What’s your approach to pricing your products or services? What factors do you consider? We asked industry experts for their top strategies, and they delivered 16 actionable tips to guide your pricing decisions.
- Test and Adjust Pricing for Value
- Understand and Meet Client Needs
- Balance Quality, Value, and Competitiveness
- Base Pricing on Core Costs
- Combine Competitive Positioning with Value-Added Services
- Adapt Offerings to Client Budgets
- Align Value with Market Demand
- Balance Costs, Value, and Competition
- Focus on Transparency and Long-Term Relationships
- Align Value with Client Needs
- Balance Value and Accessibility
- Consider Internal and External Factors
- Focus on Value-Driven Pricing
- Estimate Timeline and Hourly Rate
- Reflect Value and Client Priorities
- Utilize AI-Powered Dynamic Pricing
16 Pricing Strategy Factors Businesses Consider
Test and Adjust Pricing for Value
My approach to pricing products or services, especially for companies with pricing pages, is to test, test, test before fully launching. I always recommend starting with a soft launch to gather feedback and test higher price points first. However, when testing higher prices, it’s important to increase the value somewhere—whether through added features, bonuses, or improved packages—so customers see the difference and aren’t comparing identical offerings. It’s much easier to adjust pricing downward later, but raising prices without adding value can frustrate existing customers and erode trust. Pricing is as much about positioning as it is about profit, so testing with intentional value increases ensures you hit the right balance for sustainable growth.
Rizala Carrington
CEO, MyGrowthAgent.com
Understand and Meet Client Needs
I approach pricing products or services with a firm understanding of the value we’re delivering to our clients and their needs. Pricing isn’t just about what we pay; it’s also about how we position ourselves, how our clients perceive the value of what we offer, and making sure the outcome we deliver matches what they pay for. My strategy in this is providing a price point that is fair with the impact we create, ensuring the client understands the return on investment.
Market research is one of the first factors that I look at. I study the competitive landscape in our industry to determine what others in our space charge for comparable technology stacks. This sets a baseline but also helps me pinpoint gaps that are opportunities to differentiate us through premium products or more bespoke solutions.
The next test I apply is value versus cost. Rather than merely figuring cost-plus pricing, I consider all the value we’re delivering, be it higher revenue for a client, operational efficiencies, or a better customer experience. In website design, for instance, our offerings encompass not only the design aspect but also the SEO and overall user experience components that significantly influence business success. All this added value deserves a higher price point, especially with measurable benefits.
I also think of client segmentation. Recognizing the fact that every client may not have the same needs or budget, I have a tiered pricing model where I offer different levels of service. This enables us to serve small business clients who want to build the groundwork, as well as enterprise clients who will want full-service, white-glove solutions. Through tiered pricing, we can keep the services accessible but still have a premium option for anyone who desires it.
Last but not least, testing and feedback are essential. I embrace iterative improvement, experimenting with pricing models and seeing how clients react and tweaking accordingly. By, for instance, bundling services together or providing incentives such as discounts on long-term contracts, you can enhance client retention without sacrificing your bottom line.
That said, for me it ultimately comes down to clear, value-based pricing that reflects the quality of the work and the results we achieve. It’s not only about gaining the trust of potential clients, serving their needs for mutual benefit, but also about making our services seem like an investment rather than an expense.
Darryl Stevens
CEO, Digitech Web Design
Balance Quality, Value, and Competitiveness
Pricing is both an art and a science for me. I aim to strike the perfect balance between quality, value, and market competitiveness. I start by analyzing our costs, from sourcing sustainable materials to delivering the final product. This guarantees our prices represent the craftsmanship and durability customers expect.
I also study market trends and competitor prices to provide premium furniture at affordable prices. Customer perception plays a significant role, too—people are willing to pay more if they see genuine value, so I highlight our unique selling points, such as eco-friendly materials and timeless designs.
One key factor is listening to customer feedback. For instance, if customers mention pricing as a barrier, we might consider introducing payment plans or bundles. Ultimately, pricing is about creating a win-win situation: fair for the customer and sustainable for the business.
