AMA: Hims & Hers Former Sr. Director, Product Marketing & Development, Alex Chahin on The Psychology of Pricing

I would encourage you to make sure you’re putting the customer first whenever you encounter this. In my experience, it’s really tempting to bolt on the next product with slightly different pricing that solves for that particular new product but doesn’t account for the existing one. Then you can end up with a bit of a frankenstein experience that makes it hard for customers to evaluate what’s right for them, having downstream effects on conversion. So make sure that whenever you’re going from one ...Read More

Many things should play a role in shaping the product roadmap. That might include customer insights, market opportunities, current customer satisfaction, and beyond.  Willingness to pay (WTP) should absolutely be among those considerations. In order to determine how much it should play a role for your particular product, you need to first reflect on what the product strategy is. Are you more of an engagement-based product trying to get customers to interact (e.g., TikTok, Nextdoor, Instagram). I ...Read More

While there’s no perfect answer here, there can be too much of a good thing. Behavioral economics research has shown that we tend to have a hard time deciding from a large array of options. This phenomenon is known as choice overload. It’s also often referred to as the paradox of choice, being paradoxical, of course, because you’d think that more options would be better. In fact, not only is it harder to make a decision when there’s too much choice available, if we do end up making a decision, i ...Read More

The best time to prepare a change in pricing strategy is when you have actionable data. Perhaps you would have guessed something more related to the product or portfolio lifecycle, like when another product is getting added into the mix. These moments can certainly make internal conversations a little smoother, but ultimately you’re going to want your case to be built on a strong foundation rather than anchoring yourself to internal processes. In that case, the question then becomes “What data?” ...Read More

It’s always really tempting to look for “answers” among what competitors are doing. I think you should absolutely keep competitive moves in mind, but I would urge you to start from a place from the value you deliver and only rely on competition if you don’t think you can articulate the value well enough. To understand why, here are some of the pitfalls of relying too heavily on competitive moves: Information asymmetry: You might think they’re basing a choice on sound information, but there’s a d ...Read More

Picture this: You’re working on the merchandising team at Williams-Sonoma, a home goods store that sells things like upscale kitchen appliances, utensils, and cooking supplies. Your boss has just asked you to figure out how to sell more breadmakers, which are appliances that mix the ingredients, form the dough, and bake it all in one. Many people enjoy fresh-baked bread, but not many people have the time or patience to make it, so the convenience of it makes it interesting for the brand to push ...Read More

Price acts as a huge quality signal. One of my favorite studies on the subject is one done by Professor Dan Ariely. He had a hypothetical painkiller he called Veladone Rx. In reality, in this experiment, it was nothing more than a sugar pill. There was no actual active medication in it. But the participants didn’t know that. It was paired with literature that said “clinical studies show over 92% of patients report relief in 10 minutes.” In the first variant, people were told that the drug cost $ ...Read More