's real genius isn't selling movie tickets. It's monetizing the moment when customers are emotionally committed and their wallets are already open. That's your opportunity too. Picture: Respective Owner #D2C #businessstrategy #pricing #revenue #growth #Ecommerce

What do you do when your brand has become too commercial, overexposed in the wrong channels, with too many discounts? You pause. And you start rebuilding trust. Because once discounting becomes the main growth lever, brand equity starts to slip. Quietly, but fast. According to BCG, over 70% of consumers say repeated discounts make them question a brand’s quality. And a Wharton study found that brands managed purely for quarterly results tend to suffer long-term equity erosion, even when sales look strong in the short term. The pattern is always the same: A brand chases volume → opens too many channels → loses pricing power → dilutes perception. So how do you fix it? 1. Audit your brand ecosystem. Map every channel and partner. Identify which drive discovery and which dilute value. If your product can be found everywhere, it won’t be desired anywhere. 2. Trim the product range. Fewer SKUs. Fewer promos. Fewer collabs. Focus on the assets that reinforce your IP and your story. 3. Rebuild pricing integrity. Discounts aren’t strategy, they’re a symptom of the loss of brand power. Shift incentives toward access, loyalty, and limited experiences. Make full price aspirational again. 4. Recenter on meaning. Remind people why your brand exists, not just what it sells. When story and identity lead, sales follow. Build an ecosystem coherence for the brand: DTC, wholesale, online, IRL, product, marketing. All in alignment and all at once. And btw, if you keep chasing visibility, how can you rebuild value?

Machine learning for dynamic pricing optimization offers businesses a competitive edge by enabling them to adjust prices in real-time, ensuring they remain responsive to market demands, customer behavior, and competition, ultimately maximizing revenue and profitability. Machine learning, a subset of AI, allows systems to learn from data and improve without explicit programming, identifying patterns and making predictions from historical data. In pricing optimization, it helps set prices strategically by considering demand, competition, costs, and customer perception. Fundamental data types used include sales history, market trends, competitor pricing, customer behavior, demographics, seasonality, and search trends. Standard algorithms, such as regression, decision trees, neural networks, clustering, and reinforcement learning, are applied to predict demand shifts. Dynamic pricing then adjusts prices in real-time, boosting revenue and competitiveness. For business implementation, ML models can be integrated with existing systems like sales, ERP, and CRM, allowing for real-time price adjustments. Challenges include maintaining high data quality, investing in technology and skills, and addressing ethical and regulatory concerns regarding dynamic pricing, customer perception, and compliance. #ai #MachineLearning #Pricing #CRO #COO

Inflation often forces businesses into a dilemma—raise prices and risk losing customers, or keep prices stable and shrink margins. But what if data could help strike the perfect balance? 🚀 Challenge: Flipkart, one of India’s largest e-commerce platforms, noticed fluctuating customer retention rates and declining repeat purchases, especially during inflationary periods. Traditional deep-discount campaigns led to short-term sales spikes but failed to build long-term customer loyalty. 🔎 Solution: Data-Driven Discounting Strategy Flipkart’s analytics team uncovered a key insight: Small, frequent discounts (e.g., 5-10% on repeat purchases) led to higher engagement. Personalized offers based on purchase history encouraged repeat buys. A/B testing revealed that customers preferred consistency over occasional deep discounts. 💡 Implementation: Using AI-driven dynamic pricing, Flipkart rolled out: ✅ Tiered discounts for loyal customers. ✅ AI-powered coupon recommendations. ✅ Targeted email campaigns promoting small, time-sensitive discounts. 📈 Results: After three months of testing, Flipkart saw: ✔️ 17% increase in repeat purchases ✔️ 12% uplift in customer retention ✔️ Higher profit margins vs. deep discounting 🎯 Key Takeaway: In an inflationary environment, data-driven pricing isn't just about maximizing revenue—it’s about customer psychology. Businesses that personalize their offers and optimize discounts intelligently can boost retention while protecting margins. 𝑾𝒉𝒂𝒕 𝒑𝒓𝒊𝒄𝒊𝒏𝒈 𝒔𝒕𝒓𝒂𝒕𝒆𝒈𝒊𝒆𝒔 𝒉𝒂𝒗𝒆 𝒘𝒐𝒓𝒌𝒆𝒅 𝒇𝒐𝒓 𝒚𝒐𝒖𝒓 𝒃𝒖𝒔𝒊𝒏𝒆𝒔𝒔 𝒊𝒏 𝒄𝒉𝒂𝒍𝒍𝒆𝒏𝒈𝒊𝒏𝒈 𝒕𝒊𝒎𝒆𝒔? #datadrivendecisionmaking #DataAnalytics #DiscountStrategy #BusinessStrategies

