Pricing and Positioning – Are They Related?
Pragmatic Institute’s Box of the Month is Positioning. Before reading my opinion, stop and think for yourself how these are related.
I can come up with 2 ways. But first we need to review positioning, especially from Pragmatic Institute’s perspective. We do positioning so we clearly understand who and why. Who are we targeting by building a product or creating a marketing message. Once we know who, then why do they care? What problems of theirs are we solving?
Defining positioning like that almost makes the answer about pricing jump out at us. We price based on who and on why.
First the who. Different market segments and different personas have different willingness to pay. If we can be extremely clear about our personas and their market segments it will direct us to learning about how much each persona is willing to pay which of course drives pricing.
Next the why. Once you know why, meaning what problems the persona is trying to solve, willingness to pay becomes easier to figure out. If we are solving big problems, problems that really matter, then we should be able to charge more. If we are solving small problems, then not so much.
Maybe positioning and pricing aren’t often linked, but they are very closely related. When you use positioning to identify the right personas and find the biggest problems, then pricing becomes more clear. Charge more.
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