Optimizing prices to find the best balance of conversion rate, sales volume, and revenue is key for startups to maximize business impact.

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  00:00

  Monetization is key for startups, with a 1% increase in effort resulting in a 3.32% return on acquisition and retention.

  • This talk covers the fundamentals of pricing, why it is difficult for startups, how to do price optimization, how pricing affects acquisition strategy, and pricing tricks to make it easier.
  • Monetization is the Big Dawg, with a 1% increase in effort resulting in a 3.32% return on acquisition and retention.
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  02:31

  Start with cost or value to determine price, and avoid common mistakes to optimize pricing for maximum business impact.

  • The pricing thermometer concept helps to understand the relationship between cost, price, and value, and how to optimize pricing for maximum business impact.
  • Start with the cost or value of your product to determine the price, and avoid four common mistakes when pricing.
  • Most startups undercharge due to underestimating costs, not understanding their value, and focusing on the wrong customers.
• 📈
  06:15

  Early adopters drive momentum and growth in the product development stage, but price optimization is a complicated way to show value.

  • Sales and profits over a product's life cycle can be seen in the Shinto demise, which consists of five stages.
  • Early adopters, the first two to five percent of potential buyers, drive momentum and growth in the product development stage.
  • Early adopters are not price sensitive and price optimization is a complicated way to show value.
• 🤑
  09:29

  Optimizing prices involves trying different prices and seeing the effect on conversion rate, sales volume, and revenue generated to determine the best balance.
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  10:50

  Calculate customer numbers to reach a billion dollar company by setting different price points and understanding potential.

  • Calculate the number of customers needed to reach a billion dollar company by setting different price points and understanding the potential of each.
  • Products with a price point of $2,000 or less require inbound marketing and have low complexity in the sales process.
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  13:20

  Focus on generating qualified leads, offering SLAs and training, and having an inside sales rep and SDR, to reduce acquisition costs and optimize pricing.

  • At a price point of two to ten thousand dollars, marketing should focus on generating qualified leads, while customer support should offer SLAs and training, and sales should have an inside sales rep and SDR, with a sales cycle of one to three months.
  • Increase the perceived value of your product or service to reduce acquisition costs and optimize pricing.
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  15:40

  Charge a price that customers perceive to be 10x its value, until you're losing 20% of customers.

  • Charge a price that customers perceive to be 10x its value.
  • Raise prices until you're losing 20% of customers for optimal balance of price and value.
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  17:29

  Go after early adopters, set a price 10x the value and increase prices by 5% until you lose 20% of the deals.