Chris Putrimas
CEO, Teak Warehouse
Base Pricing on Core Costs
We start by drilling into our core costs—like hosting, development, and customer support—so we know exactly where our spending goes.
From there, we set profit margins that feel sustainable, rather than just piling on profit for the sake of it.
We keep a close eye on what our competitors charge, not to copy them, but to understand how we can differentiate on value without cutting corners. If we find ways to streamline operations or reduce overhead while maintaining quality, we take them.
In the end, it’s about offering pricing that honestly reflects our effort, keeps our solution accessible to clients, and respects the trust they place in us.
Alex Chaidaroglou
CEO, Altosight
Combine Competitive Positioning with Value-Added Services
Our pricing strategy stems from our teenage experiences of finding hobby-grade RC cars financially out of reach. This personal insight shaped our core pricing philosophy.
Our pricing model combines competitive positioning with value-added services. We maintain margins between 40-70% depending on direct manufacturer relationships, but consistently price 15-20% below traditional brick-and-mortar stores. This strategy delivered 127% year-over-year growth in 2023 while maintaining product quality and customer satisfaction at 4.9/5 stars across 750+ reviews.
The pricing approach factors in three key elements: real-time market analysis of competitor pricing, bulk purchasing power through direct manufacturer relationships, and operational efficiency through our e-commerce-first model. Dynamic pricing software allows us to adjust prices across thousands of SKUs while maintaining healthy margins that support our same-day dispatch service and comprehensive post-purchase support.
Customer lifetime value drives our strategy more than short-term profits. By pricing entry-level RC cars affordably, we’ve created a pathway for beginners to enter the hobby and naturally progress to higher-end models, resulting in 73% customer retention.
Hamish McRitchie
Co-Founder & Director, Hobbies Direct
Adapt Offerings to Client Budgets
My approach to pricing services is all about working to a client’s expectations and budgets while delivering real value. Flexibility is key. Not every client needs—or can afford—a complex, all-singing, all-dancing solution. Sometimes, they just need something simple and effective, and it’s our job to deliver that without over-engineering the process or reinventing the wheel.
For smaller businesses or clients on tighter budgets, I adapt our offerings to focus on what’s truly essential for their needs. There’s no point in upselling unnecessary features that don’t solve their problem. A streamlined solution can often be just as impactful when executed well.
At the same time, I ensure that quality is never compromised. Being flexible doesn’t mean cutting corners-it means being honest about what can be achieved within a set budget and delivering the best possible outcome. Whether it’s a full website build or a refresh, the goal is to provide value without overcomplicating things.
We also offer special pricing structures for NGOs and charities. Supporting organizations that do important, meaningful work is something I care about, and providing high-quality solutions at rates they can manage helps them achieve their goals without breaking the bank.
Ultimately, my pricing approach is about finding the right balance: meeting the client where they are, adapting to their budgets, and ensuring they walk away with something that works for them. It’s not just about what a project costs—it’s about building trust, delivering results, and showing clients they’ve made a smart investment in their business.
Jm Littman
CEO, Webheads
Align Value with Market Demand
When pricing products or services, I focus on aligning value to the customer with market demand and internal costs. Competitor pricing and psychological factors, like charm pricing (e.g., $99 vs. $100), also play a role. I’m also a big believer in adding as much value as possible that helps justify the investment. Testing models like tiered or subscription pricing helps find the best fit for both the business and its audience.
Josh Kimmes
Founder, Bear North Digital
Balance Costs, Value, and Competition
I think pricing is as much about strategy as it is about understanding your customers and the market. Our approach involves balancing three key factors: costs, value, and competition. First, we calculate all direct and indirect costs, including materials, labor, and overhead, to ensure we’re covering our expenses and maintaining profitability.
Next, we focus on the value our services bring to customers. For example, our precision and reliability in CNC machining allow clients to avoid costly errors, so we position our pricing to reflect that premium. We also consider market competition by benchmarking against other providers. This helps us stay competitive without undervaluing our expertise.
I think flexibility is important, too. For bulk orders or long-term clients, we offer discounts, which builds loyalty. Pricing isn’t just about numbers—it’s about creating a win-win where both you and your customers feel the value is worth the cost.
