My post was from a B2B perspective. I guess it could be applied to a B2C scenario as well.

Unless there is strong differentiation that market is ready to pay a premium for, pricing yourself too high compared to the competition will just result in lesser sales. If the market thinks of you as another Zendesk or another support software, then they would not see the need to pay premium for your product. But if you’re able to establish the differentiation through marketing and/or product then you could demand that premium. Intercom and Drift help you chat with your customers but through their marketing, they’ve created a separate category called Conversational Marketing which I guess helps them charge a premium over the Olarks of the world.

If you charge too low, then that’s just leaving money on the table, unless your objective is to grab as much market share as you can before you raise your prices. You could also charge lower if you’re entering a competitive space and price is one of the ways in which you want to differentiate yourself to get the initial traction going. Amplitude used this strategy pretty well in a crowded analytics space.

Principal Product Manager @ ThoughtSpot

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