The Pricing Manifesto: Creating Sustainable Business Models and Valuing Customer Satisfaction

The Pricing Manifesto: Creating Sustainable Business Models and Valuing Customer Satisfaction

In today's digital age, pricing strategies play a crucial role in the success and sustainability of businesses. Determining the right price for a product or service is a delicate balance, one that requires careful consideration of various factors. In this article, we will explore the importance of pricing based on the value created, the pitfalls of offering free forever plans, and the need for pricing sustainability rather than relying on future salvation. Additionally, we will delve into the myth surrounding the effectiveness of highlighting as a study technique. By examining these topics, we hope to provide actionable advice for businesses and students alike.

The Pricing Manifesto: Valuing Value Creation

When it comes to pricing, one fundamental principle should guide businesses: value creation. The price of a product or service should be determined by the value it brings to customers. This means that businesses should assess the impact their offering has on their target audience and charge accordingly. By aligning pricing with value creation, businesses ensure that their customers receive the appropriate return on their investment.

Free Forever Plans: A Double-Edged Sword

While offering free plans may seem like a generous gesture to attract users, it often comes with unintended consequences. Free forever plans create bad incentives and are not sustainable in the long run. Digital products that do not charge enough or at all often resort to selling customer data or shutting down altogether. These outcomes are unacceptable both ethically and from a business perspective.

Furthermore, users on free forever plans may not fully appreciate the value of a product. Their demands and feedback can dilute the product, ultimately harming those who rely on it the most. By implementing higher prices, businesses create higher expectations. This, in turn, motivates them to deliver a higher quality product, ensuring that customers receive the value they deserve.

Priced for Sustainability, Not Future Salvation

In the fast-paced world of technology, many businesses fall into the trap of building a user base quickly, hoping for future salvation through venture capital or acquisition. However, this approach often leads to bad incentives and sub-par products. Instead of relying on external sources for financial support, businesses should focus on sustainable pricing models.

Sunsama, a productivity product, demonstrates the importance of sustainability through its subscription-based pricing. By charging a recurring fee, Sunsama ensures that customers remain committed to the product while they, in turn, remain committed to its maintenance and improvement. This approach fosters long-term relationships with customers and enables businesses to focus on meaningful product enhancements rather than chasing short-term marketing fads.

Building a business solely on people's forgetfulness is ethically questionable. Instead, businesses should strive to earn their customers' loyalty and financial support through a genuine love for the product. Sunsama understands this and allows customers to cancel their subscription easily without any hassle. By prioritizing customer satisfaction, Sunsama emphasizes the importance of building a sustainable business model based on long-term committed customers.

MythBusters: The Truth About Highlighting as a Study Technique

In the realm of education, the effectiveness of highlighting as a study technique has been a topic of debate. While many students turn to highlighting to enhance their learning, research suggests that its benefits may be overrated. Numerous studies have found that highlighting, as typically used, offers no significant advantage over simply reading the material.

For example, Fowler and Barker (1974), Rickards and Denner (1979), Stordahl and Christensen (1956), and Todd and Kessler (1971) all found no substantial benefits of highlighting compared to reading alone. However, researchers have also discovered promising results when students learn to highlight effectively. Rickards and August (1975) conducted a study where students were instructed to highlight only one sentence per paragraph. Surprisingly, these students recalled more information from the text than those who solely read it.

Blanchard and Mikkelson (1987) and L. L. Johnson (1988) found that highlighting text while reading improved performance on questions related to the highlighted information but hindered performance on questions related to non-highlighted information. This suggests that highlighting may limit students' ability to make inferences about the text as they focus solely on the highlighted content.

Actionable Advice for Businesses and Students

• 1. Focus on value creation: When pricing your products or services, consider the value they bring to your customers. Align your pricing strategy with the impact your offering has on your target audience, ensuring a fair return on investment.

• 2. Embrace sustainable pricing models: Avoid the allure of quick growth through external funding or acquisitions. Instead, build a sustainable business model that relies on long-term committed customers. Charging a subscription fee, like Sunsama, can foster loyalty and enable continuous product improvement.

• 3. Rethink highlighting as a study technique: While highlighting may have some benefits, it is not a universally effective study technique. Instead of relying solely on highlighting, explore other methods such as active reading, summarizing, and self-testing. Experiment with different techniques to find what works best for you.

Conclusion

In an ever-evolving business landscape, pricing strategies and study techniques continue to be subjects of interest and debate. By prioritizing value creation, embracing sustainable pricing models, and reevaluating traditional study techniques, businesses and students can enhance their success and achieve their goals. Remember, the key lies in understanding the needs and expectations of your customers or yourself and adapting accordingly.