Create Your Order Receipt Sample for Product Management Effortlessly

Order receipt sample for Product Management

hi everyone I'm shreya thank you for having me today so today I'm going to be talking about product pricing principles and we're gonna help answer two questions the first is how do I come up with a price and the second is what makes people buy and a little bit about me before we kind of go into the presentation I have 10 years of art experience ranging from startups to big companies like Disney focused on mobile video and social experiences and currently I'm at evite where I am the head of mobile product and have launched in app purchase and description for the first time on the apps and I've also LED price testing for the company so that's really a great experience I can share with you today as you kind of think about pricing for your own products so next we're going to talk about how to create a price structure and a few principles to keep in mind when you're coming up with the price structure for your products so the first and what might be the most important is to remember to price differently for different customers to maximize value and they think one of the best industries for this in terms of an example is the airline industry they have you know created different classes from first class all the way down to basic economy even though everyone is really pained for getting from point A to point B they're able to create these different experiences in these different classes to provide unique value to each of these different customer segments and also maximize revenue and value for themselves so this is really interesting to me because I actually learned that on a typical transatlantic flight the revenue generated from all of the first-class passengers is often more than all of the economy passengers combined which really speaks to the importance of creating these different classes to meet two different customer needs and you might be asking well why don't I just create a flight with just all first-class passengers and the reason is there's not enough demand or people that are willing to pay that kind of price for a seat but instead of just having first-class seats and economy seats you know airlines have done this way well where they have like business class Premium Economy regular economy and basic economy and that allows the airlines to maximize value for each of these different segments and also create a differentiated experience for customers it's principle to keep in mind is it's really important to price based on user needs not features so I think we've all seen examples like that on the left where we see a bunch of different tiers like standard and premium and a bunch of features kind of going down the list on those different rows and we don't really know which tier I should pick as a consumer do I pick standard or I pick premium that name doesn't really tell me a lot about what's included and I have to do a lot of work to read through those features and see which tier makes the most sense to me and even if I pick it here like let's say in this case I pick premium I might you buy a lot of features that I don't really need or might just be missing out on one feature feature from professional that I really want so a better way to do this is really to price based on user needs and create packages based on you know user needs and use cases so Strava is a running app and they do a great job of this so they actually sell a training pack if you're really focused on training for a big race or if you're really concerned about safety they sell that and then they also have an analysis pack if you're really interested in analyzing your previous fronts so by just looking at the name of these different packages you know which one you need to buy and it has a bunch of features that make sense for you and from the business perspective what this will do is really increase conversion and people will be more easily able to identify what they need to buy and be more satisfied with their product so the next principle you know you'd want to consider when creating a pricing structure is do it create one-time purchases do I offer subscriptions do I offer a mix of both and I would encourage you to definitely consider a subscription app Annie has shared that in-app subscriptions contribute to 96% of spent in the top non-gaming apps and the reason why it's so successful and so dominant in the market today is it really allows for a reliable source of renewable revenue and for you to be able to create longer-term relationship with your customers but it's also important to remember that you focus on the retention of users who are your subscribers in addition to just acquisition because to get people to renew they need to be able to see the value in your subscription you need to communicate on a regular basis the ongoing value that they're getting new features and benefits that you're adding to description through email or push and make sure that they're satisfied with the product so that they do renew you another point to consider is a lot of times scription x' offer exclusive features to differentiate themselves from the one-time purchases you know I think it's kind of table stakes that most subscriptions offer kind of unlimited access to the product and kind of an all-you-can-eat model versus the free version or the one-time purchases but if you're able to offer features that will help differentiate the description even more and nudge people into that so like I mentioned at the beginning I currently work at evite and we have launched a subscription called evite Pro and Eli is really kind of focused on creating digital imitations for different events like birthday parties or graduation and we launched evite Pro which is targeting a new segment which is really small businesses for people that are having multiple events a year for