FinTech and Pricing: Are We Leaving Money on the Table?

Tom and Yana talk about FinTech pricing and price anchoring, popular pricing models, freemiums and the importance of niching-down – so that your company is able to charge premium prices.

Show Notes:

• [01:24] Tom recently launched a SaaS product and wanted to have a very easy pricing strategy. They were going to charge 1 buck per employee, but as their customer base grew, the strategy became more complicated. 

• [02:08] With diverse clients, it’s hard to have a one size fits all pricing strategy. 

• [03:25] Yana talks about how nice restaurants use the appetizer pricing as an anchor. Pricing is never an independent decision. 

• [04:07] What kind of value add would you give away for free to entice subscribers for your paid model?

• [05:36] With information businesses, people can find the information for free if they put in enough time and work. People who are willing to pay need to have a sense of urgency, and they need to believe that you have a strategy to bring them from point A to point B. 

• [06:59] People don’t implement when advice is free. There is a correlation between paying and taking action. 

• [07:54] Tom thinks through the customer’s economics as a business case. He shares pricing models that will benefit the user. People would rather have a turnkey price than a risk reward or commission model. 

• [10:43] You might have a perfectly fine agreement, but then businesses want to negotiate a better deal and additional conditions. 

• [13:36] Businesses need to focus on what is most important. Pricing needs to keep a business profitable. 

• [14:57] Giving away free products or services can help a business grow, but there needs to be a plan for incentives or the business won’t get profitable.

• [15:27] The taking a loss strategy usually only works for the first to market. 

• [16:15] People don’t mind paying for a service, but they want the price to be justified. 

• [17:32] Most firms understand what services would cost them in-house. Offer a reasonably priced entry product and then increase over time. 

• [18:54] Startups need to design pricing strategies that work like the upgrade model or subscription model. 

• [20:10] Free month trials attract a lot of tire kickers, but not buyers. 

• [21:01] Have an attract entry level and then start the upgrade. Once the integration is done, the upgrade decision is easy. 

• [22:30] B2B software startups need to really know their customers and their customer pain points. It’s hard to nail down messaging when trying to sell to everyone. 

• [24:29] In the B2C space, everyone looks for influencers to promote their products. At the end of the day, both spaces are selling to people, so you need to make sure that your product or service is a perfect fit.

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