Ask HN: How do you set prices?
(Note: cofounder responsible for pricing decisions many times.)The closest thing to a "methodology" I've found is asking these four questions and having the users generate their own pricing curve [1]:Here's a real set of curves this process generated for me recently: http://imgur.com/lPKLk53 ($ values redacted)The four questions are:1. At what price would you consider [the product/service] to be so expensive that you would not consider buying it?2. At what price would you consider [the product/service] to be priced so low that you would feel the quality couldn’t be very good?3. At what price would you consider [the product/service] starting to get expensive, so that it is not out of the question, but you would have to give some thought to buying it?4. At what price would you consider [the product/service] to be a bargain—a great buy for the money?Require a specific $ amount as the answer to each question.Take ~100 users, ask them all four of these questions, and then compile the results. You really have to do this on a subset of your own qualified potential customers to get any meaningful data.The neat thing about this is that this creates a price sensitivity curve without anchoring the interviewee with any prior numeric values.At the end of the day, it's still a gut call about where to place your price point relative to the user's alternatives, and testing is encouraged, but these four questions are a decent start.[1] https://en.wikipedia.org/wiki/Van_Westendorp%27s_Price_Sensi...