their business and we added two features to differentiate the subscription from the one-time purchase you know it allowing you to invite up to 2,500 guests for an event and be able to check in guess with the tenants tracking these are features that make sense for that small business audience and kind of different it's more from our consumer offering so even if you're a small business and you might be having one or two events a year if it's a really big or important event you may purchase the description just because of that feature so that's why it's a really great idea to consider adding features to your subscription the other thing that's really good to consider if you are launching a subscription is to offer multiple all tiers of description or different ways to pay for the subscription so you could do things like different levels of the description but you could also offer like monthly versus annual pricing and that does a couple of things you know if you a good example on the right from evite you know if we just had the annual subscription and the one-time purchase you're debating between do I pay $15 for this one-time invitation or do I get kind of unlimited invitations for the year for $250 and that's a really big gap in price and just so like the airlines did something that I did was create kind of intermediate option of a three-month subscription for $80 so that allows people who are willing to spend more than fifteen dollars may be interested in subscription but can't connect that $250 the second thing that that does is it shifts the question away from do I buy a one-time purchase or do I buy ascription two-week subscription do I buy because I'm given more choice so offering more options with the subscription unit makes it more digestible for customers and you'll see more success so the next half of the webinar I want to share some principles to keep in mind you know once you've created your pricing structure but then trying to understand behavior on why people buy or why people don't buy so the first principle I want to share with you today is really the power of free so you know I think all of us really enjoy free things and if you're offering subscription a free trial is a really great thing to consider when offering your subscription and the reason is is that allows people to enjoy the benefits of the description without any risk and you know the idea is that they've been using these features during the trial period they see the value of it and they're willing to pay for it even after the free trial is over and Google has actually heard some really interesting data that people are actually most likely to pay within your app immediately after downloading you know I had bought oh it might be a couple of months after they've been using the products I think get familiar with it that's not actually the case and so here's like to another example from Strava which we shared earlier that does a good job of this so they actually as part of your onboarding and registration flow have this kind of model says hey the first month on us you can start a free trial there's a clear called action and it's a really easy and digestible way to kind of try to description at the beginning of your journey with this product and the power free doesn't have to just be a free trial it can also be done in the future level as well so tender which is I think is one of the most profitable you know apps in the App Store and Play Store has done this very well through their super like feature so this feature allows users to be able to super like somebody and you know they claim that you'll triple your chance of some action with them but rather than just making this a subscription feature or having to pay for it they actually allow all users including users you don't pay anything to use one of these super likes for free and that's a really effective acquisition tool into the description or being able to purchase some of these super legs a la carte which they offer like packs of three five or ten or allowing you to be a subscriber and get up to five a day because you can see the value that you get out of it if I use this future and I match with somebody that I really like you know I'm more likely to buy some more in the future or even subscribe versus he just saying that this feature is valuable I personally have had that experience I've been able to use it another example is from my time at tastemade which is a digital food and travel media start-up we allow people save up to ten recipes for free and then more than that they had to subscribe and this again is a very similar strategy of allowing people to see the value of this kind of paid feature but you know putting the paywall a little bit down the line until we've seen that you've got enough value out of it and we that you're likely to subscribe so that was a great acquisition vehicle for us the next couple principles I want to share are around social proof and urgency and social proof is really just saying you know if customers or your friends say something positive about a product or negative it's gonna weigh a lot more than you as a business just saying that this product is great right it's gonna create more credibility so for the first example I have up there with the quotes this is an example from evite Pro which I talked about a little bit earlier as I mentioned this was like a new space for us kind of targeting small businesses and by adding these quotes from small businesses to it uses the product we help establish credibility that hey as a small business owner I can use it this travel manager means that this realtor used it and we're able to find out oh you out of it and so I think it can work for me too another great company that's done this really well is booking.com so they actually show the remaining inventory for a hotel that you're looking at and how many people have actually