I think we're always competing on price to one extent or another. It's always a factor in the customer's purchasing decision (and in their ongoing decision to keep paying).
I think what people mean is: "don't make price the only factor you compete on." That makes sense. 👍
While your price should reflect what the user is willing to pay, and that in itself is competitive, if your only reason for existence is a "cheaper version of X" than you'll be outpriced soon and will cease to exist.
I've always known this deep down, but only recently embraced it. Not just because I tremble at the idea of trying to make a living from $5/mo subscriptions, but even more so because I want my work to massively help the people who use it. And for better or worse, people invest more in things they've already invested in.
Two years ago I started an accountability group that cost $650 per year to join and I immediately got two people inside. I pivoted away because I was inexperienced enough to realize that $1,300 in two weeks for a brand new idea with no audience was good, not bad.
Despite the fact that the community never lived up to what I hoped it would, I'm still having regular accountability check-ins with one of those two people.
My next venture is largely based around community once again. And I strongly feel that pricing on the higher side is the way to go. Because it's a community about belonging and self actualization and being the best version of yourself. And - aside from the fact that I'll be spending my full days on this and can't afford to sell it for less - nobody is going to believe the dream you're selling them if the pricetag doesn't match. If I tell you how much this thing could help you, and then I ask you for $5... there's going to be some cognitive dissonance there.
Amazing how when we set out inexperienced and dreaming of millions of users, 2 $650 accounts seem irrelevant, whereas, now we know, it's an AMAZING start!
I feel like you've touched on a whole new topic that I feel an itch in my fingers to write about ;-)
Not only is there no reason to compete on price because it's a zero-sum game, but also, you should give people something of value that they are HAPPY to pay you a premium.
"Never compete on price."
I think we're always competing on price to one extent or another. It's always a factor in the customer's purchasing decision (and in their ongoing decision to keep paying).
I think what people mean is: "don't make price the only factor you compete on." That makes sense. 👍
I completely agree!
While your price should reflect what the user is willing to pay, and that in itself is competitive, if your only reason for existence is a "cheaper version of X" than you'll be outpriced soon and will cease to exist.
Thanks for the comment!
> NEVER, I repeat, NEVER compete on price.
I've always known this deep down, but only recently embraced it. Not just because I tremble at the idea of trying to make a living from $5/mo subscriptions, but even more so because I want my work to massively help the people who use it. And for better or worse, people invest more in things they've already invested in.
Two years ago I started an accountability group that cost $650 per year to join and I immediately got two people inside. I pivoted away because I was inexperienced enough to realize that $1,300 in two weeks for a brand new idea with no audience was good, not bad.
Despite the fact that the community never lived up to what I hoped it would, I'm still having regular accountability check-ins with one of those two people.
My next venture is largely based around community once again. And I strongly feel that pricing on the higher side is the way to go. Because it's a community about belonging and self actualization and being the best version of yourself. And - aside from the fact that I'll be spending my full days on this and can't afford to sell it for less - nobody is going to believe the dream you're selling them if the pricetag doesn't match. If I tell you how much this thing could help you, and then I ask you for $5... there's going to be some cognitive dissonance there.
I love your story about the accountability group!
Amazing how when we set out inexperienced and dreaming of millions of users, 2 $650 accounts seem irrelevant, whereas, now we know, it's an AMAZING start!
I feel like you've touched on a whole new topic that I feel an itch in my fingers to write about ;-)
Not only is there no reason to compete on price because it's a zero-sum game, but also, you should give people something of value that they are HAPPY to pay you a premium.