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Customer will always want most the of the features in the least possible price - for any product/service. Any research technique you recommend?

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  • Usually, I've seen price framing - 3 or more tiers of offerings and usually there's a little benefit between the 2nd best and the best tier so customers usually go for the second to the best. But all this is good once you have a price in mind. – Pratap Gadgil Mar 30 '17 at 11:22
  • Upvoted because it got me thinking on a very different kind of Features based UI to pinpoint the right product. – Harshal Mar 30 '17 at 12:11
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    I'm not sure I believe your premise. Many people look for quality, aesthetics, brand status and reputation, etc., more than they look for number of features. They'll even pay more than the minimum available price for these things. – Ken Mohnkern Mar 30 '17 at 12:46
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    @KenMohnkern Depending on your market. In developing countries the price is the #1 decision point when buying a product. People just cannot connect end and are willing to use unknown "brand" if it does the work. They don't have much choice. – Kristiyan Lukanov Mar 30 '17 at 14:22
  • Finding the right price point is a black art. Pragmatic Marketing has a whole course on the topic. The US Small Business Association (SBA) has a worksheet to help. Sequoia has a fantastic guide to get you off on the right foot. – plainclothes May 30 '17 at 16:48
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I've read something on the internet and one day I stumbled upon this:

Pricing Guide: How to price your products

IMO, this article explains very well a lot of basic things and it's easy enough to understand.

I recommend this if you want a general idea of how setting a price tag works.

I'm not qualified in this so I can only share my experience with you.

Best of luck!

  • Welcome to UX.SE! Including links is a nice plus, but if tomorrow that link no longer works, this answer will be of no help. If you can, edit your answer to include relevant selections from the article. – maxathousand Mar 30 '17 at 15:02
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It's normally best to look at what others within your industry are charging for similar products.

Going too low can be seen negatively by both consumers as the product can look cheap and by other competitors as a way of devaluing the market.

Going too high can cause the opposite effect of going too low!

What I would suggest is take that on board and come up with a price you think is fair and matches the market but allows you to reap the benefits. Also, go out and ask potential customers what they are happy with and the price they would be happy to pay! (Don't necessarily ask what price they would pay as they will almost always say next to nothing! ha, but rather give them a price and see what their reactions are.)

  • What is the product is a new one and there's no benchmark? There are many IoT products which are new to the market and probably companies just put up their desired margin on top of the cost incurred. Wild guess... – Pratap Gadgil Mar 31 '17 at 12:49
  • Well, that's a good point and that is where you will need to think more about your pricing strategy. Which is moving away from UX but as a bit of help, i would refer back to when I mention going out and asking potential customers what they would pay. Look at your costs and the ongoing costs and work out what you would charge which benefits you but also gives the customer the feel of a valued product for what they are paying. – Tom Brennan Apr 1 '17 at 15:36
  • That's something I can try out! I'll have to first identify potential customers, do some interviews to get an understanding of what would add value to them and then test out the pricing figure with them. – Pratap Gadgil Apr 3 '17 at 5:14
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Survey your target audience

Design a short survey where you will show and describe your product and ask users how much they are willing to pay for it and why.

You can use Surveymonkey or Amazon mechanical turk to find respondents.

Do it with your target audience and try to divide the responses on groups. For example, low/high income group, young/old, etc. and observe their patterns.

This way you will be able to adjust your pricing based on user type (if you are able to identify them before that), and thus increasing your conversion rate.

  • Thanks for the suggestion! Just curious to know whether anyone has done such research and has got a genuine feedback. My concern is that if a product is new and people don't know how to price it then how will I get a realistic response. – Pratap Gadgil Apr 3 '17 at 5:13
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You can also look at running a conjoint analysis to understand what combination of factors and what price are the sweet spot.

https://en.wikipedia.org/wiki/Conjoint_analysis

It is similar conceptually to MVT testing but done as a prior research piece rather than live optimisation.

  • I'd heard about it. Will read and learn this and try to implement. Thanks! – Pratap Gadgil Apr 3 '17 at 5:17

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