For most businesses, this is not a question that is often considered as part of a pricing strategy.
Its too easy to jump to an automatic conclusion and decide to set your prices on the most commonly used pricing metrics in your industry, e.g.:
· price per product
· price per hour
· price per project
· price per client type
· price per user, etc.
And if you are new in your market, you’ve probably just copied what your competitors do, and used their pricing metric.
However, careful consideration of your pricing metric can unlock a lot of pricing power and allow you to think more creatively about your pricing strategy.
If you are a SaaS or digital business, don’t just default to “per user” pricing. Try and identify the metric that your customers value the most, and design your prices using that metric.
⭐ For example, the pricing metric used by HubSpot is the number of “marketing contacts” you are allowed to have on their system. For Zoom, it’s the number of minutes and the number of participants per meeting.
Its far better to identify the metric that your customers value the most, and design your prices around that, rather than just follow the herd.
⭐ For a consultant, advisor or freelancer, rather than just selling an hourly rate, you may be better off designing fixed price packages that offer your clients budget certainty, rather than an open-ended bill.
⭐ A manufacturer might be better off bundling extra services into a finished product, such as extended warranties, free delivery, commissioning, and so on.
By thinking about which pricing metrics you should use, it will force you to think more about what your customers really value, and then you can design an appropriate pricing response.