Ask HN: Pricing/marketing strategies/tactics in large, non-niche market
I'm developing a product that is a direct competitor to well-established apps (web and mobile) but offers more flexibility for pro and prosumer users, as well as:
* People that need those tools for their clients, and
* Groups that need the same (e.g., corporations, publishers, ...)
It's ambitious, and I'd settle for a small percentage of the market, especially since my main targets are the more sophisticated users and the groups.
The competitors charge regular users anywhere from $5-20/month, and don't have options for the groups. Groups can consist of anywhere between a dozen users (e.g., person managing their clients) to tens of thousands (e.g., the subscribers to a magazine).
My current thoughts are to have a freemium model with somewhat-lessened functionality (which people hate), a small-group pricing scheme, and a "OMG ALL THE PEOPLES" model.
Problem is it's not clear to me how to:
* Break up functionality between "levels", and
* Price fairly enough to bring in new users, and
* Price fairly enough to allow for massive on-boarding
Any resources--blogs, books, videos, articles, whatever would be greatly appreciated. My knowledge of large-scale marketing is limited; I know more about the small-scale guerilla-style bits (but modern resources for that are also desperately wanted) but I'm not sure how to break in to larger-scale adoption.
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It's hard to answer something like this without specific information. Very generally, for a crowded market think of things in terms of a 'distribution strategy' vs a pure marketing/pricing one. People invariably buy from a small subset in a range of choices. Your job is to market sure you become within that subset, and then have a hook to get you over the decision line in enough cases. People are generally looking for simplicity so dont overthink it. Just get the product in front of people and then give them that hook. Test/learn and be flexible. Look what the competitors are doing and emulate them if you unsure until you understand things better.
Most importantly, understand the financial metrics of customer acquisition. Not doing so is a common error. I see it in almost every business I consult. Firstly if you understand this you can test strategies much more effectively, Secondly don't look at acquisition as a cost. Treat it like you would an investment and you'll be well placed.
I would stop thinking about how to split functionality and start thinking about the types of customers that you might attract. Who would use your product? How could one group of customers absorb more value from your product than others? Pricing should always be customer-centric rather than product-centric. Start reading up on "personas" and don't be overly-focused on what other companies charge for now - the market supports both Hondas and Ferraris.
Source: I wrote a book on software pricing, have a blog with 200+ articles on pricing, a video on my homepage with some common pricing pitfalls and various other materials. http://taprun.com
How far along are you with the product? Do you already have an established group of customers and you're looking to grow?
I'd recommend you start having a chat with your customers/potential customers to get a better sense of their needs. They will help you to segment the pricing levels as you'll understand what's valuable to each customer segment.