(Part 2) Bundles that actually move the needle on AOV In Part 1, we covered layout, positioning, and small UI tweaks that reduce friction and increase conversions on the product page Now let’s talk strategy, specifically how to use bundles to drive higher average order value without relying on random upsells or blanket discounts The right bundle strategy doesn’t just increase cart size It helps you launch new products, clear stale inventory, and create a better customer experience Here are 3 proven ones you can start with 👇 1. “Try me” launch bundles 💡 Perfect for: new products, seasonal collections, or early access drops Pair your new release with a proven bestseller to get attention and lower the risk of trying something new How to do it: • Use “Buy X, Get Y” (e.g. Buy our hero product, get the new one at 25% off) • Add a limited-time tag or countdown badge to drive urgency 2. Inventory busters 💡 Perfect for: slow-moving SKUs, returned items, or high-CTR but low-converting products Have stock you want to clear without discounting it to the ground? Bundle it How to do it: • Fixed bundles or BOGO formats work well • Combine with top-selling products to make the offer more attractive 3. Mix & match builder 💡 Perfect for: apparel, beauty, wellness, and giftable products Give customers a way to create their own bundle, it feels more personal and increases perceived value How to do it: • Let shoppers choose 3-5 products from a collection • Offer tiered pricing (e.g. 3 items = 15% off, 5 items = 25% off) These aren’t gimmicks. They’re practical tools to boost margin, move stock, and give customers more of what they want 📌 Next up: 3 more bundle ideas to increase cart size and personalize the experience. Stay tuned #shopify #ecommerce #growth

$9.99 works in the US. In Germany, €9.99 looks suspicious. €9.49 converts better. In Japan, round numbers win. ¥1,000 beats ¥999. Psychological pricing is culturally specific, not universal. These are some of the patterns: US/UK: Just-below pricing ($X.99) works. Germany/Switzerland: Precision matters (clean numbers or .49). Japan/Korea: Round numbers signal quality. Latin America: Heavy discounting expected. Nordics: Price sensitivity is lower, but trust signals matter Most apps apply US pricing psychology globally. That's leaving conversion rate on the table in every market. If you're going to localize prices, localize the psychology too. Have you tested different price endings across markets? #Pricing #MobileApps #Localization #Psychology #Monetization

Never compete on price. (unless you are Costco or Ryanair) When everyone in your market starts discounting, most founders make the same mistake: They join them. I would do the opposite. Because the moment every competitor looks cheaper, the real opportunity is to stop looking comparable. Here is the strategy I would use instead: → First, narrow the problem. Do not sell “marketing,” “software” or “consulting.” Sell a specific outcome for a specific customer. The more precise the problem, the less useful the competitor’s cheaper quote becomes. → Second, quantify the cost of doing nothing. If your solution costs $50,000 but the problem is leaking $300,000 a year, the conversation should not be about your fee. It should be about the $250,000 gap. Founders lose pricing power when they present the price without presenting the economics. → Third, change the offer before changing the price. If a buyer cannot afford the full scope, reduce the scope. Remove custom work. Extend the timeline. Change the service level. But do not quietly sell the same thing for less. That trains the market to wait for a discount. → Fourth, create proof around the outcome. Not more testimonials saying you were “great to work with.” Show: Time saved. Revenue created. Costs removed. Risk reduced. Speed to result. Proof makes price harder to argue with. → Fifth, make switching away from you feel expensive. This does not mean trapping customers. It means building knowledge, workflows, data and relationships that compound over time. The strongest pricing power often comes after the sale, not before it. → And finally, know your walk-away number. Every founder should know: The minimum gross margin worth accepting. The maximum delivery effort per customer. The discount level that makes the deal financially unattractive. Without those numbers, pricing becomes emotional. You start negotiating against yourself. When competitors cut prices, do not ask: “How do we match them?” Ask: “How do we make the comparison irrelevant?” Because price competition is usually a sign that the market cannot see enough difference. The answer is not always to charge less. Sometimes it is to become harder to compare.