booked it in the last few hours and so if I'm looking at this hotel you know to me it's like hey this is a really hot property I wanna should move on it quickly so I don't lose that there's only a few rooms left a lot of people have been booking it in the past few hours so that helps create Drive urgency it can really improve conversion another great way to drive urgency is by offering limited time deals so like I mentioned previously you know Google I share after you download the app is the time most people are likely to buy reflectively which is a self reflection app actually offers a one time free trial offer only during the signup process so rather than being like hey look maybe I'll poke around and decide later if I want to sign up for this description you know this creates urgency it's like hey I don't want to miss out on this free time offer let me do it now so creating urgency is another great way to help you know increase purchase and conversion so the next principle and want to share is around fairness so I think we all remember this old uber surge price where they would show you how much you were overpaying like it's 2 X 4 X 5 X what I should be paying and if you're like me you just switch to like a competitor app like lip and see if it was cheaper um but now they've done away with that and the interesting thing is I don't think they have actually changed their pricing at all they just haven't communicated it to you in terms of how much you're overpaying so it doesn't feel like you're getting ripped off as much but it's a really important change that they made in terms of the UI and how they're communicating that pricing another example that's really great to share here is actually from JCPenney and it's a little bit ironic because they actually set out this campaign to be really fair and they said you know we're gonna do away with sales we're gonna do it with coupons we're just never flat everyday price so you don't have to worry about you know being here during the sale or having a coupon to get the best deal but it really backfired on them and they reverse course pretty quickly because customers like getting a big deal they like saying hey I got this 80% off they like the enjoyment of you know redeeming a coupon at the store so it's really important to keep that in mind and offer you know deals when you can to attract users the one caveat I will say to that is it's important not to offer too many deals because what will happen is you will attract these deal seekers who are just there for the deal and then we'll leave or people who won't make a purchase unless they get a deal since they're so accustomed to getting them and I think a lot of the meal delivery companies that blue apron have been dipped into this where people just use it for the deal and then they leave in ways you can do to mitigate this is offering deals you know very contextual and a limited time so like the example I shared previously from reflect Lee where they offer it only after you know only through the signup process can help mitigate that so the next principle I want to share is relativity and this principle is really just understanding that your prices don't exist in isolation and people comparing them to make the desk decision that is for them and this example is from the Wall Street Journal they offer two different descriptions they offered a web suit of shin for $59 and a print and web scription for a hundred and twenty-five dollars and what they did is they offer a third option which is a print only subscription for $125 now how many of you would pick that print only option I don't think many of you right because it's the same price as the print and web description so for the same price you're able to get the web scription as well and so if you get kind of before-and-after you know adding this third tier it shouldn't really change behavior because it's not really a valid option but what it did is it actually tripled the number of users that pick the print and web option because it seemed like a better deal compared to that print only option again it doesn't make any sense that it's not necessarily rational but people don't always think you know rationally and they know with pricing people are building spreadsheets and having a lot of conversations around that but being aware all of these cognitive biases that we all have is important when you're coming up with your pricing and because of these biases I think it's really important to test these do a/b test and also if you can try and test only one change at one time if you change a lot of different variables you might see an increase in revenue but one of those factors might have actually decrease revenue and you're gonna be sub optimizing and also I think it's really important to understand that just because somebody did something it worked well even a competitor it doesn't mean that if you do it's gonna work well for you too so it's important to test all of these changes on your own product and even retest it you know for a year or two years because consumers change the marketplace changes there's different expectations and behaviors so in summary you know here are the three main takeaways I would say you know from this webinar you know one as we learn with Airlines it's really important to create different prices to fully monetize different segments and maximize revenue it's important to be aware of the cognitive biases that can influence how customers perceive and make purchases in your product and because of that it's really important to test an isolate price changes to see if your pricing is successful and once again you know feel free to reach out to me you can add me on LinkedIn my full name is Cherie come to us and I'm happy to answer any questions that you might have and hope you found this webinar very useful as you kind of think about pricing for your own products [Music]