Title: Monetisation and Pricing Strategies, with Oliver Berger
Session context
- Format: Interactive masterclass + live Q&A with pricing examples
- Speaker: Oliver Berger, product and strategy advisor; ex-CPO at Stake, ex-MySpace, ex-eBay
- https://www.linkedin.com/in/oliverberger/
- Focus: Value-based pricing fundamentals for early-stage founders
Core pricing principles (the foundation)
Price according to value delivered, not:
- Time/hours spent
- Cost to build (COGS still matters for viability)
- Competitor pricing (use as reference, not anchor)
- What you think they’ll pay (research what they actually will)
- Cheapest option to attract customers (race to the bottom)
The transaction principle: Every purchase = exchange of currency for something more valuable to the customer
- Example: $6.50 Big Mac is worth more to me than $6.50 in my pocket
- Doesn’t matter: cook time, ingredient cost, Burger King’s price
- Only matters: perceived value to customer at moment of purchase
Strategic pricing decisions: Margin vs. Growth
| Approach | When to choose | Trade-offs |
|---|---|---|
| High margin (price near perceived value) | Limited runway; need revenue fast; no network effects | Higher profit per customer; slower growth |
| Growth focus (price well below perceived value) | Network effects business; viral potential; scale advantages | Lower margin; faster user acquisition |
Network effects consideration (key insight from session):
- If your business benefits from more users (dating apps, social platforms, marketplaces)
- Value increases with each additional user
- Sacrifice early margin for long-term volume and network strength
Pricing models breakdown
Freemium (best practices)
- Give everything away, but in limited way (not feature-gated)
- Example: Authority app - one group with 6 members vs. multiple groups with 12+ members
- Highlight upgrade paths inside product experience, not just pricing page
- Avoid if: high onboarding costs or small TAM
- Laura’s insight: Friends experience full features when invited, creating viral demonstration
Free trials
- Deeper usage, less viral than freemium
- Full experience matters - remove friction to core value
- Time limits create urgency (Timothy’s coffee: feedback required within 2 weeks)
- QR codes for viral sharing (Timothy’s personalized coffee recipes)
Recurring revenue & bundles
- Recurring revenue valued at higher multiples than one-time sales
- Bundle benefits unavailable elsewhere (Disney+ subscribers get exclusive Disney World perks)
- Requires hard choices - some features/perks only for subscribers
- Consumer psychology: underestimate time value, use less than they pay for
Pricing psychology: Anchoring
Oliver’s email calendar tool example:
- Basic ($4): Minimal features, almost useless
- Standard ($5): Core value, positioned as “bargain”
- Premium ($30): Over-featured for most users
How anchoring works:
- Research optimal price point through surveys
- Create “decoy” options above and below
- Make target option appear as obvious middle choice
- Drive behavior toward your preferred price
Double-lever pricing (advanced):
- Salesforce model: per user + per message/action
- Adds complexity but increases revenue potential
- Only recommend after establishing brand loyalty
- Can alienate early customers if introduced too soon
Pricing research methods
Van Westendorp Price Sensitivity Meter (recommended)
Four questions to find acceptable price range:
- Too expensive: “At what price would this be so expensive you wouldn’t consider buying?”
- Too cheap: “At what price would this seem so low-quality you wouldn’t trust it?”
- Getting expensive: “At what price does this start feeling expensive but you’d still consider it?”
- Bargain price: “At what price would this be a great deal?”
Result: Identifies sweet spot where most customers feel comfortable (e.g., $15-20 range)
A/B Price Testing (for larger samples)
- Split traffic: 100 users see $10, 100 see $15, 100 see $20, 100 see $25
- Measure conversion rates at each price point
- Find optimal price/conversion balance
- Requires: 400+ users for statistical significance
- Cost: Can be expensive but scientifically rigorous
Problems with traditional surveys
- “How much would you pay?” = race to bottom
- People always answer lowest possible amount
- Better approach: “How much would you pay to solve this problem?” (Tiana’s insight)
Pricing tips and tricks
| Tactic | Example | Psychology |
|---|---|---|
| Remove dollar signs | ”15” vs “$15” | Reduces payment pain |
| End prices in 7 | $97 vs $100 | Perceived value (unconfirmed) |
| Term discounts vs upfront | ”Stay 10 months, get 2 free” vs “Pay year upfront for discount” | Avoids procurement delays |
WiseTech enterprise insight:
- Instead of: “Pay $400K upfront for discount”
- Try: “Stay 10 months, get November-December free”
- Benefit: Avoids 6-12 month procurement cycles
- Trade-off: Cash flow vs. faster deal closure
Case studies from session
Authority (Laura) - Safety app for teens
- Model: Freemium with network effects
- Free tier: 1 group, 6 members, basic features
- Paid tier: Multiple groups, 12+ members, full features
- Viral mechanism: Friends experience full app when invited
- Future: Licensing to schools/youth organizations
Best Schools (Anthony) - School finder platform
- Model: Free for parents, paid for schools
- Value prop: School enrollment competitiveness (especially private schools)
- Challenge: “If every vendor says same thing, value prop weakens”
- Solution: Must be more valuable than alternatives, not just cheaper
Coffee customization (Timothy)
- Model: Paid product with viral QR codes
- Free trial equivalent: Discounted second bag if feedback provided within 1 week
- Viral element: QR codes link to personalized recipes, shareable by influencers
- Bundle opportunity: Exclusive grinder for subscribers
Advanced considerations
Grandfathering price increases
Key principles:
- Never guarantee prices forever in T&Cs
- Price increases now more acceptable (post-Netflix/Uber era)
- Commercial decision: Trust/longevity vs. revenue optimization
- Soften with added value: “Price up 20%, but you now get X feature”
NDIS/Assistive technology (Avalon’s challenge)
- Situation: NDIS pays up to $500, but don’t want to exploit users
- Advantage: High upper bound provides pricing flexibility
- Approach: Use pricing surveys to find fair value within range
- Follow-up: Complex case requiring individual consultation
Estate administration (Emmanuel)
- Current: $150 flat fee per workspace (vs. $15/month subscription)
- Reasoning: Periods of inactivity make monthly fees poor value
- Price testing: Increase price for new cohorts, measure stickiness
- Legal professionals: Free when invited, potential future revenue source
Immediate action items
- Define your value proposition in customer terms (problem solved, not features delivered)
- Choose margin vs. growth strategy based on network effects and runway
- Run Van Westendorp survey with 50-100 potential customers
- Set up pricing infrastructure (Stripe/payment system) for easy price changes
- Plan messaging for price changes - expect to iterate pricing within 12 months
- Test anchoring strategy with 3-tier pricing structure
Key takeaway
Pricing will change - everyone will adjust prices within 12 months. Focus on getting infrastructure and research methods right, then iterate based on real customer behavior and feedback.
Final wisdom: “If customers won’t pay what you want, you’re not valuable enough to them yet” - focus on increasing value before competing on price.