Be truthful to your value when setting your price.

Whatever service or product we’re offering, at some point we need to decide on a price tag. In most cases, especially when starting a new business, we set a very low price to attract as many customers as possible and move the needle from zero in our bank account.

Pricing is not just a revenue driver—it also helps us identify our target market segment and define our positioning.

Needless to say, pricing should make sense for us as entrepreneurs or companies, aligning with our expenses, forecasts, and goals.

I have a peculiar case to share with you—actually, I have several, but this is probably the craziest. It perfectly illustrates the issue of perceived value and positioning, at least in my opinion. I’m not debating the efficiency of this strategy or the reasoning behind it—I’m sure it makes sense for this company and their growth goals.

Lingvist is an app for learning languages, much like many others. I actually like their method, even though I think these apps are more like “nice toys” and are generally ineffective for serious learning.

Anyway, I just received a very tempting Christmas offer:

A 35% discount means I’m getting the subscription at 1/3 of the original price—not bad. Even so, I could have gotten a better discount on Black Friday:

What should I do now? Wait for another chance at 45%, or subscribe at 35%? At the end of the day, it’s not a bad deal at all:

Out of curiosity, I went through my inbox to find the oldest promotion, hoping to get a hint about when I might snag a better discount. Here’s what I found:

Crap! This was one hell of a deal—1.46€/month instead of 4.34€/month.

But wait, there’s more—I found another offer!

Wow! Ten years at 199€… wait… at 159€! (They even double-discounted in the same email!)

What bothers me is that this crazy 10-year offer was just sent out in October, only a month before Black Friday, where the discount was only 45% on the annual subscription. There’s no apparent added value or any upselling element—just the same product, but not as heavily discounted anymore.

Maybe they did well with the promotion, and now they don’t need crazy numbers anymore because their subscriptions have surged, and everyone’s happy again.

I don’t know.

But what’s in it for us?

When thinking about pricing, it’s important to keep some decisive factors in mind:

1. Your economics: A promotion might make sense if you’re validating the product or need to improve your signup ratio. It also makes sense if there’s a compelling upselling process in place.

2. Market positioning: Any change in price alters your position in the market. More clients aren’t always positive, especially if you have a customer care policy or must actively manage these clients.

3. Client quality: Cheaper clients tend to be the most demanding and are often ready to jump ship at any time.

4. Perceived value: Depending on what and to whom you’re selling, lowering your price might signal a decline in value, potentially alienating the customers you’ve worked hard to attract.

Cheers!

F