There's no incumbent price to copy in an emerging category. Here's the 8-step willingness-to-pay method from the person who wrote the book on B2B pricing.
I spent nearly two decades in San Francisco marketing, including as a CMO, so your point about pricing as a strategic decision really resonated with me. I’ve always seen pricing as part of positioning because it affects who buys, what they expect, who you compete with, and how the entire brand has to show up.
It took me back to my agency’s nine years working with Apple. At a time when much of the computer market was competing on price, Apple kept choosing premium. That was risky, but the product and marketing gave people reasons to value it differently: design, experience, simplicity, identity.
We saw something similar later working with Beats. Headphones had traditionally been a pretty price-sensitive category, but Beats helped turn them into something closer to fashion and status. Suddenly the comparison wasn’t simply, “Which headphones cost less?”
Going premium can be a hard decision because you deliberately narrow the market. But when the product, positioning and brand all support the price, premium can become part of the desirability. The lines wrapped around Apple Stores in major cities before product launches were pretty hard to argue with. 🙂
I spent nearly two decades in San Francisco marketing, including as a CMO, so your point about pricing as a strategic decision really resonated with me. I’ve always seen pricing as part of positioning because it affects who buys, what they expect, who you compete with, and how the entire brand has to show up.
It took me back to my agency’s nine years working with Apple. At a time when much of the computer market was competing on price, Apple kept choosing premium. That was risky, but the product and marketing gave people reasons to value it differently: design, experience, simplicity, identity.
We saw something similar later working with Beats. Headphones had traditionally been a pretty price-sensitive category, but Beats helped turn them into something closer to fashion and status. Suddenly the comparison wasn’t simply, “Which headphones cost less?”
Going premium can be a hard decision because you deliberately narrow the market. But when the product, positioning and brand all support the price, premium can become part of the desirability. The lines wrapped around Apple Stores in major cities before product launches were pretty hard to argue with. 🙂
Some of the advice here is gold, Andrew. Very relevant for B2B finance.
Thanks for letting me know. As an operator, these posts are often just things that are helpful to me so it's good to know that others benefit too.