Jason Wong
General Manager, Rosedwell machinery ltd
Focus on Transparency and Long-Term Relationships
Pricing is a delicate balance for any business leader, particularly in the competitive world of recruitment marketing. Our approach to pricing reflects our commitment to transparency, value, and long-term relationships with clients. Our pricing strategy starts with understanding the unique challenges and budgets of public sector agencies. Government entities often operate with constrained resources, so our goal is to offer cost-effective solutions that maximize their return on investment while meeting their specific recruitment needs.
For example, we implemented a flexible pricing model based on performance metrics such as cost-per-application (averaging $0.80-$1.00). By providing clients with detailed reporting and data transparency, we demonstrated the tangible value of our services. This approach has resulted in sustained client relationships averaging 5-10 years, emphasizing the importance of trust and value in our pricing decisions.
When pricing your services, consider your clients’ unique constraints and needs. Use data-driven insights to communicate the value of your offerings and adopt a flexible approach that fosters long-term relationships. Transparency is key to building trust and ensuring mutual success.
Michael Hurwitz
President/Co-Founder, Careers in Government
Align Value with Client Needs
Our approach to pricing services focuses on aligning value with client needs while maintaining competitiveness in the global hiring market. Key factors we consider include the complexity of the roles being filled, the region-specific salary benchmarks, and the level of customization required in our recruitment process.
We also factor in operational efficiencies, such as leveraging AI-driven tools to reduce costs, which allows us to pass savings to our clients. By regularly analyzing market trends and client feedback, we ensure our pricing remains transparent and justifiable, offering a clear ROI. This approach builds trust and positions our services as both high-quality and accessible for businesses of all sizes.
Nick Esquivel
CEO, Globaltize
Balance Value and Accessibility
I advocate for a pricing model for our AI-driven video editing platform that balances value with accessibility. We should consider factors like the complexity of features (e.g., basic editing vs. advanced options), the volume of video content produced, the number of users, and the desired level of support. A tiered subscription model could offer flexibility, with options for individuals, teams, and enterprises. We can also explore usage-based pricing, potentially offering pay-per-minute or annual pay-per-access options. Ultimately, our goal is to create a pricing structure that empowers L&D professionals to leverage the power of AI while optimizing their budgets and maximizing their return on investment.
Alex Uspenskyi
Founder & CTO, Elai
Consider Internal and External Factors
There are two key factors in pricing your products and services: internal, which relates to your costs, and external, which relates to the market price. Internal factors relate to your costs of delivering the product or service. What are your direct costs or the cost of sales of delivering the product or service? Direct costs are those costs that are directly involved with bringing/creating your product/service so it can be sold. The costs would not exist if it were not for the sale. These are different from the indirect costs of your business which are those costs that support the company and its infrastructure. They exist whether the sale is made or not.
It is useful to understand the gross margin of each of your products or services. This is calculated by subtracting the cost of sales/direct costs from the sales price and calculating the gross profit, and then converted to a percentage. The higher this is, the better. A high gross margin business is a “price setter” and has a much more valuable business than a “price taker” who competes on price typically at low margins. The more differentiated a product or service is then typically the higher the gross margin.
While this is the starting point for pricing, it must still be benchmarked to the market price. There is no point having a theoretical price that is significantly different from what the market will stand so this needs to be understood too, and the price adjusted accordingly. The ability to differentiate and create a market niche reduces the impact of market comparison, but it is still something to be considered. Once you better understand why customers buy your product or service and the value it has to them then the more effective your pricing will become.
Craig Alexander Rattray
Growth Strategist, Know Your Numbers
Focus on Value-Driven Pricing
When we price our custom software development services, transparency and flexibility are key. Each client has unique needs, so a fixed approach doesn’t work for us.
We focus on value-driven pricing. Instead of just calculating hours or scope, we ask: What outcomes are the client aiming for? If our work helps solve a major problem or brings in significant business, we factor that into our pricing.