As we approach the New Year—a perfect time for adjustments—many companies handle price increases much like the guy in the photo: underprepared and hoping for the best. But increasing prices doesn't have to be a risky gamble. Here's how to carry your "eggs" safely into 2025 with an effective price increase strategy: 1️⃣ Strategic Planning Price increases require careful calculation: ➡️ Market Analysis: Understand industry trends. If raw material costs have risen due to supply chain issues, acknowledge how this impacts pricing. ➡️ Competitive Landscape: Know your position. If competitors are also raising prices, align your strategy to prevent customer loss. ➡️ Value Assessment: Evaluate your unique offerings. Highlight enhancements or superior services that justify the increase. 2️⃣ Transparent Communication Honesty builds trust: ➡️ Advance Notice: Inform customers ahead of time to show respect and allow budget adjustments. ➡️ Explain the Reasons: Clearly state why the increase is necessary—be it higher costs or improved services. ➡️ Highlight Continued Value: Emphasize the quality and benefits they continue to receive. 3️⃣ Customer Segmentation Tailor your approach: ➡️ Identify Segments: Classify customers by purchase habits and price sensitivity. ➡️ Customized Strategies: Apply different adjustments. Loyal customers might see a smaller increase or receive added perks. ➡️ Offer Alternatives: Provide options like bundles or loyalty programs to add value. 4️⃣ Train Your Team Your employees bridge strategy and customer experience: ➡️ Internal Briefings: Explain the rationale so they can convey it confidently. ➡️ Provide Tools: Supply scripts and FAQs to handle inquiries consistently. ➡️ Encourage Feedback: Let staff share customer reactions to inform future strategies. 5️⃣ Monitor and Adapt Stay agile post-implementation: ➡️ Track Data: Watch sales and retention rates closely. ➡️ Gather Feedback: Seek opinions through surveys and direct conversations. ➡️ Be Flexible: If negative impacts arise, adjust your strategy—perhaps with promotions or reevaluated pricing. Don't let your price increase strategy be an accident waiting to happen. With careful planning and execution, you can strengthen your business without risking customer relationships. Let's carry our "eggs" safely into the New Year! 🥳 How are you adjusting your pricing strategy for 2025? Share your insights below! How 2025 will be different to previous years? ----- 📢 Curious about navigating the dynamic world of pricing and staying ahead of the curve? Hit the 🔔 icon and follow me to receive timely updates on pricing strategies, industry trends, and more!

Price isn't just about a number—it's about the mental model that supports it. 🧠 When OpenStore approached us about OpenDesk—their AI customer support tool for eCommerce brands—they faced a classic behavioral challenge: pricing doesn’t exist in a vacuum. The behavioral POV on value is that it’s subjective and created in the moment. That was true here, too. It wasn't actually the price point that was holding them back. It was the invisible mental accounting happening in customers' heads. 😬 Merchants mentally categorized support tools as expenses, not investments. This mental accounting created a pricing perception problem. When something falls into your "expense" bucket, your goal is to minimize it. When it's in your "investment" bucket, you evaluate ROI instead. 💡 When we reframe the value proposition, willingness to pay changes. Instead of "better customer support," we positioned OpenDesk as a "customer retention driver" – shifting its category from cost center to revenue generator. With this new mental model established, we designed pricing strategies that reinforced this investment framing: 💲 A hybrid model combining subscription + per-ticket charges that balanced predictability with value 🔢 A usage-based option with an interactive calculator that made total costs transparent—similar to how merchants evaluate ROI on other investments 👥 A per-seat model that simplified budgeting while aligning costs with team structure Curious to see where they landed, or to get ideas on optimizing product positioning or pricing strategy? 👇 Check out the case study in the comments. #BehavioralDesign #AIStrategy #ProductPricing