Unlocking Growth: The Power of Dynamic Pricing

2 min readOct 12, 2024

Pricing is a criminally underused lever in product growth.

3 destructive myths get in the way:

𝟭: 𝗧𝗵𝗲 𝗠𝘆𝘁𝗵 𝗼𝗳 𝗙𝗮𝗶𝗿𝗻𝗲𝘀𝘀

This is the idea that it might be “unfair” for someone to be able to pay less than another for your product

Here’s why it’s wrong:

• Just by virtue of purchasing power differences, every consumer already has a different ability to pay for your product.

• The vast majority of other companies and products also do it.

• Even if it is unfair, the potential benefit outweighs the gain.

This is the idea that users might be dissuaded from purchasing your product if they see different prices.

Here’s why it’s wrong:

• In reality, most people just try to get the lower price.

• There are multiple other explanations, like a bug, currency, or cost.

The amount of people who might be dissuaded is less than the potential gain you might be get from learning more about your pricing.

Here’s how to actually test price for impact.

This is the idea that it’s only worth changing your price if you can get to statistical significance in a few weeks.

Here’s why it’s wrong:

• While people do churn on new, higher prices, if timed at their contract renewal, most customers are used to it nowadays.

• A price decrease is almost always well-received by a customer. Just handle the messaging.

• Migration is mostly a pain to manage, not impossible.