Pricing strategy · Monetization

How often do you change your pricing?

Megan May UI Designer at Chicyy

December 20th, 2015

Curious as to how often people change their pricing strategies? Is it common to do yearly gradual increases or every two years? From others experience what is the best pricing strategy?
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David Werdiger Tech Entrepreneur | Mentor at TheBoardroom.com | Author & Speaker

December 20th, 2015

Your pricing strategy should not change that frequently. Regarding the price you charge for your product/service, there are no hard & fast rules, and it will depend on the product & the market.
Some products are allowed to increase their price with CPI annually. In other cases, you may be able to increase prices because of increased costs or exchange rate changes, e.g. petrol/gas prices or air travel.
Usually, small price increases are easier because they are less likely to be noticed, as per Weber's law.

Neil Gordon Board Member, Corporate Finance Advisor and Strategy Consultant

December 21st, 2015

Find out what's common in your industry/sector. That will give you a significant clue as to what your customers/marketplace expects and will tolerate.

Steve Everhard All Things Startup

December 21st, 2015

Megan you price to your market and not to a retail price index. If you have subscription pricing you may be able to apply an indexed increase but much depends on your competitive position, and you would need to include such a provision in your sales agreement. 

 If you are selling products that are not subscription based then price increases would generally be based on factors such as cost of materials increases or forex if the product manufacture originated outside of that market. It would be folly indeed to merely plan for a 12 month or 24 month price increase without reflecting your competition or macro economic factors if you have a physical product supply chain.