8 Creative Pricing Strategies Most Startups Overlook

As an advisor to new business owners, I’m accustomed to seeing primarily the simple traditional product pricing strategies, usually driven by competitor prices, or cost plus a reasonable margin. I often wonder whether you as the entrepreneur have worked as hard on your pricing strategy as you have on your innovative solution. I hate to see money left on the table through poor pricing.

For example, I believe that Starbucks surprised most people by proving that they could take a commodity business, a coffee shop, and make it a worldwide profit winner, just by justifying premium pricing with a quality product, the right locations, personalized service, and appealing to the professional customer personas.

As I look around at other great businesses out there, I see many have incorporated innovation into their pricing strategies, as well as their products or solutions. By definition, true innovations are things we haven’t seen yet, but here are a few pricing alternatives that have contributed to the success of companies I know, and I recommend for evaluation by every business leader:

Charging a premium for your technology innovation. If your innovation is real, it brings added value to the table, so most customers, especially early ones, are willing to pay a premium over competitive products. Later, when that innovation becomes the new norm, you must be prepared to lower your price to meet new competitors.

Originally posted at Crazy About Startups