Of course, we also consider effort and complexity. Factors like project difficulty, the skills required, and potential risks affect the cost. For example, if the project demands niche expertise or has tight deadlines, the pricing reflects that. It’s about being fair to our team and setting clear expectations for the client.
One lesson we’ve learned? Clear communication is non-negotiable. We break down exactly what the client is paying for and why. When clients understand the value behind the price, it builds trust and avoids friction later. In the end, honesty and clarity make the whole process smoother for everyone. When we price our custom software development services, transparency and flexibility are key. Each client has unique needs, so a fixed approach doesn’t work for us.
We focus on value-driven pricing. Instead of just calculating hours or scope, we ask: What outcomes are the client aiming for? If our work helps solve a major problem or brings in significant business, we factor that into our pricing.
Of course, we also consider effort and complexity. Factors like project difficulty, the skills required, and potential risks affect the cost. For example, if the project demands niche expertise or has tight deadlines, the pricing reflects that. It’s about being fair to our team and setting clear expectations for the client.
One lesson we’ve learned? Clear communication is non-negotiable. We break down exactly what the client is paying for and why. When clients understand the value behind the price, it builds trust and avoids friction later. In the end, honesty and clarity make the whole process smoother for everyone.
Vikrant Bhalodia
Head of Marketing & People Ops, WeblineIndia
Estimate Timeline and Hourly Rate
When it comes to determining the pricing for our development services, we primarily focus on these two factors:
1. The estimated timeline needed for the project, which the developer determines after having reviewed the scope of work in its entirety.
2. Hourly rate of development, which varies depending on the tech stack and experience and skill set of the developer.
With that said, these two factors act as a foundation for an estimated price. Other variables, like budget constraints of the client and their offer, can influence us to increase or decrease our pricing.
Gursharan Singh
Co-Founder, WebSpero Solutions
Reflect Value and Client Priorities
We build our pricing strategy around client needs and market demand. By focusing on what clients prioritize—flexible terms, transparency, and exceptional service—we price our services in a way that reflects their value to our target audience.
Competitor analysis is a starting point, but we also look at client behavior and feedback to adjust our pricing dynamically. For example, we’ve introduced tiered packages to cater to different budgets while maintaining profitability. The aim is to stay adaptable, transparent, and aligned with the changing demands of the market.
Teresha Aird
Chief Marketing Officer & HR Lead, Offices.net
Utilize AI-Powered Dynamic Pricing
In today’s rapidly evolving e-commerce landscape, pricing has become increasingly complex. Traditional pricing methods that worked in brick-and-mortar retail struggle to keep pace with the dynamic nature of online markets, where conditions can change by the hour and competitors can adjust prices instantly. This complexity, combined with the vast amount of data now available, has led to the emergence of more sophisticated pricing approaches.
We approach pricing for e-commerce through AI-powered pricing, which fundamentally differs from traditional methods like cost-plus, competitor matching, or simple A/B testing. While cost-plus pricing often leaves money on the table by ignoring market dynamics, and competitor matching can trigger destructive price wars, AI-powered pricing analyzes multiple data streams in real-time to optimize prices. Traditional A/B testing provides useful insights but is limited by its static nature and inability to adapt quickly to changing market conditions.
Our AI system continuously processes historical sales data, real-time demand signals, competitor movements, and customer behavior patterns to adjust prices dynamically. This means we can identify and respond to emerging trends, seasonal shifts, and changing customer preferences faster than traditional methods allow. The system segments customers based on their behavior and preferences, enabling personalized pricing strategies that maximize value for both price-sensitive and premium buyers. By incorporating supply chain data and inventory levels, we maintain optimal stock positions while preserving margins.
Unlike manual pricing methods that can be overwhelmed by the complexity of modern e-commerce, our AI system can analyze thousands of products and variables simultaneously, finding optimization opportunities that human analysts might miss. The result is a pricing strategy that continuously adapts to market conditions while maintaining profitability and competitive positioning. Through this approach, we’re able to capture value that would be lost using conventional pricing methods, while building stronger relationships with customers through more personalized pricing.
Nabeel Siddiqi
CEO, Moksha AI LLC
