How to use pricing research to price your app effectively

Pricing strategies for subscription apps often rely on competitors' pricing or production costs, which can be misguided. Instead, understanding the perceived value from customers' perspectives is crucial, as they prioritize value over the cost of development. While running pricing experiments is beneficial, excessive testing may confuse customers, making focused pricing research essential. Popular research methods include the Van Westendorp Pricing Model, Conjoint Analysis, and the Gabor-Granger Pricing Method. Each has unique strengths: the Van Westendorp model identifies acceptable price ranges based on consumer perception, Conjoint Analysis evaluates how customers value different features and pricing packages, and the Gabor-Granger method assesses demand elasticity by testing various price points. These approaches help refine pricing strategies by highlighting customer value perceptions, although they have limitations like reliance on stated intentions rather than actual behaviors. Ultimately, combining these methods can provide a holistic view of optimal pricing, helping businesses align prices with perceived value and customer expectations.